Entera Bio 发布临时股东大会委托书：表决7月2.75亿美元私募配套的股权激励池扩容及高管补偿，属例行治理/薪酬备案

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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
SCHEDULE
14A
information
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
(Amendment No. )
____________________________________
Filed by the Registrant
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Filed by a Party other than the Registrant
☐
Check the appropriate box:
☐
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 under §240.14a-12
ENTERA
BIO LTD.
(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 all boxes that apply):
☒
No fee required.
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
Dear Fellow Entera Shareholders,
Thank you for your continued trust in our mission and
for your support through this journey that we started together four years ago.
I am writing to you in connection with our upcoming
Special Meeting of Shareholders, scheduled for November 24, 2026. The accompanying proxy statement describes the proposals on which you
are being asked to vote. I encourage you to read it carefully, and I want to take this opportunity to provide some brief context.
The first half of 2026 marked one of the most consequential
periods in Entera’s history and initiates a new chapter in our evolution. In July we announced the completion of a transformational
private placement, raising approximately $275 million in gross proceeds, led by BVF Partners L.P. and joined by a distinguished group
of leading institutional healthcare investors.
This financing provides Entera with capital that we
expect to fully fund our Phase 3 registrational program of EB613 and extends our cash runway into 2030 so that we may continue to expand
our core team of global leaders, luminaries and pioneers, deliver on our pipeline and expand our scientific footprint as a leader in the
field of oral peptide therapeutics.
As a reminder, the terms of our July 2026 private placement,
including key corporate governance and equity compensation-related provisions, were publicly announced at the time and have been described
in our prior SEC filings.
The Special Meeting presents eight proposals for your
consideration, five of which derive from our previously reported agreements entered into in connection with the private placement. Specifically,
these “Supported Proposals” seek your approval of: (1) an increase in the number of ordinary shares issuable under our 2018
Equity Incentive Plan to ensure we have sufficient equity capacity as we scale; (2) a one-time equity grant to me as your CEO; and (3)
one-time equity grants to our Chief Financial Officer, Chief Operating Officer, and Chief of Research and Development. In addition, the
Special Meeting includes proposals to approve an updated compensation policy, amend non-executive director compensation, and provide an
extension of the post-termination exercise period for options granted to officers and directors.
I, together with the other members of our Board of
Directors, unanimously recommend that you vote
FOR
each of the eight proposals, which we believe provide the proper,
market benchmarked compensation for our management and independent directors going forward.
At Entera, we are driven by our mission to develop
transformative oral peptide medicines and invest in therapeutic spaces that require urgent attention, starting with EB613 — the
first oral anabolic tablet in development for postmenopausal women with osteoporosis.
The milestones ahead of us are significant, and I am
deeply grateful for the steadfast support that allows our team to pursue them with conviction.
Your vote matters, and we look forward to your continued
partnership.
With gratitude,
Miranda Toledano
Chief Executive Officer and Director
Kiryat Hadassah
Minrav Building - Fifth Floor
Jerusalem, Israel
NOTICE OF
2026 SPECIAL MEETING OF SHAREHOLDERS
October 14, 2026
NOTICE IS HEREBY GIVEN that the 2026 Special Meeting
of Shareholders (the “Special Meeting”) of Entera Bio Ltd., a company formed under the laws of the State of Israel (“we,”
“Entera,” or the “Company”), will be held on Tuesday, November 24, 2026 at 08:00 AM Eastern Time, at our offices
located at Kiryat Hadassah, Minrav Building – Fifth Floor, Jerusalem Israel 9112002.
Proposals One through Five set forth below are being
presented to shareholders following, and in connection with, the consummation of the Company’s private placement, which was publicly
announced on July 27, 2026, and closed on July 28, 2026, and which is more fully described in the enclosed proxy statement.
The Special Meeting is being held for the following
Agenda Items:
1.
To approve an amendment to the Company’s 2018 Equity Incentive Plan (the “2018 Plan”) to increase the number of Ordinary
Shares issuable thereunder by 13,937,915 Ordinary Shares;
2.
To approve a one-time equity grant, as described in the accompanying proxy statement, to Ms. Miranda Toledano, our Chief Executive Officer
and a Director;
3.
To approve a one-time equity grant, as described in the accompanying proxy statement, to Ms. Dana Yaacov-Garbeli, our Chief Financial
Officer;
4.
To approve a one-time equity grant, as described in the accompanying proxy statement, to Mr. Hillel Galitzer, our Chief Operating Officer;
5.
To approve a one-time equity grant, as described in the accompanying proxy statement, to Mr. Gregory Burshtein, our Chief of Research
and Development;
6.
To approve the amended and restated compensation policy for the directors and officers of the Company, as described in the accompanying
proxy statement and attached as Appendix B thereto;
7.
To approve the amended terms of compensation of the Company’s non-executive directors; and
8.
To approve the extension of the post-termination exercise period for options granted or to be granted to the Company’s officers
and directors, as described in the accompanying proxy statement.
The foregoing proposals are described more fully in
the enclosed proxy statement. We urge you to read the enclosed proxy statement in its entirety. The Special Meeting constitutes an extraordinary
general meeting of the Company’s shareholders for purposes of the Israeli Companies Law and the Articles, under which all general
meetings other than the annual general meeting are referred to as extraordinary meetings.
Only holders of record of our ordinary shares, par
value NIS 0.0000769 per share (the “Ordinary Shares”), at the close of business on Thursday, October 1, 2026, are entitled
to notice of and to attend and vote at the Special Meeting and any adjournments thereof. The vote required to approve the resolutions
to be presented is set forth in each proposal brought for shareholders’ approval in the accompanying proxy statement.
Whether or not you expect to be present at the Special
Meeting, please vote using the Internet, or by mail, in each case by following the instructions in our proxy statement. Shareholders who
execute a proxy may nevertheless attend the Special Meeting, revoke their proxy and vote their shares in person.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
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Shareholders of record who do not expect to attend
the Special Meeting in person are kindly requested to mark, date, sign and mail the enclosed proxy card in the accompanying pre-addressed,
postage-paid envelope as promptly as possible to our address below, c/o Dana Yaacov-Garbeli, our Chief Financial Officer.
You
may also vote your shares through the internet by going to
www.voteproxy.com
and following the on-screen instructions or scanning
the QR code located on the proxy card with your smartphone. Please have your proxy card available when you access the webpage. Internet
voting is available until 11:59 p.m. Eastern Time on Monday, November 23, 2026.
If voting by mail, the proxy must be received
at our registered office at least four (4) hours prior to the Special Meeting (that is, by 04:00 a.m. (Eastern time), Tuesday, November
24, 2026) to be validly included in the tally of Ordinary Shares voted at the Special Meeting. Detailed proxy voting instructions are
provided both in the proxy statement and on the enclosed proxy card.
If you are the record holder of your Ordinary Shares,
you can also authorize the voting of your shares over the Internet by following the instructions provided above or in the proxy statement.
Ordinary Shares can be voted at the Special Meeting only if the holder is present or represented by proxy.
We will be using the U.S. Securities and Exchange Commission’s
“Notice and Access” rules, which allows us to make the Notice of the Special Meeting, proxy statement and form of proxy (collectively,
the “Proxy Materials”) available on the Internet, as the primary means of furnishing Proxy Materials to our shareholders.
On or about October 14, 2026, we will mail to all of our shareholders a Notice of Internet Availability of Proxy Materials, which contains
instructions for accessing our Proxy Materials on the Internet and voting by telephone or on the Internet. The Notice of Internet Availability
of Proxy Materials also contains instructions for requesting a printed set of Proxy Materials. The Proxy Materials are available online
at www.eqproxyportal.com/22270/special.
A Notice of Internet Availability of Proxy
Materials, this proxy statement and the form of proxy are first being made available to shareholders on or about October 14, 2026.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Geno J. Germano
Geno J. Germano
Chairman of the Board
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
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TABLE OF CONTENTS
Page
PROXY STATEMENT
1
INFORMATION ABOUT OUR SPECIAL MEETING
1
SECURITY OWNERSHIP
6
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
8
EXECUTIVE COMPENSATION
9
PROPOSAL ONE – APPROVAL OF AN AMENDMENT TO THE COMPANY’S 2018 EQUITY INCENTIVE
PLAN
24
PROPOSAL TWO – APPROVAL OF A ONE-TIME EQUITY GRANT TO MS. MIRANDA TOLEDANO, OUR CHIEF
EXECUTIVE OFFICER AND A DIRECTOR
26
PROPOSAL THREE – APPROVAL OF A ONE-TIME EQUITY GRANT TO MS. DANA YAACOV-GARBELI, OUR
CHIEF FINANCIAL OFFICER
28
PROPOSAL FOUR – APPROVAL OF A ONE-TIME EQUITY GRANT TO MR. HILLEL GALITZER, OUR CHIEF
OPERATING OFFICER
30
PROPOSAL FIVE - APPROVAL OF A ONE-TIME EQUITY GRANT TO MR.GREGORY BURSHTEIN, OUR CHIEF OF
RESEARCH AND DEVELOPMENT
32
PROPOSAL SIX – APPROVAL OF AN AMENDED AND RESTATED COMPENSATION POLICY
34
PROPOSAL SEVEN – APPROVAL OF THE AMENDED TERMS OF COMPENSATION OF THE COMPANY’S
NON-EXECUTIVE DIRECTORS
36
PROPOSAL EIGHT – APPROVAL OF EXTENSION OF THE POST-TERMINATION EXERCISE PERIOD FOR OFFICERS
AND DIRECTORS
38
WHERE TO OBTAIN ADDITIONAL INFORMATION
40
EXPENSES RELATING TO THIS PROXY STATEMENT
40
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
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Kiryat Hadassah
Minrav Building - Fifth Floor
Jerusalem, Israel
PROXY STATEMENT
Proxy Statement for Special Meeting
of Shareholders
You are receiving this proxy statement and the enclosed
proxy card because you owned ordinary shares, par value NIS 0.0000769 per share (the “Ordinary Shares”), of Entera Bio Ltd.
(referred to as the “Company,” “Entera,” “we,” “us,” or “our”), as of the
close of business on Thursday, October 1, 2026 (the “Record Date”), which entitles you to attend and vote at the 2026 Special
Meeting of Shareholders (the “Special Meeting”). The Company’s board of directors (the “Board”) is soliciting
proxies from shareholders who wish to vote at the Special Meeting. By use of a proxy, you can vote even if you do not attend the Special
Meeting. This proxy statement describes the matters on which you are being asked to vote and provides information on those matters so
that you can make an informed decision.
Important Notice Regarding the Availability
of Proxy Materials for the Special Meeting to be Held on November 24, 2026
This proxy statement is available online at www.eqproxyportal.com/22270/special.
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”) is available, free of
charge, through the Investors — SEC Filings section of our website at https://investors.enterabio.com/.
We will be using the U.S. Securities and Exchange Commission’s
(the “SEC”) “Notice and Access” rules, which allow us to make the Notice of the Special Meeting, proxy statement
and form of proxy (collectively, the “Proxy Materials”) available on the Internet, as the primary means of furnishing Proxy
Materials to our shareholders. On or about October 14, 2026, we began mailing to all of our shareholders a Notice of Internet Availability
of Proxy Materials, which contains instructions for accessing our Proxy Materials on the Internet and voting by telephone or on the Internet.
The Notice of Internet Availability of Proxy Materials also contains instructions for requesting a printed set of Proxy Materials.
We believe the electronic method of delivery under
the “Notice and Access” model will decrease postage and printing expenses, expedite delivery of Proxy Materials to you
and reduce our environmental impact. We encourage you to take advantage of the availability of the Proxy Materials on the Internet. If
you received the Notice but would like to receive a full printed set of the Proxy Materials in the mail, you may follow the instructions
in the Notice of Internet Availability of Proxy Materials for requesting such materials.
Date, Time and Place of the Special Meeting
We will hold the Special Meeting on Tuesday, November
24, 2026, at 8:00 a.m. Eastern Time at Kiryat Hadassah, Minrav Building – Fifth Floor, Jerusalem Israel 9112002.
INFORMATION ABOUT OUR SPECIAL MEETING
Q:
Who may vote at the Special Meeting?
A:
You may vote all of the Ordinary Shares that you owned at the close of business on Thursday, October 1, 2026
(the “Record Date”). On the Record Date, there were 173,922,428 Ordinary Shares outstanding and entitled to be voted at the
Special Meeting. You may cast one vote for each Ordinary Share held by you as of the Record Date on all matters presented at the Special
Meeting for shareholders’ approval.
You do not need to attend the Special Meeting
to vote your Ordinary Shares. Ordinary Shares represented by valid proxies, received in time for the Special Meeting and not revoked prior
to the Special Meeting, will be voted at the Special Meeting. See “How do I vote?” below.
Q:
Have any shareholders agreed to vote in favor of certain proposals at the Special Meeting?
A:
Yes. On July 26, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase
Agreement”) with certain institutional and accredited investors (collectively, the “Purchasers”), providing for a private
placement of Ordinary Shares and pre-funded warrants to purchase Ordinary Shares (the “Pre-Funded Warrants”) for aggregate
gross proceeds of approximately $275.0 million (the “Private Placement”). The Private Placement closed on July 28, 2026. In
connection with the Private Placement, the Company and the Purchasers agreed upon an increase in the pool of Ordinary Shares reserved
for equity awards under the 2018 Plan, which is presented at the Special Meeting as Proposal One. In addition, each Purchaser agreed to
vote the Ordinary Shares beneficially held by such Purchaser in favor of certain equity awards to the Company’s Chief Executive
Officer and to certain other named executive officers, which were formally approved by the Board following the closing of the Private
Placement and are presented at the Special Meeting as Proposals Two, Three, Four and Five (Proposals One through Five,
(inclusive)
,
the “Supported Proposals”).
Each Purchaser has agreed under the Securities
Purchase Agreement to vote all Ordinary Shares beneficially held by it in favor of each of the Supported Proposals. See the section titled
“Security Ownership” in this proxy statement for such Purchasers’ beneficial ownership of the Ordinary Shares. While
the Purchasers are entitled to vote on Proposal Six, Proposal Seven and Proposal Eight, they are not obligated under the Securities Purchase
Agreement to do so.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
1
Q:
Why are shareholders being asked to approve Proposals Two through Eight (inclusive)?
A:
We are an Israeli public company subject to the Israeli Companies Law and the applicable laws and regulations.
Under the Israeli Companies Law, the terms of compensation of the Company’s directors require the approval of our shareholders,
and the terms of compensation of the Company’s officers require the approval of our shareholders if such terms are outside the ranges
set forth in the Company’s compensation policy.
Q:
What constitutes a quorum, and why is a quorum required?
A:
A quorum is required to conduct business at the Special Meeting. Pursuant to our Amended and Restated Articles
of Association (the “Articles”), the presence, in person or by proxy, of at least two shareholders who hold in the aggregate
at least 25% of the voting power of our issued and outstanding shares constitutes a quorum. A proxy may be deemed to be two (2) or more
shareholders pursuant to the number of shareholders it represents. Under applicable Nasdaq rules, however, a quorum must consist of not
less than an aggregate of 33 1/3% of the voting power of our issued and outstanding shares. Therefore, notwithstanding the lower percentage
set forth in our Articles, we will require the greater percentage mandated by Nasdaq in order to determine the presence of a quorum. If
a quorum is not present within half an hour following the time scheduled for the Special Meeting, the Special Meeting will be adjourned
to the same day in the following week (at the same time and place), or to a later time and date if so specified in the notice of the Special
Meeting, unless such day shall fall on a statutory holiday (either in Israel or in the United States), in which case the Special Meeting
will be adjourned to the first business day afterwards. If at such adjourned meeting a quorum as specified above is not present within
half an hour following the time designated for holding the Special Meeting, subject to certain exceptions, the Articles allow that any
two shareholders present in person or by proxy shall constitute a quorum at the adjourned meeting. Under applicable Nasdaq rules, however,
a quorum must consist of not less than an aggregate of 33 1/3% of the voting power of our issued and outstanding shares.
Q:
What is the difference between a shareholder of record and a beneficial owner?
A:
If your Ordinary Shares are registered directly in your name with our transfer agent, Equiniti Trust Company,
LLC, then you are the “shareholder of record” with respect to those Ordinary Shares. If your Ordinary Shares are held by a
brokerage firm, bank, trustee or other agent (a “nominee”), then you are the “beneficial owner” of Ordinary Shares
held in “street name.” If you hold your Ordinary Shares through a nominee, then the Notice of Internet Availability of Proxy
Materials, and, if applicable, this proxy statement, the Notice of Special Meeting and the accompanying proxy have been forwarded to you
by that nominee who is considered, with respect to those Ordinary Shares, the shareholder of record. As the beneficial owner, you have
the right to direct your nominee on how to vote your Ordinary Shares by following the instructions provided by your nominee for voting.
If you hold Ordinary Shares through a nominee,
it is critical that you instruct the nominee how to vote your Ordinary Shares if you want your Ordinary Shares to be voted. See “What
if I am a beneficial shareholder and I do not give the nominee voting instructions?” below.
Q:
Why did I receive a “Notice of Internet Availability of Proxy Materials” but no proxy
materials?
A:
We are distributing our Proxy Materials to certain shareholders via the Internet under the SEC’s “Notice
and Access” rules. This approach conserves natural resources and reduces our distribution costs, while providing a timely and convenient
method of accessing the Proxy Materials and voting. On or about October 14, 2026, we began mailing a “Notice of Internet Availability
of Proxy Materials” to participating shareholders containing instructions on how to access the proxy materials on the Internet and
how to vote.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
2
Q:
How do I vote?
A:
If you are a shareholder of record, you may vote:
•
via Internet;
•
by mail; or
•
in person at the Special Meeting.
Shareholders of record who do not expect
to attend the Special Meeting in person are kindly requested to mark, date, sign and mail the enclosed proxy card in the accompanying
pre-addressed, postage-paid envelope as promptly as possible to our address below, c/o Dana Yaacov-Garbeli, our Chief Financial
Officer. You
may also vote your shares through the Internet by going to
www.voteproxy.com
and following the on-screen instructions or scanning
the QR code located on the proxy card with your smartphone. Please have your proxy card available when you access the webpage. Internet
voting is available until 11:59 p.m. Eastern Time on Monday, November 23, 2026.
Your Internet delivery authorizes the named proxy
holders to vote your shares in the same manner as if you marked, signed and returned your proxy by mail. If voting by mail, the proxy
must be received at our registered office at least four (4) hours prior to the Special Meeting (that is, by 04:00 a.m. Eastern Time on
Tuesday, November 24, 2026) to be validly included in the tally of Ordinary Shares voted at the Special Meeting. Detailed proxy voting
instructions are provided both in the proxy statement and on the enclosed proxy card.
If you hold Ordinary Shares through a nominee,
you must follow the voting procedures of your nominee included with your proxy materials. If your shares are held by a nominee and you
intend to vote at the Special Meeting, please bring with you evidence of your ownership as of the Record Date (such as a letter from your
nominee confirming your ownership or a bank or brokerage firm account statement).
If you provide specific instructions (by
marking a box) with regard to the proposals, your shares will be voted as you instruct. If you sign and return your proxy card or voting
instruction form, the persons named as proxies will vote in their discretion on any other matters that properly come before the Special
Meeting and are not included in the proposals set forth above under “Agenda Items.” Please also see “What if I sign
and return my proxy without making any selections?” below.
Q:
What am I voting on and what are the Board’s recommendations?
At the Special Meeting you will be asked to vote on
the following eight proposals. Our Board recommendation for each proposal is set forth below.
Proposal
Board Recommendation
1.
To approve an amendment to the Company’s 2018 Equity Incentive Plan to increase the number of Ordinary Shares issuable thereunder
by 13,937,915 Ordinary Shares;
FOR
2.
To approve a one-time equity grant to Ms. Miranda Toledano, our Chief Executive Officer and a Director;
FOR
3.
To approve a one-time equity grant to Ms. Dana Yaacov-Garbeli, our Chief Financial Officer;
FOR
4.
To approve a one-time equity grant to Mr. Hillel Galitzer, our Chief Operating Officer;
FOR
5.
To approve a one-time equity grant to Mr. Gregory Burshtein, our Chief of Research and Development;
FOR
6.
To approve the amended and restated compensation policy for the directors and officers of the Company;
FOR
7.
To approve the amended terms of compensation of the Company’s non-executive directors;
FOR
8.
To approve the extension of the post-termination exercise period for share options granted or to be granted to the Company’s officers
and directors;
FOR
Proposals One through Five described above are being
presented to shareholders following, and in connection with, the consummation of the Company’s private placement, which was publicly
announced on July 27, 2026, and closed on July 28, 2026, and which is more fully described in the enclosed proxy statement.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
3
Q:
What happens if additional matters are presented at the Special Meeting?
A:
Other than the items of business described in this proxy statement, we are not aware of any other business
to be acted upon at the Special Meeting. If you grant a proxy, the persons named as attorneys-in-fact, agents and proxy holders, Miranda
Toledano and Dana Yaacov-Garbeli, will have the discretion to vote your Ordinary Shares on any additional matters properly presented for
a vote at the Special Meeting in accordance with the Israeli Companies Law, 5759-1999 and the regulations promulgated thereunder (together,
the “Israeli Companies Law”) and our Articles.
Q:
What if I abstain on a proposal?
A:
If you sign and return your proxy marked “abstain” on any proposal, your Ordinary Shares will not
be voted on that proposal. Abstentions and broker non-votes will have no effect on the outcome of the vote. However, your Ordinary Shares
will be counted for purposes of determining whether a quorum is present.
Q:
What if I sign and return my proxy without making any selections?
A:
If you sign and return your proxy without making any selections, your Ordinary Shares will be voted “FOR”
Proposals One through Eight described in this proxy statement. If other matters properly come before the Special Meeting, Miranda Toledano
and Dana Yaacov-Garbeli will have the authority to vote on those matters for you at their discretion. As of the date of this proxy statement,
we are not aware of any matters that will come before the Special Meeting other than those disclosed in this proxy statement.
Q:
What if I am a beneficial shareholder and I do not give the nominee voting instructions?
A:
If you are a beneficial shareholder and your Ordinary Shares are held in the name of a nominee, the nominee
is bound by the rules of the New York Stock Exchange regarding whether it can exercise discretionary voting power for any particular proposal
if such nominee has not received voting instructions from you. Nominees have the authority to vote shares for which their customers do
not provide voting instructions on “routine” matters. None of Proposals One through Eight is intended to be treated as a routine
matter. As a result, your nominee may not be permitted to exercise discretion and vote your Ordinary Shares for or against any of these
proposals without your instructions. A “broker non-vote” occurs when a nominee who holds shares for a beneficial owner submits
a proxy but does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has
not received instructions from the beneficial owner of the shares. Broker non-votes are included in the calculation of the number of votes
considered to be present at the Special Meeting for purposes of determining the presence of a quorum but are not counted as votes cast
for or against any matter.
Q:
Can I change my vote or revoke my proxy after I have delivered my proxy?
A:
Yes, you may change your vote or revoke your proxy prior to the Special Meeting. If you are a shareholder of
record, you may change your vote by delivering to our Chief Financial Officer, at the address set forth under “Where to Obtain Additional
Information”, a written notice of revocation or a duly executed proxy bearing a later date (but not less than 24 hours before the
Special Meeting) or by attending the Special Meeting and voting in person. Attendance at the Special Meeting will not in and of itself
constitute revocation of a vote. If you are a beneficial owner, you must contact your nominee to change your vote or obtain a legal proxy
to vote your shares if you wish to cast your vote in person at the Special Meeting.
Q:
Who can attend the Special Meeting?
A:
Only shareholders of record as of the Record Date and our invited guests may attend the Special Meeting. To
gain admittance, you must bring a form of personal identification to the Special Meeting, where your name will be verified against our
shareholder list. If a broker or other nominee holds your Ordinary Shares and you plan to attend the Special Meeting, you should bring
a recent brokerage statement showing your ownership of the Ordinary Shares as of the Record Date, a letter from the broker confirming
such ownership, and a form of personal identification.
Q:
If I plan to attend the Special Meeting, should I still vote by proxy?
A:
Yes. Casting your vote in advance does not affect your right to attend the Special Meeting.
If you vote in advance and also attend the
Special Meeting, you do not need to vote again at the Special Meeting unless you want to change your vote. Written ballots will be available
at the Special Meeting for shareholders of record.
Beneficial shareholders who wish to vote
in person must request a legal proxy from the broker or other nominee and bring that legal proxy to the Special Meeting.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
4
Q:
How many votes are required for approval of each of the proposals?
A:
Each of Proposals One, Two, Three, Four, Five, Six, Seven and, Eight requires the affirmative vote of a simple
majority of our Ordinary Shares cast in person or by proxy at the Special Meeting, meaning that more votes must be cast “for”
than “against” a given proposal. Abstentions and broker non-votes have no effect on the outcome of any proposal. Under the
Israeli Companies Law, each of Proposals Two, Three, Four, Five, Six, Seven and Eight may also require, if necessary pursuant to the Israeli
Companies Law and in addition to the simple majority vote described above, that either: (i) the Ordinary Shares voting in favor of
the proposal include at least a majority of the shareholders who are neither controlling shareholders of the Company nor have a personal
interest with respect to the proposal voting on the matter (excluding abstaining shareholders); or (ii) the total shareholdings of
the shareholders who are not controlling shareholders of the Company and do not have a personal interest who vote against the proposal
do not represent more than 2% of the voting rights in the Company. We refer to this threshold in this proxy statement as a “Special
Majority.”
We are not aware of any shareholders that
would be deemed to be a controlling shareholder of our Company as of the date hereof for purposes of Proposals Two, Three, Four, Five,
Six, Seven and Eight.
The term “controlling shareholder”
means a shareholder having the ability to direct the activities of a company, other than by virtue of being an “Office Holder”
(as defined under the Israeli Companies Law, which includes directors, the CEO, other executive officers and any other managers directly
subordinate to the CEO). Additionally, under the Israeli Companies Law, a shareholder is considered a controlling shareholder (for the
purposes of calculating votes in respect of matters involving a personal interest) if the shareholder holds 25% or more of the voting
rights in a company (where no other shareholder holds a greater number of voting rights) and/or is otherwise a controlling shareholder
as described above.
Under the Israeli Companies Law, a “personal
interest” of a shareholder in an act or transaction of a company includes: (i) a personal benefit, gain or other interest of
(a) the shareholder, (b) any relative of the shareholder; (c) a company with respect to which the shareholder (or any such
relative) serves as a director or the chief executive officer, owns at least 5.0% of the shares or voting rights or has the right to appoint
a director or the chief executive officer; and (d) a person acting as a proxy for the shareholder (even if the shareholder himself
does not have a personal interest), and (ii) excludes an interest arising solely from the ownership of shares. The term “relative”
means a spouse, sibling, parent, grandparent and child, and child, sibling or parent of a spouse or the spouse of any of the foregoing.
The Israeli Companies Law requires each
shareholder voting on Proposals Two, Three, Four, Five, Six, Seven and Eight to indicate whether the shareholder is a controlling shareholder
or has a personal interest in the approval of the proposal.
According to the Israeli Companies Law Regulations
(exemptions for companies whose securities are listed for trading on a stock exchange outside of Israel) 5760-2000 (the “Relief
Regulations”), by signing and submitting the accompanying proxy card, a shareholder declares and approves that it, he or she is
not a controlling shareholder and has no personal interest in the approval of Proposals Two, Three, Four, Five, Six, Seven and Eight except
if such shareholder notified the Company of such personal interest in writing. If you believe that you have a personal interest in
any of the items on the Special Meeting agenda and wish to inform the Company of such personal interest, you should submit such information
in advance of voting to the Company at its registered offices at Kiryat Hadassah Minrav Building, 5th Floor, Jerusalem 9122002, Israel,
to the attention of Dana Yaacov-Garbeli, our Chief Financial Officer. Alternatively, you may also contact the representative managing
your account, who could then contact us on your behalf.
Q:
Where can I find voting results of the Special Meeting?
A:
We will announce at the Special Meeting the results for the proposals voted upon, and we will publish final
detailed voting results in a Current Report on Form 8-K within four business days following the Special Meeting.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
5
Q:
Where can I find additional copies of this proxy statement?
A:
Copies of this proxy statement are available on our website at https://investors.enterabio.com, under the Investors
– SEC Filings tab, at www.eqproxyportal.com/22270/specialand on the SEC website,
www.sec.gov
.
Q:
Where can I find more information?
A:
Our website is located at www.enterabio.com. We make available, free of charge, on our investors section under
the heading “SEC Filings” our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
any amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with,
or furnish it to, the SEC. Our website address is included in this report only as an inactive textual reference. Information contained
on, or available through, our website is not incorporated by reference in, or made a part of, this report.
SECURITY
OWNERSHIP
The
following table sets forth information known to us with respect to the beneficial ownership of our Ordinary Shares as of October 1, 2026
by:
•
each person or entity known by us to own beneficially
5% or more of our outstanding Ordinary Shares;
•
each of our directors and executive officers individually;
and
•
all of our executive officers and directors as a group.
According
to our transfer agent, as of October 1, 2026, there were 69 record holders of our Ordinary Shares. None of our shareholders has different
voting rights from other shareholders.
The
beneficial ownership of our Ordinary Shares is determined in accordance with the rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership, generally, includes any shares over
which a person exercises sole or shared voting or investment power. For purposes of the table and the related footnotes, unless described
otherwise within the footnotes, we deem Ordinary Shares issuable pursuant to options or warrants that are currently exercisable or exercisable
within 60 days as of October 1, 2026, to be outstanding and to be beneficially owned by the person holding the options or warrants for
the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing
the percentage ownership of any other person, except with respect to the percentage ownership of all executive officers and directors
as a group. The percentage of Ordinary Shares beneficially owned is based on 173,922,428 Ordinary Shares outstanding as of October 1,
2026. The beneficial ownership data provided below is based solely on information available to our Company and, in the case of major shareholders
who are not otherwise officers or directors, has not been verified further. Except where otherwise indicated, we believe, based on information
furnished to us by such owners, that the beneficial owners of the Ordinary Shares listed below have sole investment and voting power with
respect to such shares.
Unless
otherwise noted below, each shareholder’s address is c/o Entera Bio Ltd., Kiryat Hadassah, Minrav Building - Fifth Floor, Jerusalem,
Israel.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
6
Number
and Percentage of
Name
Ordinary
Shares
Number
Percent
5% or Greater Shareholders (other than directors
and executive officers)
Biotechnology Value Fund LP (1)
17,412,893
9.99
%
Vivo Opportunity, LLC (2)
12,254,901
7.05
%
TCG Crossover GP III, LLC (3)
12,254,901
7.05
%
Executive Officers and Directors:
Miranda Toledano (4)
2,910,772
1.65
%
Hillel Galitzer (5)
829,153
*
Sean Ellis (6)
676,191
*
Dana Yaacov-Garbeli (7)
671,827
*
Gregory Burshtein (8)
562,013
*
Yonatan Malca (9)
528,290
*
Haya Taitel (10)
314,878
*
Geno J. Germano (11)
97,275
*
Steven D. Rubin (12)
66,671
*
All Directors and Executive Officers as a Group (9
persons) (13)
6,657,069
3.72
%
*
Less than 1%
(1)
Pursuant to the Schedule
13D filed with the SEC on August 4, 2026 regarding Biotechnology Value Fund, L.P. holdings, the holder owns(i) 17,052,893 Ordinary Shares,
(ii)17,245,484 Ordinary Shares underlying Pre-Funded Warrants and (iii) purchase warrants to acquire 11,741,683 Ordinary Shares. The Pre-Funded
Warrants and purchase warrants include a 9.99% ownership blocker and, as a result, are not fully included in the ownership amount.
BVF
I GP LLC, as general partner of BVF I, may be deemed to beneficially own the shares held by BVF I. BVF II GP LLC, as general partner of
BVF II, may be deemed to beneficially own the shares held by BVF II. BVF GP Holdings LLC, as the sole member of BVF I GP LLC and BVF II
GP LLC, may be deemed to beneficially own the shares beneficially owned by BVF I and BVF II. BVF Partners OS Ltd, as general partner of
BVF Trading, may be deemed to beneficially own the shares beneficially owned by BVF Trading. BVF Partners L.P. (“BVF Partners”),
as the sole member of BVF Partners OS Ltd. and the investment adviser of each of BVF I, BVF II, BVF Trading and MSI, may be deemed to
beneficially own the shares beneficially owned by BVF I, BVF II, BVF Trading and MSI. BVF Inc., as general partner of BVF Partners, and
Mark N. Lampert, as officer and director of BVF Inc., may be deemed to beneficially own the shares beneficially owned by BVF Partners
and has shared voting and dispositive power over such shares. Each of BVF I GP LLC, BVF II GP LLC, BVF GP Holdings LLC, BVF Partners OS
Ltd., BVF Partners, BVF Inc. and Mr. Lampert disclaim beneficial ownership over the shares. he principal business address of the BVF Entities
is 44 Montgomery Street, 40th Floor, San Francisco, CA 94104.
(2)
Pursuant to Schedule 13G
filed with the SEC on August 4, 2026 regarding the securities are held of record by Vivo Opportunity, LLC is the general partner of Vivo
Opportunity Fund Holdings, L.P., Vivo Opportunity Co-Invest, L.P. and Vivo Opportunity Co-Invest (Cycle 3), L.P. Kevin Dai, Gaurav Aggarwal,
Frank Kung and Shan Fu are the managing members of Vivo Opportunity, LLC and may be deemed to share voting, investment and dispositive
power over the shares held by Vivo Opportunity Fund Holdings, L.P., Vivo Opportunity Co-Invest, L.P. and Vivo Opportunity Co-Invest (Cycle
3), L.P. Vivo Opportunity Cayman, LLC is the General Partner of Vivo Opportunity Cayman Fund, L.P. and Kevin Dai, Gaurav Aggarwal, Frank
Kung and Shan Fu are managing members of Vivo Opportunity Cayman, LLC. They may be deemed to share voting, investment and dispositive
power over the shares held by Vivo Opportunity Cayman Fund, L.P. The address of the entities referenced in this footnote is 192 Lytton
Avenue, Palo Alto, CA 94301.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
7
(3)
Pursuant to Schedule 13G
filed with the SEC on August 4, 2026 regarding the securities are held of record by TCG Crossover Fund III, L.P. TCG Crossover GP III,
LLC is the general partner of TCG Crossover Fund III, L.P. and may be deemed to have voting, investment, and dispositive power with respect
to these securities. Chen Yu is the sole managing member of TCG Crossover GP III, LLC and may be deemed to share voting, investment and
dispositive power with respect to these securities. The business address for the foregoing is 245 Lytton Ave., Suite 350, Palo Alto, CA
94301.
(4)
Consists of (i) 531,716
Ordinary Shares, (ii) 23,952 Ordinary Shares underlying warrants to acquire Ordinary Shares, (iii) 105,140 Ordinary Shares underlying
RSUs to acquire Ordinary Shares, and (iv) 2,249,964 Ordinary Shares underlying options to acquire Ordinary Shares.
(5)
Consists of (i) 108,821
Ordinary Shares, (ii) 18,248 Ordinary Shares underlying RSUs to acquire Ordinary Shares and (iii) 702,083 Ordinary Shares underlying options
to acquire Ordinary Shares.
(6)
Consists of (i) 208,132
Ordinary Shares and (ii) 468,059 Ordinary Shares underlying options to acquire Ordinary Shares.
(7)
Consists of (i) 127,646
Ordinary Shares, (ii) 14,599 Ordinary Shares underlying RSUs to acquire Ordinary Shares and (iii) 529,583 Ordinary Shares underlying options
to acquire Ordinary Shares.
(8)
Consists of (i) 123,340
Ordinary Shares, (ii) 21,898 Ordinary Shares underlying RSUs to acquire Ordinary Shares and (iii) 416,775 Ordinary Shares underlying options
to acquire Ordinary Shares.
(9)
Consists of (i) 100,231
Ordinary Shares and (ii) 428,059 Ordinary Shares underlying options to acquire Ordinary Shares.
(10)
Consists of (i) 119,269
Ordinary Shares and (ii) 195,609 Ordinary Shares underlying options to acquire Ordinary Shares.
(11)
Consists of (i) 65,014 Ordinary
Shares and (ii) 32,261 Ordinary Shares underlying options to acquire Ordinary Shares.
(12)
Consists of (i) 34,117 Ordinary
Shares and (ii) 32,554 Ordinary Shares underlying options to acquire Ordinary Shares.
(13)
Consists of (i) 1,418,285
Ordinary Shares, (ii) 23,952 Ordinary Shares underlying warrant to acquire Ordinary Shares, (iii) 159,885 RSUs to acquire
Ordinary
Shares and (iv) 5,054,947 Ordinary Shares underlying options to acquire Ordinary Shares.
SECURITies
authorized for issuance under equity compensation plans
The
following table provides certain information as of December 31, 2025, with respect to our equity compensation plans under which our equity
securities are authorized for issuance:
Plan
Category
Number
of securities to be issued upon exercise of outstanding options, RSUs, warrants and rights
(#)
Weighted-average
exercise price of outstanding options, RSUs,
warrants and rights
($)
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (#)
(a)
(b)
(c)
Equity compensation plans approved
by security holders
2013 Plan
810,550
$
6.31
-
2018 Plan
8,615,707
$
1.95
2,052,375
Equity compensation plans not approved by security
holders
-
-
-
Total
9,426,257
$
2.32
2,052,375
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
8
Executive
Compensation
As
part of its commitment to robust compensation governance, the Compensation Committee conducts an annual review of the Company’s
compensation policy against market benchmarks, including through the engagement of independent external compensation consultants and the
use of comprehensive compensation surveys. This annual review process is designed to ensure that the Company’s compensation framework
remains competitive, appropriately reflects the Company’s stage of development and peer-group positioning, and continues to serve
the Company’s objectives of attracting, retaining and incentivizing highly qualified executives and directors.
As
part of the most recent review cycle, the Compensation Committee reviewed updated external compensation surveys prepared by independent
compensation consultants. The surveys indicated that the Company’s executive and director compensation levels were generally below
market benchmarks. In light of these findings, the Compensation Committee and the Board determined that it would be advisable to amend
the Company’s compensation policy, and the terms of compensation of its non-executive directors, to bring the Company’s compensation
framework in line with competitive market levels for clinical-stage biopharmaceutical companies, thereby positioning the Company to attract
and retain highly qualified management and directors. The amended policy is intended to be effective for the next three years, or such
longer period as permitted under the Israeli Companies Law.
The
Compensation Committee and the Board have approved, and recommend that shareholders approve, the proposed amendments to the Company’s
compensation policy and the terms of compensation of its non-executive directors, as described in further detail under Proposal Six and
Proposal Seven, respectively, of this proxy statement.
Compensation
Policy
Our
compensation policy was last ratified by our shareholders on July 16, 2025, after having been recommended by our Compensation Committee
and approved by our Board. Under the Israeli Companies Law, our compensation policy must be re-approved, amended, or replaced by a new
policy every three years. The compensation policy includes, among other matters prescribed by the Israeli Companies Law, a framework for
establishing the terms of office and employment of the directors and officers and guidelines with respect to the structure of the variable
pay of officers. Although the compensation policy was last approved in 2025, we are presenting to our shareholders a proposal to approve
our Amended Compensation Policy, a form of which is attached to this proxy statement as Appendix B. As described in the “Executive
Compensation” section above, the Compensation Committee’s most recent review of external compensation surveys indicated that
the Company’s compensation levels were generally below market benchmarks, and the Compensation Committee and the Board determined
that certain adjustments to the compensation policy were advisable to align the Company’s compensation framework with competitive
market levels. The amended policy would be effective for the next three years, or such longer period as permitted and in accordance with
the Israeli Companies Law. For further information on the Amended and Restated Compensation Policy, please see Proposal Six of this proxy
statement.
Objectives
Our
compensation policy is intended to align our objectives and work plans with appropriate goals and objectives of our officers and directors,
and to ensure that the overall financial and strategic objectives of the Company and its shareholders are met. We recognize that strong
and effective leadership is fundamental to our continued growth and success. Therefore, our compensation policy recognizes as a primary
objective the need to attract, retain, reward and motivate highly talented officers and directors in competitive labor markets.
Officer
Compensation
With
regard to our executive officers, or “Officers,” (which includes our Named Executive Officers, as defined below) our compensation
policy is designed to provide a mix of compensation to reward Officers for individual and company performance as well as to align their
interests with the interests of shareholders. We have also designed our compensation policy to provide flexibility. It must take into
consideration the fact that the appropriate mix of compensation may vary from period to period and from Officer to Officer. To achieve
our goal of appropriately rewarding our Officers for their efforts, our compensation policy generally includes: (i) short-term incentives,
such as an annual base salary, benefits and perquisites; (ii) short to medium-term incentives, such as an annual bonus based on target
and above-target performance; and (iii) medium to long-term incentives, such as equity-based compensation and retirement benefits.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
9
Base
Salary
Base
salary compensates our Officers for the performance of their standard duties and reflects each Officer’s education, skills, qualifications,
expertise, professional experience and accomplishments, as well as the position, areas and scope of responsibilities of such Officer.
Adjustments to base salary are periodically reviewed by the Compensation Committee and the Board.
Bonuses
Cash
bonuses are generally paid annually and are intended to reward Officers based on the performance of the Company and their individual contributions.
The target bonus amount and the performance measures and targets for each Officer are determined by the Compensation Committee and the
Board at the beginning of each year for which a bonus may be paid. Additionally, the CEO has the power to determine the annual bonus performance
measures and targets for all Officers other than for herself.
The
performance measures and targets for receiving the annual bonus are intended to be measurable and quantifiable and may include, without
limitation: (i) objectives such as capital investment, cash balance relative to equity, obtaining approval from the authorities in the
target markets; and (ii) key performance indicators, determined for each Officer separately, according to the Officer’s position.
In
addition to the annual bonus, the Compensation Committee and the Board may elect to pay each Officer a special bonus, based on non-measurable
criteria (e.g., criteria or milestones not based on quantifiable measures), in recognition of a significant achievement or for completion
of an assignment, such as completion of a major transaction or achieving a major milestone with material impact on our business.
Equity-based
Compensation
Our
compensation policy also includes an equity incentive component designed to retain Officers, align Officers and shareholders’ interests
and incentivize Officers to attain business achievements without taking unreasonable risk, under which the Company may grant Officers
options to purchase shares, share appreciation rights, restricted shares, restricted share units, performance awards or other share-based
awards (collectively referred to as “equity awards”). The equity awards are determined individually by our Compensation Committee
and the Board and awarded from time to time based on, among other elements, each Officer’s (a) contribution to the Company's performance,
(b) ability to influence the Company’s future and performance and (c) the Officer’s skills, qualifications, experience, roles
and personal responsibilities. Additionally, the Compensation Committee and the Board award equity-based compensation based upon the desired
mix of compensation components and the mix of equity awards, as well as the desired competitive levels and dilution or pool limits.
Our
compensation policy currently limits the annual value of equity awards granted to an Officer, measured at the applicable grant date, to
25 times the monthly base salary of such Officer. These options may be granted with terms of not more than 10 years following the grant
date. For option grants and share appreciation rights, the exercise price shall be no less than the fair market value of the underlying
Ordinary Shares on the date of grant and subject to applicable law.
Hedging and Pledging
Pursuant to the terms of our compensation policy and
Insider
Trading Policy
, Officers and directors are prohibited from hedging or pledging their equity awards and any other
Company securities. The no-hedging policy applies to each director and Officer until one year following termination of such director’s
term of office or such Officer’s termination of employment, as applicable. Furthermore, Officers and directors may not pledge or
use their equity awards or any other Company securities held by them as collateral for loans unless otherwise approved by the Compensation
Committee and Board.
Policies and Practices Related to the Grant
of Certain Equity Awards
In response to Item 402(x)(1) of Regulation S-K, during
the fiscal year ended December 31, 2025, we did
not
grant new awards of stock options, stock appreciation rights, or similar option-like instruments within four business days before or one
business day after the release of a Quarterly Report on Form 10-Q, Annual Report on Form 10-K, or Current Report on Form 8-K that discloses
material nonpublic information.
While
the Company does
not
have a formal policy in place, it is the Company's practice to typically award equity grants to executive officers and non-employee directors
at the beginning of each fiscal year, subject to the Company
not
being in possession of any material non-public information.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
10
Benefits and Perquisites
Under the compensation policy, our Officers are entitled
to certain fringe benefits that we believe are commonly provided to similarly situated executives in our industry. These benefits allow
us to compete for talent and are therefore important to our ability to attract and retain top-level executive management. This includes
vacation days, paid sick leave, as well as additional benefits such as, but not limited to, health insurance, a company car and cell phone,
company-provided health insurance and meals.
For Officers residing in Israel, these benefits may
also include contributions to a pension fund, provident fund or insurance policy in accordance with Israeli law, contributions to an education
fund of 7.5% of the Officer’s monthly salary and recuperation pay as required under applicable law. An ‘education fund’
is a medium-term savings scheme that takes advantage of a unique tax break granted under Israeli law, whereby a company’s contributions
to such fund (which, despite its misleading name, may be used by the employee for any purpose), as well as all capital gains accrued on
such contributions, are free of tax if (a) the company contributes an amount equal to 7.5% of the employee’s salary to such fund,
up to a certain limit, and the employee further contributes 2.5% of his salary at his expense, and (b) the fund remains undrawn for a
period of at least six years from the time of the first contribution. While some of these contributions and benefits are not mandatory
under Israeli law, the nature and amount of the benefits provided to our Israeli Officers are customary and prevalent in the Israeli high-tech
and bio-pharma market, especially among executives. Non-Israeli Officers may receive similar, comparable or customary benefits as applicable
in the jurisdiction in which they are employed.
Termination
Our Officers are further entitled to certain termination
payments and benefits. Officers are entitled to an advance notice period, severance payments and retirement and termination awards. The
retirement and termination awards are subject to the Compensation Committee and the Board’s approval, and may be provided only:
(a) in certain change of control related cases; (b) if the Officer has made a special contribution to the advancement of the Company’s
business during his employment period as shall be determined by the Compensation Committee; or (c) in respect of Officers other than the
CEO, if the CEO has recommended granting a retirement bonus.
Director Compensation
The compensation policy provides that non-employee
directors’ compensation packages are determined pursuant to the provisions of the Israeli Companies Law in accordance with the Company’s
objective to attract and retain talented directors with excellent educational background, qualifications, skills, expertise, professional
experience and achievements, by providing a fair and competitive compensation program. Our non-employee directors may be eligible to receive
an annual Board membership fee, annual Committee membership fee and equity-based compensation. Non-employee directors may also be entitled
to receive insurance, indemnification and release arrangements. The chair of the Board and the chairs of the Board committees may also
receive additional annual cash payments for their service in such capacities, subject to the provisions of applicable law.
In May 2021, we elected to be exempt from the Israeli
Companies Law requirement that we appoint external directors or otherwise comply with the Israeli Companies Law requirements related to
the composition of the Audit Committee and Compensation Committee. Our eligibility for that exemption is conditioned upon: (i) the continued
listing of our Ordinary Shares on the Nasdaq Capital Market (or one of a few select other non-Israeli stock exchanges); (ii) there not
being a controlling shareholder of our company under the Israeli Companies Law; and (iii) our compliance with Nasdaq requirements as to
the composition of (a) our Board of Directors, which require that we maintain a majority of independent directors, and (b) the Audit and
Compensation Committees, which require that such committees consist solely of independent directors (at least three and two members, respectively).
At the time that it was determined to exempt our Company from the external director requirement, our Board affirmatively determined that
we met the conditions for exemption from the external director requirement. As of the date hereof, we continue to meet the conditions
for exemption from the external director requirement.
As a result of our election to be exempt from the external
director requirement under the Israeli Companies Law, none of our directors are categorized as external directors; therefore, the requirements
and restrictions relating to external directors (including certain compensation related provisions) do not apply.
Clawback Policy
On
November
30, 2023
, the Board adopted an Executive Officer Clawback Policy (the “Clawback Policy”)
in compliance with Rule 10D-1 under the Exchange Act and the applicable Nasdaq rules. In the event of an accounting restatement, under
the Clawback Policy, the Board, or another committee designated by the Board, is required to recover certain incentive-based compensation
paid to an executive officer of the Company, subject to the terms of the Clawback Policy, to the extent such incentive-based compensation
was in excess of the compensation that would have otherwise been payable based upon the restated financials. The clawback period extends
for three years prior to the restatement. The Clawback Policy is in addition to Section 304 of the Sarbanes-Oxley Act of 2002, which
permits the SEC to order the disgorgement of bonuses and incentive-based compensation earned by a registrant issuer’s chief executive
officer and chief financial officer in the year following the filing of any financial statement that the issuer is required to restate
because of misconduct, and the reimbursement of those funds to the issuer. A copy of the Clawback Policy has been filed as an exhibit
to our 2025 Annual Report.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
11
Summary Compensation Table
The table and summary below outline the compensation
granted to our named executive officers (“Named Executive Officers”) during our fiscal years ended December 31, 2025 and December
31, 2024. As a “smaller reporting company,” we are required to provide executive compensation information for the following
individuals: (i) all individuals who served as the Company’s principal executive officer (“PEO”), during the last completed
fiscal year, regardless of compensation; (ii) the two most highly compensated executive officers (other than the PEO) who were serving
as executive officers of the Company at the end of the last completed fiscal year and whose total compensation was greater than $100,000;
and (iii) up to two additional persons who served as executive officers (other than as the PEO) during the last completed fiscal year
but who were not serving in that capacity at the end of the fiscal year if their total compensation is higher than any of the other two
Named Executive Officers in the preceding group.
The below figures are represented
in thousands.
Name and Principal
Position
Year
Salary ($)
Bonus ($)
Option
Award(s)
($)(1)
RSUs
Award(s)
($)(2)
All Other
Compensation
($)
Total ($)
Miranda
Toledano
2025
490
-
590
330
72
1,482
Chief Executive Officer and director
2024
419
-
538
156
36
1,149
Hillel Galitzer
2025
282
-
176
48
25
531
Chief Operating Officer
2024
259
-
175
54
43
531
Gregory Burshtein
2025
217
-
202
48
37
504
Chief of Research and Development
2024
172
-
92
45
28
337
(1)
Reflects the associated annual expense recorded in our financial statements based on the grant date fair value
of the share-based compensation granted in exchange for the directors’ and officers’ services computed in accordance with
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718,
Compensation
- Stock Compensation
(“ASC Topic 718”). The assumptions used in calculating the amounts are discussed in Note 6 to
the Company’s audited financial statements for the year ended December 31, 2025 included in our 2025 Annual Report. The fair value
amount is recognized as an expense over the course of the vesting period of the options (subject to any applicable accounting adjustments
during that period).
(2)
Reflects the associated annual expenses for RSUs granted in place of annual bonus in cash recorded in our financial
statements based on the fair value of the share-based compensation grant date market computed in accordance with ASC Topic 718. The fair
value amount is recognized as an expense over the course of the vesting period of the RSUs in the Company’s audited financial statements
for the year ended December 31, 2025 included in our 2025 Annual Report.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
12
Outstanding Equity Awards at Fiscal Year End
The following table sets forth the outstanding equity
awards at December 31, 2025 for our Named Executive Officers.
Number of Securities Underlying
Unexercised Options and
Unvested
RSUs
Option
Expiration
Name
Exercisable
Unexercisable
Date
Miranda Toledano
33,638
-
1/17/2029
Chief Executive Officer and director
35,852
-
1/1/2032
107,557
-
1/1/2032
437,500
62,500
(1)
05/16/2032
487,500
112,500
(2)
07/15/2032
218,750
131,250
(3)
04/24/2033
250,000
250,000
(4)
04/19/2034
-
500,000
(5)
04/28/2035
-
90,351
(6)
N/A
Gregory Burshtein
20,000
-
01/17/2029
Chief of Research and Development
18,900
-
03/16/2030
51,000
-
04/07/2031
39,375
5,625
(7)
04/28/2032
40,625
24,375
(8)
04/24/2033
75,000
75,000
(9)
04/19/2034
200,000
(10)
04/28/2035
-
13,158
(11)
N/A
Hillel Galitzer
175,000
-
03/16/2030
Chief Operating Officer
125,000
-
04/21/2031
56,250
3,750
(12)
03/24/2032
131,250
78,750
(13)
04/24/2033
65,000
65,000
(14)
04/19/2034
100,000
(15)
04/28/2035
13,158
(16)
N/A
(1)
The 62,500 unexercisable options as of December 31, 2025 will vest in two equal quarterly installments beginning
on February 16, 2026.
(2)
The 112,500 unexercisable options as of December 31, 2025 will vest in three equal quarterly installments beginning
on January 15, 2026.
(3)
The 131,250 unexercisable options as of December 31, 2025 will vest in six equal quarterly installments beginning
on January 24, 2026.
(4)
The 250,000 unexercisable options as of December 31, 2025 will vest in six equal quarterly installments beginning
on January 19, 2026.
(5)
Of the 500,000 unexercisable options as of December 31, 2025, 33.33% vest on April 28, 2026, the first anniversary
of the grant date, and the remaining 66.67% vesting in 8 equal quarterly installments over the following two years.
(6)
The 90,351 unvested RSUs as of December 31, 2025 will vest in two equal quarterly installments beginning on
January 28, 2026.
(7)
The 5,625 unexercisable options as of December 31, 2025 will vest in two equal quarterly installments beginning
on January 28, 2026.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
13
(8)
The 24,375 unexercisable options as of December 31, 2025 will vest in six equal quarterly installments beginning
on January 24, 2026.
(9)
The 75,000 unexercisable options as of December 31, 2025 will vest in six equal quarterly installments beginning
on January 19, 2026.
(10)
Of the 200,000 unexercisable options as of December 31, 2025, 33.33% vest on April 28, 2026, the first anniversary
of the grant date, and the remaining 66.67% vesting in 8 equal quarterly installments over the following two years.
(11)
The 13,158 unvested RSUs as of December 31, 2025 will vest in two equal quarterly installments beginning on
January 28, 2026.
(12)
The 3,750 unexercisable options as of December 31, 2025 will vest in one installments on March 31, 2026.
(13)
The 78,750 unexercisable options as of December 31, 2025 will vest in six equal quarterly installments beginning
on March 31, 2026.
(14)
The 65,000 unexercisable options as of December 31, 2025 will vest in six equal quarterly installments beginning
January 19, 2026.
(15)
Of the 100,000 unexercisable options as of December 31, 2024, 33.33% vest on April 28, 2026, the first anniversary
of the grant date, and the remaining 66.67% vesting in 8 equal quarterly installments over the following two years.
(16)
The 13,158 unvested RSUs as of December 31, 2025 will vest in two equal quarterly installments beginning on
January 28, 2026.
Director Compensation Table
Under the Israeli Companies Law, our directors can
be paid for their services as directors to the extent such payments are in accordance with the compensation policy adopted by the Company
after approval by the Compensation Committee, our Board and our shareholders by ordinary majority, or, if their compensation deviates
from our compensation policy, after approval by the Compensation Committee, our Board and our shareholders by a Special Majority, to the
extent applicable, in accordance with the provisions of the Israeli Companies Law.
The table below outlines compensation earned by our
non-employee directors for the fiscal year ended December 31, 2025, including fees earned in cash and options awarded for services provided
as a director. To help the Company maintain sufficient cash for operations, the Company’s shareholders approved a revised compensation
structure for non-executive directors, which was implemented to enhance the Company’s financial flexibility and align directors’
interests with those of shareholders. This revised structure involves granting fully vested Ordinary Shares quarterly instead of quarterly
cash payments, effective retroactively as of January 1, 2024. Under this arrangement, each non-executive director receives a quarterly
grant of fully vested Ordinary Shares. Such quarterly grants for the fiscal year ended December 31, 2025 were granted in a single aggregate
grant on January 1, 2026. The value of these shares is equivalent to their respective cash compensation for board and committee services,
calculated based on the average daily closing share price of the Ordinary Shares during the applicable fiscal quarter. Directors who serve
only part of a quarter receive a pro rata portion of the shares. At the annual meeting of shareholders held on July 14, 2026, shareholders
approved amendments to the annual option grant framework for non-executive directors, originally approved at the October 4, 2021 annual
meeting. The Compensation Committee and Board approved the amendments on April 30, 2026 and May 7, 2026, respectively. The amendments
provide that: (i) effective January 1, 2027, annual option grants will be made on the date of the annual general meeting (or such other
date as the Board determines) rather than January 1, with each grant covering the twelve-month period beginning January 1 of that year
and vesting from January 1 regardless of grant date; and (ii) any annual option grant made after the 2026 annual meeting will fully accelerate
upon a Change in Control (as defined in the 2018 Plan). Directors joining the Board after the annual meeting receive a pro rata option
grant for the remainder of the calendar year, calculated based on days served as a fraction of 365, granted on or promptly following appointment,
vesting from the appointment date, and also subject to full acceleration upon a Change in Control. All other terms of the annual option
grant remain unchanged, and the quarterly share grant program approved on July 31, 2024 was not amended.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
14
On August 5, 2026, the Board resolved to reinstate
cash compensation for non-executive directors effective July 1, 2026, following the material improvement in the Company’s cash position
resulting from the Private Placement.
Name
Fees
Earned
or Paid
in Cash
($)
Option
Awards
($)(1)
Equity
Awards
($)(2)
All Other
Compensation
($)
Total
($)
Gerald Lieberman (3)
-
45,264
74,290
-
119,554
Yonatan Malca
-
45,264
58,505
-
103,768
Gerald M. Ostrov (3)
-
45,264
55,719
-
100,982
Sean Ellis
-
45,264
49,220
-
94,483
Haya Taitel
-
47,580
51,078
-
98,658
(1)
Reflects the associated annual expense recorded in our financial statements based on the grant date fair value
of the share-based compensation granted in exchange for the directors’ and officers’ services computed in accordance with
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation
– Stock Compensation (“ASC Topic 718”). The assumptions used in calculating the amounts are discussed in Note 6 of the
Company’s audited financial statements for the year ended December 31, 2025 included in our 2025 Annual Report. The fair value amount
is recognized as an expense over the course of the vesting period of the options (subject to any applicable accounting adjustments during
that period).
(2)
Reflects the associated annual expenses for Ordinary Shares granted in January 2026 in lieu of cash fees earned
for services rendered during 2025, based on the grant date market value.
(3)
Former board member that resigned as a director of the Company in February 2026.
The table below sets forth the aggregate number of
options to purchase Ordinary Shares of each non-employee director outstanding as of December 31, 2025:
Name
Share Options
Gerald Lieberman
402,930
Yonatan Malca
402,930
Gerald M. Ostrov
402,930
Sean Ellis
402,930
Haya Taitel
170,480
Employment Agreements
We have entered into employment agreements with our
Named Executive Officers. A summary of the material terms of these agreements with each of our Named Executive Officers is set forth below.
The below descriptions of employment agreements and separation agreements, as applicable, are only summaries and are qualified in their
entirety by reference to the full text of the applicable agreement, which are filed as exhibits to our 2025 Annual Report.
Miranda
Toledano
Ms. Toledano has served on the Board of Directors at
Entera since September 2018. Between May and July 2022, Ms. Toledano served as Chief Business Officer, Chief Financial Officer and Head
of Corporate Strategy at Entera. In July 2022, Ms. Toledano was appointed Chief Executive Officer at Entera.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
15
In connection with Ms. Toledano’s appointment as
Chief
Business Officer, Chief Financial Officer and Head of Corporate Strategy in May 2022, Ms. Toledano entered into an employment agreement
(the “Original Employment Agreement”) with the Company, providing for an annual employer cost of $350,000 inclusive of base
salary, pension payments, severance and disability benefits as required under Israeli law. Additionally, Ms. Toledano was entitled to
a grant of options pursuant to the 2018 Plan to purchase 500,000 Ordinary Shares of the Company’s Ordinary Shares at an exercise
price of $2.02 per share, the closing price of the Ordinary Shares on the date the option was approved by the Board. The options vest
over four years, with 25% of the options vesting on May 16, 2023 and the remaining 75% vesting in quarterly increments over the remaining
three-year period, subject to Ms. Toledano’s continued employment. In addition, Ms. Toledano was eligible to receive an annual bonus
in an amount equal to 50% of her annual base salary. Under the Original Employment Agreement, Ms. Toledano also agreed to customary non-disclosure
and non-competition covenants.
In connection with Ms. Toledano’s appointment
Chief Executive Officer, on July 15, 2022, Ms. Toledano and the Company entered into an amended and restated employment agreement (the
“A&R Employment Agreement”), which amends and restates the Original Employment Agreement. The material terms of the Original
Employment Agreement remain unchanged, except that the A&R Employment Agreement provides for (i) Ms. Toledano’s service as Chief
Executive Officer, (ii) an annual employer cost of $380,000 inclusive of base salary, pension payments, severance and disability benefits
as required under Israeli law, (iii) eligibility to receive an annual bonus in an amount equal to 60% of Ms. Toledano’s annual base
salary, (iv) a one-time separation payment in the total amount of 12 months of salary and an extension of the exercise period with respect
to vested options for a period of up to two-years post-termination, in each case in the event of the termination of Ms. Toledano’s
employment by the Company for any reason other than for Cause (as defined in the A&R Employment Agreement), (v) an additional grant
of options (the “Options”) pursuant to the 2018 Plan to purchase 600,000 Ordinary Shares at an exercise price of $1.40, which
was the closing price of the Ordinary Shares on the date the Board approved such option grant and (vi), upon the Company’s achievement
of certain performance or financial milestones, a grant of options (the “Additional Options”) to purchase an additional 200,000
Ordinary Shares pursuant to the 2018 Plan at an exercise price equal to the closing price of the Ordinary Shares on the date the Board
approves such option grant. The Options will vest over four years, with 25% of the Options vesting on July 15, 2023 and the remaining
75% vesting in quarterly increments over the remaining three-year period, subject to Ms. Toledano’s continued employment. The Additional
Options will vest over four years, with 25% of the Additional Options vesting on the first anniversary of the grant date and the remaining
75% vesting in quarterly increments over the remaining three-year period, subject to Ms. Toledano’s continued employment.
On April 24, 2023, the Compensation Committee and the
Board voted to approve, and on September 13, 2023, the shareholders of the Company ratified and confirmed, (i) a salary increase for Ms.
Toledano, according to which her annual employer cost would be increased to $480,000, and (ii) a one-time grant of options to purchase
350,000 Ordinary Shares, at an option exercise price of $0.795 per Ordinary Share, under the 2018 Plan, both of which were deemed by the
Board to be inside the respective ranges set in the Company’s compensation policy. For the sake of good corporate governance, the
Company and Ms. Toledano executed an amendment to Ms. Toledano’s employment agreement in January 2024, under the terms of which
the salary increase became effective on January 1, 2024.
On April 14, 2024 and April 19, 2024, the Compensation
Committee and the Board, respectively, voted to approve, and on July 31, 2024, the shareholders of the Company ratified and confirmed,
the following one-time grants of compensation for Ms. Toledano: (i) a one-time grant of options to purchase 500,000 Ordinary Shares (the
"2024 Options"), at an exercise price of $1.99 per Ordinary Share, under the 2018 Plan, and subject to the requirements of applicable
laws and regulations. The 2024 Options vest over a three (3) year period, with a third of the 2024 Options vesting at the end of a 12-month
period following April 19, 2024, and the remaining two-thirds of the 2024 Options vesting in eight substantially equal portions over the
next two (2) year period thereafter, on a quarterly basis, subject to Ms. Toledano's continued employment (i.e., such that one hundred
percent (100%) of the 2024 Options shall become fully vested on April 19, 2027); and (ii) a one-time grant of 124,121 RSUs in lieu of
cash bonus (the "2024 RSUs") under the 2018 Plan, and subject to the requirements of applicable laws and regulations. The 2024 RSUs vest
over a one (1) year period, with 100% of the 2024 RSUs vesting in four substantially equal portions over the 12 month period following
April 19, 2024, on a quarterly basis (i.e., such that one hundred percent (100%) of the 2024 RSUs shall become fully vested on April 19,
2025). In the event of a Change in Control (as defined in the 2018 Plan) in which Ms. Toledano continues to provide services to the Company
on the date of consummation of such Change in Control, 100% of any unvested 2024 Options and 2024 RSUs at the time of the consummation
of such Change in Control shall become fully vested (and, in the case of options, exercisable).
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
16
On April 23, 2025 and April 28, 2025, the Compensation
Committee and the Board, respectively, voted to approve, and on July 16, 2025, the shareholders of the Company ratified and confirmed
for Ms. Toledano: (i) a salary increase for Ms. Toledano, according to which her annual salary would be increased to $600,000 to be paid
in cash or RSU, as of April 1, 2025. With respect to the 12-month period beginning April 1, 2025, in order to preserve Company cash, Ms.
Toledano is entitled to receive a one-time grant of 43,860 RSUs in place of $100,000 of her Updated Salary in lieu of cash payment for
such one (1) year period (the “2025 Salary RSUs”), under the 2018 Plan and subject to the requirements of applicable laws
and regulations. The 2025 Salary RSUs shall vest over a one (1) year period, with 100% of the 2025 Salary RSUs vesting in four substantially
equal portions over the 12 month period and (ii) a one-time grant of options to purchase an additional 500,000 Ordinary Shares (the “2025
Options”), at an exercise price of $2.28 per Ordinary Share, under the 2018 Plan, and subject to the requirements of applicable
laws and regulations, (iii) a one-time grant of 136,842 RSUs in lieu of cash bonus for 2024 (the “2025 Bonus RSUs”) under
the 2018 Plan, subject to the requirements of applicable laws and regulations. The 2025 Bonus RSUs shall vest over a one (1) year period,
with 100% of the 2025 RSUs vesting in four substantially equal portions over the 12 month period following April 28, 2025, on a quarterly
basis, rounded down to the nearest whole share, provided, that with respect to the last such quarterly installment, the number of 2025
RSUs that vest in the installment shall be such that Ms. Toledano will be fully vested in the total number of 2025 RSUs listed above as
of such applicable quarterly anniversary (i.e., such that one hundred percent (100%) of the 2025 RSUs shall become fully vested on April
28, 2026. In addition, in the event of a Change in Control (as defined in the 2018 Plan) in which Ms. Toledano continues to provide services
to the Company on the date of consummation of such Change in Control, 100% of any unvested 2025 Options, 2025 Bonus RSUs and 2025 Salary
RSUs at the time of the consummation of such Change in Control shall become fully vested (and, in the case of options, exercisable).
On April 30, 2026 and May 7, 2026, the Compensation
Committee and the Board, respectively, voted to approve, and on July 14, 2026, the shareholders of the Company ratified and confirmed
for Ms. Toledano: (i) a one-time grant of 347,567 RSUs in lieu of cash bonus for 2025 (the “2026 Bonus RSUs”) under the 2018
Plan, subject to the requirements of applicable laws and regulations. The 2026 Bonus RSUs shall vest over a one (1) year period, with
100% of the 2026 RSUs vesting in four substantially equal portions over the 12 month period following May 1, 2026, on a quarterly basis,
rounded down to the nearest whole share, provided, that with respect to the last such quarterly installment, the number of 2026 RSUs that
vest in the installment shall be such that Ms. Toledano will be fully vested in the total number of 2026 RSUs listed above as of such
applicable quarterly anniversary (i.e., such that one hundred percent (100%) of the 2026 RSUs shall become fully vested on May 1, 2027.
(ii) a one-time grant of options to purchase an additional 500,000 Ordinary Shares (the “2026 Options”), at an exercise price
of 1.37 per Ordinary Share, under the 2018 Plan, and subject to the requirements of applicable laws and regulations, (iii) With respect
to the 12-month period beginning May 1, 2026, in order to preserve cash, Ms. Toledano will be entitled to receive a one-time grant of
72,993 RSUs under the 2018 Plan in lieu of $100,000 of her salary otherwise payable in cash during such period (the “2026 Salary
RSUs”), subject to the requirements of applicable laws and regulations. The 2026 Salary RSUs shall vest as follows: provided that
Ms. Toledano has not undergone a Termination of Service (as defined in the 2018 Plan) prior to the applicable vesting date, the 2026 Salary
RSUs shall vest on a quarterly basis in four substantially equal portions over the 12 month period beginning on May 1, 2026, rounded down
to the nearest whole share, provided, that with respect to the last such quarterly installment, the number of 2026 Salary RSUs that vest
in the installment shall be such that Ms. Toledano will be fully vested in the total number of 2026 Salary RSUs listed above as of such
applicable quarterly anniversary (i.e., such that one hundred percent (100%) of the 2026 Salary RSUs shall become fully vested on May
1, 2027). In addition, in the event of a Change in Control (as defined in the 2018 Plan) in which Ms. Toledano continues to provide services
to the Company on the date of consummation of such Change in Control, 100% of any unvested 2026 Options, 2026 Bonus RSUs and 2026 Salary
RSUs at the time of the consummation of such Change in Control shall become fully vested (and, in the case of options, exercisable).
On August 5, 2026, the Board determined that the Triggering
Event (being the raising of sufficient funding to complete the Company’s Phase III FDA trial) was satisfied in full upon completion
of the Private Placement, and accordingly confirmed that Ms. Toledano’s grant eligibility conditions had been satisfied and that
she would receive the grant of options to purchase 200,000 Ordinary Shares (the “Triggering Event Options”) at an exercise
price of $2.81 per Ordinary Share, under the 2018 Plan, as this grant was previously approved by the shareholders. The Triggering Event
Options vest over four (4) years, with 25% vesting on the first anniversary of the vesting commencement date of August 5, 2026 and the
remaining 75% vesting in equal quarterly increments over the remaining three-year period, so long as Ms. Toledano remains employed by
the Company on a full-time basis in accordance with the terms of her employment agreement. The expiration date of the Triggering Event
Options is ten (10) years from the date of grant, or such earlier date in accordance with the 2018 Plan or the Company’s option
agreement.
Hillel Galitzer
In March 2014, we entered into an employment agreement
with our Chief Operating Officer, Mr. Hillel Galitzer. Pursuant to the terms of his employment, and within the discretion granted to the
Board, Mr. Galitzer was entitled to an annual gross base salary of $230,725 for both 2022 and 2023, which represents an increase in base
salary from the original terms of the employment agreement approved by the Board. In April 2023, the Compensation Committee and the Board
voted to approve a one-time grant of options to Mr. Galitzer to purchase 210,000 Ordinary Shares (the “Galitzer 2023 Options”),
at an exercise price of $0.795 per Ordinary Share, under the 2018 Plan, and subject to the requirements of applicable laws and regulations,
which was deemed by the Board to be inside the respective ranges set in the Company’s compensation policy. The Galitzer 2023 Options
vest over a four (4) year period, with 25% of the Galitzer 2023 Options vesting on April 24, 2024, and the remaining 75% vesting in twelve
equal quarterly installments over the remaining three-year period, subject to Mr. Galitzer’s continued employment (i.e., such that
one hundred percent (100%) of the Galitzer 2023 Options shall become fully vested on April 24, 2027).
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
17
On April 19, 2024 the Board, approved the following
compensation terms for Mr. Galitzer: (i) an increase to Mr. Galitzer’s annual salary to $246,000 (ii) a one-time grant of options
to purchase 130,000 Ordinary Shares (the “Galitzer 2024 Options”), at an exercise price of $1.99 per Ordinary Share, under
the 2018 Plan, and subject to the requirements of applicable laws and regulations. The Galitzer 2024 Options vest over a three (3) year
period, with a third of the Galitzer 2024 Options vesting at the end of a 12-month period following April 19, 2024, and the remaining
two-thirds of the Galitzer 2024 Options vesting in eight substantially equal portions over the next two (2) year period thereafter, on
a quarterly basis, subject to Mr. Galitzer’s continued employment (i.e., such that one hundred percent (100%) of the Galitzer 2024
Options shall become fully vested on April 19, 2027); and (iii) a one-time grant of 30,151 RSUs in lieu of cash bonus for 2023 (the “Galitzer
2024 Bonus RSUs”) under the 2018 Plan, and subject to the requirements of applicable laws and regulations. The Galitzer 2024 Bonus
RSUs vest over a one (1) year period, with 100% of the Galitzer 2024 Bonus RSUs vesting in four substantially equal portions over the
12-month period following April 19, 2024, on a quarterly basis (i.e., such that one hundred percent (100%) of the Galitzer 2024 Bonus
RSUs shall become fully vested on April 19, 2025). In addition, in the event of a Change in Control (as defined in the 2018 Plan) in which
Mr. Galitzer continues to provide services to the Company on the date of consummation of such Change in Control, 100% of any unvested
Galitzer 2024 Options and Galitzer 2024 Bonus RSUs at the time of the consummation of such Change in Control shall become fully vested
(and, in the case of options, exercisable).
Effective April 1, 2025, the Board approved an additional
increase to Mr. Galitzer’s annual salary, increasing his annual gross base salary to $254,000. In April 2025, the Board voted to
approve the following one-time grants of compensation for Mr. Galitzer: (i) a one-time grant of options to purchase 100,000 Ordinary Shares
(the “Galitzer 2025 Options”), at an exercise price of $2.28 per Ordinary Share, under the 2018 Plan, and subject to the requirements
of applicable laws and regulations. The Galitzer 2025 Options vest over a three (3) year period, with a third of the Galitzer 2025 Options
vesting at the end of a 12-month period following April 28, 2025, and the remaining two-thirds of the Galitzer 2025 Options vesting in
eight substantially equal portions over the next two (2) year period thereafter, on a quarterly basis, subject to Mr. Galitzer’s
continued employment (i.e., such that one hundred percent (100%) of the Galitzer 2025 Options shall become fully vested on April 28, 2028);
and (ii) a one-time grant of 26,316 RSUs in lieu of cash bonus for 2024 (the “Galitzer 2025 Bonus RSUs”) under the 2018 Plan,
and subject to the requirements of applicable laws and regulations. The Galitzer 2025 Bonus RSUs vest over a one (1) year period, with
100% of the Galitzer 2025 Bonus RSUs vesting in four substantially equal portions over the 12- month period following April 28, 2025,
on a quarterly basis (i.e., such that one hundred percent (100%) of the Galitzer 2025 Bonus RSUs shall become fully vested on April 28,
2026). In addition, in the event of a Change in Control (as defined in the 2018 Plan) in which Mr. Galitzer continues to provide services
to the Company on the date of consummation of such Change in Control, 100% of any unvested Galitzer 2025 Options and Galitzer 2025 Bonus
RSUs at the time of the consummation of such Change in Control shall become fully vested (and, in the case of options, exercisable).
On April 30, 2026 and May 7, 2026, the Compensation
Committee and the Board, respectively, approved the following revised compensation terms for Mr. Galitzer, which were deemed by the Board
to be inside the respective ranges set in the Company's compensation policy: (i) an increase to Mr. Galitzer’s annual salary, effective
May 1, 2026, to an annual gross base salary of 961,796 NIS (approximately $330,855 as of May 7, 2026), (ii) a one-time grant of options
to purchase 200,000 Ordinary Shares (the “Galitzer 2026 Options”), at an exercise price of $1.37 per Ordinary Share, under
the 2018 Plan, subject to the requirements of applicable laws and regulations, (iii) a one-time grant of 72,933 RSUs in lieu of cash bonus
for 2025 (the "Galitzer 2026 Bonus RSUs") under the 2018 Plan, subject to the requirements of applicable laws and regulations. The Galitzer
2026 Bonus RSUs shall vest over a one (1) year period, with 100% of the Galitzer 2026 Bonus RSUs vesting in four substantially equal portions
over the 12 month period following the grant date, on a quarterly basis, rounded down to the nearest whole share, provided, that with
respect to the last such quarterly installment, the number of Galitzer 2026 Bonus RSUs that vest in the installment shall be such that
Mr. Galitzer will be fully vested in the total number of Galitzer 2026 Bonus RSUs listed above as of such applicable quarterly anniversary.
In addition, in the event of a Change in Control (as defined in the 2018 Plan) in which Mr. Galitzer continues to provide services to
the Company on the date of consummation of such Change in Control, 100% of any unvested Galitzer 2026 Options and Galitzer 2026 Bonus
RSUs at the time of the consummation of such Change in Control shall become fully vested (and, in the case of options, exercisable).
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
18
Additionally, pursuant to the terms of his employment
agreement, Mr. Galitzer is eligible to participate in the Company’s standard full-time employment benefits that are offered by the
Company from time to time, which currently include short-term disability and pension fund benefits. Mr. Galitzer is also generally entitled
to reimbursement for travel and other business expenses and other benefits, including vacation, holidays, company car and sick leave.
Subject to applicable law, Mr. Galitzer is also covered by our D&O insurance policy. Pursuant to the terms of his employment agreement,
Mr. Galitzer is eligible to receive equity awards under the Company’s existing and future incentive plans, on such amount and terms
as shall be approved by the Board. Pursuant to the terms of his employment agreement, Mr. Galitzer also agreed to customary non-disclosure
and non-competition covenants.
Gregory Burshtein
Mr. Burshtein currently serves as the Company's Chief
of Research and Development. Pursuant to the terms of his employment, and within the discretion granted to the Board, Mr. Burshtein was
entitled to an annual gross base salary of $157,000 for 2024, increasing to $200,000 effective as of April 1, 2025. In April 2023, the
Board approved a one-time grant of 65,000 options to purchase Ordinary Shares (the “Gregory’s 2023 Options”), at an
exercise price of $0.795 per Ordinary Share, under the 2018 Plan, and subject to the requirements of applicable laws and regulations.
Gregory’s 2023 Options shall vest over a four (4) year period, with 25% of Gregory’s 2023 Options vesting on April 24, 2024,
and the remaining 75% vesting in twelve equal quarterly installments over the remaining three-year period, subject to Mr. Burshtein's
continued employment (i.e., such that one hundred percent (100%) of Gregory’s 2023 Options shall become fully vested on April 24,
2027). On April, 2024, the Board voted to approve the following one-time grants of compensation for Mr. Burshtein, which were deemed by
the Board to be inside the respective ranges set in the Company’s compensation policy: (i) a one-time grant of options to purchase
150,000 Ordinary Shares (the “Gregory’s 2024 Options”), at an exercise price of $1.99 per Ordinary Share, under the
2018 Plan, and subject to the requirements of applicable laws and regulations. Gregory’s 2024 Options vest over a three (3) year
period, with a third of Gregory’s 2024 Options vesting at the end of a 12-month period following April 19, 2024, and the remaining
two-thirds of Gregory’s 2024 Options vesting in eight substantially equal portions over the next two (2) year period thereafter,
on a quarterly basis, subject to Mr. Burshtein’s continued employment (i.e., such that one hundred percent (100%) of Gregory’s
2024 Options shall become fully vested on April 19, 2027); and (ii) a one-time grant of 25,126 RSUs in lieu of cash bonus for 2023 (the
“Gregory’s 2024 RSUs”) under the 2018 Plan, and subject to the requirements of applicable laws and regulations. Gregory’s
2024 RSUs vest over a one (1) year period, with 100% of Gregory’s 2024 RSUs vesting in four substantially equal portions over the
12 month period following April 19, 2024, on a quarterly basis (i.e., such that one hundred percent (100%) of Gregory’s 2024 RSUs
shall become fully vested on April 19, 2025). Additionally, pursuant to the terms of his employment agreement, Mr. Burshtein is eligible
to participate in the Company's standard full-time employment benefits that are offered by the Company from time to time, which currently
include pension fund benefits. Mr. Burshtein is also generally entitled to reimbursement for travel and other business expenses and other
benefits, including, vacation, holidays, travel expenses and sick leave. Subject to applicable law, Mr. Burshtein is also covered by our
D&O insurance policy. Pursuant to the terms of his employment agreement, Mr. Burshtein also agreed to customary non-disclosure and
non-competition covenants.
On April 28, 2025, the Board voted to approve revised
compensation terms and a one-time grant of compensation for Mr. Burshtein, including (i) options to purchase 200,000 Ordinary Shares (the
“Gregory's 2025 Options”), at an exercise price of $2.28 per Ordinary Share, under the 2018 Plan, and (ii) a one-time grant
of 26,316 RSUs in lieu of a cash bonus for 2024 (the “Gregory's 2025 RSUs”) under the 2018 Plan. Gregory's 2025 Options shall
vest over a three (3) year period, with a third of the Gregory's 2025 Options vesting at the end of a 12-month period following April
28, 2025, and the remaining two-thirds of Gregory's 2025 Options shall vest in eight substantially equal portions over the next two (2)
year period thereafter, on a quarterly basis, rounded down to the nearest whole share, provided, that with respect to the last such quarterly
installment, the number of Gregory's 2025 Options that vest in the installment shall be such that Mr. Burshtein will be fully vested in
the total number of Gregory's 2025 Options listed above as of such applicable quarterly anniversary (i.e., such that one hundred percent
(100%) of Gregory's 2025 Options shall become fully vested on April 28, 2028). Gregory's 2025 RSUs shall vest over a one (1) year period,
with 100% of Gregory's 2025 RSUs vesting in four substantially equal portions over the 12 month period following April 28, 2025, on a
quarterly basis, rounded down to the nearest whole share, provided, that with respect to the last such quarterly installment, the number
of Gregory's 2025 RSUs that vest in the installment shall be such that Mr. Burshtein will be fully vested in the total number of Gregory's
2025 RSUs listed above as of such applicable quarterly anniversary (i.e., such that one hundred percent (100%) of Gregory's 2025 RSUs
shall become fully vested on April 28, 2026).
On April 30, 2026 and May 7, 2026, the Compensation
Committee and the Board, respectively, approved the following revised compensation terms for Mr. Burshtein, which were deemed by the Board
to be inside the respective ranges set in the Company's compensation policy: (i) an increase to Mr. Burshtein's annual gross base salary
to 756,000 NIS (approximately $260,062 equal as of May 7, 2026); (ii) a one-time grant of options to purchase 180,000 Ordinary Shares
(the “Burshtein 2026 Options”), at an exercise price of $1.37 per Ordinary Share, under the 2018 Plan, subject to the requirements
of applicable laws and regulations; and (iii) a one-time grant of 87,591 RSUs in lieu of cash bonus for 2025 (the “Burshtein 2026
Bonus RSUs”) under the 2018 Plan, subject to the requirements of applicable laws and regulations. The Burshtein 2026 Bonus RSUs
shall vest over a one (1) year period, with 100% of the Burshtein 2026 Bonus RSUs vesting in four substantially equal portions over the
12 month period following the grant date, on a quarterly basis, rounded down to the nearest whole share, provided, that with respect to
the last such quarterly installment, the number of Burshtein 2026 Bonus RSUs that vest in the installment shall be such that Mr. Burshtein
will be fully vested in the total number of Burshtein 2026 Bonus RSUs listed above as of such applicable quarterly anniversary. In addition,
in the event of a Change in Control (as defined in the 2018 Plan) in which Mr. Burshtein continues to provide services to the Company
on the date of consummation of such Change in Control, 100% of any unvested Burshtein 2026 Options and Burshtein 2026 Bonus RSUs at the
time of the consummation of such Change in Control shall become fully vested (and, in the case of options, exercisable).
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
19
Employee Equity Incentive Plans
2013 Share Incentive Plan
On March 17, 2013, our Board approved our 2013 Plan
for the granting of stock options, restricted share units, restricted share awards and performance-based awards, in order to provide incentives
to our employees, directors, consultants and/or service providers. As of December 31, 2025, 810,550 Ordinary Shares were issuable upon
the exercise of outstanding awards under the 2013 Plan, at a weighted-average exercise price of $6.31 per share. As of December 31, 2025,
all of the foregoing outstanding options had vested under the 2013 Plan. The 2013 Plan is administered by our Board or by a committee
appointed by our Board. Upon the completion of our initial public offering, the remaining pool of reserved Ordinary Shares under the 2013
Plan was cancelled, and the only reserved Ordinary Shares available for grants to our employees, directors, consultants and service providers
in the future are those under the 2018 Plan (which is described below).
2018 Equity Incentive Plan
On July 2, 2018, in connection with the consummation
of our initial public offering, our Board approved our 2018 Plan, with the purpose of advancing the interests of our shareholders by enhancing
our ability to attract, retain and motivate individuals to perform at the highest level. The 2018 Plan governs issuances of equity incentive
awards from and after the closing of our initial public offering. The maximum number of Ordinary Shares initially available for issuance
under equity incentive awards granted pursuant to the 2018 Plan could not exceed 12% of the total outstanding Ordinary Shares as of the
time of adoption. On January 1, 2019 and on January 1 of each calendar year thereafter, an additional number of shares equal to 5% of
the total outstanding Ordinary Shares on such date (or any lower number of shares as determined by our Board) have and will become available
for issuance under the 2018 Plan. In our shareholders meeting held September 7, 2022, our shareholders approved an amendment to the 2018
Plan to increase the number of Ordinary Shares issuable under the 2018 Plan by a one-time additional amount of 576,188 Ordinary Shares.
In our shareholders meeting held July 31, 2024, our shareholders approved an amendment to the 2018 Plan to increase the number of Ordinary
Shares issuable under the 2018 Plan by a one-time additional amount of 1,788,515 Ordinary Shares. On January 1, 2025, pursuant to the
annual evergreen provision and following the approval of our Board, an additional 1,941,859 Ordinary Shares, equal to 5% of the total
outstanding shares as of January 1, 2025, became available for issuance under the 2018 Plan. As of December 31, 2025, a total of 2,052,375
Ordinary Shares representing 4.4% of the total outstanding shares remained available for issuance under the 2018 Plan. On January 1, 2026,
pursuant to the annual evergreen provision and following the approval of our Board, an additional 2,308,931 Ordinary Shares, equal to
5% of the total outstanding shares as of January 1, 2026, became available for issuance under the 2018 Plan. At our annual meeting of
shareholders held on July 14, 2026, our shareholders approved a further amendment to the 2018 Plan to increase the number of Ordinary
Shares issuable thereunder by a one-time additional amount of 2,500,000 Ordinary Shares.
Equity incentive awards may be granted to our employees,
non-employee directors, consultants or other advisors, as well as holders of equity compensation awards granted by a company that may
be acquired by us in the future. Awards under the 2018 Plan may be granted in the form of options, share appreciation rights, restricted
shares, restricted share units, performance awards or other share-based awards. Options and share appreciation rights will have an exercise
price determined by the administrator but that is no less than fair market value of the underlying Ordinary Shares on the date of grant.
As of December 31, 2025, 8,615,707 Ordinary Shares were issuable upon the exercise of outstanding awards under the 2018 Plan, at a weighted-average
exercise price of $1.95 per share. Of the foregoing outstanding awards, as of December 31, 2025, options to purchase 5,496,836 Ordinary
Shares, in the aggregate, had vested under the 2018 Plan, with a weighted-average exercise price of $1.90 per share. In addition,
as of December 31, 2025, 78,071 Ordinary Shares are issuable upon the vesting of outstanding RSUs under the 2018 Plan.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
20
As described in Proposal One of this Proxy Statement,
the Company is seeking shareholder approval of an amendment to the 2018 Plan to increase the number of Ordinary Shares issuable thereunder
by 13,937,915 Ordinary Shares. The Board believes that the proposed increase is necessary in light of the Private Placement, the equity
grants described in Proposals Two through Five and to ensure that the Company has sufficient equity capacity to attract, retain and incentivize
highly qualified employees and executives as the Company expands its team to support its next stage of development. See Proposal One.
The vesting conditions for grants under the 2018 Plan
will be determined by the administrator and, in the case of restricted shares and restricted share units, will be set forth in the applicable
award documentation.
In the event of a participant’s termination of
employment, the administrator may, in its discretion, determine the extent to which an equity incentive award may be exercised, settled,
vested, paid or forfeited. In the event of a change in control (as defined in the 2018 Plan) of the Company, the Compensation Committee
may, in its discretion, take a number of actions with respect to awards outstanding under the 2018 Plan, including the following: (i)
continuing awards or converting such awards into an award or right with respect to shares of the successor or surviving corporation; (ii)
immediately vesting and settling awards (or in the case of options and share appreciation rights, providing that such awards will become
fully exercisable); (iii) cancelling unvested awards for no consideration; (iv) terminating or cancelling awards in exchange for a cash
payment; and (v) providing that awards may be assumed, exchanged, replaced or continued by the successor or surviving corporation with
cash, securities, rights or other property. In the event of a structural change of the Company (i.e., a transaction in which the Company’s
shares immediately prior to the transaction are converted into or exchanged for shares that represent at least a majority of the share
capital of the surviving corporation, such as a re-domestication of the Company or a share flip), outstanding awards will be exchanged
or converted into awards to acquire shares of the company (if it is the surviving corporation) or the successor company in accordance
with the applicable exchange ratio.
The 2018 Plan is administered by the Board, provided
that the Board may delegate its authority to the Compensation Committee to administer the 2018 Plan.
The 2018 Plan provides for granting awards in compliance
with Section 102 of the Israeli Income Tax Ordinance, 5721-1961 (the “Ordinance”), which provides to employees, directors
and officers of the Company, who are not controlling shareholders (as defined in the Ordinance) of the Company and are Israeli residents,
potential favorable tax treatment for compensation in the form of shares or equity awards issued or granted, as applicable, to a trustee
under the Capital Gains Track for the benefit of the relevant employee, director or officer, subject to compliance with the terms and
conditions of such tax track. Under the Capital Gains Track, any accounting expense with respect to the grant or issuance of such shares
or awards which relates to gain taxed as capital gains is not allowed as a deduction for tax purposes.
Pay versus Performance
We are required by SEC rules to disclose the following
information regarding compensation paid to our Principal Executive Officer (the “PEO”) and our other Named Executive Officers
(such other Named Executive Officers collectively referred to hereinafter as the “Non-PEO NEOs”). The amounts set forth below
under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs”
have been calculated in a manner prescribed by the SEC rules and do not necessarily align with how we or the compensation committee views
the link between our performance and pay of our named executive officers. The footnotes below set forth the adjustments from the total
compensation for each of our NEOs reported in the Summary Compensation Table above. As permitted under the rules applicable to smaller
reporting companies, we are including two years of data and are not including a peer group total shareholder return or company-selected
measure, as contemplated under Item 402(v) of Regulation S-K. For further information concerning our executive compensation philosophy
and how executive compensation is aligned with the Company’s performance, refer to the section entitled “Executive Compensation”
included in this proxy statement.
PEO and Non-PEO NEOs’ compensation is designed
to provide a mix of compensation to reward Officers for individual and company performance as well as to align their interests with the
interests of shareholders. To achieve our goal of appropriately rewarding our Officers for their efforts, the compensation generally includes:
(i) annual base salary, benefits and perquisites; (ii) annual bonus based on target and above-target performance; and (iii) equity-based
compensation and retirement benefits.
For the years 2024 and 2025, in order to preserve Company’s
cash, PEO and Non-PEO NEOs were granted RSUs in lieu of an annual cash bonus and a portion of their respective salary increase.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
21
A significant portion of the PEO and Non-PEO NEOs total
compensation is “at-risk” in the form of equity compensation and is directly tied to the Company’s share performance
.
As a result, this component of compensation aligns the PEO and Non-PEO NEOs interests with those of shareholders by linking potential
rewards to long-term stock price appreciation.
The following table sets forth additional compensation
information of our PEO and Non-PEO NEOs, along with total shareholder return, and net loss results for the years ended December 31, 2025
and 2024:
Year
(1)
Summary
Compensation
Table Total
for PEO
(in
000s)
(2)
Compensation
Actually Paid
to PEO
(in 000s)
(3)
Average
Summary
Compensation
Table Total
for
Non-PEO
NEOs
(in 000s)
(4)
Average
Compensation
Actually Paid
to Non-PEO
NEOs
(in
000s)
(3)
Value of
Initial Fixed
$100
Investment
Based
on
Total
Shareholder
Return
(5)
Net Loss
(in 000s)
(6)
2025
$
1,482
$
1,351
$
518
$
437
$
223
$
(
11,439
)
2024
$
1,149
$
2,187
$
485
$
849
$
212
$
(
9,541
)
(1)       The Non-PEO
NEOs for 2024 are Hillel Galitzer and Dana Yaacov-Garbeli. The non-PEO NEOs for 2025 are Hillel Galitzer and Gregory Burshtein.
(2)       The dollar
amounts reported herein represent the amount of total compensation reported for each covered fiscal year in the “Total” column
of the Summary Compensation Table for each applicable year.
(3)
The
dollar amounts reported below represent the amount of “compensation actually paid” to our PEO and Non-PEO NEOs (as an average)
as computed in accordance with Item 402(v) of Regulation S-K, for each covered fiscal year. The dollar amounts do not reflect the actual
amount of compensation earned or received by or paid to the PEOs and Non-PEO NEOs during the applicable fiscal year.
For
purposes of the equity award adjustments shown below, no equity awards were cancelled due to a failure to meet vesting conditions and
no dividends or other earnings paid on share or option awards in the covered fiscal year prior to the vesting date were not otherwise
included in the total compensation for the covered fiscal year. In calculating the “compensation actually paid” amounts reflected
in these columns, the fair value or change in fair value, as applicable, of the equity award adjustments included in such calculations
was computed in accordance with FASB ASC Topic 718. The valuation assumptions used to calculate such fair values did not materially differ
from those disclosed at the time of grant. The following table details the applicable adjustments that were made to determine “compensation
actually paid” (all amounts are averages for Non-PEO NEOs).
(4)
The
dollar amounts reported herein represent the average of the amounts of total compensation reported for our Non-PEO NEOs as a group for
each covered fiscal year in the “Total” column of the Summary Compensation Table for each applicable year.
(5)
Cumulative
total stockholder return (“TSR”) assumes $100 was invested on December 31, 2023 and is calculated by dividing the sum of the
cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our share price
at the end and the beginning of the measurement period (December 31, 2023) by our stock price at the beginning of the measurement period.
At December 31, 2025, 2024 and 2023, the per share closing prices for our Ordinary Shares were $1.94, $2.28 and $0.60, respectively. No
dividends were paid on share or option awards for all periods presented.
(6)
Net
loss
is reflected as reported in our audited consolidated financial statements for the applicable fiscal
year.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
22
The below figures are represented in thousands.
PEO
Non-PEO NEO Average
2025
2024
2025
2024
Summary Compensation Table Total
$
1,482
$
1,149
$
518
$
485
-the fair value of equity awards granted that are reported in the Summary Compensation Table
(
889
)
(
742
)
(
238
)
(
246
)
+ Fair value as of the end of all awards granted during the covered fiscal year that are outstanding and unvested at the end of the covered
year
791
360
210
245
+/- Change in fair value as of the end of the covered fiscal year (from the end of the prior fiscal year) of any awards granted in any
prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year
(
151
)
863
(
47
)
222
Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year
207
112
30
28
+/- Change in fair value as of the vesting date (from the end of the prior fiscal year) of any awards granted in any prior fiscal year
for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year
(
89
)
445
(
35
)
115
Compensation Actually Paid
$
1,351
$
2,187
$
437
$
849
Pay versus Performance Comparative Disclosure
In accordance with SEC rules, the Company is providing
the following narrative disclosure regarding the relationships between information presented in the pay versus performance tables above.
Compensation Actually Paid and Cumulative Total
Shareholder Return
During 2024 and 2025, compensation actually paid (“CAP”)
to our PEO decreased from $2,187 thousand in fiscal year 2024 to $1,351 thousand in fiscal year 2025. Average compensation actually paid
to our Non-PEO NEOs decreased from $849 thousand in fiscal year 2024 to $437 thousand in fiscal year 2025. Over the same period, the value
of an investment of $100 in our Ordinary Shares on the last trading day of 2023 increased by $280 to $380 during fiscal 2024 and decreased
by $57 to $323 during fiscal 2025.
The following graph sets forth the relationship between
CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our cumulative TSR over the three most recently completed fiscal years.
Compensation Actually Paid and Net Loss
During 2024 and 2025, CAP to our PEO decreased from
$2,187 thousand in fiscal year 2024 to $1,351 thousand in fiscal year 2025. Average compensation actually paid to our Non-PEO NEOs decreased
from $849 thousand in fiscal year 2024 to $437 thousand in fiscal year 2025. Over the same period, our net loss increased by $1,898 thousand
during fiscal year 2025 (from a net loss in fiscal year 2024 of $9,541 thousand to a net loss in fiscal year 2025 of $11,439 thousand).
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
23
PROPOSAL ONE — APPROVAL OF AN AMENDMENT TO THE COMPANY’S 2018
EQUITY INCENTIVE PLAN
Background
This Proposal One is being presented to shareholders
following, and in connection with, the consummation of the Private Placement.
On July 2, 2018, in connection with the consummation
of our initial public offering, our Board approved our 2018 Plan, with the purpose of advancing the interests of our shareholders by enhancing
our ability to attract, retain and motivate individuals to perform at the highest level. The maximum number of Ordinary Shares initially
available for issuance under equity incentive awards granted pursuant to the 2018 Plan could not exceed 12% of the total outstanding Ordinary
Shares as of the time of adoption. On January 1, 2019 and on January 1 of each calendar year thereafter, an additional number of shares
equal to 5% of the total outstanding Ordinary Shares on such date (or any lower number of shares as determined by our Board) become available
for issuance under the 2018 Plan (referred to hereinafter as the “Evergreen Provision”). At our shareholders meeting held
on September 7, 2022, our shareholders approved an amendment to the 2018 Plan to increase the number of Ordinary Shares issuable under
the 2018 Plan by a one-time additional amount of 576,188 Ordinary Shares. At our shareholders meeting held on July 31, 2024, our shareholders
approved a further amendment to the 2018 Plan to increase the number of Ordinary Shares issuable under the 2018 Plan by a one-time additional
amount of 1,788,515 Ordinary Shares and to delete Section 10 of the 2018 Plan to provide additional flexibility with respect to vesting
terms. On January 1, 2025, pursuant to the Evergreen Provision and following the approval of our Board, an additional 1,941,859 Ordinary
Shares, equal to 5% of the total outstanding shares as of January 1, 2025, became available for issuance under the 2018 Plan. As of December
31, 2025, a total of 2,052,375 Ordinary Shares remained available for issuance under the 2018 Plan. On January 1, 2026, pursuant to the
Evergreen Provision and following the approval of our Board, an additional 2,308,931 Ordinary Shares, equal to 5% of the total outstanding
shares as of January 1, 2026, became available for issuance under the 2018 Plan. At our annual meeting of shareholders held on July 14,
2026, our shareholders approved a further amendment to the 2018 Plan to increase the number of Ordinary Shares issuable thereunder by
a one-time additional amount of 2,500,000 Ordinary Shares.
As of September 14, 2026, a total of 3,087,230 Ordinary
Shares, representing approximately 1.78% of the total outstanding Ordinary Shares as of that date, remained available for issuance under
the 2018 Plan.
In connection with the Private Placement, the Purchasers
agreed to vote in favor of a proposal seeking an increase in the number of Ordinary Shares reserved under the 2018 Plan such that the
pool of unallocated Ordinary Shares eligible for equity awards following such increase equals ten percent (10%) of the Company’s
outstanding Ordinary Shares at such time, minus the Top-up Grants, as defined in Proposal Two (the “Share Pool Increase”).
On July 26, 2026, the Board approved the Share Pool
Increase, subject to shareholder approval, and noted that the number of Ordinary Shares comprising the Share Pool Increase would be calculated
promptly following the closing of the Private Placement (the “Closing”) based on the actual number of securities issued in
the Private Placement. Accordingly, on September 16, 2026, the Board approved an increase in the number of Ordinary Shares issuable under
the 2018 Plan by a one-time additional amount of 13,937,915 Ordinary Shares, pursuant to an amendment to the 2018 Plan subject to shareholder
approval (such amendment being referred to hereinafter as the “2018 Plan Amendment”).
The form of the 2018 Plan Amendment is attached to
this proxy statement as
Appendix A
. You are encouraged to read the complete text of the
2018 Plan Amendment.
The Company continues to use equity-based compensation
as a key tool for attracting, retaining and incentivizing its employees, officers, directors and consultants. In light of the substantial
increase in the Company’s outstanding share capital resulting from the Private Placement, the equity grants described in Proposals
Two through Five and the Company’s anticipated hiring and retention needs as it expands its clinical and management teams to support
its next stage of development, including the preparation for and initiation of its Phase 3 registrational study of EB613, the Board has
determined that the number of Ordinary Shares currently available for issuance under the 2018 Plan is insufficient to meet the Company’s
anticipated needs and does not reflect current market benchmarks. The Board believes that the Share Pool Increase is necessary to ensure
that the Company has sufficient equity capacity to attract, retain and incentivize highly qualified employees, officers, directors and
consultants and to make competitive equity-based grants as the Company advances its clinical development programs. The Board further believes
that maintaining sufficient equity capacity will promote the alignment of the interests of such individuals with those of the Company’s
shareholders by providing them with an opportunity to acquire or increase a direct ownership interest in the Company and its future success.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
24
Summary of the 2018 Plan
A summary of the material provisions of the 2018 Plan
is included in this proxy statement under the section “Executive Compensation—Employee Equity Incentive Plans—2018 Equity
Incentive Plan”, and a summary of the effect of the 2018 Plan Amendment is described above in this Proposal One. Such summaries
do not purport to be complete descriptions of all the provisions of the 2018 Plan and the 2018 Plan Amendment, and they are qualified
in their entirety by reference to the complete text of the 2018 Plan, which we filed as Exhibit 10.8 to our 2025 Annual Report, and the
2018 Plan Amendment, the form of which is set forth in
Appendix A
to this proxy statement.
Proposal
Shareholders are being asked to adopt the following
resolution:
“RESOLVED, that the 2018 Plan Amendment, providing
for an increase in the number of Ordinary Shares issuable under the 2018 Plan by a one-time additional amount of 13,937,915 Ordinary Shares,
as described in this Proposal One and attached as
Appendix A
to the Company’s Proxy
Statement for the Company’s 2026 Special Meeting, be, and it hereby is, approved.”
Vote Required
Proposal One requires the affirmative vote of a simple
majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must be cast “for” than “against”
for Proposal One. Abstentions and broker non-votes will have no effect on the outcome of Proposal One.
Board Recommendation
The Board recommends that our shareholders
vote “FOR” the adoption of this resolution
.
Entera Bio Ltd. | 2026 Special Meeting Proxy Statement
25
PROPOSAL
two — APPROVAL OF A ONE-TIME EQUITY GRANT TO MS. MIRANDA TOLEDANO, OUR CHIEF EXECUTIVE OFFICER AND A DIRECTOR
Background
This
Proposal Two is being presented to shareholders following, and in connection with, the consummation of the Private Placement.
On
July 28, 2026, the Company consummated the Private Placement and received gross proceeds of approximately $275 million. The Private Placement
represented a transformational financing for the Company, substantially increasing the Company’s issued share capital and financial
resources and providing significant capital to support the Company’s next stage of development, including the Phase 3 registrational
program for EB613.
In
connection with the Private Placement, the Purchasers agreed to vote in favor of a proposal approving an equity award to the Company’s
Chief Executive Officer, allocated equally between share options and restricted share units (collectively, the “CEO Equity Awards”),
with the size of the award to be determined following the Closing to restore the Chief Executive Officer’s fully diluted ownership
company to her percentage holding in the Company on a fully-diluted basis immediately prior to Closing. The agreed methodology was intended
to provide an objective basis for determining the size of the CEO Equity Awards following the substantial increase in the Company’s
capitalization resulting from Private Placement. Under the Israeli Companies Law, the CEO Equity Awards require the approval of our shareholders.
On
July 26, 2026, the Compensation Committee and the Board, respectively, voted to approve an equity award to Ms. Miranda Toledano, our Chief
Executive Officer, in accordance with the terms described above, subject to the approval of our shareholders and the final determination,
following the Closing, of the number of Ordinary Shares subject thereto and the applicable exercise price. Following the Closing and based
on the actual number of securities issued in the Private Placement, the number of Ordinary Shares underlying the CEO Equity Awards was
calculated in accordance with the agreed methodology and approved by the Board on September 16, 2026. Ms. Miranda Toledano serves as our
Chief Executive Officer and as a director of the Company.
Accordingly, and given her service as a member of our Board, any transaction
between us and Ms. Toledano relating to her terms of compensation must be approved by the Compensation Committee, the Board and a Special
Majority of our shareholders, to the extent applicable, in accordance with the provisions of the Israeli Companies Law
.
The
CEO Equity Awards are intended as long-term incentive and retention awards designed to further align her interests with those of our shareholders.
The options included in the CEO Equity Awards have an exercise price equal to the fair market value of the Ordinary Shares as of the date
of approval by the Board (i.e., September 16, 2026) and will vest over time subject to continued service, so that the CEO Equity Awards
will provide realizable value only to the extent the value of the Ordinary Shares exceeds the applicable exercise price.
A
significant portion of our Chief Executive Officer’s total compensation is accordingly “at-risk” and tied directly to
share price performance, aligning her interests with those of our shareholders
.
As
contemplated by the Securities Purchase Agreement, the number of Ordinary Shares underlying the CEO Options (as defined below) and the
number of CEO RSUs (as defined below) were calculated immediately following the Closing, based on the actual number of securities issued
in the Private Placement, and were approved by the Board on September 16, 2026, in each case maintaining the allocation of 50% CEO Options
and 50% CEO RSUs.
Our
Compensation Committee and Board believe that approval of the CEO Equity Awards is in the best interest of the Company and our shareholders.
We believe that retaining and incentivizing our Chief Executive Officer is central to the continued advancement of the Company’s
corporate strategy, including the execution of key clinical development milestones, the successful execution of the Phase 3 registrational
program for EB613, further development of our pipeline, and effective deployment of the Company’s capital allocation. The Compensation
Committee and the Board consider a meaningful long-term equity holding to be the most effective means of aligning her interests with those
of our shareholders. In reaching that view, the Compensation Committee and the Board took into account Ms. Toledano’s meaningful
contribution and achievements since undertaking the CEO role, the competitive market for chief executives of clinical-stage companies
conducting registrational programs, and the comparative market compensation benchmark data. We are now seeking shareholder approval, as
required under the Israeli Companies Law, by a Special Majority approval, of the CEO Equity Awards, as described herein. To the extent
this Proposal Two is approved by our shareholders, the CEO Equity Award would restore our Chief Executive Officer’s ownership of
the Company to 4.57% on a fully diluted basis.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
26
The
CEO Equity Award described in this Proposal Two, together with the CFO Equity Awards, the COO Equity Award and R&D Equity Award described
in Proposals Three, Four and Five, respectively, are referred to collectively as the “Top-up Grants.”
Terms
of the CEO Equity Awards
The
terms of the CEO Equity Awards, which would become effective following the approval of our shareholders at this Special Meeting (and the
other conditions noted below), would be as follows:
(i)
Option
Grant
. Ms. Toledano will be entitled to receive a grant of options to purchase 3,351,790 Ordinary Shares (the “CEO Options”),
at an exercise price of $2.96 per Ordinary Share, under the 2018 Plan, subject to the requirements of applicable laws and regulations.
The CEO Options shall vest as follows: provided that Ms. Toledano has not undergone a Termination of Service (as defined in the 2018 Plan)
prior to the applicable vesting date, the CEO Options shall vest over a three (3) year period, with one-third of the CEO Options vesting
on September 16, 2027 and the remaining two-thirds of the CEO Options vesting in eight substantially equal portions over the remaining
two (2) year period thereafter, on a quarterly basis, rounded down to the nearest whole share, provided, that with respect to the last
such quarterly installment, the number of CEO Options that vest in the installment shall be such that Ms. Toledano will be fully vested
in the total number of CEO Options listed above as of such applicable quarterly anniversary (i.e., such that one hundred percent (100%)
of the CEO Options shall become fully vested on September 16, 2029); provided further, however, that in the event of a Change in Control
(as defined in the 2018 Plan) in which Ms. Toledano continues to provide services to the Company on the date of consummation of such Change
in Control, 100% of any unvested CEO Options at the time of the consummation of such Change in Control shall become fully vested and exercisable.
The expiration date of the CEO Options shall be September 16, 2036, or such earlier date in accordance with the 2018 Plan or the Company’s
option agreement.
(ii)
RSU
Grant.
Ms. Toledano will be entitled to receive a grant of 3,351,790 restricted share units (the “CEO RSUs”) under
the 2018 Plan, subject to the requirements of applicable laws and regulations. The CEO RSUs shall vest as follows: provided that Ms. Toledano
has not undergone a Termination of Service (as defined in the 2018 Plan) prior to the applicable vesting date, the CEO RSUs shall vest
over a one (1) year period, with 100% of the CEO RSUs vesting in four substantially equal quarterly installments over the one (1) year
period following September 16, 2026, rounded down to the nearest whole share, provided, that with respect to the last such quarterly installment,
the number of CEO RSUs that vest in the installment shall be such that Ms. Toledano will be fully vested in the total number of CEO RSUs
listed above as of such applicable quarterly anniversary (i.e., such that one hundred percent (100%) of the CEO RSUs shall become fully
vested on September 16, 2027); provided further, however, that in the event of a Change in Control (as defined in the 2018 Plan) in which
Ms. Toledano continues to provide services to the Company on the date of consummation of such Change in Control, 100% of any unvested
CEO RSUs at the time of the consummation of such Change in Control shall become fully vested.
The
grant of the CEO Options and CEO RSUs are also subject to the subject to the approval of our shareholders and the approval of the amendment
to the 2018 Plan described in Proposal One and filing by the Company of a Registration Statement on Form S-8 registering the Ordinary
Shares underlying the CEO Options and CEO RSUs.
Proposal
Shareholders
are being asked to adopt the following resolution:
“RESOLVED,
that the one-time equity grant to Miranda Toledano, our Chief Executive Officer, as described in Proposal Two of the Company’s Proxy
Statement for the Company’s 2026 Special Meeting, be, and is hereby, approved.”
Vote
Required
Proposal
Two requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Two, and abstentions and broker non-votes have no effect on the outcome
of Proposal Two. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent applicable
pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the votes cast
by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned
in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the Company.
As
part of the Special Majority vote, you must indicate whether you are a controlling shareholder or have a personal interest in the approval
of this proposal. According to the Relief Regulations, by signing and submitting the accompanying proxy card, you declare and approve
that you have no personal interest in the approval of this proposal, unless you have notified the Company of such personal interest in
writing. If you believe that you have a personal interest in this Proposal and you wish to inform the Company of such personal interest,
you should submit such information in advance of voting to Dana Yaacov-Garbeli, our Chief Financial Officer.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
27
PROPOSAL
three — APPROVAL OF A ONE-TIME EQUITY GRANT TO MS. DANA YAACOV-GARBELI, OUR CHIEF FINANCIAL OFFICER
Background
This
Proposal Three is being presented to shareholders following, and in connection with, the consummation of the Private Placement.
On
July 28, 2026, the Company consummated the Private Placement and received gross proceeds of approximately $275 million. The Private Placement
represented a transformational financing for the Company, substantially increasing the Company’s issued share capital and financial
resources and providing significant capital to support the Company’s next stage of development, including the Phase 3 registrational
program for EB613.
In
connection with the Private Placement, and in order to retain and incentivize the Company’s senior management over the long term,
the Purchasers agreed to vote in favor of a proposal approving equity awards to certain of the Company’s named executive officers,
as determined by the Board, to restore their respective percentage ownership of the Company on a fully-diluted basis to their respective
percentage ownership of the Company on a fully-diluted basis immediately prior to the Closing of the Private Placement. Under the Israeli
Companies Law, these awards require the approval of our shareholders, and each Purchaser agreed to vote the Ordinary Shares beneficially
held by it in favor of their approval.
With
respect to Ms. Dana Yaacov-Garbeli, our Chief Financial Officer, the equity award described in this proposal is referred to as the “CFO
Equity Award.”
On
July 26, 2026, the Board approved the Securities Purchase Agreement, including the Supported Proposals, while noting that no determination
was made at that time with respect to the identity of the additional executive officers who would receive Top-up Grants or the specific
terms of any such grants and that such matter would be discussed and approved following the Closing, subject to the approval of the Compensation
Committee, the Board and the shareholders of the Company, to the extent required under applicable law.
Accordingly,
on September 16, 2026, the Compensation Committee and the Board approved the CFO Equity Award to Ms. Yaacov-Garbeli, consisting of the
CFO Options (as defined below) and calculated to restore her percentage ownership of the Company on a fully diluted basis to her percentage
ownership of the Company on a fully diluted basis immediately prior to the Closing, subject to the approval of our shareholders and the
approval of the amendment to the 2018 Plan described in Proposal One.
Our
Compensation Committee and Board believe that the CFO Equity Award is in the best interest of the Company and our shareholders, in order
to retain and incentivize Ms. Yaacov-Garbeli, our Chief Financial Officer, over the long term and better align her interests with those
of our shareholders.
Pursuant
to the Israeli Companies Law, any transaction between us and an office holder (as defined in the Companies Law), relating to his or her
terms of compensation, must generally be consistent with our compensation policy, and must be approved by the Compensation Committee,
the Board and a Special Majority of our shareholders, to the extent applicable, in accordance with the provisions of the Israeli Companies
Law.
We
are now seeking shareholder approval, as required under the Israeli Companies Law, by a Special Majority approval, of the CFO Equity Award,
as described herein
.
To the extent this Proposal Three is approved by our shareholders, the CFO Equity Award would restore
our Chief Financial Officer’s ownership of the Company to 1.09% on a fully diluted basis.
Terms
of the CFO Equity Award
The
terms of the CFO Equity Award, which would become effective following the approval of our shareholders at this Special Meeting (and the
other conditions noted below), would be as follows:
(i)
Option
Grant
. Ms. Dana Yaacov-Garbeli will be entitled to receive a grant of options to purchase 1,595,260 Ordinary Shares (the “CFO
Options”), at an exercise price of $2.96 per Ordinary Share, under the 2018 Plan, subject to the requirements of applicable laws
and regulations. Provided that Ms. Yaacov-Garbeli has not undergone a Termination of Service (as defined in the 2018 Plan) prior to the
applicable vesting date, the CFO Options shall vest over a three (3) year period, with one-third of the CFO Options vesting on September
16, 2027 and the remaining two-thirds vesting in eight substantially equal portions over the remaining two (2) year period thereafter,
on a quarterly basis, rounded down to the nearest whole share, provided, that with respect to the last such quarterly installment, the
number of CFO Options that vest in the installment shall be such that Ms. Yaacov-Garbeli will be fully vested in the total number of CFO
Options listed above as of such applicable quarterly anniversary (i.e., such that one hundred percent (100%) of the CFO Options shall
become fully vested on September 16, 2029); provided further, however, that in the event of a Change in Control (as defined in the 2018
Plan) in which Ms. Yaacov-Garbeli continues to provide services to the Company on the date of consummation of such Change in Control,
100% of any unvested CFO Options at the time of the consummation of such Change in Control shall become fully vested and exercisable.
The expiration date of the CFO Options shall be September 16, 2036, or such earlier date in accordance with the 2018 Plan or the Company’s
option agreement. The grant of the CFO Options is subject to the approval of our shareholders and the approval of the amendment to the
2018 Plan described in Proposal One, as well as the filing by the Company of a Registration Statement on Form S-8 registering the Ordinary
Shares underlying the option grants.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
28
Proposal
Shareholders
are being asked to adopt the following resolution:
“
RESOLVED,
that the one-time equity grant to Dana Yaacov-Garbeli, our Chief Financial Officer, as described in Proposal Three of the Company’s
Proxy Statement for the Company’s 2026 Special Meeting, be, and is hereby, approved.”
Vote
Required
Proposal
Three requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Three, and abstentions and broker non-votes have no effect on the outcome
of Proposal Three. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent
applicable pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the
votes cast by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders
mentioned in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the Company.
As
part of the Special Majority vote, you must indicate whether you are a controlling shareholder or have a personal interest in the approval
of this proposal. According to the Relief Regulations, by signing and submitting the accompanying proxy card, you declare and approve
that you have no personal interest in the approval of this proposal, unless you have notified the Company of such personal interest in
writing. If you believe that you have a personal interest in this Proposal and you wish to inform the Company of such personal interest,
you should submit such information in advance of voting to Dana Yaacov-Garbeli, our Chief Financial Officer.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
29
PROPOSAL
four— APPROVAL OF A ONE-TIME EQUITY GRANT TO MR. HILLEL GALITZER, OUR CHIEF OPERATING OFFICER
Background
This
Proposal Four is being presented to shareholders following, and in connection with, the consummation of the Private Placement.
On
July 28, 2026, the Company consummated the Private Placement and received gross proceeds of approximately $275 million. The Private Placement
represented a transformational financing for the Company, substantially increasing the Company’s issued share capital and financial
resources and providing significant capital to support the Company’s next stage of development, including the Phase 3 registrational
program for EB613.
In
connection with the Private Placement, and in order to retain and incentivize the Company’s senior management over the long term,
the Purchasers agreed to vote in favor of a proposal approving equity awards to certain of the Company’s named executive officers,
as determined by the Board, to restore their respective percentage ownership of the Company on a fully-diluted basis to their respective
percentage ownership of the Company on a fully-diluted basis immediately prior to the Closing of the Private Placement. Under the Israeli
Companies Law, these awards require the approval of our shareholders, and each Purchaser agreed to vote the Ordinary Shares beneficially
held by it in favor of their approval.
The
equity award to Mr. Hillel Galitzer described in this proposal is referred to as the “COO Equity Award.”
On
July 26, 2026, the Board approved the Securities Purchase Agreement, including the Supported Proposals, while noting that no determination
was made at that time with respect to the identity of the additional executive officers who would receive Top-up Grants or the specific
terms of any such grants and that such matter would be discussed and approved following the Closing, subject to the approval of the Compensation
Committee, the Board and the shareholders of the Company, to the extent required under applicable law.
Accordingly,
on September 16, 2026, the Compensation Committee and the Board approved the COO Equity Award to Mr. Hillel Galitzer, our Chief Operating
Officer, in accordance with the terms described below, consisting of the COO Options described below and calculated to restore his percentage
ownership of the Company on a fully diluted basis to his percentage ownership of the Company on a fully diluted basis immediately prior
to the Closing, subject to the approval of our shareholders, and the approval of the amendment to the 2018 Plan described in Proposal
One.
Our
Compensation Committee and Board believe that the COO Equity Award is in the best interest of the Company and our shareholders in order
to retain and incentivize Mr. Galitzer, our Chief Operating Officer, over the long term and better align his interests with those of our
shareholders.
Pursuant
to the Israeli Companies Law, any transaction between us and an office holder (as defined in the Companies Law), relating to his or her
terms of compensation, must generally be consistent with our compensation policy, and must be approved by the Compensation Committee,
the Board and a Special Majority of our shareholders, to the extent applicable, in accordance with the provisions of the Israeli Companies
Law.
We
are now seeking shareholder approval, as required under the Israeli Companies Law, by a Special Majority approval, of the COO Equity Award,
as described herein. To the extent this Proposal Four is approved by our shareholders, the COO Equity Award would restore our Chief Operating
Officer’s ownership of the Company to 1.33% on a fully diluted basis.
Terms
of the COO Equity Award
The
terms of the COO Equity Award, which would become effective following the approval of our shareholders at this Special Meeting (and the
other conditions noted below), would be as follows:
(i)
Option Grant. Mr. Hillel
Galitzer will be entitled to receive a grant of options to purchase 1,950,925 Ordinary Shares (the “COO Options”), at an exercise
price of $2.96 per Ordinary Share, under the 2018 Plan, subject to the requirements of applicable laws and regulations. Provided that
Mr. Galitzer has not undergone a Termination of Service (as defined in the 2018 Plan) prior to the applicable vesting date, the COO Options
shall vest over a three (3) year period, with one-third of the COO Options vesting on September 16, 2027 and the remaining two-thirds
vesting in eight substantially equal portions over the remaining two (2) year period thereafter, on a quarterly basis, rounded down to
the nearest whole share, provided, that with respect to the last such quarterly installment, the number of COO Options that vest in the
installment shall be such that Mr. Galitzer will be fully vested in the total number of COO Options listed above as of such applicable
quarterly anniversary (i.e., such that one hundred percent (100%) of the COO Options shall become fully vested on September 16, 2029);
provided further, however, that in the event of a Change in Control (as defined in the 2018 Plan) in which Mr. Galitzer continues to provide
services to the Company on the date of consummation of such Change in Control, 100% of any unvested COO Options at the time of the consummation
of such Change in Control shall become fully vested and exercisable. The expiration date of the COO Options shall be September 16, 2036,
or such earlier date in accordance with the 2018 Plan or the Company’s option agreement. The grant of the COO Options is subject
to the approval of our shareholders and the approval of the amendment to the 2018 Plan described in Proposal One, as well as the filing
by the Company of a Registration Statement on Form S-8 registering the Ordinary Shares underlying the option grants.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
30
Proposal
Shareholders
are being asked to adopt the following resolution:
“RESOLVED,
that the one-time equity grant to Hillel Galitzer, our Chief Operating Officer, as described in Proposal Four of the Company’s Proxy
Statement for the Company’s 2026 Special Meeting, be, and is hereby, approved.”
Vote
Required
Proposal
Four requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Four, and abstentions and broker non-votes have no effect on the outcome
of Proposal Four. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent applicable
pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the votes cast
by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned
in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the Company.
As
part of the Special Majority vote, you must indicate whether you are a controlling shareholder or have a personal interest in the approval
of this proposal. According to the Relief Regulations, by signing and submitting the accompanying proxy card, you declare and approve
that you have no personal interest in the approval of this proposal, unless you have notified the Company of such personal interest in
writing. If you believe that you have a personal interest in this Proposal and you wish to inform the Company of such personal interest,
you should submit such information in advance of voting to Dana Yaacov-Garbeli, our Chief Financial Officer.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
31
PROPOSAL
five—
APPROVAL OF A ONE-TIME EQUITY GRANT TO MR. GREGORY BURSHTEIN, OUR CHIEF OF RESEARCH AND DEVELOPMENT
Background
This
Proposal Five is being presented to shareholders following, and in connection with, the consummation of the Private Placement.
On
July 28, 2026, the Company consummated the Private Placement and received gross proceeds of approximately $275 million. The Private Placement
represented a transformational financing for the Company, substantially increasing the Company’s issued share capital and financial
resources and providing significant capital to support the Company’s next stage of development, including the Phase 3 registrational
program for EB613.
In
connection with the Private Placement, and in order to retain and incentivize the Company’s senior management over the long term,
the Purchasers agreed to vote in favor of a proposal approving equity awards to certain of the Company’s named executive officers,
as determined by the Board, to restore their respective percentage ownership of the Company on a fully-diluted basis to their respective
percentage ownership of the Company on a fully-diluted basis immediately prior to the Closing of the Private Placement. Under the Israeli
Companies Law, these awards require the approval of our shareholders, and each Purchaser agreed to vote the Ordinary Shares beneficially
held by it in favor of their approval.
The
equity award to Mr. Gregory Burshtein described in this proposal is referred to as the “R&D Equity Award”.
On
July 26, 2026, the Board approved the Securities Purchase Agreement, including the Supported Proposals, while noting that no determination
was made at that time with respect to the identity of the additional executive officers who would receive Top-up Grants or the specific
terms of any such grants and that such matter would be discussed and approved following the Closing, subject to the approval of the Compensation
Committee, the Board and the shareholders of the Company, to the extent required under applicable law.
Accordingly,
on September 16, 2026, the Compensation Committee and the Board, respectively, approved the R&D Equity Award to Mr. Gregory Burshtein,
our Chief of Research and Development, in accordance with the terms described below, consisting of the R&D Options described below
and calculated to restore his percentage ownership of the Company on a fully diluted basis to his percentage ownership of the Company
on a fully diluted basis immediately prior to the Closing, subject to the approval of our shareholders and the approval of the amendment
to the 2018 Plan described in Proposal One.
Our
Compensation Committee and Board believe that the R&D Equity Award is in the best interest of the Company and our shareholders, in
order to retain and incentivize Mr. Burshtein, our Chief of Research and Development, over the long term and better align his interests
with those of our shareholders.
Pursuant
to the Israeli Companies Law, any transaction between us and an office holder (as defined in the Companies Law), relating to his or her
terms of compensation, must generally be consistent with our compensation policy, and must be approved by the Compensation Committee,
the Board and a Special Majority of our shareholders, to the extent applicable, in accordance with the provisions of the Israeli Companies
Law.
We
are now seeking shareholder approval, as required under the Israeli Companies Law, by a Special Majority approval, of the R&D Equity
Award, as described herein. To the extent this Proposal Five is approved by our shareholders, the R&D Equity Award would restore our
Head of R&D’s ownership of the Company to 1.05% on a fully diluted basis.
Terms
of the R&D Equity Award
The
terms of the R&D Equity Award, which would become effective following the approval of our shareholders at this Special Meeting (and
the other conditions noted below), would be as follows:
(i)
Option Grant. Mr. Gregory
Burshtein will be entitled to receive a grant of options to purchase 1,540,754 Ordinary Shares (the “R&D Options”), at
an exercise price of $2.96 per Ordinary Share, under the 2018 Plan, subject to the requirements of applicable laws and regulations. Provided
that Mr. Burshtein has not undergone a Termination of Service (as defined in the 2018 Plan) prior to the applicable vesting date, the
R&D Options shall vest over a three (3) year period, with one-third of the R&D Options vesting on September 16, 2027 and the remaining
two-thirds vesting in eight substantially equal portions over the remaining two (2) year period thereafter, on a quarterly basis, rounded
down to the nearest whole share, provided, that with respect to the last such quarterly installment, the number of R&D Options that
vest in the installment shall be such that Mr. Burshtein will be fully vested in the total number of R&D Options listed above as of
such applicable quarterly anniversary (i.e., such that one hundred percent (100%) of the R&D Options shall become fully vested on
September 16, 2029); provided further, however, that in the event of a Change in Control (as defined in the 2018 Plan) in which Mr. Burshtein
continues to provide services to the Company on the date of consummation of such Change in Control, 100% of any unvested R&D Options
at the time of the consummation of such Change in Control shall become fully vested and exercisable. The expiration date of the R&D
Options shall be September 16, 2036, or such earlier date in accordance with the 2018 Plan or the Company’s option agreement. The
grant of the R&D Options is subject to the approval of our shareholders and the approval of the amendment to the 2018 Plan described
in Proposal One, as well as the filing by the Company of a Registration Statement on Form S-8 registering the Ordinary Shares underlying
the option grants.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
32
Proposal
Shareholders
are being asked to adopt the following resolution:
“RESOLVED,
that the one-time equity grant to Gregory Burshtein, our Chief of Research and Development, as described in Proposal Five of the Company’s
Proxy Statement for the Company’s 2026 Special Meeting, be, and is hereby, approved.”
Vote
Required
Proposal
Five requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Five, and abstentions and broker non-votes have no effect on the outcome
of Proposal Five. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent applicable
pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the votes cast
by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned
in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the Company.
As
part of the Special Majority vote, you must indicate whether you are a controlling shareholder or have a personal interest in the approval
of this proposal. According to the Relief Regulations, by signing and submitting the accompanying proxy card, you declare and approve
that you have no personal interest in the approval of this proposal, unless you have notified the Company of such personal interest in
writing. If you believe that you have a personal interest in this Proposal and you wish to inform the Company of such personal interest,
you should submit such information in advance of voting to Dana Yaacov-Garbeli, our Chief Financial Officer.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
33
PROPOSAL
SIX —
APPROVAL OF AN AMENDED AND RESTATED COMPENSATION POLICY
Background
Pursuant
to the Israeli Companies Law, all Israeli companies, such as the Company, whose shares are publicly listed, are required to adopt a written
compensation policy for their executives, which addresses certain items prescribed by the Israeli Companies Law and serves as a flexible
framework for executive and director compensation. The compensation policy must further be approved once every three years by the Board,
after it considers the recommendations of the Compensation Committee, and then by a Special Majority of the shareholders, to the extent
applicable, in accordance with the provisions of the Israeli Companies Law. To the extent a compensation policy is not approved by the
shareholders, then generally, following re-discussion of the matter, the Compensation Committee and the Board may nonetheless approve
the compensation policy based on detailed reasoning, provided such approval is in the Company’s best interest. Revisions to the
compensation policy require the same approval process, unless otherwise provided by applicable Israeli law.
As
part of its ongoing commitment to robust compensation governance, the Compensation Committee, together with the Board, conducts an ongoing
review of the Company’s compensation policy against market benchmarks, including through the engagement of independent external
compensation consultants and the use of comprehensive compensation surveys. This review process is designed to ensure that the Company’s
compensation framework remains competitive, appropriately reflects the Company’s stage of development and peer-group positioning,
and continues to serve the Company’s objectives of attracting, retaining and incentivizing highly qualified executives and directors.
In
determining that the proposed amendments are appropriate, the Compensation Committee and the Board considered, among other things, external
compensation surveys prepared by Aon plc, a leading global compensation consulting firm, and by Brightman Almagor Zohar & Co. (Deloitte
Israel). Both surveys benchmarked the Company’s executive compensation against peer groups consisting of Israeli companies listed
in the United States and U.S. public companies of comparable size and stage of development. The surveys confirmed that a majority of the
Company’s executive compensation levels are below market and do not reflect current market benchmarks, with the fair value of annual
equity grants to the Company’s officers being below the median of the relevant peer groups. The below-market positioning of the
Company’s executive compensation, particularly with respect to equity-based awards, poses a meaningful risk to the Company’s
ability to attract, retain and motivate the highly qualified executives necessary to lead the Company’s next stage of development.
We
adopted a compensation policy on September 27, 2018. On October 4, 2021, July 31, 2024 and July 16, 2025, the Company’s shareholders
approved amendments to the compensation policy at the Company’s 2021, 2024 and 2025 annual meetings of shareholders, respectively,
in order to ensure a relevant and appropriate compensation framework to meet the Company’s needs and in accordance with Israeli
law requirements. Although the compensation policy was last approved in 2025, for the reasons described above and below (i.e., to align
with current market benchmarks), we are now presenting to our shareholders a proposal to approve our Amended Compensation Policy, a form
of which is attached to this proxy statement as Appendix B. The policy would be effective for the next three years, or such longer period
as may be permitted in accordance with the Israeli Companies Law. Pursuant to our compensation policy, the compensation that may be granted
to an executive officer may include: base salary; cash bonuses; and equity-based compensation. The cash bonus component aims to ensure
that the Company’s executive officers are incentivized to reach the Company’s annual goals. The equity-based compensation
component is intended to incentivize and reward for future long-term performance, to foster a long-term link between executive officers’
interests and the interests of the Company and its shareholders, and to attract, motivate and retain executive officers for the long term.
Our compensation policy also provides for compensation to the members of our Board in accordance with the principles determined in our
compensation policy and the specific terms as further described in this proxy statement under Proposal Seven.
On
September 16, 2026, the Compensation Committee and the Board determined that, in light of the results of the updated external compensation
surveys mentioned above, as well as the Private Placement and the substantial increase in the Company’s outstanding share capital
and capital resources resulting therefrom, it would be advisable for the Company to adjust certain thresholds and to make certain additional
changes to its existing compensation policy to better reflect the terms offered by companies of a similar size and in a similar sector
to the Company, and to bring the Company’s compensation framework in line with competitive market levels for clinical-stage biopharmaceutical
companies. Maintaining a competitive compensation program as reflected in the Amended Compensation Policy (as defined below) is essential
to retaining the experienced management team that has guided the Company through a transformational financing and to attracting new talent
as the Company expands its global operations, while aligning their compensation terms with Company resources and needs. Aligning executive
compensation with peer-group norms also serves to strengthen the link between management incentives and long-term shareholder value, by
ensuring that a meaningful portion of executive compensation is delivered in the form of equity awards whose value is directly tied to
the Company’s performance. Shareholders are therefore urged to vote in favor of this Proposal Six.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
34
Unlike
a “say-on-pay” advisory vote, which is a retrospective shareholder vote based on actual executive compensation granted in
the previous year, the compensation policy serves as a shareholder-approved prospective framework for the Compensation Committee and the
Board when making compensation decisions generally for the following three-year period, which sets caps and other limitations. The Compensation
Committee and the Board generally cannot approve any compensation to directors or executive officers that does not fall within the framework
of the Company’s compensation policy without seeking shareholder approval. Therefore, and in light of our previous experience, we
believe that our compensation policy must provide flexibility to address our various needs and challenges, including special circumstances
that may arise during the applicable three-year period. The compensation elements, caps and other limitations set forth in the compensation
policy do not create an obligation or a promise to grant such compensation.
Following
the recommendation of the Compensation Committee, the Board has approved, and recommends that shareholders approve, the amended compensation
policy (the “Amended Compensation Policy”) in the form attached to this proxy statement as Appendix B. The Amended Compensation
Policy submitted for shareholder approval under this Proposal Six addresses the requirements under the Israeli Companies Law and shall
be in effect in accordance with the Israeli Companies Law, as long as such requirements are applicable to the Company. You are encouraged
to read the complete text of the Amended Compensation Policy attached as Appendix B.
Proposal
Shareholders
are being asked to adopt the following resolution:
“RESOLVED,
that the Amended Compensation Policy, as described in Proposal Six and attached as Appendix B of the Company’s Proxy Statement for
the Company’s 2026 Special Meeting, be, and it hereby is, approved.”
Vote
Required
Proposal
Six requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Six, and abstentions and broker non-votes have no effect on the outcome
of Proposal Six. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent applicable
pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the votes cast
by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned
in clause (i) above who voted against such proposal does not exceed 2% of the total voting rights in the Company.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
35
PROPOSAL
SEVEN — APPROVAL OF THE AMENDED TERMS OF COMPENSATION OF THE COMPANY’S NON-EXECUTIVE DIRECTORS
Background
Pursuant
to the Israeli Companies Law, any transaction between the Company and a member of its Board relating to his or her terms of compensation
must generally be consistent with the Company’s compensation policy, and must be approved by the Compensation Committee, the Board
and a Special Majority of the Company’s shareholders, to the extent applicable, in accordance with the provisions of the Israeli
Companies Law.
In
connection with the Company’s periodic review of the compensation of its non-executive directors, the Compensation Committee and
the Board considered external compensation survey prepared by Aon, a leading global compensation consulting firm. The survey benchmarked
the compensation of the Company’s non-executive directors against peer groups consisting of U.S. public companies of comparable
size and stage of development. The survey found that the equity component of the Company’s non-executive director compensation is
below market and is not competitive compared to the relevant peer groups. In particular, the fair value of the initial and annual equity
grants to the Company’s non-executive directors was identified as below the peer-group benchmarks.
The
Compensation Committee and the Board believe that adjusting the compensation terms of the Company’s non-executive directors to competitive
market levels is in the best interests of the Company and its shareholders. Non-executive directors play a critical governance role, providing
independent oversight of management and guiding the Company’s strategic direction, which is particularly important as the Company
enters the pivotal Phase 3 stage of its clinical development program. Offering competitive compensation is essential to attracting and
retaining highly qualified independent directors with the specialized industry expertise, corporate governance experience and strategic
judgment that the Company requires at this stage. Aligning director compensation with peer-group norms, particularly the equity component,
further strengthens the alignment between the Board’s interests and those of shareholders, as the value of equity-based awards is
directly tied to the Company’s long-term performance. Shareholders are therefore urged to vote in favor of this Proposal Seven.
On
September 16, 2026, our Board, following the approval of the Compensation Committee, approved, and recommended that shareholders approve,
an amended compensation structure to be granted to each of our non-executive directors (whether currently serving as a director or appointed
in the future, without the need for further action or approval with respect to any specific non-executive director, with effect on and
from October 1, 2026).
(i)
Board membership
fee
. Each non-executive director will be entitled to receive an annual participation fee equal to $40,000, except that the Chairman
of the Board will be entitled to receive an annual participation fee equal to $80,000. In the event that a non-executive director or the
chairman serves as a member of the Board during only part of a year, a pro rata portion of the annual fee shall be paid. The annual Board
membership fee is paid on a quarterly basis.
(ii)
Committee participation
fees
. In addition, each non-executive director will be entitled to receive annual participation fees for service on each Board
committee ($8,000 for service on the audit committee, $6,000 for the compensation committee, and $5,000 for other committees, including
the nomination and corporate governance committee and ad-hoc committees) provided that the chairman of each committee will be entitled
to receive annual participation fees for serving as chairman on such committee ($15,000 for providing services as chairman of the audit
committee, $12,000 for providing services as chairman of the compensation committee or $10,000 for serving as chairman of other committees,
including nomination and corporate governance committee and ad-hoc committees). All participation fees are paid on a quarterly basis.
In the event that a non-executive director serves as a member or chairman in any of the foregoing compositions during only part of a year,
a pro rata portion of the annual fee shall be paid.
(iii)
Annual Equity-based
Compensation Grant
. In addition, each non-executive director will be entitled to receive an annual grant of options to purchase
Ordinary Shares in such amount as reflects a Fair Market Value (as defined in the 2018 Plan) of up to $86,000 as of the applicable grant
date. The options will vest over the course of one year in four quarterly installments, so long as such non-executive director’s
engagement with the Company is still in effect. The options shall be granted under the Company’s 2018 Plan, as amended from time
to time, and are subject to the terms thereof. These options shall be subject to full acceleration of vesting upon the consummation of
a “Change in Control” (as such term is defined in the 2018 Plan).
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
36
In
addition, each new non-executive director who joins the Board subsequent to September 16, 2026 shall also be entitled to receive:
(iv)
One-Time Equity-Based
Compensation Grant
. Each new non-executive director who joins the Board subsequent to September 16, 2026 will be entitled to
receive a one-time grant of options to purchase Ordinary Shares in such amount as reflects a Fair Market Value (as defined in the 2018
Plan) of up to $130,000 as of the date of the grant (to be granted on, or promptly following, the date on which such new director joins
the Board). The options will vest over a three (3) year period, with one-third of the options vesting on the first anniversary from the
date of grant and the remaining two-thirds vesting in eight substantially equal portions over the remaining two (2) year period thereafter,
on a quarterly basis, so long as such non-executive director’s engagement with the Company is still in effect. The options shall
be granted under the Company’s 2018 Plan, as amended from time to time, and are subject to the terms thereof. These options shall
be subject to full acceleration of vesting upon the consummation of a “Change in Control” (as such term is defined in the
2018 Plan).
VAT,
if applicable, will be added to all compensation components mentioned in this Proposal Seven.
For
the avoidance of doubt, as previously approved by our shareholders at our 2026 annual meeting of shareholders, any non-executive director
who joins the Board after the date of the applicable annual general meeting shall be entitled to receive a pro rata portion of the annual
options grant for the remainder of the applicable year, calculated based on the number of days from the date of such director’s
appointment to December 31 of such calendar year as a fraction of 365 days. Such pro rata grant shall be made on, or promptly following,
the date of the director’s appointment to the Board, with the vesting commencement date being the date of such director’s
appointment. Any such pro rata grant shall also be subject to the full acceleration upon a Change in Control as described above. In addition,
the grant timing of the annual Equity-based Compensation Grant shall be as approved by our shareholders at our 2026 annual meeting of
shareholders (proposal two of that meeting).
For
the avoidance of doubt, if this Proposal Seven is not approved by the shareholders, then the non-executive directors shall be entitled
to receive the cash and equity compensation as previously approved by the shareholders and as in effect immediately prior to the Special
Meeting.
Proposal
Shareholders
are being asked to adopt the following resolution:
“RESOLVED,
that the amended terms of compensation of the Company’s non-executive directors, as described in Proposal Seven of the Company’s
Proxy Statement for the Company’s 2026 Special Meeting, be, and it hereby is, approved.”
Vote
Required
Proposal
Seven requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Seven, and abstentions and broker non-votes have no effect on the outcome
of Proposal Seven. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent
applicable pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the
votes cast by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders
mentioned in clause (i) above who voted against such proposal does not exceed 2% of the total voting rights in the Company.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
37
PROPOSAL
EIGHT — APPROVAL OF EXTENSION OF THE POST-TERMINATION EXERCISE PERIOD FOR OFFICERS AND DIRECTORS
Background
Under
the Company’s existing share option agreements, granted pursuant to the 2018 Plan, if a participant (including an officer or director)
incurs a Termination of Service (as defined in the 2018 Plan) for any reason other than death, Disability or for Cause, the participant’s
vested share options must be exercised within three (3) months following the date of such Termination of Service (or, if earlier, prior
to the expiration date of such options) (the “Current Exercise Period”). The Board believes that this 90-day post-termination
exercise window may not provide sufficient flexibility for the Company’s officers and directors and may not fully reflect the long-term
nature of the Company’s equity compensation program. In particular, the realization of value in a clinical-stage biopharmaceutical
company may depend on clinical, regulatory and other strategic milestones that occur over periods extending well beyond the respective
periods of service of the Company’s officers and directors, including non-executive directors (collectively, “Office Holders”).
Pursuant
to the Israeli Companies Law, the terms of compensation of the Company’s directors and officers (including the terms of share option
agreements) must generally be consistent with the Company’s compensation policy, and must be approved by the Compensation Committee,
the Board and a Special Majority of the Company’s shareholders, to the extent applicable, in accordance with the provisions of the
Israeli Companies Law. Accordingly, the Company is seeking shareholder approval of the Extended Exercise Period (as defined below) as
a term of compensation applicable to all current and future Office Holders.
Accordingly,
on September 16, 2026, the Compensation Committee and the Board approved, subject to the approval of our shareholders at this Special
Meeting, an amendment to the post-termination exercise provisions of the Company’s standard form of share option agreement under
the 2018 Plan, to extend the post-termination exercise period for vested share options held by the Office Holders from three (3) months
to five (5) years following the date of such Office Holder’s Termination of Service (or, if earlier, the original expiration date
of the applicable option) (the “Extended Exercise Period”).
The
Board believes that extending the post-termination exercise period for Office Holders from 90 days to five (5) years is appropriate for
the following reasons:
i.
Retention and Long-Term
Alignment
. A longer post-termination exercise window allows Office Holders who depart the Company to retain a meaningful equity stake,
reinforcing the connection between their contributions during their tenure and the Company’s long-term performance. This is particularly
important for a clinical-stage biopharmaceutical company such as Entera, where the realization of shareholder value may depend on long-duration
clinical and regulatory milestones that extend well beyond a departing Office Holder’s service period. The Board believes that the
Extended Exercise Period reduces the pressure on Office Holders to exercise options prematurely (or forfeit them) upon departure, including
in circumstances where exercise may require a significant cash investment or may be affected by applicable trading restrictions. The Extended
Exercise Period does not provide additional vesting or extend the original term of any option.
ii.
Competitive Market Practice
.
In considering the Extended Exercise Period, the Compensation Committee and the Board reviewed market practices relating to post-termination
exercise periods, including practices adopted by other Israeli public companies. Certain public companies have adopted equity arrangements
under which vested options held by eligible participants may remain exercisable following termination of service for periods substantially
longer than 90 days and, in certain circumstances, through the options’ original expiration dates. The Compensation Committee and
the Board considered market practices, together with the Company’s particular circumstances and the long-term nature of value creation
in the biopharmaceutical and technology industries, in determining that the proposed five-year Extended Exercise Period is appropriate.
The proposed Extended Exercise Period does not extend any option beyond its original expiration date.
If
approved, Section 3 of the Company’s standard form of share option agreement under the 2018 Plan, as applied to Office Holders,
would be replaced in its entirely as follows (with the amended language shown in bold for illustrative purposes only):
“If
the Participant incurs a Termination of Service by the Company for Cause, any Options held by the Participant shall be immediately cancelled
and may not thereafter be exercised, even if exercisable on the date of such Termination of Service.
If
the Participant incurs a Termination of Service for any reason (including as a result of death or Disability) other than for Cause, the
Option, to the extent vested as of the date of such Termination of Service, may be exercised by the Participant or, following the Participant’s
death (whether on or after the date of such Termination of Service), by the Participant’s designated Beneficiary, estate or other
permitted transferee, at any time before the earlier of (i) the
five (5) year anniversary
of the date of the Termination
of Service, and (ii) the original expiration date of such Option. To the extent the Option was not vested and exercisable on the date
of the Participant’s Termination of Service, such portion of the Option shall terminate.”
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
38
All
other terms of the share option agreement, will remain unchanged.
If
approved by the shareholders, the Extended Exercise Period will apply to all share options held or to be held by Office Holders, whether
granted pursuant to the proposals being approved at this Special Meeting (including, without limitation, the Top-up Grants),options previously
granted under the 2018 Plan on a retroactive basis (such that the option agreements governing such previously granted options shall be
deemed amended to reflect the Extended Exercise Period), or options to be granted in the future to any individual who is an Office Holder
at the time of grant (or who subsequently becomes an Office Holder while holding outstanding options), in each case, without the need
for further shareholder approval with respect to the Extended Exercise Period. For the avoidance of doubt, the Extended Exercise Period
(i) applies solely to the vested portion of an applicable option, (ii) does not accelerate or otherwise modify the vesting schedule of
any option, (iii) does not modify the exercise price of any option, and (iv) does not extend the original expiration date or original
term of any option.
The
Extended Exercise Period applies solely to options held by Office Holders. Options held by other participants under the 2018 Plan who
do not serve as officers or directors of the Company will continue to be governed by the post-termination exercise provisions set forth
in their respective option agreements and as previously approved by the Company.
The
change will be effectuated through amendments to the applicable individual share option agreements (for previously granted options) and
through the inclusion of the Extended Exercise Period in the standard form of option agreement used for future grants to Office Holders.
The
Extended Exercise Period does not result in the issuance of any additional Ordinary Shares and does not increase the number of Ordinary
Shares reserved for issuance under the 2018 Plan.
Proposal
Shareholders
are being asked to adopt the following resolution:
“RESOLVED,
that the extension of the post-termination exercise period for vested share options granted or to be granted to the Company’s Office
Holders, as described in Proposal Eight of the Company’s Proxy Statement for the Company’s 2026 Special Meeting, be, and it
hereby is, approved.”
Vote
Required
Proposal
Eight requires the affirmative vote of a simple majority of our Ordinary Shares voted in person or by proxy, meaning that more votes must
be cast “for” than “against” for Proposal Eight, and abstentions and broker non-votes have no effect on the outcome
of Proposal Eight. In addition to the simple majority vote described above, the Israeli Companies Law requires further, to the extent
applicable pursuant to the provisions of the Israeli Companies Law, that either (i) such majority must include a simple majority of the
votes cast by shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders
mentioned in clause (i) above who voted against such proposal does not exceed 2% of the total voting rights in the Company.
Board
Recommendation
The
Board recommends that our shareholders vote “FOR” the adoption of this resolution.
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
39
where
to OBTAIN ADDITIONAL information
We
maintain an internet website at https://investors.enterabio.com/. Copies of the committee charters of each of the Audit Committee, Compensation
Committee and Nominating and Governance Committee can be found under the Company — Investors — Corporate Governance section
of our website, and such information is also available in print to any shareholder who requests it through our Investor Relations department
at the address below.
We
maintain copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, free of charge, through
the Investors — SEC Filings section of our website at https://investors.enterabio.com/.
Expenses
relating to this proxy statement
We
will pay all expenses relating to this proxy solicitation. In addition to this solicitation by mail, our officers, directors, and employees
may solicit proxies by personal interview, telephone, facsimile, email or other method without extra compensation for that activity. We
may also retain an independent contractor to assist in the solicitation of proxies. If retained for such services, we will pay the related
costs. We may reimburse the reasonable charges and expenses of brokerage houses or other nominees or fiduciaries for forwarding proxy
materials to, and obtaining authority to execute proxies from, beneficial owners for whose accounts they hold Ordinary Shares.
By order of the Board of Directors,
/s/ Geno J. Germano
Geno J. Germano
Chairman of the Board
October
14, 2026
Entera
Bio Ltd. | 2026 Special Meeting Proxy Statement
40
Appendix
A
FORM
OF AMENDMENT TO THE ENTERA BIO LTD. 2018 EQUITY INCENTIVE PLAN
This
Amendment (the “Amendment”) to the 2018 Equity Incentive Plan (the “2018 Plan”) of Entera Bio Ltd., a company
organized under the laws of the State of Israel (the “Company”), is made effective as of November 24, 2026. Unless otherwise
specifically defined herein, each capitalized term used herein shall have the meaning afforded such term under the 2018 Plan.
WHEREAS
,
the Board of Directors of the Company (the “Board”) via meeting of the Board held on September 16, 2026, determined it to
be in the best interests of the Company to amend the 2018 Plan to increase the aggregate number of ordinary shares, par value NIS 0.0000769
per share (“Ordinary Shares”) of the Company authorized for issuance thereunder by a one-time additional amount of 13,937,915
Ordinary Shares (the “Share Increase”); and
WHEREAS
,
at the Company’s 2026 special meeting of shareholders held on November 24, 2026, the Company’s shareholders approved the Share
Increase.
NOW,
THEREFORE
, be it resolved that the 2018 Plan is hereby amended as follows:
1.
Section 4(a) of the 2018 Plan is hereby deleted in its entirety and replaced with the following:
“Subject
to adjustment as provided in Section 4(c), the maximum number of Shares available for issuance under the Plan shall not exceed 12% of
the Company’s issued and outstanding share capital as of the Effective Date;
provided
that, (a) starting on January 1, 2019,
on January 1 of each year, the total number of Shares available for issuance under the Plan will be increased by an amount equal to the
lesser of (i) 5% of the Company’s outstanding Shares on December 31 of the immediately preceding year or (ii) such number of Shares
as determined by the Board in its discretion, (b) on September 7, 2022, the total number of Shares available for issuance under the Plan
shall also be increased by a one-time amount equal to 576,188 Shares and (c) on July 31, 2024, the total number of Shares available for
issuance under the Plan shall also be increased by a one-time amount equal to 1,788,515 Shares, (d) on July 14, 2026, the total number
of Shares available for issuance under the Plan shall also be increased by a one-time amount equal to 2,500,000 Shares and (e) on November
24, 2026, the total number of Shares available for issuance under the Plan shall also be increased by a one-time amount equal to 13,937,915
Shares. Shares underlying Replacement Awards and Shares remaining available for grant under a plan of an acquired company or of a company
with which the Company combines, appropriately adjusted to reflect the acquisition or combination transaction, shall not reduce the number
of Shares remaining available for grant hereunder.”
2.
To record the adoption of this Amendment to the 2018 Plan by the Board, and the approval by the Company’s shareholders of this Amendment
effective as of November 24, 2026, the Company has caused its authorized officer to execute the same as of the date first set forth above.
ENTERA
BIO LTD.
By:
/s/ Miranda Toledano
Name:
Miranda Toledano
Title:
Chief Executive Officer
Appendix
B
ENTERA
BIO LTD.
DIRECTORS
AND OFFICERS COMPENSATION POLICY
1.
PURPOSE
This document is designed to determine,
describe and detail the policy of Entera Bio Ltd. (the “
Company
”) with respect to the Terms of Office and
Employment of the Company’s Office Holders (as defined hereunder), its components and the manner in which they are determined, inter
alia, in accordance with the provisions of the Israeli Companies Law, 5759-1999, or “
Companies Law
” (the
“
Compensation Policy
” or “
Policy
”).
2.
DEFINITIONS
“
Office Holders
”
- as such term is defined under the Companies Law, including members of the Company’s board of directors, or the Company’s
general manager, chief executive officer (CEO), a deputy chief officer, chief financial officer, and any person holding such position
in the Company, irrespective of his or her title, and also any manager who reports directly to the CEO of the Company (i.e., C-level officers).
“
Officers
”
- the Company’s general manager, CEO, a deputy chief officer, chief financial officer, and any person holding such position in the
Company, irrespective of his or her title, and also any manager who reports directly to the CEO of the Company (i.e., C-level officers).
“
Directors
”
- members of the Company’s board of directors.
“
Terms of Office and Employment
”
of Office Holders – as such term is defined under the Companies Law.
Terms not otherwise defined herein shall
have the meaning ascribed to them in the Companies Law, unless the context dictates otherwise. To the extent any provision herein conflicts
with the conditions of any applicable law, the provisions of such applicable law shall prevail over this Policy, and the Company’s
board of directors (the “
Board
”) is empowered hereunder to interpret and enforce such prevailing provisions.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
3.
CONSTRUCTION; EFFECT
This Compensation Policy shall take effect
as of the date of its approval by the general meeting for three years, in accordance with the provisions of the Companies Law (the “
Effective
Date
”), and shall apply to the Terms of Office and Employment of Office Holders that are approved following the Effective
Date.
This Policy shall not apply, shall have
no effect with respect to, or derogate from, any Terms of Office and Employment of any Office Holder which are in effect prior to the
Effective Date.
Nothing in this Policy shall confer upon
any person, including, any Office Holder, any rights, entitlements, benefits or remedies whatsoever, including any right or entitlement
to any compensation, remuneration or benefits of any kind or nature. The Terms of Office and Employment of an Office Holder shall only
be as set in an agreement between such Office Holder and the Company or in a written undertaking of the Company or in a resolution of
the Company’s Compensation Committee, Board and shareholders (to the extent shareholder approval is required by law) setting forth
the Terms of Office and Employment and their applicability to the relevant Office Holder.
The provisions of this Policy determine,
inter alia, the framework for various components of compensation. Any deviation from this Compensation Policy shall be subject to the
approval of the Company’s Compensation Committee, Board and shareholders, to the extent required by law. However, if the applicable
corporate organs of the Company determine, with respect to a specific Office Holder, that such Office Holder is entitled to compensation
components that are inferior to those indicated herein, such shall not be deemed as deviation from the Compensation Policy.
To the extent that after the Effective
Date a relief is granted as to the mandatory or minimum requirements prescribed by applicable law to be included in a Compensation Policy,
or any limitation contained in this Policy is more stringent than that required by applicable law, then such relief or less stringent
limitation shall be deemed incorporated by reference into this Policy notwithstanding anything else to the contrary, unless otherwise
determined by the Board.
4.
GENERAL BACKGROUND
4.1.
Objectives
This Compensation Policy is designed to
promote and advance the Company’s long-term objectives, work plans and policy, and to create appropriate incentives subject to any
law, taking into consideration, inter alia, the Company’s risks management policy, in view of the Company’s size, the nature
of its activities and its financial state.
In support of this goal, compensation practices,
including variable compensation, for the Company’s Office Holders, are designed to meet the following objectives:
4.1.1.
Improve business results and strategy implementation, and support the Company’s work-plans, from a long-term
perspective;
4.1.2.
Align Officers’ and Directors’ interests with those of the Company and its shareholders and incentivize
Officers and Directors to create long- term economic value for the Company;
4.1.3.
Create motivation for Office Holders to attain a high level of business achievements without taking unreasonable
risks;
4.1.4.
Create a clear line-of-sight between Officers’ and Directors’ compensation and both Company and
individual performance;
4.1.5.
Establish an appropriate balance between the various compensation components - fixed vs. variable compensation,
quantitative and measurable components vs. discretionary components, short-term vs. long-term components, compensation in cash vs. equity-based
compensation and benefits and perquisites, to ensure sustained business performance over time; and
4.1.6.
Utilize market benchmark compensation tools to ensure our Officers and Directors are compensated fairly and
best practices are implemented.
4.2.
Primary Bodies Involved in Determining the Compensation Policy for Office Holders
The parties involved in determining the Company’s
Compensation Policy are:
•
The Compensation Committee – (i) makes recommendations to the Board regarding the approval of the Compensation
Policy for Office Holders and any extensions and updates to the Policy to the extent required; (ii) approves the Terms of Office and Employment
of Office Holders; and (iii) subject to certain requirements prescribed by the Companies Law, may determine to exempt a transaction from
shareholder approval.
•
The Board of directors – (i) approves the Compensation Policy for Office Holders; (ii) periodically reviews
the Compensation Policy; and (iii) is responsible for updating it as and when necessary.
•
The General Meeting (shareholders) - approves the Compensation Policy, as required by law.
The Compensation Committee and the Board
shall review this Compensation Policy from time to time, as required by the Companies Law. This Compensation Policy shall be brought for
reconsideration and re-approval, as required by the Companies Law (currently, every three years).
4.3.
Business Environment and its Impact on Compensation of Office Holders
The Company’s Compensation Policy
was designed, inter alia, to ensure the Company’s ability to recruit and retain the highly talented Office Holders with appropriate
qualifications, in accordance with and subject to the objectives of the Compensation Policy set forth in Section 4.1, including the promotion
of the Company’s goals in the long-term.
B -2
5.
OFFICE HOLDER’S COMPENSATION IN VIEW OF COMPANY VALUES AND BUSINESS STRATEGY
5.1.
Compensation According to the Office Holder’s Characteristics and Experience
Office Holder’s Terms of Office and
Employment shall be determined, for each of the various compensation components, while taking into account the Office Holder’s education,
skills, qualifications, expertise, professional experience and accomplishments, as well as the Office Holder’s position, areas and
scope of responsibilities and his or her prior compensation agreements.
5.2.
Ratio Between Office Holders Compensation and Compensation of Other Company Employees
Nevertheless, since the Company employs
a relatively small number of employees most of whom have unique professional expertise, the Company attaches importance to the creation
of appropriate compensation for all of its employees and in preserving reasonable gaps between the overall cost of the Terms of Office
and Employment of Office Holders and the overall cost of salary (including any payment or benefit) of the other Company employees.
In determining the Terms of Office and
Employment of Office Holders, the Compensation Committee and the Board will examine, inter alia, the ratio between the overall Terms of
Office and Employment of Office Holders and the average and median salary of the Company’s employees and contractors other than
the Company’s Office Holders, as well as the possible ramifications of such ratio on the work environment in the Company.
The Compensation Committee and the Board
have examined the current ratio, and believe that this ratio is appropriate and reasonable, taking into account the size and nature of
the Company, its value, scale of business, the mixture of manpower, its field of business and its ramifications on the work environment
of the Company.
5.3.
Relationship Between the Company’s Business Results and Office Holders Compensation
The Company’s policy is that the
overall Terms of Office and Employment for Officers should be considerably influenced by its business results as well as the individual
contribution, responsibility and professional expertise of each Officer to the achievement of these results. The influence of the business
results and the individual contribution on the compensation shall increase the higher the Office Holder’s position is. In accordance,
the higher the position is, the weight of the variable compensation that is performance based in relation to the overall Terms of Office
and Employment shall increase, all as specified in Section 4.2 below.
6.
PRIMARY CONCEPTS OF THE COMPENSATION POLICY
6.1.
Overall Compensation Concept
The Company’s Compensation Committee
and Board believe that the overall compensation of each employee, and in particular of Office Holders, should be comprised of a number
of different components, such that each element rewards the employee for a different element of his or her contribution to the Company,
thus achieving the objectives of the Company’s Compensation Policy:
•
Base salary
- designed to partially reward the Office Holder for his or her devotion and contribution
to the performance of his or her role and the daily performance of his or her tasks. The base salary takes into account the Office Holder’s
skills, experience, expertise, education, professional qualifications etc., and the requirements of the role and the responsibilities
and authorities it carries.
•
Benefits and perquisites
- some of which are mandatory according to law (such as pension,
severance pay, vacation days, sick leave, recuperation pay, etc.), some of which are common market practice (such as health insurance,
further education funds, all which may have certain tax benefits for the employee and the Company) and others are designed to compensate
the employee for expenses incurred in fulfilling the position (such as car lease, travel expenses, phone, etc.).
•
Variable performance-based awards (e.g. annual bonus)
- designed to reward the Office Holder
for his or her achievements and contribution to attaining the Company’s goals during the course of the period for which the variable
compensation is paid and to supplement the base salary. The weight of variable performance-based compensation in relation to the overall
compensation shall increase the higher the Officer’s position is.
•
Equity-based compensation
- designed to link long-term shareholder returns and the compensation
of Office Holders of the Company. Equity- based compensation creates a correlation between the interests of employees and Office Holders
and the interests of the Company’s shareholders, and assists in creating motivation and in retaining the key personnel in the Company.
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6.2.
Ratio Between Variable and Fixed Components of the Compensation Package
The rate of the annual variable components
(including, without limitation, cash bonuses, performance-based awards and equity-based awards) of the Office Holders overall annual compensation
package (comprised of the base salary and variable components) shall not exceed the 90% of the Office Holder’s total compensation
package.
A deviation of up to 10% of these terms
shall not constitute a deviation or deflection from the compensation policy.
Note that this refers to the planned ratio
only, assuming the receipt of the target bonus as stated in this policy. The actual ratio between the components of the compensation package,
in a given year, may be different due to underperformance or overachievement impacting the variable compensation, as stated in this Policy.
6.3.
Market comparison (benchmark)
To determine the salary for the recruitment
of our new Office Holders, a comparison shall be made of the acceptable salary in the market for similar positions in companies similar
to the Company (“
Peer Group
”). For purposes of the foregoing comparative studies, companies meeting the following
characteristics shall be selected:
•
Companies operating in the field of biotech, pharmaceutical, drug development or other related fields;
•
Israeli companies whose shares are traded on the NASDAQ Stock Market or NYSE to the extent practicable, based
in Israel, and preferably, with officers residing in the US;
if the number of such companies is lower than 10, the Peer Group
may also include US companies
; and
•
Companies of similar size in the following financial dimensions: market cap, shareholder equity, balance sheet,
sales turnover, operating profit and/or net profit, as provided in the most updated published information or the Company’s last
annual report.
The Company shall make reasonable efforts
to include at least 10 companies in the Peer Group (but in no event less than 5 companies).
The comparative study shall address all
the components of the compensation package and shall include (to the extent the information is available):
•
the acceptable range of base salaries for similar positions (including the split within the range);
•
the acceptable range for annual bonuses;
•
the acceptable range for equity-based compensation; and
•
the benefits and perquisites that are acceptable in the market.
7.
COMPENSATION COMPONENTS
7.1.
Base Salary
7.1.1.
Determination of the base salary for Officers
The base salary for an Officer shall be determined
during the course of negotiations for his or her employment in the Company, which shall be conducted by the person who shall directly
supervise the Officer (for the CEO - the chairman of the Board, for any other Officer - the Company’s CEO, or whoever is appointed
on behalf of the chairman or CEO for such purposes). The Officer’s intended supervisor may determine the base salary within the
range determined in the directives of this policy (as detailed in the following table in Section 7.1.1.3 below) and the salary shall be
brought before the relevant Company organs for approval, as required by law.
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In determining the base salary, the Office
Holder’s characteristics and experience, as provided in Section 5.1 above, shall be taken into consideration, as well as the acceptable
salary conditions for similar positions in Peer Group companies, as other companies which compete with the Company for similar talents.
The Company’s financial state and cash position at the time of recruitment shall also be taken into consideration.
The base salary shall also be subject to
any requirements or restrictions prescribed by the Companies Law, U.S. securities laws, NASDAQ rules, any other applicable law from time
to time, and (with regard to U.S. based Officers) evolving best practices among shareholder advisory and institutional investor groups.
The Company believes that the emphasis of
its Compensation Policy should be on performance based compensation, and therefore, the Company’s policy is to determine a base
salary which is targeted at the median salary in the relevant market for similar positions (including in Peer Group companies), alongside
variable performance based compensation and long-term compensation components that will bring the Officer’s overall compensation
to a level which will allow the Company to recruit and retain the highly talented management personnel it requires for continuation of
its success.
Since Officers hold management positions
within the meaning of the Hours of Work and Rest Law, 5711-1951, Officers shall not be entitled to compensation for overtime work or work
on the day of rest.
7.1.1.1.
Internal comparison
- in determining the salary for the recruitment
of a new Officer, the following considerations shall be taken into account, as well as their potential impact on the Company’s labor
relations as a whole and within the management team:
•
The gap between the proposed salary of the Officer and the salary of the other Officers of the Company.
•
The ratio between the proposed salary of the Officer and the salary of the other employees of the Company.
•
If there are Officers with similar positions in the Company - the gap between the proposed salary of the Officer
and the salary of Officers in similar positions.
•
The geographical location of the Officer.
7.1.1.2.
Geographical Location
- To the extent necessary, the Company
may employ an Officer outside of Israel. In such case, the process of determination of his or her salary, shall be adjusted to the country
where such Officer is employed and shall be applied by reference to the compensation practices customary in that Officer’s local
market and
geographical
location of training and or resident. Notwithstanding the foregoing,
In the event that the salary of Officers (either in Israel or outside of Israel) deviates from this policy, the salary shall be considered
as deviating from this Policy and shall be subject to the approval process required for compensation in deviation from the Policy.
7.1.1.3.
The maximum amount of monthly salaries for Company’s Officers
shall be:
Rank
Maximum
CEO
$65,000
C-level Officers
$50,000
A deviation of up to 10% above and below
the ranges detailed in the table shall not constitute deviation from the Compensation Policy.
The base salaries of the Company’s
Officers shall be linked to the Consumer Price Index (or a similar index customary in the country in which the employee is located, if
not Israel).
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7.1.2.
Periodical review and update of salary
In order to retain Office Holders other than
non-employee and non-executive Directors, such Office Holders’ base salary shall be reviewed annually by the Compensation Committee
and the Board, taking into consideration the challenges of the given year and the following year, the complexity of such Office Holders’
roles, their scope and importance to the Company’s performance - all based upon the Company’s resources and in comparison
to the acceptable salary for similar roles in the relevant market. To the extent necessary, a proposal regarding an increase to all or
any of the Office Holders’ salaries shall be prepared and brought before the Company’s relevant organs for approval, as required
by law.
7.2.
Variable Compensation
Variable compensation components are intended to achieve, inter
alia, the following objectives:
•
To link Office Holders’ compensation to the Company’s achievement of business goals and targets
and the maximization of its profits, with a long-term view and in accordance with the office holder’s position, and align Office
Holders’ interests with those of the Company and its shareholders.
•
Increase the Officers’ motivation to attain a high level of business achievements without taking unreasonable
risks.
•
Correlating some of the Company’s payroll costs with its performance and enhancing its financial and
operational flexibility.
7.2.1.
Annual bonus
The Company’s Officers shall be entitled to an annual
bonus, based upon the annual bonuses plan, which shall be brought before the Compensation Committee and the Board for approval.
7.2.1.1.
Principles
Annual bonuses for Officers shall be calculated
according to an annual bonus plan, to the extent it is determined and approved by the Company’s Compensation Committee and Board,
at the beginning of each calendar year for which the bonus is paid. The annual bonus plan shall be comprised of the following provisions:
•
Payment thresholds, based on one or more quantitative financial Company performance measure(s) during the year
for which the bonus is paid (such as capital investments, cash balance relative to equity, obtaining approval from the authorities in
the target markets, and other quantitative performance measures suitable to the company). The Compensation Committee and the Board shall
determine the measure according to the Company’s targets for the bonus year, based on the Company’s short and long term objectives.
If an Officer does not meet the threshold performance measures in a given calendar year, calculated on a weighted average basis, he or
she will not be entitled to an annual cash bonus. The lower percentage threshold is 75 % for each Officer. The Compensation Committee
and the Board may determine that in respect of any specific year, all or any particular Officer or Officers shall not be entitled to any
annual bonus.
•
Target bonus for each Officer - the target bonus is the annual cash bonus amount to be paid to an Officer upon
achievement of 100 % of the Officer’s performance measures. The target bonus shall be set in monthly employer salary cost multiplier
terms. A target bonus shall be identical for each Officer of a particular rank and
shall
not exceed
the following:
Rank
Target
bonus (multiplier of monthly employer salary cost )
CEO
12
C-level Officers
10
•
Maximum bonus (in terms of a salary multiplier) is the maximum annual cash bonus to be paid to an Officer upon
achievement of 125 % of the Officer’s performance measures. The maximum bonus (bonus cap) for all Officers shall be 18 times the
applicable monthly base salary;
•
The measures according to which the bonus shall be calculated for each Officer and their relative weights,
in accordance with Section 7.2.1.2 below;
•
The performance measures and targets, for the bonus year.
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7.2.1.2.
Determining the bonus plan performance measures and targets
Personal targets and performance measures
shall be determined by the Compensation Committee and the Board for the CEO, and by the CEO for each of the other Officers of the company.
The Officer’s performance shall be measured according to such personal targets and performance measures. A weight shall be assigned
to each measure for determining the annual bonus for each Officer, and the bonus paid to the Officer shall be determined in accordance
with the weighted percentage of meeting the targets, as described below. There shall be three main categories of performance measures
for each Officer:
•
Company measures - economic or strategic quantitative measures, relating to the Company’s performance
(capital investment, cash balance relative to equity, obtaining approval from the authorities in the target markets and other quantitative
performance measures suitable to the company). These measures shall be the same for all Company Officers, and shall determine up to 40%
of the total bonus of the Company’s Officers.
•
Personal measures - quantifiable and measurable key performance indicators (KPIs) shall be determined for each
Officer separately, according to his or her position. These measures shall determine up to 40% of the total bonus of the Company’s
Officers. The goals for each Officer’s personal measures shall be based, to the extent possible, on performance focusing on the
long-term view.
•
Managerial appraisal - an evaluation of each Officer’s performance in non-measurable terms. The managerial
appraisal shall determine up to 20% of the total bonus of any Officer, including the CEO. At the beginning of each year, qualitative measures
shall be determined on the basis of which the appraisal of each Officer shall be made.
The targets in the personal and managerial
measures of each Officer shall be determined in accordance with the work plan targets for the bonus year.
7.2.1.3.
Determination of the bonus budget
The total annual budget for the bonuses of
Company’s Officers shall be determined according to the sum of the maximum bonuses of all Officers.
7.2.1.4.
Bonus calculation mechanism
The bonus for each Officer shall be calculated
based on the achievement of the targets determined for each Officer for the bonus year.
The bonus for meeting each of such targets
will be made on the basis of a pro-rata allocation of the Officers’ bonus cap in accordance with the respective weight of each target,
subject to the “payment line” formula determined in the annual bonus plan for Officers, which shall be multiplied by the target
bonus (the personal bonus) of the Officer for the purpose of calculating the actual bonus.
The “payment line” shall determine:
•
The performance threshold, up to which the Officer shall not be paid any bonus whatsoever, as stated above.
•
The percentage of the target bonus which shall be paid in achieving the lower performance threshold;
•
A maximum bonus, as stated above.
Calculation of the target bonus percentage
for each level of performance between the above-mentioned points shall be made by a linear method.
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7.2.1.5.
The approval process for the actual bonus
At the end of each year, the extent of meeting
targets by each of the Officers shall be determined. The extent of meeting targets of the Officer shall be translated into a rate of target
bonus, according to the payment line formula.
The Compensation Committee and the Board
shall have the right to reduce the Officers’ annual bonus at their discretion, due to circumstances determined by the Compensation
Committee and the Board.
The annual bonuses approved by the Compensation
Committee and the Board shall be paid to the Officers with the first monthly salary paid after the approval of the annual bonuses by the
Board.
7.2.2.
Special bonus
The Company’s Compensation Committee
and Board shall be authorized to award any of the Company’s Officers a one-time special bonus (which is only based on non-measurable
criteria) of up to an amount equal to a six month base salary (in addition to the annual bonus), in recognition of a significant achievement
or for completion of an assignment, such as completion of a major transaction or achieving a major milestone with material effect over
the Company’s business, subject to applicable law. Such bonus is individual for any Officer and should be approved by the Company’s
Compensation Committee and Board. Notwithstanding the aforesaid, the Company shall be authorized to award a special cash bonus which is
only based on non-measurable criteria, only if the annual value of such bonus does not exceed an aggregate three months base salary, subject
to applicable law.
7.2.3.
Equity-Based Compensation
The Company’s Compensation Committee
and Board believe that as part of the Office Holders’ total compensation package, it is appropriate to offer a component of equity-based
compensation, as customary by companies whose shares are publicly listed on the NASDAQ Stock Market or any other stock exchange, for the
purpose of advancing the interests of the Company’s shareholders by enhancing the Company’s ability to attract, retain and
motivate individuals to perform at the highest level. By virtue of the long-term nature of equity-based compensation plans, they support
the Company’s ability to retain senior managers in their position for the long term.
In view of the advantages of equity-based
compensation plans, the Company shall offer its Office Holders, including directors (subject to the provisions of the Compensation Regulations),
participation in an equity-based compensation plan according to the provision set forth below:
7.2.3.1.
Equity Incentive Plan
Subject to the approval of the Company’s
competent organs, as prescribed by law, the Company may offer Officers and Directors participation in an equity-based compensation plan
(“
Equity Incentive Plan
”), which may include options to purchase shares, share appreciation rights, restricted
shares, restricted share units, performance awards or other share-based awards (herein described collectively as “
Awards
”).
The Equity Incentive Plan may provide for granting Awards in compliance with Section 102 of the Israeli Income Tax Ordinance, 5721-1961
in the “capital gains track”, as applicable.
The Equity Incentive Plan, shall include
the following:
•
The maximum number of securities available for issuance under equity incentive awards, and the dilution rate
resulting from grants;
•
The method of allocating the grants among grantees;
•
Reserve pool for grants to Office Holders who may join the Company in the future, during the course of the
term of the plan;
•
The vesting conditions for grants under the Equity Incentive Plan will be determined by the administrator and,
in the case of restricted shares and restricted share units, will be set forth in the applicable Award documentation.
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•
Options and share appreciation rights will have an exercise price determined by the administrator, that is
no less than fair market value of the underlying ordinary shares on the date of grant, and subject to applicable law, unless otherwise
approved by the Company’s shareholders from time to time;
•
The expiration date of the Awards - up to 10 years from the date of grant; and
•
Terms upon termination of employment or service (due to dismissal, resignation, death or disability) and change
of control. The Company may set or update and amend the expiration terms of grants, as determined by the administrator from time to time,
in accordance with the terms of the Equity Incentive Plan and the applicable law. The Equity Incentive Plan shall include a definition
of a change of control, and the actions the Compensation Committee may take in the event of a change of control with respect to awards
outstanding. In the event of a structural change of the Company (i.e., a transaction in which the Company’s shares immediately prior
to the transaction are converted into or exchanged for shares that represent at least a majority of the share capital of the surviving
corporation, such as a re-domestication of the Company or a share flip), outstanding awards will be exchanged or converted into awards
to acquire shares of the Company (if it is the surviving corporation) or the successor company in accordance with the applicable exchange
ratio.
7.2.3.2.
Grants
Awards shall be granted to Office Holders
of the Company in accordance with the terms of the approved Equity Incentive Plan, subject to the approval process required pursuant to
the Companies Law.
When a new Office Holder joins the Company
during the course of a plan, and granted an Award, such Award shall be granted out of the reserve determined in the Equity Incentive Plan.
Awards shall be granted from time to time
and be individually determined and awarded, inter alia, according to the following considerations:
•
The Office Holder’s contribution to the Company’s performance;
•
The Office Holder’s ability to influence the Company’s future and performance;
•
The mix of compensation components to which the Office Holder is entitled and the desired mix of Awards;
•
The Office Holder’s performance, skills, qualifications, experience, role and personal responsibilities;
and
•
The desired competitive levels and dilution or pool limits.
7.2.3.3.
Maximum Value of Equity-Based Compensation
The maximum value of equity-based compensation,
as of the grant date, per each calendar year, shall be up to 45 monthly base salaries for the CEO and up to 40 monthly base salaries for
other Officers.
For the avoidance of doubt, full-value awards,
including restricted shares and restricted share units, are expressly permitted under the Compensation Policy and subject to the terms
of the Equity Incentive Plan. For purposes of testing compliance with the equity caps set forth in this Section 7.2.3.3 and under the
Plan, full-value awards shall be counted at their grant-date fair market value, and a conversion ratio of two (2) options for each one
(1) restricted share unit or restricted shares shall apply.
7.3.
Additional Benefits and Perquisites
7.3.1.
Benefits and perquisites (such as medical and health insurance, life insurance, savings, provident fund, vacations
and sick days) may be granted to Officers in order, among other things, to comply with legal requirements and to accommodate compensation
benefits customary in that Officer’s local market (i.e., compensation packages may vary – based on the geographical location
of the Company’s Officers – US or Israel or other geographical locations).
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7.3.2.
The Company may offer additional benefits and perquisites to Officers, which will be comparable to customary
market practices, such as, but not limited to: company car benefits; company cellular phone; meals; etc.; provided however, that such
additional benefits and perquisites shall be determined in accordance with the Company’s policies and procedures.
7.3.3.
The Company may determine in its contractual engagement with the Officer that it would bear part, or all, of
the expenses incurred by the Officer for the discharge of his or her duties, in accordance with the terms of the Company’s policy
in this regard.
8.
TERMINATION OF OFFICE CONDITIONS
8.1.
Advance Notice
An Officer shall be entitled to an advance
notice period, in accordance with and subject to the provisions of the employment agreement and/or contractual engagement entered between
the Officer and the Company, and in the absence of an advance notice provision in such agreement or engagement, as determined by applicable
law. In any event, the advance notice period shall not exceed four months. During the course of the advance notice period, the Officer
shall be required to continue to fulfill his or her position, unless the CEO (and in respect of the CEO, the Board) decides to release
him or her from this obligation, and he or she shall be entitled to the continuation of all Terms of Office and Employment without change,
during such period, with the exception that equity awards continuation shall be subject to the terms of the Equity Incentive Plan.
8.2.
Severance Payment
Officers shall be entitled to a severance
payment (other than termination under circumstances which deprive the Officers of severance pay under Israeli law) of up the greater of
(i) the minimum amount required under applicable law; (ii) any amount provided under the Officer’s employment agreement and/or contractual
engagement, entered into prior to the Effective Date of this Policy; and (iii) a cap of two times the Officer’s monthly salaries
per each year of service.
8.3.
Retirement and Termination Awards
As a general rule, no retirement and termination
awards shall be determined in the Officers’ personal employment agreements. The Compensation Committee and the Board (and as required
by law, the shareholders), may approve a retirement award to Officers, in an amount not exceeding the following maximum amounts:
•
Employed by the Company as Officer for up to five years: up to 3 monthly base salaries.
•
Employed by the Company as Officer for five years or more: up to 6 monthly base salaries.
The retirement bonus may be granted after
examining the Terms of Office and Employment during the Officer’s employment period and the Company’s performance during such
period, and may be approved in one or more of the following cases
•
Certain change of control related cases;
•
During his or her employment period the Officer has made a special contribution to the advancement of the Company’s
business as shall be determined by the Compensation Committee;
•
In respect of any Officer other than the CEO, the CEO has recommended granting a retirement bonus.
Retirement bonus, if such is approved,
shall be paid upon termination of employment relationship and shall be equal to the months approved multiplied by the (gross) base salary
to which the Officer was entitled upon termination of his or her employment with the Company. Retirement bonus for Officer other than
the CEO shall not include associated benefits. The retirement bonus for the CEO shall include accompanying benefits in accordance with
the CEO’s employment agreement.
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8.4.
Non-Competition
Officers shall undertake in writing, at
the time they enter into an employment agreement with the Company, to refrain from competing with the Company in accordance with and subject
to the provisions of the employment agreement and/or contractual engagement entered between the Officer and the Company. The non-competition
provision applies for a period which is generally not less than 12 months following termination of employment. We have entered into written
employment agreements with all of our Officers who are employed in the Company at the date of publication of the Policy. Each of these
agreements contains provisions regarding confidentiality, non-competition/non-solicitation and ownership of intellectual property.
9.
NON-EXECUTIVE DIRECTORS’ COMPENSATION
The Company aims to attract and retain
talented directors with excellent educational background, qualifications, skills, expertise, professional experience and achievements,
by providing a fair and competitive compensation program.
The compensation of non-employee and non-executive
Directors of the Company shall be determined pursuant to the provisions of the Companies Law.
Elements
:
•
Board Membership Fee
. non-executive Directors will generally be entitled to receive an annual
cash payment by virtue of their membership on the Board.
•
Committee Membership Fee
. non-executive Directors will generally be entitled to receive an
annual cash payment by virtue of their membership on one or more committees of the Board (which payments may vary by committee).
•
Board/Committee Chair Fee
. The chair of the Board and/or the chair of the Board committees
may also receive additional annual cash payments for their extra service in such capacities.
•
Equity-Based Compensation
. non-executive Directors may also receive equity-based awards, which
are intended to align directors’ interests with those of the Company and its shareholders over the long term. Such awards will generally
be granted on an annual basis or on such other basis (such as an initial joining equity grant upon appointment to the Board) or in such
other intervals all as approved by the Company’s shareholders from time to time.
•
Special Contribution
. Any non-executive Director who takes on increased duties on behalf of
the Company as determined by the Board, may receive additional payments, in recognition of their increased duties, subject to applicable
law.
•
Insurance, Indemnification, Release
. non-employee and non-executive Directors shall also be
entitled to insurance, indemnification and release arrangements, as provided below.
The above compensation is designed to compensate
directors for their services to the Company, without payment of additional per-meeting fees. Applicable value-added tax will be added
to such compensation in accordance with applicable law.
The Company may reimburse or cover its
non-executive directors (including travel and related expenses) incurred in connection with Board and its committees meetings or performing
their services for the Company.
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10.
OFFICE HOLDERS’ INSURANCE, INDEMNIFICATION AND RELEASE
Office Holders may be covered by Directors’
and Officers’ liability insurance which the Company shall acquire, from time to time (the “
Insurance Policy
),
in accordance with the Company’s Articles of Association and the provisions of applicable law, including the Companies Law and the
Companies Regulations (Reliefs Regarding Transaction with Interested Parties), 2000 (the “
Relief Regulations
”).
Subject to the provisions of the Relief Regulations, the approval of the acquisition, extension, renewal or replacement of the Company’s
Insurance Policy shall only require the approval of the Company’s Compensation Committee provided that the Insurance Policy is on
market terms and the Insurance Policy is not likely to materially impact the Company’s profitability, assets or obligations. Such
insurance coverage may include “run-off” provisions covering the Directors’ and Officers’ liability following
termination of service or employment.
The Company will release all current and
future Office Holders from liability for actions taken in the performance of or related to the Director’s or Officer’s duties
and provide each of them with indemnification to the fullest extent permitted by law and the Company’s Articles of Association.
The Company awards, and shall continue
to award, indemnification undertakings to Office Holders, to the extent permitted by the Companies Law and the Company’s Articles
of Association.
11.
GENERAL DISCRETION; CLAWBACK
11.1.
General Discretion
•
The Compensation Committee and the Board may, at their sole discretion, approve compensation terms that are
lower than the thresholds and benchmarks described herein.
•
The Committee and the Board have the right to reduce any variable compensation to be granted to an Office Holder
due to any circumstances determined by the Compensation Committee and the Board.
11.2.
Non-Material Updates
Subject to the provisions of the Companies
Law, (i) a non-material update to the Terms of Office and Employment of an Officer other than the CEO may be approved by the CEO of the
Company (and shall not require the approval of the Compensation Committee); and (ii) a non-material update to the Terms of Office and
Employment of the CEO may be approved by Compensation Committee (and shall not require the approval of the Board and/or the general meeting)
, provided that the updated terms are consistent with this Policy.
11.3.
Clawback
The Company’s Office Holders are required
to return any compensation paid to them (including any incentive-based compensation granted to them) on the basis of results included
in financial statements that turned out to be erroneous and were subsequently restated, during the three year period following filing
thereof. In such case, compensation amounts will be returned net of taxes that were withheld thereon, unless the Office Holder has reclaimed
or is able to reclaim such tax payments from the relevant tax authorities (in which case the Office Holder will also be obligated to return
such tax amounts).
The Officer shall refund the surplus bonuses
sums, within one year from the date of the Company’s notice with respect thereto, linked to the consumer price index, and if the
Officer has received less, the Company shall pay the missing bonus amounts together with the next monthly salary. The Company, by written
notice to the Officer 60 days in advance, may set-off all or part of the surplus bonuses sums from the bonuses owing to the Officer in
respect of the following years.
For the avoidance of doubt, the terms of
this Compensation Policy shall be in addition to, and shall not derogate from, the terms of the Company’s Clawback Policy as may
adopted or in effect from time to time, in compliance with Rule 10D-1 under the Exchange Act and the appliable Nasdaq rules (the “Clawback
Policy”) or Section 304 of the Sarbanes-Oxley Act of 2002. Without limiting the foregoing, in the event of a conflict or inconsistency
between the Compensation Policy and the Clawback Policy with respect to clawback’s aspects, the Clawback Policy shall prevail.
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12.
HEDGING AND PLEDGING
Officers and directors are prohibited from
hedging or pledging their equity awards and any other Company securities. The no-hedging policy applies to each director and Officer until
one year following termination of such director’s term of office or such Officer’s termination of employment, as applicable.
Furthermore, Officers and directors may not pledge or use their equity awards or any other Company securities held by them as collateral
for loans unless otherwise approved by the Compensation Committee and Board.
13.
RESERVED.
14.
MAINTENANCE OF THE COMPENSATION POLICY
14.1.
The Company’s Compensation Committee shall be responsible for maintaining the Compensation Policy updated.
14.2.
Updates to the Compensation Policy shall be approved by the Compensation Committee, the Board and the shareholders,
as required under the Companies Law.
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ENTERA BIO LTD.
PROXY CARD
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, NOVEMBER 24, 2026
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS
The undersigned hereby appoints Ms. Miranda Toledano
and Ms. Dana Yaacov-Garbeli as the true and lawful attorneys-in-fact, agents and proxies of the undersigned, with full power of substitution
to each of them, to represent and to vote, on behalf of the undersigned, all of the ordinary shares of Entera Bio Ltd. (the “
Company
”),
held of record in the name of the undersigned at the close of business on Thursday, October 1, 2026, at the Special Meeting of Shareholders
of the Company (the “
Special Meeting
”). The Special Meeting is scheduled to be held on Tuesday, November
24, 2026, at 08:00 AM Eastern Time at Kiryat Hadassah, Minrav Building – Fifth Floor, Jerusalem Israel 9112002.
This Proxy, when properly executed, will be
voted in the manner directed herein by the undersigned. If no direction is made with respect to the proposals described below, this Proxy
will be voted identical to the Board of Directors’ recommendation with respect to such proposal and in such manner as the holder
of the proxy may determine with respect to any other business as may properly come before the Special Meeting or all and any adjournments
or postponements thereof. Any and all proxies heretofore given by the undersigned are hereby revoked.
The undersigned acknowledges receipt of the Notice
of the Special Meeting of Shareholders and Proxy Statement of the Company relating to the Special Meeting.
(Continued and to be signed on the reverse side)
SPECIAL MEETING OF SHAREHOLDERS
OF ENTERA BIO LTD. Tuesday, November 24, 2026 GO GREEN e - Consent makes it easy to go paperless . With e - Consent, you can quickly access
your proxy material, statements and other eligible documents online, while reduc - ing costs, clutter and paper waste . Enroll today at
equiniti . com/us/ast - access . Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting The Notice
of Meeting, proxy statement and proxy card are available at www.eqproxyportal.com/22270/special Please sign, date and mail your proxy
card in the envelope provided as soon as possible. Note: Please sign exactly as your name or names appear on this Proxy. When shares are
held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title
as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer
is a partnership, please sign in partnership name by authorized person. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH
OF THE PROPOSALS ON THE AGENDA OF THE MEETING. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN
BLUE OR BLACK INK AS SHOWN HERE x Please detach along perforated line and mail in the envelope provided. 112426 1. To approve an amendment
to the Company's 2018 Equity Incentive Plan (the “ 2018 Plan”) to increase the number of Ordinary Shares issuable thereunder
by 13 , 937 , 915 Ordinary Shares, as described in the accompanying proxy statement and attached as Appendix A thereto . 2. To approve
a one - time equity grant, as described in the accom - panying proxy statement, to Ms . Miranda Toledano, our Chief Executive Officer
and a Director . 3. To approve a one - time equity grant, as described in the accom - panying proxy statement, to Ms . Dana Yaacov - Garbeli,
our Chief Financial Officer . 4. To approve a one - time equity grant, as described in the accom - panying proxy statement, to Mr . Hillel
Galitzer, our Chief Operating Officer . 5. To approve a one - time equity grant, as described in the accom - panying proxy statement,
to Mr . Gregory Burshtein, our Chief of Research and Development . 6. To approve the amended and restated compensation policy for the
directors and officers of the Company, as described in the accompanying proxy statement and attached as Appendix B thereto . 7. To approve
the amended terms of compensation of the Company's non - executive directors, as described in the accom - panying proxy statement . 8.
To approve the extension of the post - termination exercise period for share options granted or to be granted to the Company's offi -
cers and directors, as described in the accompanying proxy statement . FOR AGAINST ABSTAIN Name & Signature of shareholder (if joint)
Date: To change the address on your account, please check the box at right and indicate your new address in the address space above .
Please note that changes to the registered name(s) on the account may not be submitted via this method . Name & Signature of shareholder
Date: Note : Please sign exactly as your name or names appear on this Proxy . When shares are held jointly, each owner should sign . When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such . If the signer is a corporation, please
sign full corporate name by a duly authorized officer, giving full title as such . If the signer is a partner - ship, please sign in partnership
name by authorized person . PLEASE NOTE that by signing and submitting this proxy card, you declare that you have no personal interest
in items 2 , 3 , 4 , 5 , 6 , 7 and 8 except for a personal interest of which you have notified the Company about in writing, as required
under the Israeli Companies Law 5759 - 1999 . For further information, please see the proxy state - ment .