Medgenics, Inc. : Announces Issue of Options and Restricted Shares to Directors and Officers

MISGAV, Israel & SAN FRANCISCO--(BUSINESS WIRE)--Jan. 9, 2012-- Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG), the developer of a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, announces that, pursuant to approvals given at a Board meeting held on 9 December 2011, on 3 January 2012 it (i) granted options to subscribe for 15,000 common shares ("Options") and (ii) made a restricted share award of 7,000 common shares of par value US$0.0001 each ("Common Shares") in the Company ("Restricted Shares") to each of Isaac Blech, Gary Brukardt, Alastair Clemow, Joel Kanter, and Stephen McMurray, all non-executive directors of the Company, as part of their remuneration for the year.

50% of these Restricted Shares will be vested immediately and the remaining 50% will be vested one year from the date awarded, 3 January 2012 (the "Reference Date"). All of the Options are for a term of 10 years commencing on the Reference Date, vest in equal instalments on each of the first three anniversaries of the Reference Date and have an exercise price of US$2.66 or, based on an exchange rate of £1=US$1.55837, 172 pence per Common Share, being the average of the MDGN closing price for the ten trading days prior to the Reference Date as reported on NYSE Amex.

These awards of Restricted Shares and options grants were made pursuant to the terms of the Company's 2006 Stock Incentive Plan (the "2006 Stock Plan") previously approved by the Company's stockholders and in accordance with the Board approved non-executive director compensation program, adopted on 22 March 2010 and amended on 9 December 2011, which provides for each non-executive director: annual grants of options to purchase 15,000 Common Shares and awards of 7,000 Restricted Shares; an annual cash retainer fee of $12,000; and meeting attendance fees ranging from $1,000 to $2,500 per meeting, depending on the location and type of meeting. In addition, committee chairmen are entitled to an annual cash fee of $2,000.

The Company has also issued and allotted 15,034 shares in lieu of payments to service providers and interest on debentures and it is expected that these, together with the 35,000 shares awarded to non-executive directors will be admitted to AIM on 12 January under the MEDG line.

As part of its annual review of executive compensation and pursuant to the terms of the 2006 Stock Plan, the Compensation Committee of the Board also approved at its meeting on 9 December 2011 the issuance of options to purchase an aggregate of 80,000 Common Shares to Andrew Pearlman, CEO and a director of the Company. These options are for a term of 10 years commencing on December 9, 2011 (the "Effective Date"), vest in equal instalments on each of the first four anniversaries of the Effective Date and have an exercise price of US$3.14 or, based on an exchange rate of £1=US$1.55837, 201 pence per Common Share, being the average of the MDGN closing price for the ten trading days prior to the Effective Date as reported on NYSE Amex.

This announcement is being made pursuant to the London Stock Exchange's AIM Rules for Companies admitted to trading on the AIM market.

Following the award of the Restricted Shares and grant of the Options to the non-executive Directors and the grant of options to Andrew Pearlman, the interests of the directors of the Company and their related parties and other significant shareholders in the Common Shares of which the Company is aware will be as follows:

Name		Common Shares		% of Issued Share Capital		Instrument		Number		Expiry Date		Exercise Price		Total interests		% of Issued Share Capital
Isaac Blech & related parties1		1,645,471				Warrant		230,357		22/9/2015		$4.54
Total						Warrant		1,000,000		12/4/2016		$6.00
						Options		19,068		10/12/2020		$6.65
						Options		15,000		2/1/2022		$2.66
		7,000*
		1,652,471		16.9%				1,264,425						2,916,896		29.9%
Joel S. Kanter (Director) & related parties2		1,147,943				Warrant		26,785		22/9/2015		$4.54
						Warrant		2,755		13/2/2012		$8.75
						Warrant		15,540		12/4/2016		$4.99
						Options		48,803		14/11/2012		$7.35
						Warrant		12,857		30/1/2012		$8.75
						Options		12,857		11/1/2021		$6.55
						Options		28,571		14/9/2020		$8.19
						Options		15,000		2/1/2022		$2.66
		7,000*
Total		1,154,943		11.8%		Options		163,078						1,318,021		13.5%
Andrew L. Pearlman (Director) & related parties4		35,375				Warrant		35,922		31/3/2016		$0.0002
						Warrant		905,190		31/3/2016		$2.49
						Options		182,806		31/3/2016		$2.49
						Options		91,403		14/11/2012		$7.35
						Options		80,000		12/9/2021		$3.14
Total		35,375		0.4%				1,295,321						1,330,696		13.7%
The Executors of Lord Leonard Steinberg's estate & Steinberg family		606,553				Warrant		32,742		31/5/2012		$5.37
						Warrant		21,828		12/04/2012		$5.37
						Warrant		23,784		12/04/2012		$5.65
						Warrant		21,885		4/12/2016		$4.99
						Warrant		12,857		30/1/2012		$8.75
Total		606,553		6.2%				113,096						719,649		7.4%
Chicago Investments, Inc.3		637,008				Warrant		5,357		22/9/2015		$4.54
						Warrant		8,368		12/4/2016		$4.99
Total		637,008		6.5%				13,725						650,733		6.7%
Andrew Cader		350,000				Warrant		264,000		12/4/2016		$6.00		614,000		6.3%
Total		350,000		3.6%				264,000						614,000		6.3%
CIBC Trust Company (Bahamas) Limited, as Trustee of T-5553		349,386				Warrant		10,714		22/9/2015		$4.54
Total						Warrant		12,857		30/1/2012		$8.75
						Warrant		5,150		12/4/2016		$4.99
		349,386		3.6%				28,721						378,107		3.9%
Eugene A. Bauer (Director)		133,276				Options		82,327		14/11/2012		$7.35
						Options		28,571		14/9/2020		$8.19
		52,142*
Total		190,418		2.0%				110,898						301,316		3.1%
Stephen D. McMurray (Director)		72,835				Warrant		644		12/4/2016		$4.99
						Options		33,052		14/11/2012		$7.35
						Options		12,857		11/1/2021		$6.55
						Options		28,571		14/9/2020		$8.19
						Options		15,000		2/1/2022		$2.66
		7,000*
Total		79,835		0.8%				90,124						169,959		1.7%
Gary Brukardt (Director)		66,077				Options		26,705		14/11/2012		$7.35
						Options		12,857		11/1/2021		$6.55
						Options		28,571		14/9/2020		$8.19
						Options		15,000		2/1/2022		$2.66
		7,000*
Total		73,077		0.7%		Options		83,133						156,210		1.6%
Alastair Clemow (Director)		-				Options		12,857		13/9/2020		$8.19
						Options		12,857		11/1/2021		$6.55
						Options		15,000		1/2/2022		$2.66
		7,000*
Total		7,000-		0.1%				40,714						47,714		0.5%

Notes
1	Included within the interests of Isaac Blech are his interests in:
	I.		845,471 Common shares and warrants to subscribe for 430,357 Common shares held by River Charitable fbo Isaac Blech
	II.		400,000 Common shares and warrants to subscribe for 400,000 Common shares held by Liberty Charitable Remainder Trust fbo Isaac Blech
	III.		400,000 Common shares and warrants to subscribe for 400,000 Common shares held by West Charitable Remainder Unitrust
2	Included within the interests of Joel Kanter are his interests in:
	I.		106,889 Common Shares and warrants to subscribe for 15,401 Common shares held by the Kanter Family Foundation, an Illinois not-for-profit corporation of which Mr. Kanter is the President and is a Director;
	II.		349,388 Common Shares and warrants to subscribe for 28,721 Common shares held by CIBC Trust Company (Bahamas) Limited ("CIBC"). CIBC is the trustee of Settlement T-555 (the "CIBC Trust"). The CIBC Trust was established for the benefit of various descendants of (i) Helen and Henry Krakow, and (ii) Beatrice and Morris Kanter. Mr. Kanter is a discretionary beneficiary of the CIBC Trust. Sole voting and investment control of the Common Shares owned by the CIBC Trust is vested in CIBC as trustee of the CIBC Trust;
	III.		637,008 Common Shares and warrants to subscribe for 13,725 Common shares held by Chicago Investments, Inc. ("CII"). CII is a majority-owned subsidiary of Chicago Holdings, Inc. ("CHI"). CHI is majority owned by various trusts (together the "Kanter Trusts") established for the benefit of various descendants of (i) Helen and Henry Krakow, and (ii) Beatrice and Morris Kanter. Joel Kanter is a discretionary beneficiary of some, but not all, of the Kanter Trusts. Sole voting and investment control of the Common Shares owned by CII is vested in Mr. Kanter's brother, Joshua Kanter, as President of CII; and
	IV.		6,870 Common Shares held by Chicago Private Investments, Inc ("CPI"). CPI is a wholly owned subsidiary of The Holding Company ("THC"). THC is owned by Kanter Trusts. Sole voting and investment control of the shares of the Company owned by CPI is vested in Mr. Kanter's brother, Joshua Kanter, as President of CPI.
3	For the purpose of the AIM Rules, also included within the interests of Joel Kanter (Director).
	For the purposes of applicable US Securities Laws and regulations, Mr. Kanter disclaims all beneficial and pecuniary interest to the Common Shares held by CII and CPI and the CIBC Trust. Such disclaimer does not affect Mr. Kanter's status as a discretionary beneficiary under the Kanter Trusts or the CIBC Trust.
4	Including interests in 94 Common shares held by family members and 1,719 Common Shares and warrants to subscribe for 35,922 Common shares held by ADP Holdings LLC, a company in which Andrew Pearlman is interested

Source: Medgenics, Inc.

Medgenics, Inc.
Dr. Andrew L. Pearlman, [phone]
[e-mail]
or
LHA
Anne Marie Fields, 212-838-3777
[e-mail]
or
Abchurch Communications
Adam Michael / Joanne Shears / Jamie Hooper
[phone]
[e-mail]
or
Religare Capital Markets (NOMAD)
James Pinner, [phone]
or
SVS Securities plc (Joint Broker)
Alex Mattey / Ian Callaway
[phone]
or
Nomura Code Securities (Joint Broker)
Jonathan Senior, [phone]