Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Amendment No. 3
to Stacy Lindborg’s Offer Letter Agreement
On January 3, 2023, Brainstorm
Cell Therapeutics Inc. (the “Company”) and Dr. Stacy Lindborg entered into an amendment (the “Lindborg Amendment”)
to Dr. Lindborg’s offer letter agreement (the “Lindborg Agreement”). Pursuant to the Lindborg Amendment, Dr. Lindborg
will be appointed to the position of Co-Chief Executive Officer of the Company. In connection with her appointment, and pursuant to the
Lindborg Amendment, Dr. Lindborg will receive a Base Salary (as defined in the Lindborg Agreement) of $500,000. Dr. Lindborg will also
be eligible to receive (i) an annual merit performance increase of 5% of her Base Salary, which shall be effective as of January 1 of
every year, (ii) an annual cash bonus of 40% of the Base Salary, and (iii) a one-time bonus in the form of an equity grant (the “Equity
Grant”) of up to 250,000 shares of restricted common stock of the Company, $0.00005 par value per share (“Common Stock”)
under the Company’s 2014 Stock Incentive Plan (or any successor or other equity plan then maintained by the Company). The Equity
Grant shall vest as to twenty-five percent (25%) of the award on each of the first, second, third and fourth anniversary of the date of
grant, provided Dr. Lindborg remains continuously employed by the Company from the date of grant through each applicable vesting date.
The Equity Grant shall be subject to accelerated vesting upon a Change of Control (as defined in the Lindborg Agreement and Lindborg Amendment)
of the Company, subject to Board approval. In the event of Dr. Lindborg’s termination of employment, any portion of the Equity Grant
that is not yet vested (after taking into account any accelerated vesting) shall automatically be immediately forfeited to the Company,
without the payment of any consideration to Dr. Lindborg. In the event that the Company terminates the Lindborg Agreement or the Executive’s
employment without cause or if Dr. Lindborg terminates the Agreement or employment with good reason, the Company shall pay Dr. Lindborg
an amount equal to six months of the Base Salary, subject to delivery and execution of a full and general waiver and release to the Company.
If within six months of a Change in Control Dr. Lindborg’s employment is terminated without cause or due to disability or death,
the Company shall provide an amount equal to 12 months of the Base Salary, any portion of bonus compensation that Dr. Lindborg would otherwise
be entitled to receive, and accelerated vesting of the Equity Grant as described above, subject to delivery and execution of a full and
general waiver and release to the Company.
Ralph Kern Separation
Agreement
On January 3, 2023, the
Company and Dr. Ralph Kern entered into a separation agreement (the “Kern Separation Agreement”). Effective as of January
3, 2023, the Kern Separation Amendment terminates the employment agreement previously entered into between the Company and Dr. Kern on
February 28, 2017. The Kern Separation Agreement provides, among other things, that Dr. Kern shall be eligible to receive, in exchange
for agreeing and complying with the terms of the Kern Separation Agreement, including the release it contains, (i) a payment of $250,000,
payable within 90 days of January 20, 2023 (the “Kern Separation Date”), (ii) a grant of 150,000 non-restricted shares of
Common Stock, which shall be granted 90 days after the Kern Separation Date, and (iii) a payment of $125,000 as prorated annual bonus
compensation, payable within 30 days of the Kern Separation Date. In addition, all unvested equity and/or equity-based awards that would
have vested during the six months following the Kern Separation Date shall vest immediately upon the Kern Separation Date and be treated
as described in the preceding sentence.
Effective as of the Kern
Separation Date, Dr. Kern will become a member of the Company’s Scientific Advisory Board, which advises the management team on
scientific matters such as research, clinical trials and drug development. In connection with Dr. Kern’s appointment to the Scientific
Advisory Board, the Company will enter into a consulting agreement (the “Kern Consulting Agreement”), effective as of the
Kern Separation Date, with Dr. Kern. Pursuant to the Kern Consulting Agreement, Dr. Kern will provide scientific advisory board consulting
services to the Company for $450 per hour for up to ten hours each month, for an initial term of two years, unless earlier terminated
in accordance with the terms of the Kern Consulting Agreement.
On January 4, 2023, the
Company issued a press release announcing the promotion of Dr. Lindborg and the retirement of Dr. Kern, a copy of which is filed as Exhibit
99.1 hereto and incorporated herein by reference.