UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☒ | Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☐ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
GERON CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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GERON CORPORATION
149 Commonwealth Drive, Suite 2070
Menlo Park, CA 94025
April 1, 2016___, 2019
Dear Geron Stockholder:
You are cordially invited to attend the 20162019 Annual Meeting of Stockholders of Geron Corporation which willto be held on May 17, 2016Thursday, June 6, 2019, at 4:8:00 p.m.a.m., Pacific Daylight Time, at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae,Geron Corporation’s offices located at 149 Commonwealth Drive, Menlo Park, California 94030.94025. In addition, we will be hosting the meeting via conference call which can be accessed via telephone by dialing 877-303-9139_________ (U.S.); 760-536-5195_______ (international). The passcode is 72479234._____. A live audio-only webcast will also be available at http://edge.media-server.com/m/p/idtu8fhu._________.
As permitted by the rules of the Securities and Exchange Commission, we are also pleased to furnish our proxy materials to stockholders primarily over the Internet. We believeConsequently, most stockholders will receive a notice with instructions for accessing proxy materials and voting via the Internet, instead of paper copies of proxy materials. However, this processnotice will expedite stockholders’ receiptprovide information on how stockholders may obtain paper copies of proxy materials lower the costs of our annual meeting and reduce the environmental impact of printing and mailing hard copies.if they choose. Stockholders who continue to receive hard copies of proxy materials may help us reduce costs by opting to receive future proxy materials by e-mail.
On or about April 4, 2016, we will distribute to our stockholders a notice containing instructions on how to access our 2016 Proxy Statement and our 2015 Annual Report on Form 10-K, and how to vote online. This notice also will include instructions on how you can receive a paper copy of the proxy materials, including the notice of the Annual Meeting, 2016 Proxy Statement, 2015 Annual Report on Form 10-K and proxy card. If you received your proxy materials by mail, the notice of Annual Meeting, 2016 Proxy Statement, 2015 Annual Report on Form 10-K and proxy card from our Board of Directors were enclosed. If you received your proxy materials via e-mail, the e-mail contained voting instructions and links to the 2016 Proxy Statement and 2015 Annual Report on Form 10-K.
At this year’s Annual Meeting, the agenda includes the following items:
election of the two nominees for director named in the accompanying proxy statement to hold office as Class II members of the Board of Directors until the 2022 annual meeting of stockholders;
approval to increase the total number of authorizedsharesof our common stock from 300,000,000to 450,000,0000 shares;
advisory vote to approve named executive officer compensation; and
ratification of Ernst & Young LLP as our independent registered public accounting firm.
Your vote is important to us.us. Whether or not you plan to attend the meeting, please vote electronically via the Internet or by telephone, or, if you requested paper copies of the proxy materials, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope.envelope, as promptly as possible. If you attend the Annual Meeting, you will have the right to vote your shares in person.
Thank you for your ongoing support of, and continued interest in, Geron Corporation.
John A. Scarlett, M.D.
Chairman of Contentsthe Board, President and Chief Executive Officer
PRELIMINARY PROXY – SUBJECT TO COMPLETION
GERON CORPORATION
149 Commonwealth Drive, Suite 2070
Menlo Park, CA 94025
______________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 17, 2016June 6, 2019
To the Stockholders of Geron Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the “Annual Meeting”) of GERON CORPORATION, a Delaware corporation (the “Company”), will be held on May 17, 2016,June 6, 2019, at 4:8:00 p.m.a.m., Pacific Daylight Time, at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae,Company’s offices located at 149 Commonwealth Drive, Menlo Park, California 94030.94025. Stockholders may also access the meeting via telephone by dialing 877-303-9139_______ (U.S.); 760-536-5195_______ (international). The passcode is 72479234._____. A live audio-only webcast will also be available at http://edge.media-server.com/m/p/idtu8fhu._____. The meeting will be held for the following purposes:
1. | To elect the two nominees for director named in the accompanying proxy statement |
2. | To approve an amendment to the Company’s Restated Certificate of Incorporation to increase the total number of authorized shares of the Company’s Common Stock from 300,000,000 to 450,000,000 shares; |
3. | To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Proxy Statement; |
4. | To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, |
5. | To transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof. |
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 21, 2016,April 8, 2019, as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof. Each stockholder is entitled to one vote for each share of common stock held at that time.
Your Vote Is Important To Us. Whether or not you plan to attend the meeting, please vote electronically via the Internet or by telephone, or, if you requested paper copies of the proxy materials, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope.envelope, as promptly as possible. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name.
By Order of the Board of Directors,
Stephen N. Rosenfield
Executive Vice President,
Chief Legal Officer and Corporate Secretary
Menlo Park, California
April 1, 2016___, 2019
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Meeting to Be Held on June 6, 2019:
Letter to Stockholders, Notice and 20162019 Proxy Statement, and 20152018 Annual Report on Form 10-K are available atwww.proxyvote.com.
www.proxyvote.com.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, WE URGE YOU TO SUBMIT
YOUR PROXY PROMPTLY IN ORDER TO ASSURE THAT A QUORUM IS PRESENT.
Table of ContentsPRELIMINARY PROXY – SUBJECT TO COMPLETION
GERON CORPORATION
149 Commonwealth Drive, Suite 2070
Menlo Park, CA 94025
____________________
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2016____________________JUNE 6, 2019
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why am I receiving these materials?
We have sentYou are receiving this annual meeting information and Proxy Statement from us because you a Noticeowned shares of Availability of Proxy Materials (the “Notice”) or our proxy materials, as applicable, because the Board of Directors (the “Board”)common stock of Geron Corporation, a Delaware corporation (“Geron”,Geron,” the “Company”,“Company,” “we” or “us”), is soliciting your proxy to vote atas of April 8, 2019, the record date for our 20162019 Annual Meeting of Stockholders (the “Annual Meeting”), to be held on May 17, 2016,June 6, 2019, at 4:8:00 p.m.a.m., Pacific Daylight Time, at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae,Company’s offices located at 149 Commonwealth Drive, Menlo Park, California 9403094025, or at any adjournment or postponement thereof. The Geron Board of Directors (the “Board”) has made these materials available to you in connection with the Board’s solicitation of proxies for use at the Annual Meeting. You may vote by proxy over the Internet or by phone, or by mail if you requested printed copies of the proxy materials.
As permitted by the rules of the Securities and Exchange Commission (the “SEC”), we are providing our stockholders access to proxy materials via the Internet. Accordingly, we are sending by mail only a Notice of Availability of Proxy Materials (the “Notice”) to certain of our stockholders of record and posting our proxy materials online at www.proxyvote.com. Stockholders who previously requested to receive hard copies of proxy materials will receive a full set of proxy materials, instead of the Notice. We intend to distribute the Notice and the proxy materials on or about April 4, 2016___, 2019 to all stockholders of record entitled to vote at the Annual Meeting.
What is the purpose of the Annual Meeting?
At our Annual Meeting, stockholders will act upon the matters described in this Proxy Statement. In addition, following the meeting, management will report on current events at Geron and respond to questions from stockholders.
How can I attend the Annual Meeting?
All stockholders are cordially invited to attend the Annual Meeting in person at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae, California 94030. For directions to attend the Annual Meeting, please contact our Investor Relations department at (650) 473-7765 or by email at investor@geron. com. Stockholders may also access the meeting via telephone by dialing 877-303-9139 (U.S.); 760-536-5195 (international). The passcode is 72479234. A live audio-only webcast will also be available at http://edge.media-server.com/m/p/idtu8fhu via the Internet. The Annual Meeting will start at 4:00 p.m., Pacific Daylight Time, on May 17, 2016.
How can I participate in the Annual Meetingdoes it mean if I cannot attend in person?receive more than one set of proxy materials or more than one Notice, or combination thereof?
If you cannot attend the meeting in person, stockholders may participate via telephone by dialing 877-303-9139 (U.S.); 760-536-5195 (international). The passcode is 72479234. We recommend that you dial in at least 10 minutes early to minimize any delay in joining the meeting. Participants via telephone will also have an opportunity to ask questions during the meeting.
The Annual Meeting will also be available via the Internet in a live audio-only webcast available at http://edge.media-server.com/m/p/idtu8fhu. The audio webcast of the Annual Meeting will be available for replay approximatelyreceive more than one hour following the live meeting through June 17, 2016. Since the webcast is audio-only, participants will be unable to ask questions in this forum.
Why did I receive a Notice in the mail regarding the Internet availabilityset of proxy materials, instead ofor more than one Notice or a fullcombination thereof, your shares may be registered in more than one name or may be registered in different accounts. Please follow the voting instructions on each set of proxy materials?materials or Notices to ensure that all of your shares are voted.
We are pleased to continue to apply the rules from the United States Securities and Exchange Commission (the “SEC”) that allow companies to furnish theirWill I receive any proxy materials overby mail other than the Internet. If you received the Notice by mail,Notice?
No, you will not receive a printed copy of the proxy materials unless you request one. Instead, the Notice will instruct you as to how you may access and review the proxy materials and cast your vote via the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice. A stockholder’s election to receiveany other proxy materials by mail or electronically by email will remain in effect untilother than the stockholder terminates such election.
Why did I receiveNotice unless you request paper copies. This Proxy Statement and Geron’s 2018 Annual Report on Form 10-K are available at www.proxyvote.com. You may request a full set of proxy materials insteadbe sent to your specified postal or email address as follows:
by telephone: call 1-800-579-1639 free of charge and follow the instructions;
by Internet: go to www.proxyvote.com and follow the instructions; or
by e-mail: send an e-mail message to sendmaterial@proxyvote.com. Please send a blank e-mail and insert the 16-Digit Control Number located in your Notice regardingin the Internet availability of proxy materials?subject line.
We are providing paper copies of the proxy materials to stockholders who previously requested to receive them. If you would like to reduce the environmental impact and costs incurred by us in mailing proxy materials, you may elect to receive all future proxy materials electronically via email or the Internet. To sign up for electronic delivery of proxy materials, please follow the instructions provided with your proxy materials and on your proxy card or voting instruction card, to vote using the Internet and, when prompted, indicate that you agree to receive or access future stockholder communications electronically. Alternatively, you can go to www.proxyvote.com and enroll for online delivery of proxy materials. A stockholder’s election to receive proxy materials by mail or electronically by email will remain in effect until the stockholder terminates such election.
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What is the purpose of the Annual Meeting?
At our Annual Meeting, stockholders will act upon the matters described in this Proxy Statement. In addition, following the meeting, management will report on current events at Geron and respond to questions from stockholders.
How can I accessparticipate in the proxy materials overAnnual Meeting?
All stockholders are cordially invited to attend the Internet?Annual Meeting in person at the Company’s offices located at 149 Commonwealth Drive, Menlo Park, California 94025. For directions to attend the Annual Meeting, please contact CG Capital at (877) 889-1792 or by email at investor@geron.com.
YouIf you cannot attend the meeting in person, you may view andparticipate via telephone by dialing _______ (U.S.); _______ (international). The passcode is _____. We recommend that you dial in at least 10 minutes early to minimize any delay in joining the meeting. Participants joining via telephone will also download our proxy materials, includinghave an opportunity to ask questions during the 2015meeting.
The Annual Report on Form 10-K, at www.proxyvote.com.
How do I order proxy materials if I have not received them?
This Proxy Statement and Geron’s 2015 Annual Report on Form 10-K areMeeting will also be available via the Internet in a live audio-only webcast available at www.proxyvote.com. Internet distribution of proxy materials is designed to expedite receipt by stockholders, lower the cost_____. The audio webcast of the Annual Meeting and conserve natural resources. However, if you have not received a copy of our proxy materials and would likewill be available for replay approximately one hour following the live meeting through July 6, 2019. Since the webcast is audio-only, participants will be unable to receive one for the Annual Meeting or for future stockholder meetings, you may request printed copies as follows:ask questions in this forum.
Who can vote at the Annual Meeting?
Only holders of record at the close of business on March 21, 2016April 8, 2019 (the “Record Date”) will be entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. At the close of business on the Record Date, we had 158,916,775____ shares of common stock, par value $0.001 per share (“Common Stock”), outstanding. Each holder of record of Common Stock on the Record Date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting. The stock transfer books will not be closed between the Record Date and the Annual Meeting date. A list of stockholders entitled to vote at the Annual Meeting will be available for examination at our principal executive offices at the address listed above for a period of ten days prior to the Annual Meeting and during the Annual Meeting.
TableA quorum of Contentsstockholders is necessary to hold a valid meeting. In order to constitute a quorum and to transact business at the Annual Meeting, a majority of the outstanding shares of Common Stock on the Record Date must be represented at the Annual Meeting. Shares represented by proxies that reflect abstentions or “broker non-votes” will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum.
What am I voting on at the Annual Meeting? What is the Board’s recommendation on each of the proposals?
You are being asked to vote on threefour proposals, as follows:
Proposal | Proposal | Board | ||||
1 | To elect the two nominees for director named in this Proxy Statement to hold office as Class II members of our Board of Directors until the | FOR BOTH director nominees | ||||
2 | To approve an amendment to our Restated Certificate of Incorporation to increase the total number of authorized shares of our Common Stock from 300,000,000 to 450,000,000 shares. | FOR | ||||
3 | To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this Proxy | FOR | ||||
4 | ||||||
To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, | FOR |
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WhatHow many votes are the choices in voting?
For Proposal 1, you may either vote “For” all nomineesneeded to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For Proposals 2 and 3, you may vote “For” the proposal or “Against” the proposal or “Abstain” from voting on the proposal.
approve each proposal? What is the recommendationeffect of the Boardabstentions and broker non-votes on each of the matters scheduledproposals?
The following table summarizes the minimum vote needed to be votedapprove each proposal and the effect of abstentions and broker non-votes on ateach of the Annual Meeting?proposals:
The Board of Directors recommends that you vote:
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What are the choices in voting?
For Proposal 1, you may either vote “FOR” both nominees to the Board of Directors or you may “WITHHOLD” your vote for both nominees or any nominee you specify. For proposals 2, 3 and 4, you may vote “FOR” the proposal or “AGAINST” the proposal or “ABSTAIN” from voting on the proposal.
Could other matters be decided at the Annual Meeting?
Our Bylaws require that we receive advance notice of any proposal to be brought before the Annual Meeting by our stockholders, and we have not received notice of any such proposals. If any other matter were to be properly submitted for a vote at the Annual Meeting, the proxy holders appointed by the Board will have the discretion to vote on those matters for you as they see fit. This includes, among other things, considering any motion to adjourn the Annual Meeting to another time and/or place, including for the purpose of soliciting additional proxies for or against a given proposal.
What isHow do I vote my shares and what are the difference between holding shares as a stockholder of recordvoting deadlines?
Please refer to the proxy card for instructions on, and access information for, voting by telephone, over the Internet or as a beneficial owner?by mail.
Stockholder of Record: Shares Registered inIn Your Name
You are a stockholder of record if, aton the close of business on March 21, 2016,Record Date, your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A. As a stockholder of record, there are several ways for you to vote your shares.
Via the Internet.You may vote at www.proxyvote.com, 24 hours a day, seven days a week. You will need the 16-Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials). Votes submitted through the Internet must be received by 11:59 p.m., Eastern Time, on June 5, 2019.
By Telephone.You may vote using a touch-tone telephone by calling 1-800-690-6903, 24 hours a day, seven days a week. You will need the 16-Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials). Votes submitted by telephone must be received by 11:59 p.m., Eastern Time, on June 5, 2019.
By Mail.If you received printed proxy materials, you may submit your vote duringby completing, signing, and dating each proxy card received and returning it in the postage-paid envelope. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received no later than June 5, 2019 to be voted at the Annual Meeting.
During the Annual Meeting.Stockholders may also submit their vote if they attend the Annual Meeting orin person.
The Internet and telephone voting procedures described above, which comply with Delaware law, are designed to authenticate stockholders’ identities, to allow stockholders to vote by proxy.their shares, and to confirm that their instructions have been properly recorded. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
You are a beneficial owner, if aton the close of business on March 21, 2016,Record Date, your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization and not in your name. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. Being a beneficial owner means that, like most stockholders, your shares are held in “street name” and these proxy materials are being forwarded to you by that organization.
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As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account by following the voting instructions your broker
or other nominee provides. If you do not provide your broker or nominee with instructions on how to vote your shares, your broker or nominee will be able to vote your shares with respect to some of the proposals, but not all. Refer to the section below “What are broker non-votes?” for more information.
How do I vote my shares and what are the voting deadlines?
Please refer to the proxy card for instructions on, and access information for, voting by telephone, over the Internet or by mail.
Stockholder of Record: Shares Registered In Your Name
If you are a stockholder of record, there are several ways for you to vote your shares.
The Internet and telephone voting procedures described above, which comply with Delaware law, are designed to authenticate stockholders’ identities, to allow stockholders to vote their shares, and to confirm that their instructions have been properly recorded. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If you are a beneficial owner of your shares, you should have received a Notice or voting instructions from the broker or other nominee holding your shares. You should follow the instructions in the Notice or voting instructions provided by your broker or nominee in order to instruct your broker or other nominee on how to vote your shares. The availability of telephone and Internet voting will depend on the voting process of the broker or nominee. Please contact your bank, broker or other agent if you have questions about their instructions on how to vote your shares. To vote duringin person at the 20162019 Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent, and attend the meeting in person to submit your vote.
If you do not provide your broker or bank with instructions on how to vote your shares, your broker or bank will be able to vote your shares with respect to the approval of an amendment to our Restated Certificate of Incorporation to increase the total number of authorized shares of our Common Stock from 300,000,000 to 450,000,000 shares (Proposal 2) and ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 (Proposal 4). For more information, see “If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with my voting instructions, what happens?” and “What are broker non-votes?” below.
Geron Plan Participants
As trustee of the Geron 401(k) Plan, Prudential Bank and Trust FSB will receive a proxy that incorporates all the shares owned by the Geron 401(k) Plan and will vote such proxy as directed by the Geron 401(k) sponsor.
SharesIf you purchased through the 1996 Employee Stock Purchase Plan and the 2014 Employee Stock Purchase Plan will follow standard brokerage industry practices. Sharesand your shares are held in the name of a broker, please refer to the brokerdiscussion above under “Beneficial Owner: Shares Registered in the Name of a Broker or Bank.”
If I am a shareholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions, what happens?
If you are a stockholder of record and you do not specify your vote on each proposal individually when voting via the Internet, over the telephone or if you sign and return a proxy card without giving specific voting instructions, then your shares will be voted in line with the Board recommendations above as described under “What am I voting on behalfat the Annual Meeting? What is the Board’s recommendation on each of the holder on certain routine matters. Toproposals?” If any other matter is properly presented at the extent the brokerage firm votes shares on the behalf2019 Annual Meeting, your proxyholder (one of the holder,individuals named on your proxy card) will vote your shares using his or her best judgment.
If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with my voting instructions, what happens?
If you are a beneficial owner of shares registered in the shares will be counted for the purposename of determining a quorum.
Can I vote my shares by filling outyour broker, bank or other agent, and returning the Notice?
No. The Notice will, however, provide instructions onyou do not instruct your broker, bank or other agent how to vote by Internet, by telephone,your shares, your broker, bank or by requesting and returning a paper proxy card or voting instruction card.
How many votes are neededother agent may still be able to approve a proposal?
A quorum of stockholders is necessary to hold a valid meeting.vote your shares in its discretion. In order to constitute a quorum and to transact business atthis regard, under the Annual Meeting, a majorityrules of the outstanding shares of CommonNew York Stock on the Record Date must be represented at the Annual Meeting. Shares represented by proxies that reflect abstentions or “broker non-votes” will be counted as sharesExchange (NYSE), brokers, banks and other securities intermediaries that are present and entitledsubject to NYSE rules may use their discretion to vote for purposes of determining the presence of a quorum.
Although the election of directors at the Annual Meeting is uncontested and directors are elected by a plurality of votes cast, and we therefore expect that each of the named nominees for director will be elected at the Annual Meeting, under our Corporate Governance Guidelines, any nominee for director is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committee if such nominee for director (in an uncontested election) receives a greater number of “WITHHOLD” votes from his or her election than votes “FOR” such election. In such case, the Nominating and Corporate Governance Committee will then consider all of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to such offermatters considered to be “routine” under NYSE rules, but not with respect to “non-routine” matters. In this regard, Proposals 1 and 3 are considered to be “non-routine” under NYSE rules meaning that your broker may not vote your shares on those proposals in the absence of resignation. For more informationyour voting instructions. However, Proposals 2 and 4 are considered to be “routine” matters under NYSE rules meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on this policy seeProposals 2 and 4.
If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the section entitled “Corporate Governance Matters – Corporate Governance Guidelines”.way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.
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What are “broker non-votes”?broker non-votes?
Broker non-votes occurAs discussed above, when a beneficial owner of shares held in “street name”street name does not give voting instructions to thehis or her broker, bank or nomineeother securities intermediary holding thehis or her shares onas to how to vote on matters deemed “non-routine.” Generally, ifto be “non-routine” under NYSE rules, the broker, bank or other such agent cannot vote the shares. These un-voted shares are counted as “broker non-votes.” Proposals 1 and 3 are considered to be “non-routine” under NYSE rules and we therefore expect broker non-votes to exist in connection with those proposals.
As a reminder, if you are a beneficial owner of shares held in street name, the beneficial owner of the shares is entitledin order to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. In the event that a broker, bank, custodian, nominee or other record holder of Geron Common Stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then those shares will be treated as broker non-votes with respect to that proposal. Accordingly, if you own shares through a nominee, such as a broker or bank, please be sure to instruct your nominee on how to vote to ensure that your vote is counted on each of the proposals.
Which ballot measures are considered “routine” or “non-routine?”
The ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016 (Proposal 3) is considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to occur in connection with Proposal 3. The election of directors (Proposal 1) and the advisory vote on the compensation of our named executive officers (Proposal 2) are considered non-routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore we expect broker non-votes on Proposals 1 and 2.
What does it mean if I receive more than one set of proxy materials or more than one Notice, or combination thereof?
If you receive more than one set of proxy materials, or more than one Notice or a combination thereof, your shares may be registered in more than one name or may be registered in different accounts. Please follow the voting instructions oneach set of proxy materials or Notices to ensure that all of your shares are voted.
How will your proxy be voted?
Votes will be counted byvoted in the Inspector of Election appointed for the Annual Meeting, who will separately count “FOR” and (with respect to proposals other than the election of directors) “AGAINST” votes, abstentions and broker non-votes. In addition, with respect to the election of directors, the Inspector of Election will count the number of “WITHHOLD” votes received for the nominees. If your shares are held by your broker as your nominee (that is, in “street name”),way you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. Ifwould prefer, you do not givemust provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, can vote your shares with respect to “routine” items, but not with respect to “non-routine” items. See “What are “broker non-votes?” and “Which ballot measures are considered “routine”bank or “non-routine”?” above for more information regarding “routine” and “non-routine” matters.other agent.
Can I revoke or change my vote after I submit my proxy?
Stockholder of Record: Shares Registered Inin Your Name
If you are a stockholder of record, you may revoke or change your vote at any time before the final vote at the Annual Meeting by:
signing and returning a new proxy card with a later date;
submitting a later-dated vote by telephone or via the Internet — only your latest Internet or telephone proxy received by 11:59 p.m., Eastern Time, on June 5, 2019, will be counted;
attending the Annual Meeting in person and voting again; or
delivering a written revocation to our Corporate Secretary at Geron’s offices, 149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025, before the Annual Meeting.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If you are a beneficial owner of your shares, you must contact the broker or other nominee holding your shares and follow their instructions for revoking or changing your vote.
How will your proxy be counted?
Votes will be counted by the Inspector of Election appointed for the Annual Meeting, who will separately count “FOR,” “WITHHOLD” and broker non-votes with respect to Proposal 1 regarding the election of directors, and, with respect to Proposals 2, 3 and 4, “FOR” and “AGAINST” votes, abstentions and, as applicable, broker non-votes.
Is my vote confidential?
Yes. Proxy cards, ballots and voting tabulations that identify stockholders by name are kept confidential. There are exceptions for contested proxy solicitations or when necessary to meet legal requirements. In addition, all comments written on a proxy card or elsewhere will be forwarded to management, but your identity will be kept confidential unless you ask that your name be disclosed.
How can I obtain a copy of Geron’s Annual Report on Form 10-K?
We will mail to you without charge, upon written request, a copy of our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2015, as well as a copy of any exhibit specifically requested. Requests should be sent to: Corporate Secretary, Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025. A copy of our Annual Report on Form 10-K has also been filed with the SEC and may be accessed from the SEC’s homepage (www.sec.gov). You may also view and download our 2015 Annual Report on Form 10-K on our website at www.geron.com as well as www.proxyvote.com.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published by Geron in a Current Report on Form 8-K, filed with the SEC, that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we intend to file a Current Report on Form 8-K to
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publish preliminary results and, within four business days after the final results are known to us, file an additional Current Report on Form 8-K to publish the final results.
Who is paying for this proxy solicitation?
We will pay the entire cost of solicitation of proxies, including preparation, assembly, printing and mailing of this Proxy Statement, the proxy card and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of Common Stock beneficially owned by others to forward to such beneficial owners. In addition, we may reimburse persons representing beneficial owners of Common Stock for their costs of forwarding solicitation materials to such beneficial owners. The original solicitation of proxies by mail may be supplemented by solicitation by mail, telephone or other electronic means, or in person, by our directors, officers, or other regular employees, or at our request, by Alliance Advisors, LLC. No additional compensation will be paid to directors, officers or other regular employees for such services, but Alliance Advisors will be paid its customary fee, estimated to be $6,000, to render solicitation services.
When are stockholder proposals due for next year’s Annual Meeting?
ToSee the sub-section entitled “Stockholder Nominations and Proposals for 2020 Annual Meeting” under the section entitled “Other Matters.”
How can I obtain a copy of Geron’s Annual Report on Form 10-K?
We will mail to you without charge, upon written request, a copy of our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2018, as well as a copy of any exhibit specifically requested. Requests should be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 5, 2016, to oursent to: Corporate Secretary, at Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025,94025. A copy of our Annual Report on Form 10-K has also been filed with the SEC and must comply with all applicable requirements of Rule 14a-8 promulgated undermay be accessed from the Securities Exchange Act of 1934,SEC’s homepage (www.sec.gov). You may also view and download our 2018 Annual Report on Form 10-K on our website at www.geron.com as amended (the “Exchange Act”). However, if our 2017 Annual Meeting of Stockholders is not held between April 17, 2017 and June 16, 2017, then the deadline will be a reasonable time prior to the time we begin to print and send our proxy materials.well as www.proxyvote.com.
If you wish to bring a proposal before the stockholders or nominate a director at the 2017 Annual Meeting of Stockholders, but you are not requesting that your proposal or nomination be included in next year’s proxy materials, you must notify our Corporate Secretary, in writing, not earlier than the close of business on January 17, 2017 and not later than the close of business on February 16, 2017. However, if our 2017 Annual Meeting of Stockholders is not held between April 17, 2017 and July 16, 2017, then the deadline will be the 90th day prior to the 2017 Annual Meeting or, if later, the 10th day following the day on which public disclosure of the date of the 2017 Annual Meeting of Stockholders was first made. We also advise you to review Geron’s Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. The chairman of the 2017 Annual Meeting of Stockholders may determine, if the facts warrant, that a matter has not been properly brought before the meeting and, therefore, may not be considered at the meeting. Stockholders interested in submitting a proposal are advised to contact knowledgeable counsel with regard to the detailed requirements of the applicable securities laws. The submission of a stockholder proposal does not guarantee that it will be included in our proxy statement. For additional discussion, refer to the section entitled “Stockholder Nominations and Proposals for 2017 Annual Meeting”.
What is householding and how does it affect me?
Some brokers and other nominee record holders may be participating in the practice of “householding” proxy statements. This means that only one copy of this Proxy Statement and 20152018 Annual Report on Form 10-K or the Notice may have been sent to multiple stockholders in a stockholder’s household. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive separate copies of the proxy statement, annual report or the notice of internet availability of proxy materials, please notify your broker or our Investor Relations department. We will promptly deliver copies of the Proxy Statement and our 20152018 Annual Report on Form 10-K or the Notice to any stockholder who contacts our Investor Relations departmentCG Capital at (650) 473-7765(877) 889-1972 or by mail addressed to Investor Relations, Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025, requesting such copies. If a stockholder is receivingyou receive multiple copies of the proxy statement and annual report at the stockholder’syour household and would like to receive a single copy of the proxy statement and annual report for a stockholder’syour household in the future, stockholdersyou should contact theiryour broker, other nominee record holder, or our Investor Relations department to request mailing of a single copy of the proxy statement and annual report.
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MATTERS TO BE CONSIDERED AT THE 20162019 ANNUAL MEETING
Board Structure
Our Board currently consists of eight directors, seven members, six of whom are “independent,” as that term is defined by NASDAQNasdaq Rule 5605(a)5602(a)(2)., and one of whom is an executive officer of the Company. Our Bylaws provide for the classification of the Board into three classes as nearly equal in number as possible, with staggered terms of office. Our Bylaws also provideoffice so that upon expirationone class of the term of office for aBoard is elected annually, and each class of directors nomineesstands for such class will be elected for a term ofelection every three years or until their successors are duly elected and qualified.years.
The term of office of the Class II directors, Hoyoung Huh, M.D., Ph.D., and Daniel M. Bradbury, Dawn C. Bir and Elizabeth G. O’Farrell will expire at the Annual Meeting in May 2016.June 2019. Effective December 26, 2018, Hoyoung Huh, M.D., Ph.D., a former Class II director, resigned from the Board, including his roles as Chairman of the Board and as a member of the Nominating and Corporate Governance Committee, for personal reasons. On January 30, 2019, Daniel M. Bradbury, a Class II director, notified the Company of his decision to not stand for re-election at the Annual Meeting due to his new responsibilities as a chief executive officer of another public company. As a result, there are two nominees for election as Class II directors at the Annual Meeting, Mses. Bir and O’Farrell, both of whom were recently appointed to the Board in March 2019. Proxies may only be voted for the two Class II directors nominated for election at the Annual Meeting.
The Class III directors, Karin Eastham,Eastham; V. Bryan Lawlis, Ph.D.,; and Susan M. Molineaux, Ph.D., have one year remaining on their terms of office. The Class I directors, John A. Scarlett, M.D.,; and Robert J. Spiegel, M.D., FACP, have two years remaining on their terms of office.
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The following table provides summary information about each director nominee and currently-serving director as of March 31, 2019:
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| Committee Memberships |
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Name and Principal Position | Age | Independent | AC | CC | NG | Other Public Boards |
2019 Director Nominees |
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Dawn C. Bir | 48 | Yes |
|
| M | None |
Chief Commercial Officer, Reata Pharmaceuticals, Inc. |
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Elizabeth G. O’Farrell | 55 | Yes | M |
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| 1 |
Independent Director |
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Currently Serving Directors |
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Daniel M. Bradbury (1) | 57 | Yes | M, FE |
| M | 3 |
Independent Director |
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Karin Eastham | 69 | Yes | C, FE | M |
| 3 |
Retired C.P.A. |
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Lead Independent Director |
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V. Bryan Lawlis, Ph.D. | 67 | Yes | M | M |
| 4 |
Independent Director |
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Susan M. Molineaux, Ph.D. | 65 | Yes |
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| C | 2 |
President, Chief Executive Officer and |
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Director, Calithera Biosciences, Inc. |
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Independent Director |
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John A. Scarlett, M.D. | 68 | No |
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| 2 |
Chairman of the Board, President, and Chief Executive Officer |
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Robert J. Spiegel, M.D., FACP | 69 | Yes |
| C |
| 2 |
Independent Director |
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AC: Audit Committee | C: Chair | |||
CC: Compensation Committee | M: Member | |||
NG: Nominating and Corporate Governance Committee | FE: Financial Expert |
(1): | In connection with his decision not to stand for re-election due to his new responsibilities as a chief executive officer for another public company, Mr. Bradbury will not be standing for re-election at the Annual Meeting; accordingly, his term of office will expire at the Annual Meeting. |
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NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
For a Three YearThree-Year Term Expiring at the2019
2022 Annual Meeting
The Board has selected two nominees for Class II directors, Ms. Dawn C. Bir and Ms. Elizabeth G. O’Farrell, both of whom are currently directorswere appointed to the Board in March 2019 and neither of Geron andwhom were previously elected by the stockholders.
Set forth below is a brief biography of each nominee for Class II director, including their ages, the periods during which they have served as a director of Geron, and information furnished by them as to principal occupations and public company directorships held by them. The biographies below also include a discussion of the specific experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate Governance Committeeand the Board to conclude, as of the date of this Proxy Statement, that each nominee for Class II director should continue to serve as a director. Each person nominated for election has consented to being named as a nominee in this proxy statementProxy Statement and has agreed to serve if elected, and the Board has no reason to believe that any nominee will be unable to serve.
TableIt is a key objective of Contentsthe Company to have a diverse Board, representing a range of expertise, skills, perspectives and experiences in areas that are relevant to the Company’s business and the needs of the Board. As stated in our Nominating and Corporate Governance Committee Charter and our Corporate Governance Guidelines, as part of the director search process, the Nominating and Corporate Governance Committee endeavors to consider qualified candidates, including women and minorities, who meet the relevant business and search criteria. In furtherance of the foregoing, where a third-party search firm is engaged and requested to furnish an initial list of possible candidates, such firm will be requested to include in such list women and minority candidates who meet such criteria. Regarding the appointments of Mses. Bir and O’Farrell in March 2019, a third-party search firm provided the Nominating and Corporate Governance Committee with a slate of potential candidates for consideration, which included Mses. Bir and O’Farrell. After reviewing the potential candidates, the Nominative and Corporate Governance Committee selected Mses. Bir and O’Farrell from such slate based on their qualifications and background, performed further evaluation of each of their particular experiences, qualifications, attributes and skills, and then recommended their appointment to the Board.
Class II Director Nominees (Term Expiring at the 20192022 Annual Meeting)
Hoyoung Huh, M.D., Ph.D., has been the Chairman of the Board since September 2011, served as our interim Executive Chairman from February 2011 to September 2011, andDawn C. Bir
Experience
Ms. Bir has served as a director of Geron since May 2010. He is also ChairmanMarch 2019. Since September 2016, Ms. Bir has served as the Chief Commercial Officer of the board of directors of CytomX Therapeutics, Inc., an emerging medical technology company and a director of AntriaBio,Reata Pharmaceuticals, Inc., a biopharmaceutical company, focused on developing therapies for diabetes. Additionally, Dr. Huh serves on the boards of directors of several privately-held companies. Dr. Huhwhere she leads marketing, market access, sales, and commercial operations. From February 2013 to September 2016, Ms. Bir served as a directorVice President of ADDEX Pharmaceuticals, a pharmaceutical discoverySales with Pharmacyclics LLC, an AbbVie company, where she built and development company, from Mayled their first hematology national sales organization, and was responsible for the launch of IMBRUVICA in the United States and Puerto Rico. From October 2011 to May 2014;February 2013, Ms. Bir served as ChairmanVice President of Sales & Marketing of SKY Pharmaceuticals Packaging, Inc. & Rx Pak, a unit within the U.S. pharmaceutical and specialty solutions division of McKesson Corporation, a global healthcare company, where she was responsible for two companies and revenue centers, and led multiple functions, including sales, marketing, contract management, project management and customer service. From 1996 to October 2011, Ms. Bir held several commercial and sales positions of increasing responsibility within Genentech, Inc., a member of the board of directors and Chief Executive Officer of BiPar Sciences, Inc., a wholly-owned subsidiary of Sanofi-Aventis,Roche Group, a global pharmaceutical company, from February 2008 to December 2011; as a director of Facet Biotech, a wholly-owned subsidiary of Abbott, a global, broad-based health care company, from September 2009 to April 2010; and as a director of Nektar Therapeutics, a clinical-stage biopharmaceutical company, from February 2008 to May 2009. Dr. Huh has held several senior management positions in the biopharmaceutical industry, including President and Chief Executive Officer at BiPar and Chief Operating Officer and Senior Vice President of Business Development and Marketing at Nektar. Prior to Nektar, Dr. Huh was a partner at McKinsey &Bristol-Myers Squibb Company, a global management consulting firm, where he waspharmaceutical company. Ms. Bir holds a B.S. in the biotechnology and biopharmaceutical sectors. Prior to McKinsey, he held positions as a physician and researcher at Cornell University Medical College and Sloan-Kettering Cancer Center. Dr. Huh holds an A.B. in biochemistryBiology from Dartmouth College and an M.D. and Ph.D. in genetics and cell biology from Cornell University Medical College and Sloan-Kettering Institute.Binghamton University.
Qualifications
The Board believes Dr. Huh’s managementMs. Bir’s extensive commercial, sales and operationalmarketing expertise, including with hematology-oncology products, broadens the Board’s ability to advise, evaluate and analyze future potential commercialization activities for imetelstat, especially in the United States, as well as to provide insights into the
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competitive landscape of other hematology-oncology products. This knowledge and experience, together with her strong leadership ability as President and Chief Executive Officer of BiPar Sciences and Chief Operating Officer of Nektar Therapeutics, his significant expertise with implementing strategic and line management initiatives from McKinsey and his knowledge of biotechnology and pharmaceutical collaborations, qualifies Dr. Huha female executive in the healthcare industry, qualify Ms. Bir to be nominatedelected as a director and serve as Chairman of the Board.director.
Daniel M. BradburyElizabeth G. O’Farrell
Experience
Ms. O’Farrell has served as a director of Geron since September 2012. HeMarch 2019. Ms. O’Farrell also serves as a member of the boards of directors of Illumina,PDL BioPharma, Inc., a manufacturer of life science tools and reagents; Corcept Therapeutics,since June 2018, a company focused on acquiring and managing a portfolio of companies, products, royalty agreements and debt facilities in the discoveryhealthcare industry, and development of drugs that regulate the effects of cortisol; Biocon Ltd., a company focused on reducing therapy costs of chronic diseases like diabetes, cancer and autoimmune diseases; and Syngene International Ltd., a contract research and manufacturing organization focused on providing multidisciplinary skills in chemistry and biology services, as well as being a member of the board of trustees of the Keck Graduate Institute. Mr. Bradburyprivately-held biotechnology company. Since January 2018, Ms. O’Farrell also served on the boardfinance committee of directorsthe United Way of BioMed Realty Trust, Inc.Brevard (Brevard County, Florida), a real estate investment trust focused on providing real estate to the life science industry,non-profit organization. In December 2017, Ms. O’Farrell retired from January 2013 to January 2016. He also serves on the University of California San Diego, Rady School of Management’s Advisory Council, Investor Growth Capital Advisory Boarda 24-year career with Eli Lilly and the BioMed Ventures Advisory Committee. Mr. BradburyCompany, a global pharmaceutical company, where she held several senior management positions in finance and corporate governance, most recently serving as Chief Procurement Officer and Head of Global Shared Services from January 2012 to December 2017. Prior to that position, she also served as Senior Vice President, Policy and Finance; Senior Vice President, Finance; Chief Financial Officer, Lilly USA; Chief Financial Officer, Lilly Canada; and General Auditor. Before joining Eli Lilly, Ms. O’Farrell was an accountant with Boise Cascade Office Products, and served as an auditor at Amylin Pharmaceuticals, Inc.,Whipple & Company, a biopharmaceutical company focused on diabetesprofessional accountancy firm, and metabolic disorders, including Chief Executive OfficerPrice Waterhouse, an international public accounting firm. Ms. O’Farrell holds a B.S. in accounting with honors and an M.B.A. in management information systems, both from March 2007 until its acquisition by Bristol-Myers Squibb Company in August 2012.Indiana University.
Qualifications
Ms. O’Farrell’s significant financial, operational and corporate governance expertise strengthens the Board’s collective knowledge related to compliance, financial reporting and internal controls. In addition, Mr. BradburyMs. O’Farrell’s management and leadership experience, gained through the various roles she has served in, also provides unique and valuable insights to the Board regarding organizational development for a growing company, as a memberGeron pursues late-stage development and potential commercialization of the board of directors of Amylin from June 2006 until August 2012. Prior to joining Amylin, he spent ten years at SmithKline Beecham Pharmaceuticals, a pharmaceutical company, holding a number of sales and marketing positions. He received a Bachelor of Pharmacy from Nottingham University and a Diploma in Management Studies from Harrow and Ealing Colleges of Higher Education in the United Kingdom.
imetelstat. The Board believes that Mr. Bradbury’s extensiveMs. O’Farrell’s knowledge and experience in the biopharmaceutical industry, togetheras a senior female executive with his experience in the research, development and commercialization ofa long tenure at a large global pharmaceutical drug products, qualifies Mr. Bradburycompany qualify Ms. O’Farrell to be nominatedelected as a director.
Vote Required and Board Recommendation
Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy at the meeting. TheEach of the two nominees receiving the highest number of “FOR” votes properly cast in person or by proxy at the meeting will be elected as a Class II director of Geron. The election of directors is a non-routine matter on which a broker or other nominee is not empowered to vote. Accordingly, if the beneficial owner does not give a broker specific instructions, the beneficially owned shares may not be voted on this proposal and will not be counted in determining the number of shares necessary for election. Broker non-votes will not have any effect on the outcome of this proposal. In tabulating the voting results for the election of directors, only “FOR” and “WITHHOLD” votes and broker non-votes are counted. “WITHHOLD” votes and broker non-votes will not have any effect on the outcome of the election. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares that would have been voted for that nominee will instead will be voted for the election of sucha substitute nominee, as ourif any, proposed by the Nominating and Corporate Governance Committee and Board may propose.the Board.
Although the election of directors at the Annual Meeting is uncontested and directors are elected by a plurality of votes cast, and we therefore expect that each of the named nominees for director will be elected at the Annual Meeting, under our Corporate Governance Guidelines, any nominee for director is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committee if such nominee for director (in an uncontested election) receives a greater number of “WITHHOLD” votes from his or her election than votes “FOR” such election. In such case, the Nominating and Corporate Governance Committee will then consider all of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to such offer of resignation. For more information on this policy seePromptly following the section entitled “Corporate Governance Matters – Corporate Governance Guidelines”.Board’s decision, we would disclose that decision and an explanation of such decision in a filing with the SEC or a press release.
The Board of Directors Unanimously Recommends That Stockholders
Vote FORVoteFOR the Election of Each NomineeBoth Nominees to the Board of Directors
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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
AFTER THE ANNUAL MEETING
Set forth below is a brief biography of each continuing director composing the remainder of the Board with terms expiring as shown, including their ages, the periods during which they have served as a director of Geron, and information furnished by them as to principal occupations and public company directorships held by them. The biographies below also include a discussion of the specific experience, qualifications, attributes or skills of each continuing director that led the Nominating and Corporate Governance Committee and the Board to conclude, as of the date of this Proxy Statement, that the applicable director should continue to serve as a director.
Class III Directors (Term Expiring at the 20172020 Annual Meeting)
Karin Eastham
Experience
Ms. Eastham has served as a director of Geron since March 2009.2009, and as Lead Independent Director of the Board since December 2018. Ms. Eastham also serves as a director for MorphoSys AG, a Frankfurt Stock Exchange-listed biotechnology company;member of the boards of directors of Illumina, Inc., a manufacturer of life science tools and reagents; andreagents, since July 2004; Veracyte, Inc., a molecular diagnostics company.company, since December 2012; and Nektar Therapeutics, a clinical-stage biopharmaceutical company, since September 2018. Ms. Eastham alsopreviously served as a director of MorphoSys AG, a Frankfurt Stock Exchange-listed biotechnology company, from May 2012 to May 2017; Trius Therapeutics, Inc., a biopharmaceutical company, from 2009 until its sale in 2013; Amylin Pharmaceuticals, Inc., a biopharmaceutical company focused on diabetes and metabolic disorders, from 2005 until its sale in 2012; and Genoptix, Inc., a provider of specialized laboratory services, from 2008 until its sale in 2011. From 1976 until her retirement in September 2008, Ms. Eastham has held several senior management positions in finance in the biopharmaceutical industry, including with the Burnham Institute for Medical Research, a non-profit corporation engaged in basic biomedical research; Diversa Corporation, a biotechnology company; CombiChem, Inc., a computational chemistry company; Cytel Corporation, a biopharmaceutical company; and Boehringer Mannheim Corporation, a biopharmaceutical company. Ms. Eastham holds a B.S. and an M.B.A. from Indiana University and is a retired Certified Public Accountant.
Table of ContentsQualifications
The Board believes Ms. Eastham’s understanding of biotechnology companies, combined with her business leadership and financial experience, her contributions to the Board’s understanding of corporate governance and strategy for life science companies through her experience as a director in the biopharmaceutical industry, and her extensive senior management experience in the biopharmaceutical industry, particularly in key corporate finance and accounting positions, provides important perspectives to the Board. In addition, the Board believes Ms. Eastham’s financial expertise and deep business experience, as well as her demonstrated commitment to our Board and her extensive knowledge of Geron’s business and strategies, based on her service on Geron’s Board since 2009, qualifies Ms. Easthamher to serve as a director.
V. Bryan Lawlis, Ph.D.,
Experience
Dr. Lawlis has served as a director of Geron since March 2012. He currentlyalso serves as a director formember of the boards of directors of BioMarin Pharmaceuticals,Pharmaceutical, Inc., a biopharmaceutical company specializing in rare genetic diseases;diseases, since June 2007; Coherus Biosciences,BioSciences, Inc., a biologics platform company specializing in biosimilars;biosimilars, since May 2014; Sutro Biopharma, Inc., a biologics platform company specializing in therapeutics for cancer and atautoimmune disorders, since January 2004; Aeglea BioTherapeutics, Inc., a biotechnology company specializing in human enzyme therapeutics for rare genetic diseases and cancer, since July 2018; and several privately-held biotechnology companies. From August 2013 to September 2014, Dr. Lawlis served as a director formember of the board of directors of KaloBios Pharmaceuticals, Inc., a biopharmaceutical company specializing in customized antibodies for the treatment of human disease.company. Dr. Lawlis iswas also the President and Chief Executive Officer of Itero Biopharmaceuticals LLC, a privately-held, early stage
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biopharmaceutical company that he co-founded, infrom 2006 to 2011, and serveshas served as an advisor to Phoenix Venture Partners, a venture capital firm specializing in manufacturing technologies.technologies, since October 2015. Dr. Lawlis has held several senior management positions in the biopharmaceutical industry, including President and Chief Executive Officer of Aradigm Corporation, a specialty drug company focused on drug delivery technologies, and President and Chief Executive Officer of Covance Biotechnology Services, a contract biopharmaceutical manufacturing operation, which he co-founded. Dr. Lawlis holds a B.A. in microbiology from the University of Texas at Austin and a Ph.D. in biochemistry from Washington State University.University.
Qualifications
The Board believes Dr. Lawlis’ extensive experience in manufacturing biotechnology and other pharmaceutical products, as well as his expertise in the research and development of drug products and managingin the management and conductingconduct of clinical trials and drug regulatory processes, qualifies Dr. Lawlis to serve as a director.
Susan M. Molineaux, Ph.D.,
Experience
Dr. Molineaux has served as a director of Geron since September 2012. SheDr. Molineaux has been Chief Executive Officer, President and Presidenta member of the board of directors of Calithera Biosciences, Inc., a biotechnology company developing oncology therapeutics, since co-founding the company in June 2010. She also serves as a member of the board of directors of Theravance Biopharma, Inc., a biopharmaceutical company located in South San Francisco, since April 2015.2015, where she is a member of the Sciences and Technology Committee, and as a Scientific Advisor to Lightstone Ventures, a private life sciences investment company, since September 2016. Prior to Calithera, Dr. Molineaux co-founded Proteolix, Inc., a privately-held oncology-oriented biopharmaceutical company, where she served as Chief Scientific Officer from December 2003 until December 2005 and from February 2009 until November 2009, and as President and Chief Executive Officer from January 2006 until February 2009, until the company’s acquisition by Onyx Pharmaceuticals, Inc., a global oncology-oriented biopharmaceutical company, in November 2009. Previously, Dr. Molineaux held several senior management positions in the biopharmaceutical industry, including Vice President of Biology at Rigel Pharmaceuticals, Inc., a biopharmaceutical company focused on inflammatory and autoimmune diseases; Vice President of Biology at Praelux, Inc.;, a biopharmaceutical company; and Vice President of Drug Development at Praecis Pharmaceuticals, Inc., an oncology-focused biopharmaceutical company. Dr. Molineaux holds a B.S. in biology from Smith College, a Ph.D. in molecular biology from Johns Hopkins University, and completed a postdoctoral fellowship at Columbia University. She currently is
Qualifications
Dr. Molineaux has demonstrated her ability to dedicate sufficient time and focus on her duties as a memberdirector of Geron, including her role as Chair of our Nominating and Corporate Governance Committee. As President and director of Calithera, Dr. Molineaux does not serve on any Calithera board committees, and accordingly serves only on board committees for Geron and Theravance. In the past year, Dr. Molineaux has attended 100% of the boardmeetings for Geron’s Board and Geron’s Nominating and Corporate Governance Committee, and 100% of directors of We Teachthe meetings for Theravance’s board. Dr. Molineaux’s duties on Theravance’s Science and Technology Committee are limited in scope and therefore our Board believes that her membership on that committee does not interfere with her ability to reliably devote time to Geron’s Board, as well as Geron’s Nominating and Corporate Governance Committee. In accordance with our Board’s standard practice, Dr. Molineaux reviews scheduled Geron Board and committee meeting dates a year in advance to confirm availability to participate and attend all Board and committee meetings. All the companies for which she serves as a director are located in the San Francisco Bay Area, mentoring program for students in mathenabling her to travel and science.regularly attend Geron’s Board and committee meetings. Dr. Molineaux does not serve on the board of any privately-held companies.
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The Board believes Dr. Molineaux’s extensive experience in pharmaceutical and oncology drug development, and her expertise in managing and conducting clinical trials, qualifies Dr. Molineaux to be a director of the Company. The Board and the Nominating and Corporate Governance Committee also believe that Dr. Molineaux provides great value to the Board and contributes significantly to discussions and decision-making. Dr. Molineaux has extensive experience in the biotechnology industry, with current executive experience at Calithera. Accordingly, the Board believes that Dr. Molineaux’s contributions as director are substantial, based upon her business and scientific expertise acquired in successfully holding executive and leadership positions in biotechnology companies, and her demonstrated reliability and commitment to service on our Board and Nominating and Corporate Governance Committee. Dr. Molineaux’s knowledge of the biotechnology industry and business, and healthcare related issues, combined with her experience as the chief executive officer of a public company, qualifies her to serve as a director.
Class I Directors (Term Expiring at the 20182021 Annual Meeting)
John A. Scarlett, M.D.,
Experience
Dr. Scarlett has served as our Chairman of the Board effective December 2018, our Chief Executive Officer and a director since joining Geron in September 2011 and President since January 2012. Dr. Scarlett also serves as a directormember of the boards of directors for Chiasma, Inc., a biopharmaceutical company focused on transforming injectable drugs into oral medications, since February 2015.2015, and CytomX Therapeutics, Inc., an oncology-oriented company, since June 2016. Prior to joining Geron, Dr. Scarlett served as President, Chief Executive Officer and a member of the board of directors of Proteolix, Inc., a privately-held, oncology-oriented biopharmaceutical company, from February
2009 until its acquisition by Onyx Pharmaceuticals, Inc., an oncology-oriented biopharmaceutical company, in November 2009. From February 2002 until its acquisition by Ipsen, S.A. in October 2008, Dr. Scarlett served as the Chief Executive Officer and a member of the board of directors of Tercica, Inc., an endocrinology-oriented biopharmaceutical company, and also as its President from February 2002 through February 2007. From March 1993 to May 2001, Dr. Scarlett served as President and Chief Executive Officer of Sensus Drug Development Corporation.Corporation, a privately-held company focused on endocrine disorders. In 1995, he co-founded Covance Biotechnology Services, Inc., a contract biopharmaceutical manufacturing operation, and served as a member of its board of directors from inception to 2000. From 1991 to 1993, Dr. Scarlett headed the North American Clinical Development Center and served as Senior Vice President of Medical and Scientific Affairs at Novo Nordisk Pharmaceuticals, Inc., a wholly-owned subsidiary of Novo Nordisk A/S.S, a global pharmaceutical company. Dr. Scarlett received his B.A. degree in chemistry from Earlham College and his M.D. from the University of Chicago, Pritzker School of Medicine.
Qualifications
As the only management representative on the Board, Dr. Scarlett brings management’s perspective to boardthe Board’s discussions about Geron’s business and strategic direction. In addition, the Board believes Dr. Scarlett’s deep understanding of what makes businesses work effectively and efficiently, as well as his medical background and extensive drug development experience, whichprovide valuable insights to the Board. See discussion below regarding Board Leadership and Governance in connection with the appointment of a Lead Independent Director who provides substantial understandingleadership for the independent members of potential clinical product opportunities, qualifiesthe Board.
Serving as a director for other publicly-held biopharmaceutical companies provides Dr. Scarlett with alternate viewpoints on business strategy and board decision-making, which we believe enhances his contributions to our Board. Dr. Scarlett has demonstrated his ability to dedicate sufficient time and focus on his duties as a member of our Board and attended 100% of our Board meetings in 2018. In accordance with our Board’s standard practice, Dr. Scarlett reviews scheduled Board meeting dates a year in advance to confirm availability to participate and attend all our Board meetings, and prioritizes Geron’s meetings over Chiasma and CytomX board meetings. Accordingly, the Board believes Dr. Scarlet’s business and medical expertise acquired in successfully holding executive and leadership positions in biotechnology companies, and his demonstrated
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reliability and commitment to service on our Board, qualifies him to serve as a director.director and Chairman of the Board.
Robert J. Spiegel, M.D.,FACP,
Experience
Dr. Spiegel has served as a director of Geron since May 2010. Dr. Spiegel currently serves as an Associate Professor at the Weill Cornell Medical School, a Senior Advisor to Warburg Pincus, a private equity firm, and an Advisor to the Israel Biotech Fund, a venture investment fund. He is also a member of the boards of directors of Edge Therapeutics, Inc., a biotechnology company, since August 2013; Cyclacel Pharmaceuticals, Inc., a biopharmaceutical company developing targeted medicines for cancer and other proliferative diseases; since September 2018; and several privately-held biotechnology companies. He previously served as a director for Avior Computing Corporation, a privately-held governance risk and compliance process technology company, from October 2011 to November 2017; Talon Therapeutics, Inc., a biopharmaceutical company, from July 2010 to July 2013; Capstone Therapeutics Corp., a biotechnology company, from May 2010 to January 2012; Sucampo Pharmaceuticals, Inc., a biopharmaceutical company, from January 2015 to January 2018; the Cancer Institute of New Jersey from 1999 to 2009; and Cancer Care New Jersey from 1995 to 2011. From March 2011 to April 2016, Dr. Spiegel served as Chief Medical Officer of PTC Therapeutics, Inc., a biopharmaceutical company focused on discovering and developing treatments for rare and neglected disorders; as an Associate Fellow at the University of Pennsylvania Center for Bioethics; and as an Associate Professor at the Weill Cornell Medical School. He is also a director of Edge Therapeutics, Inc., a biopharmaceutical company; Sucampo Pharmaceuticals, Inc., a biopharmaceutical company; and Avior Computing Corporation, a governance risk and compliance process technology company. He served as a director for the Cancer Institute of New Jersey from 1999 todisorders. In 2009, and as a director of Cancer Care New Jersey from 1995 to 2011. Afterafter 26 years with the Schering-Plough Corporation (now Merck & Co.), a global healthcare company, Dr. Spiegel retired in 2009 as Chief Medical Officer and Senior Vice President of the Schering-Plough Research Institute, the pharmaceutical research arm of the Schering-Plough Corporation. His career at Schering-Plough involved various positions, including Director of clinical research for oncology, Vice President of clinical research, and Senior Vice President of worldwide clinical research. Following a residency in internal medicine, Dr. Spiegel completed a fellowship in medical oncology at the National Cancer Institute, and from 1981 to 1999 he held academic positions at the National Cancer Institute and New York University Cancer Center. Dr. Spiegel holds a B.A. from Yale University and an M.D. from the University of Pennsylvania.
Qualifications
The Board believes Dr. Spiegel’s extensive medical experience developing oncology products, his deep understanding of pharmaceutical research and development, and broad expertise in gaining regulatory approval for drug candidates, enhances the Board’s ability to critically assess the progress and potential of imetelstat, and qualifies Dr. Spiegel to serve as a director.
DIRECTOR WITH TERM EXPIRING AT THE ANNUAL MEETING
CORPORATEAs noted above, Mr. Bradbury has advised the Board that he will not stand for reelection at the Annual Meeting. Accordingly, his term of office will expire at the Annual Meeting. Mr. Bradbury has served as a director of Geron since September 2012. He is the Chief Executive Officer, Chairman and co-founder of Equillium, Inc., a biotechnology company focused on developing products for severe autoimmune and inflammatory disorders. He also serves as a member of the board of directors of Intercept Pharmaceuticals, Inc., a biopharmaceutical company focused on the development and commercialization of novel therapeutics for non-viral liver diseases, since July 2016, and Corcept Therapeutics Incorporated, a company focused on the discovery and development of drugs that regulate the effects of cortisol, since October 2012. Additionally, Mr. Bradbury serves on the boards of directors of several privately-held companies. Mr. Bradbury previously served as a member of the boards of directors of BioMed Realty Trust, Inc., a real estate investment trust, from January 2013 to January 2016; and Illumina, Inc., a manufacturer of life science tools and reagents, from January 2004 to May 2017. Mr. Bradbury is a member of the board of trustees of the Keck Graduate Institute and an advisory board member for the University of California San Diego, Rady School of Management’s Deans Advisory Board, and the BioMed Ventures Advisory Committee. Mr. Bradbury held several senior positions at Amylin Pharmaceuticals, Inc., a biopharmaceutical company focused on diabetes and metabolic disorders, including Chief Executive Officer from March 2007 until its acquisition by Bristol-Myers Squibb Company in August
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2012. In addition, Mr. Bradbury served as a member of the board of directors of Amylin from June 2006 until August 2012. Prior to joining Amylin, he spent ten years at SmithKline Beecham Pharmaceuticals, a pharmaceutical company, holding a number of sales and marketing positions. He received a Bachelor of Pharmacy from Nottingham University and a Diploma in Management Studies from Harrow and Ealing Colleges of Higher Education in the United Kingdom.
BOARD LEADERSHIP AND GOVERNANCE MATTERS
We have an ongoing commitment to excellence in corporate governance and business practices. In furtherance of this commitment, we regularly monitor developments in the area of corporate governance and review our processes, policies and procedures in light of such developments. We comply with the rules and regulations promulgated by the SEC and NASDAQ, and implement additionalKey information regarding our corporate governance practices that we believe are ininitiatives can be found on the best interestCorporate Governance page under the Investor Relations section of Geron and our stockholders.
website at www.geron.com, including our Corporate Governance Guidelines, Code of Conduct, Insider Trading Policy, Privacy Policy and the charters for our Audit, Compensation and Nominating and Corporate Governance committees. We believe that our corporate governance policies and practices, including the substantial percentage of independent directors on our board of directors and the leadership provided by our Lead Independent Director, Ms. Eastham, empower our independent directors to effectively oversee our management—including the performance of our Chief Executive Officer—and provide an effective and appropriately balanced board governance structure.
Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines that set forth key principles to guide the operation of the Board and its committees in theirthe exercise of their responsibilities andto serve the interests of Geron and our stockholders. OurAs stated in our Nominating and Corporate Governance Committee Charter and our Corporate Governance Guidelines, include provisions whereby any nominee foras part of the director shall submit an offer of resignation for consideration bysearch process, the Nominating and Corporate Governance Committee endeavors to consider qualified candidates, including women and minorities, who meet the relevant business and search criteria. In furtherance of the Board, ifforegoing, where a third-party search firm is engaged and requested to furnish an initial list of possible candidates, such nominee for directorfirm will be requested to include in an uncontested election receives a greater number of “WITHHOLD” votes from his or her election than votes “FOR” such election. The Nominatinglist women and Corporate Governance Committee would then consider all
Table of Contentsminority candidates who meet such criteria.
of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to such offer of resignation. Promptly following the Board’s decision, we would disclose that decision and an explanation of such decision in a filing with the SEC or a press release. The current form of the Corporate Governance Guidelines can be found on the Corporate Governance page under the Investor Relations section of our website at www.geron.com. In addition, these guidelines are available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025.
Board Independence
In accordance with Nasdaq listing standards and Geron’s Corporate Governance Guidelines, a majority of the members of our board of directors must qualify as “independent” as defined by Nasdaq Rule 5605(a)(2). In keeping with these guidelines, a member of our Board may serve as a director of another company only to the extent such position does not conflict or interfere with such person’s service as a director of Geron.
Board Independence
In accordance with NASDAQ listing standards and Geron’s Corporate Governance Guidelines, our Board has affirmatively determined that all nominees for election at the Annual Meeting and all current and continuing directors, other than Dr. Scarlett, are independent under NASDAQ listing standards. The Board consults with our counsel to ensure that the Board’s determinations regarding Board independence are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of NASDAQ,Nasdaq, as in effect from time-to-time.time to time.
One classConsistent with these considerations, our Board has determined affirmatively that Mses. Bir and O’Farrell, nominees for election at the Annual Meeting, and all current and continuing directors, with the exception of Dr. Scarlett, are independent with the meaning of the Nasdaq listing standards.Dr. Scarlett, who is our Chairman of the Board, President and Chief Executive Officer, is elected annually,the sole non-independent director, and each class of directors stands for election every three years. Our Board is comprised of seven directors, one of whom is an executive officer and six of whom were affirmatively determined by the Board to be independent, meetingregularly meets in executive sessions outside the objective requirements set forth by the SEC and NASDAQ, and having no relationship, direct or indirect, to Geron other than as stockholders or through their service on the Board.
Board Leadership Structure
presence of Dr. Scarlett. The Board has an independent Chair,previously determined that Dr. Huh, who resigned from the Board effective December 26, 2018, was independent within the meaning of the Nasdaq listing standards.
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There are no family relationships between any director and any of our executive officers. There are no arrangements or agreements relating to compensation provided by a third party to any member of our Board, including current nominees for director, in connection with their candidacy or board service to us.
Board Leadership Structure
In December 2018, Dr. Huh, who was an independent director and Chairman of the Board, resigned from the Board for personal reasons. Effective December 27, 2018, the Board appointed Dr. Scarlett to serve as Chairman of the Board, in addition to his role as President and Chief Executive Officer of the Company. Particularly in light of the rapid growth the Company expects to experience as it resumes development of imetelstat on its own, the Board at this time believes that Dr. Scarlett is best suited to serve as our Chairman because he is the member of the Board who is most familiar with our business as a whole and the most capable of identifying and bringing to the attention of the full Board the strategic priorities and key issues facing the Company. The Board also believes that having Dr. Scarlett in a combined Chairman/Chief Executive Officer role helps provide strong, unified leadership for our management team. To counterbalance our Board’s decision to have a combined Chairman and Chief Executive Officer, the Company’s Corporate Governance Guidelines require that the Board appoint a Lead Independent Director when the role of Chairman is held by a director who does not qualify as an independent director. Accordingly effective December 27, 2018, the Board appointed Ms. Eastham to serve as Lead Independent Director for the Board. In her role as Lead Independent Director, Ms. Eastham facilitates Board interactions and information flow. The structure also allows for a clear communication path for the non-employee directors, who may raise any issues or concerns that they have directly with the Lead Independent Director.
The Chairman of the Board has the authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly,However, the Board Chair has substantial ability to shape the workLead Independent Director provides active leadership on behalf of the independent directors on the Board. We believe that separation ofWith the positions of Board ChairChairman, President and Chief Executive Officer, reinforcesDr. Scarlett, the independenceLead Independent Director, Ms. Eastham, advises on Board meeting agendas and discussion priorities. In addition, the Lead Independent Director provides regular communications to directors between meetings, inviting comments, ideas and concerns from each non-employee director. The Lead Independent Director also has the following responsibilities:
Presiding at executive sessions of non-employee directors;
Serving as a liaison between the Board Chairman and non-employee directors;
Advising the Board Chairman regarding the impression of the Board in its oversightnon-employee directors as to the quality, quantity and timeliness of the business and affairsflow of Geron. As a result, we believe that having an independent Board Chair enhancesinformation from the effectiveness of the Board as a whole. In addition, we believe that having an independent Board Chair creates an environmentCompany that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability ofnecessary for the Board to monitor whether management’s actions are ineffectively perform its duties; and
Accepting additional responsibilities as may be recommended from time-to-time by the best interests of Geron and our stockholders.
The Board regularly meets in executive sessions withoutor the presencenon-employee directors of the non-independent director or management.Board.
Board’s Role in Risk Oversight
Geron is subject to a variety of risks, which generally include any undesired event, circumstance or outcome that could affect Geron’s ability to achieve its objectives or adversely impact Geron’s business, operations or financial condition. Some risks may be readily perceived and even quantified, while others are unexpected or unforeseeable. Risks can be external, such as those arising from the macroeconomic or industry environment, government policies or regulations, competitors’ activities or natural disasters. Alternatively, risks can arise as a result of our business or financial activities.
The Board and Geron’s management team work together to manage Geron’s risks. It is management’s responsibility to manage risk and bring to the Board’s attention the material risks to the Company. The Board has an active role in overseeing management of the Company’s risks. The Board regularly reviews information regarding our credit, liquidity and operations, as well as the risks associated with each. In addition, our Corporate Governance Guidelines specify that each of our Board committees oversees the risks within its areas of responsibilities. While each committee is responsible for evaluating certain risks and overseeing the management of such risks within its respective oversight area, the entire Board is regularly informed through committee reports about such risks.
The Compensation Committee of the Board is responsible for overseeing the management of risks relating to Geron’s employment policies and executive compensation plans and arrangements. In connection with the structuring of the compensation elements for executive officers, the Compensation Committee, together with the Board, considers whether such programs, individually or in the aggregate, encourage executive officers to take unnecessary risks.
The Audit Committee of the Board oversees management of financial risks. In addition to fulfilling its responsibilities for the oversight of our financial reporting processes and annual audit of Geron’s financial statements, the Audit Committee also reviews with the independent auditors and the Company’s management the adequacy and effectiveness of our policies and procedures to assess, monitor and manage fraud risk and Geron’s ethical compliance program. The Audit Committee takes the appropriate actions to set the best practices and highest standards for quality financial reporting, sound business risk practices and ethical behavior.
The Nominating and Corporate Governance Committee of the Board manages Geron’s corporate governance practices, including certain risks that those practices are intended to address. In addition, the Nominating and Corporate Governance Committee reviews risks associated with the independence of the Board, potential conflicts of interest and risks relating to management and Board succession planning.
Board Committees and Meetings
It is Geron’s policy to encourage directors to attend annual meetings of stockholders. All of our current directors, except Dr. Lawlis, attended our 20152018 Annual Meeting. During the fiscal year ended December 31, 2015,2018, the Board held seven meetings.meetings and acted once by unanimous written consent. The Board has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. During the fiscal year ended December 31, 2015,2018, each of the directors attended at least 86%75% of the aggregate number of meetings of the Board and the committees on which the director served during the portion of the last fiscal year for which he or she was a director or committee member.member, except for Dr. Lawlis who achieved a 74% attendance rate in 2018 due to family medical issues.
Below is a description of each committee of the Board. Each of the committees has authority to engage and determine the compensation for legal counsel or other experts or consultants, as it deems appropriate, to assist with fulfilling its responsibilities. The Board has determined that each member of each committee meets
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the applicable Nasdaq and SEC rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgement with regard to Geron.
Audit Committee
The Audit Committee which is comprised of Ms. Eastham, Mr. Bradbury and Dr. Lawlis, met nine times in 2015. Alloperates under a written charter that satisfies the applicable standards of the membersSEC and Nasdaq. A copy of the Audit Committee are, “independent”charter is available on our website at www.geron.com. The Audit Committee held eight meetings in 2018 and acted once by unanimous written consent. The Audit Committee’s responsibilities include:
appointing or terminating, approving the compensation of, and assessing the qualifications, performance and independence of our independent registered public accounting firm;
pre-approving audit and permissible non-audit services and the terms of such services to be provided by our independent registered public accounting firm;
reviewing the plan and scope of the annual audit of financial statements with the independent registered public accounting firm and members of management;
reviewing and discussing with management and/or the independent registered public accounting firm, prior to public disclosure, our annual and quarterly financial statements and related disclosures in our Forms 10-K, Forms 10-Q, and earnings press releases, including critical accounting policies and practices used by us and information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”
recommending to the Board, based upon the Audit Committee’s review and discussions with management and the independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K;
monitoring our internal control over financial reporting and disclosure controls and procedures, including reviewing management’s assessment and disclosures related to any significant changes, material weaknesses or significant deficiencies;
overseeing compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters, including our insider trading compliance program;
establishing policies and procedures for the receipt and retention of whistleblower complaints and concerns and overall compliance with our Code of Conduct;
preparing the audit committee report required by NASDAQ Rule 5605(c)(2)(A). the SEC to be included in our annual proxy statement;
reviewing and approving or ratifying any related party transactions; and
overseeing financial and operation risk exposures and the actions management has taken to limit, monitor and control such exposures.
The Board has determined that all of the members of the Audit Committee are financially literate and that two members of the Audit Committee, Ms. Eastham and Mr. Bradbury, have accounting and financial management expertise that qualifies each as an “Audit Committee Financial Expert,” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated by the SEC. TheSee more information about the Audit Committee’sCommittee in the section entitled “Audit Committee Report.” In connection with his decision not to stand for re-election due to his new responsibilities include: (i) sole authority to select, overseeas a chief executive officer for another public company, Mr. Bradbury will cease being a director and replace Geron’s independent registered public accounting firma member of the Audit Committee and pre-approve any fees paid to such firm, (ii) consulting with the independent auditors with regardNominating and Corporate Governance Committee of the Company effective June 6, 2019, the date of the Annual Meeting. In March 2019, Ms. O’Farrell was appointed to the plan and scope of the annual audit of financial statements, (iii) reviewing, in consultation with the independent auditors, their report of the audit or proposed report of the audit, and the accompanying management letter, if any, and (iv) consulting with the independent auditors and management with regard to the adequacy of Geron’s internal controls. Audit Committee.
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The AuditCompensation Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ. A copy of the Audit Committee charter is available on our website at www.geron.com. See more information about the Audit Committee in the section entitled “Audit Committee Report”.
Compensation Committee
The Compensation Committee, which met eight times in 2015, was comprised of Drs. Hofstaetter, Lawlis and Spiegel, until Dr. Hofstaetter’s retirement from the Board and the Compensation Committee on the date of our Annual Meeting in May 2015. The Board appointed Ms. Eastham to the Compensation Committee as of the date of our Annual Meeting in May 2015, thereafter our Compensation Committee has been comprised of Drs. Lawlis and Spiegel and Ms. Eastham. All of the current members of the Compensation Committee are, and Dr. Hofstaetter was, “independent” as required by NASDAQ Rules 5605(a)(2) and 5605(d)(2). In determining whether Drs. Lawlis and Spiegel and Ms. Eastham are, and Dr. Hofstaetter was, independent within the meaning of NASDAQ Rules pertaining to membership of the Compensation Committee, our Board determined, based on its consideration
of factors specifically relevant to determining whether any such director has a relationship to us that is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, that no member of the Compensation Committee has a relationship that would impair that member’s ability to make independent judgments about our executive compensation.
The Compensation Committee’s responsibilities include making recommendations concerning compensation of executive officers, administering Geron’s incentive compensation and benefit plans, and performing such other functions regarding compensation as the Board may delegate. In addition, the Compensation Committee has authority to administer the 2011 Incentive Award Plan (the “2011 Plan”) and the 2014 Employee Stock Purchase Plan. The Compensation Committee operates under a written charter that satisfies the applicable standards of NASDAQ.Nasdaq. A copy of the Compensation Committee charter is available on our website at www.geron.com.
Under its charter, the Compensation Committee has the sole authority, as it deems appropriate, to retain and/or replace, at Geron’s expense, as needed, any independent counsel, compensation and benefits consultants and other outside experts or advisors as the Compensation Committee believes to be necessary or appropriate. In this regard, the Compensation Committee has engaged Radford, an Aon Hewitt Company (“Radford”), since December 2011 as a compensation consultant to evaluate non-employee director and executive compensation in comparison to industry peers. For information regarding the Compensation Committee’s processes and procedures for the consideration and determination of executive compensation, including the role of Radford and our Chief Executive Officer in the determination of executive compensation, see the section entitled “Compensation Discussion and Analysis – Role of the Compensation Committee”. With respect to director compensation matters, our Board determines and sets non-employee director compensation. Our compensation arrangements for our non-employee directors, including Radford’s role with respect to such arrangements for 2015, are described under the section entitled “Compensation of Directors.” The charter of the Compensation Committee allows it to delegate responsibilities to a subcommittee of the Compensation Committee, but only to the extent consistent with our certificate of incorporation, Bylaws NASDAQ rules and Section 162(m)Nasdaq rules. The Compensation Committee held seven meetings in 2018 and acted twice by unanimous written consent. The Compensation Committee’s responsibilities include:
establishing and overseeing our executive compensation philosophy and strategy;
reviewing and approving the terms of any employment agreements, severance arrangements, change in control protections and other compensatory arrangements for our executive officers, including our Chief Executive Officer;
annually reviewing and recommending to the Board corporate goals and objectives relevant to the compensation of our executive officers, including our Chief Executive Officer;
reviewing and approving, or making recommendations to the Board with respect to, the compensation of our executive officers, including our Chief Executive Officer, based upon an annual evaluation of each individual’s performance;
overseeing and administering our cash and equity incentive plans, including establishing policies and procedures for the grant of equity-based awards and approving, or making recommendation to the full Board with respect to, the grant of such equity-based awards;
appointing, compensating and overseeing the work of any compensation and benefits consultants, legal counsel or other experts or advisors retained by the Compensation Committee, including an independence assessment as outlined by Nasdaq rules;
reviewing and discussing with management our compensation discussion and analysis disclosure to be included in our annual proxy statement;
reviewing and making recommendations to our Board regarding non-employee director compensation; and
reviewing and assessing the potential impact of our compensation practices on enterprise risk.
For information on the Compensation Committee’s processes and procedures on the consideration and determination of executive compensation, see the sub-section entitled “Compensation Discussion and Analysis – Role of the Internal Revenue CodeCompensation Committee.” For information on the Compensation Committee’s processes and procedures with respect to non-employee director compensation matters, see the section entitled “Compensation of 1986, as amended (the “Code”).Directors.”
Compensation Committee Interlocks and Insider Participation
Drs. Lawlis and Spiegel and Ms. Eastham served on the Compensation Committee for the entire fiscal year ended December 31, 2015, and Dr. Hofstaetter served on the Compensation Committee until his retirement from the Board and the Compensation Committee on the date of our Annual Meeting in May 2015. Since the date of our Annual Meeting in May 2015, Ms. Eastham has served on our Compensation Committee with2018. Neither Drs. Lawlis and Spiegel. Not one of Drs. Hofstaetter, Lawlis or Spiegel, nor Ms. Eastham, is a former or current officer or employee of Geron. None of our executive officers serves as a member of a compensation committee of any entity that has one or more executive officers serving as a member of our Board or Compensation Committee.
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Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. A copy of the Nominating and Corporate Governance Committee charter is available on our website at www.geron.com. The Nominating and Corporate Governance Committee held two meetings in 2018. The Nominating and Corporate Governance Committee’s responsibilities include include:
developing, reviewing and recommending to the Board a set of corporate governance guidelines and principles applicable to Geron, making recommendationsprinciples;
creating and recommending to the Board criteria for candidatesBoard and committee membership;
establishing procedures for identifying and evaluating individuals qualified to become members of the Board, including nominees recommended by stockholders;
recommending to the Board the persons to be nominated for election or re-election as a director by the stockholders or bydirectors;
reviewing and recommending to the Board the functions, duties and the corporate governance functions described in the Nominating and Corporate Governance Committee’s charter. Until the date of our annual meeting in May 2015, the memberscompositions of the NominatingBoard committees;
considering and Corporate Governance Committee were Ms. Eastham and Drs. Molineaux and Huh. On the date of our annual meeting in 2015,reporting to the Board appointed Ms. Eastham to our Compensation Committee,any questions of possible conflicts of interest of Board members; and Mr. Bradbury was appointed by
assessing the performance of the Board, to replace Ms. Eastham on our Nominatingthe Board committees and Corporate Governance Committee. The current members of the Nominating and Corporate Governance Committee are, and during her tenure on the Nominating and Corporate Governance Committee Ms. Eastham was, “independent” as defined in NASDAQ Rule 5605(a)(2). The Nominating and Corporate Governance Committee met on four occasions during 2015. The Nominating and Corporate Governance Committee will consider nominees for director nominated by stockholders upon submission in writing to our Corporate Secretary of the names of such nominees in accordance with our Bylaws. Members of the Nominating and Corporate Governance Committee also obtain recommendations for potential directors from their and other Board members’ contacts in our industry, and may from time to time engage a search firm to assist in identifying potentialindividual directors.
Specific qualifications and the
process for recommending director candidates are provided in more detail under the sectionsub-sections entitled “Director Nominees Recommended by Stockholders” and “Director Qualifications” below.Qualifications.” As stated in our Nominating and Corporate Governance Committee Charter and our Corporate Governance Guidelines, as part of the director search process, the Nominating and Corporate Governance Committee endeavors to consider qualified candidates, including women and minorities, who meet the relevant business and search criteria. In furtherance of the foregoing, where a third-party search firm is engaged and requested to furnish an initial list of possible candidates, such firm will be requested to include in such list women and minority candidates who meet such criteria. The Nominating and Corporate Governance Committee will investigate, evaluate and interview, as appropriate, a director candidate with regard to his or her individual characteristicsqualifications and expertise as well as how those characteristics fit with the needs of the Board and the long-term interests of our stockholders.
In connection with his decision not to stand for re-election due to his new responsibilities as a whole. The Nominatingchief executive officer for another public company, Mr. Bradbury will cease being a director and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of NASDAQ. A copymember of the Nominating and Corporate Governance Committee charterof the Company effective June 6, 2019, the date of the Annual Meeting. In March 2019, Ms. Bir was appointed to the Nominating and Corporate Governance Committee.
Board’s Role in Risk Oversight
Geron is subject to a variety of risks, including those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018. Some risks may be readily perceived and even quantified, while others are unexpected or unforeseeable. Risks can be external or can arise as a result of our internal business or financial activities.
The Board and our executive management team work together to manage our risks. It is management’s responsibility to identify various risks facing the Company, bring the Board’s attention to material risks, and implement appropriate risk management policies and procedures to manage risk exposure on a day-to-day basis. The Board has an active role in overseeing our risk management process directly or through its committees.
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The Board has delegated responsibility for the oversight of specific risks to the Board committees as follows:
The Audit Committee oversees management of financial risks. In addition to fulfilling its responsibilities for the oversight of our financial reporting processes and annual audit of Geron’s financial statements, the Audit Committee also reviews with the Company’s independent registered public accounting firm and the Company’s management the adequacy and effectiveness of our policies and procedures to assess, monitor and manage fraud risk and our ethical compliance program. The Audit Committee takes appropriate actions to set the best practices and highest standards for quality financial reporting, sound business risk practices, including practices related to cybersecurity, and ethical behavior.
The Compensation Committee is responsible for overseeing the management of risks relating to our employment policies and executive compensation plans and arrangements. In connection with structuring the executive compensation program, the Compensation Committee, together with the Board, considers whether the elements of such program, individually or in the aggregate, encourage our Named Executive Officers to take unnecessary risks. For further information, see the sub-section entitled “Risk Assessment of Compensation Policies and Practices.”
The Nominating and Corporate Governance Committee manages Geron’s corporate governance practices. In addition, the Nominating and Corporate Governance Committee reviews risks associated with the independence of the Board, potential conflicts of interest and risks relating to management and Board succession planning.
While each committee is responsible for evaluating certain risks and overseeing the management of such risks within its respective oversight area, the entire Board is regularly informed through committee reports about such risks.
Risk Assessment of Compensation Policies and Practices
The Compensation Committee maintains a pay for performance compensation philosophy, but also recognizes that providing certain types of compensation incentives may inadvertently motivate individuals to act in ways that could be detrimental to the Company in order to maximize individual compensation. To minimize such risk, the Compensation Committee annually evaluates our compensation philosophy generally as it relates to all employees, as well as individual compensation elements of base salary, annual performance-based bonuses, equity awards, severance and change in control benefits and other benefits to ensure each is evaluated against appropriate standards and that such incentives provide for the achievement of target goals that are balanced between short-term rewards and long-term enhancement of stockholder value.
The Compensation Committee believes the following elements of our compensation program mitigate the risks associated with our compensation practices:
setting annual base salaries consistent with the responsibilities of our Named Executive Officers and market comparables to ensure that our Named Executive Officers are not motivated to take excessive risks to achieve a reasonable level of financial security;
establishing corporate goals for our annual performance-based bonus program that are consistent with our annual operating and strategic plans and are designed to achieve a proper risk/reward balance without excessive risk taking;
requiring an executive officer to forfeit his or her entire annual performance-based bonus if we determine that such executive officer has engaged in any misconduct intended to affect the payment of his or her annual performance-based bonus, or has otherwise engaged in any act or omission that would constitute cause for termination of his or her employment, as defined by his or her employment agreement;
21
• | having a mix of fixed and variable, annual and long-term and cash and equity compensation elements to encourage strategies and actions that balance short-term and long-term best interests; |
granting stock option awards which provide value only if the market price of our Common Stock increases to encourage our Named Executive Officers to take a long-term view of our business and performance-based stock option awards that only vest upon the attainment of specific strategic milestones;
absence of employment agreements or contracts that contain multi-year guarantees of salary increases, or non-performance-based bonuses or equity compensation;
emphasizing pay equity amongst our employees and with reference to external comparators; and
having available, to the Compensation Committee and the Board, the discretion to measure and calculate achievement of corporate goals and other corporate performance measures, which prevents the compensation program from being susceptible to manipulation by a single employee.
The Compensation Committee has reviewed our compensation policies and practices as they relate to all employees and has determined that such policies and practices do not present any risks that are reasonably likely to have a material adverse effect on Geron, and instead, encourage behaviors that support sustainable value generation. In addition, the Compensation Committee has reviewed and evaluated our website at www.geron.com.executive compensation program and believes that our executive compensation policies and practices do not encourage inappropriate actions or risk taking by our executive officers.
OTHER CORPORATE GOVERNANCE MATTERS
Code of Conduct
In 2003, we adopted a Code of Conduct, which is available in its entirety on the Corporate Governance page in the Investor Relations section of our website at www.geron.com and to any stockholder otherwise requesting a copy. All our directors, employees, executive officers, and directors, including theour Chief Executive Officer and Chief Financial Officer, are required to adhere to the Code of Conduct in discharging their work-related responsibilities. Employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Conduct. Amendments to the Code of Conduct, and any waivers from the Code of Conduct granted to our directors or executive officers, will be made available through our website as they are adopted. Accordingly, we intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Conduct by posting such information on our website at the website address and location specified above.www.geron.com.
Whistleblower Policy
In keeping with the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures for the receipt and handling of complaints received by us regarding accounting, internal accounting controls, auditing matters, questionable financial practices or auditing matters.violations of our Code of Conduct (“complaints”). Contact information for the Chairperson of the Audit Committeean external hotline that is maintained by an independent third party has been distributed to all employees and consultants to allow for the confidential, anonymous submission of complaints by our employees and consultants. Any complaints received by this hotline are reviewed by the Audit Committee and our Chief Legal Officer.
Prohibitions on Derivative, Hedging, Monetization and Other Transactions
We maintain an insider trading policy that applies to all directors and employees, including our executive officers, which prohibits certain transactions in our Common Stock, including short sales, puts, calls or other transactions involving derivative securities, hedging or monetization transactions, purchases of concerns regarding accountingour Common Stock on margin or auditing matters.borrowing against an account in which our Common Stock is held, or pledging our Common Stock as collateral for a loan. Our Audit Committee oversees compliance with our insider trading
22
program, including approval of any material updates to the insider trading program. Our Chief Legal Officer serves as our insider trading compliance officer and reports, at least once annually, to the Audit Committee on his monitoring of the insider trading program. In addition, the Audit Committee meets with the Compliance Officer outside of the presence of any other executive officers. A copy of our insider trading policy is available on our website at www.geron.com.
Communications with the Board
Stockholders wishing to communicate with the Board, or with a specific Board member, may do so by writing to the Board, or to the particularindividual Board member, and delivering the communication in person or mailing it to: Board of Directors, c/o Stephen N. Rosenfield, Corporate Secretary, Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, CACalifornia 94025. All mail addressed in this manner will be delivered to the Chair or Chairs of the CommitteesBoard committees with responsibilities touching most closely on the matters addressed in the communication. From time-to-time,time to time, the Board may change the process by which stockholders may communicate with the Board or its members. Please refer to our website for any changes to this process.
CashThe Compensation
Since March 2014, our Committee determines non-employee director compensation, which the full Board reviews and approves upon recommendation from the Compensation Committee. When considering non-employee director compensation decisions, the Compensation Committee believes it is important to be informed as to current compensation practices of comparable publicly-held companies in the life sciences industry, especially to understand the demand and competitiveness for attracting and retaining an individual with each of the non-employee director’s specific expertise and experience. Our compensation arrangements for our non-employee directors have beenare set forth in our Non-Employee Director Compensation Policy (the “Director Compensation Policy”). The Director Compensation Policy outlines cash and equity compensation automatically payable to non-employee membersdirectors of the Board, unless such non-employee director declines receipt of such cash or equity compensation by written notice to us. Traditionally, the Compensation Committee has reviewed our non-employee director compensation relative to industry practices every other year.
In January 2018, Radford, an independent compensation consultant, conducted a review of non-employee director compensation in comparison to our industry peer group based on Geron’s market capitalization, revenue, stage of development and size of company, that was selected by Radford in 2017. Based on this review, and guidance from Radford, effective January 31, 2018, the Board approved an amendment to the Director Compensation Policy to increase the size of the Initial Grant described below from 100,000 to 120,000 shares of Common Stock and the size of the Annual Grant described below from 50,000 to 70,000 shares of Common Stock, and to increase the additional cash retainer paid to the Chairman of the Board from $30,000 annually to $35,000 annually.
In May 2018, the Director Compensation Policy was amended to incorporate reference to the 2018 Equity Incentive Plan (the “2018 Plan”), as adopted by the Company’s stockholders effective May 15, 2018, in connection with equity compensation. In October 2018, the Director Compensation Policy was amended to incorporate reference to the Directors’ Market Value Stock Purchase Plan (the “Directors Market Value Plan”) which the Board adopted in October 2018. Under the Directors Market Value Plan, to the extent permitted by the Director Compensation Policy, the cash compensation payable to a non-employee director who has formally elected to receive such cash compensation instead in the form of shares of Common Stock will be used to purchase shares of Common Stock from Geron under the Directors Market Value Plan on the date that such cash compensation is payable to the non-employee director under the Director Compensation Policy. On such date, we apply the amount of such cash compensation to the purchase of shares of Common Stock, subject to the limitations and other terms of the Directors Market Value Plan. The purchase price of each share of Common Stock acquired pursuant to the Directors Market Value Plan is equal to the “market value” on the purchase date (which generally means the consolidated closing bid price per share of Common Stock as reported by Nasdaq on the purchase date). A total of 1,000,000 shares of Common Stock has been reserved for the Directors Market Value Plan. The Directors Market Value Plan is intended to qualify for the limited
23
exemption from stockholder approval pursuant to Nasdaq Listing 5635(c)(2), as a plan that merely provides a convenient way to purchase shares from the Company at market value.
In January 2019, as a result of the change in Board leadership structure, Radford conducted a review of non-employee director compensation for lead independent directors in comparison to our industry peer group that was selected by Radford in 2018. Based on this review, and guidance from Radford, effective January 30, 2019, the Board approved an amendment to the Director Compensation Policy to add annual cash compensation of $25,000 for the Lead Independent Director role, given the recent changes to the Board’s leadership structure. For further discussion of the defined peer group recommended by Radford in 2018, see the sub-section entitled “Use of Market Data and Peer Group Analysis.”
Cash Compensation
The following table describes the 2015 annual cash compensation applicable to each role performed by non-employee directors as outlined in 2015:the Director Compensation Policy in effect for the fiscal year ended December 31, 2018 (“fiscal 2018”):
Base | Additional | |||||
Role | Retainer | Retainer | ||||
Board member | $42,500 | N/A | ||||
Chairman of the Board | N/A | $ | 30,000 | |||
Audit Committee Chair(1) | N/A | $ | 25,000 | |||
Compensation Committee Chair(1) | N/A | $ | 15,000 | |||
Nominating and Corporate Governance Committee Chair(1) | N/A | $ | 10,000 | |||
Audit Committee member | N/A | $ | 12,500 | |||
Compensation Committee member | N/A | $ | 7,500 | |||
Nominating and Corporate Governance Committee member | N/A | $ | 5,000 |
Non-Employee Director Role |
| Base Retainer |
|
| Additional Retainer |
| ||
Board member |
| $ | 42,500 |
|
| N/A |
| |
Chairman of the Board(1) |
| N/A |
|
| $ | 35,000 |
| |
Audit Committee Chair(2) |
| N/A |
|
| $ | 25,000 |
| |
Compensation Committee Chair(2) |
| N/A |
|
| $ | 15,000 |
| |
Nominating and Corporate Governance Committee Chair(2) |
| N/A |
|
| $ | 10,000 |
| |
Audit Committee member |
| N/A |
|
| $ | 12,500 |
| |
Compensation Committee member |
| N/A |
|
| $ | 7,500 |
| |
Nominating and Corporate Governance Committee member |
| N/A |
|
| $ | 5,000 |
|
(2) | Committee Chair does not also receive additional Committee member compensation. |
In 2015,Under the Director Compensation Policy, annual non-employee director cash compensation wasis paid quarterly in arrears in cash, or, at each director’s election, in fully vested shares of our Common Stock. In 2018, such Common Stock was issued under the 20112018 Plan. With the effectiveness of the Directors Market Value Plan, such Common Stock will be issued under the Directors Market Value Plan starting in 2019, as described above, based on the “market value” on the purchase date (which generally means the consolidated closing bid price per share of our Common Stock as reported by the NASDAQ Global Select MarketNasdaq on the date retainers would have otherwise been paid.purchase date).
Additionally, under the Director Compensation Policy, non-employee directors are eligible to receive equity grants, as more fully described below under the sub-section entitled “Equity Compensation.” Non-employee directors also receive reimbursement for out-of-pocket expenses incurred in connection with attendance at meetings of the Board.
24
The following table provides compensation information for the fiscal year ended December 31, 2015 (“fiscal 2015”),2018, for each non-employee memberdirector of the Board who served in such capacity during fiscal 2015.2018. Dr. Scarlett does not receive any compensation for his Board service.
Fees | |||||||||||
Earned | |||||||||||
or Paid | Option | ||||||||||
in Cash | Awards | Total | |||||||||
Director | ($) | ($)(1) | ($) | ||||||||
Bradbury, Daniel | $ | 58,091 | $ | 96,229 | $ | 154,320 | |||||
Eastham, Karin | $ | 74,045 | $ | 96,229 | $ | 170,274 | |||||
Hofstaetter, Thomas(2) | $ | 19,093 | $ | — | $ | 19,093 | |||||
Huh, Hoyoung | $ | 77,500 | $ | 96,229 | $ | 173,729 | |||||
Lawlis, V. Bryan | $ | 62,500 | $ | 96,229 | $ | 158,729 | |||||
Molineaux, Susan | $ | 52,500 | (3) | $ | 96,229 | $ | 148,729 | ||||
Spiegel, Robert | $ | 57,500 | $ | 96,229 | $ | 153,729 |
Non-Employee Director |
| Fees Earned or Paid in Cash ($) |
|
|
| Option Awards ($)(1) |
|
| Total ($) |
| |||
Bradbury, Daniel (2) |
|
| 60,000 |
| (3) |
|
| 164,395 |
|
|
| 224,395 |
|
Eastham, Karin |
|
| 75,000 |
|
|
|
| 164,395 |
|
|
| 239,395 |
|
Huh, Hoyoung (4) |
|
| 80,962 |
|
|
|
| 164,395 |
|
|
| 245,357 |
|
Lawlis, V. Bryan |
|
| 62,500 |
|
|
|
| 164,395 |
|
|
| 226,895 |
|
Molineaux, Susan |
|
| 52,500 |
| (5) |
|
| 164,395 |
|
|
| 216,895 |
|
Spiegel, Robert |
|
| 57,500 |
| (6) |
|
| 164,395 |
|
|
| 221,895 |
|
(1) | Amounts represent the aggregate grant date fair value of stock option awards granted during the fiscal year ended December 31, |
Note |
(2) | In connection with his decision not to stand for re-election due to his new responsibilities as a chief executive officer for another public company, Mr. Bradbury will cease being a director and a member of the Audit Committee and the Nominating and Corporate Governance Committee of the Company effective June 6, 2019, the date of the Annual Meeting. |
(3) | Represents fees paid in stock in lieu of cash through the issuance of an aggregate 31,425 shares of Common Stock under the 2018 Plan. |
(4) | Effective December 26, 2018, Dr. |
(5) | Represents fees paid in stock in lieu of cash through the issuance of an aggregate |
(6) | Includes $28,750 in fees paid in stock in lieu of cash through the issuance of an aggregate 15,058 shares of Common Stock under the 2018 Plan. |
Equity Compensation
Terms of Awards
Pursuant to the Director Compensation Policy, each of ourindividual who first becomes a non-employee directorsdirector receives an initial stock option grant and thereafter each non-employee director is eligible forto receive stock option grants on an annual basis and, for each person who first becomes a non-employee director, an initial stock option grant.basis. Non-employee director stock options underare currently granted pursuant to the 2018 Plan, in accordance with the Director Compensation Policy. The following describes the equity compensation arrangements as outlined in the Director Compensation Policy are granted pursuant to the 2011 Plan.in effect for fiscal 2018:
Initial GrantsGrant. . Each personindividual who first becomes a non-employee director, whether by election by Geron’s stockholders or by appointment by the Board to fill a vacancy, automatically will automatically be granted an option to purchase 100,000120,000 shares of Common Stock on the date such personindividual first becomes a non-employee director (the “Initial Grant”). The Initial Grant will vest annually over three years upon each anniversary of the date of appointment to the Board.
Annual Grants. On the date of each annual meeting of our stockholders, each non-employee director (other than any director receiving an Initial Grant on the date of such annual meeting) who is then serving as a non-employee director and who will continue as a non-employee director following the date of such annual meeting will automatically be granted an option to purchase 50,000 shares of Common Stock (the “Annual Grant”). The Annual Grant will vest in full on the earlier of: (i) the date of the next annual meeting of our stockholders or (ii) the first anniversary of the date of grant,Board, subject to the non-employee director’s continuous service. During 2015, the number of shares of Common Stock subject to annual option grants was 35,000; accordingly, each non-employee director, other than Dr. Hofstaetter, received an annual option grant to purchase 35,000 shares of Common Stock on the date of our 2015 Annual Meeting of Stockholders. In February 2016, the Director Compensation Policy was amended to increase the size of the Initial and Annual Grants, as explained below.
25
Exercise Price and Term of OptionsOptions. . The exercise price of all options granted under the 20112018 Plan is equal to the fair market value of a share of our Common Stock as reported bydetermined under the NASDAQ Global Select Market on the date of grant of the option.2018 Plan. Options granted under the 20112018 Plan have a term of ten years from the date of grant, unless terminated earlier.
Exercise Period Post-TerminationPost-Termination. . The options issuedgranted pursuant to the 20112018 Plan remain exercisable until the earlier of the original expiration date of the option or 36 months following the optionee’s termination of service as our director, unless such termination is a result of death or permanent and total disability, in which case the options (both those already exercisable and those that would have become exercisable had the director remained on the Board for up to an additional 36 months) remain exercisable until the earlier of the original expiration date of the option or for up to a 36 month period following the optionee’s termination of service.non-employee director.
The 2011 Plan allows for grants of discretionary restricted stock awards. In prior years, directors have also received grants of performance-based restricted stock awards under our 2006 Directors’ Stock Option Plan (the “2006 Directors’ Plan”), which plan terminated in March 2014. No restricted stock awards were grantedAs noted above, under the 2011Directors Market Value Plan, in 2015.
In February 2016, Radford conducted a review of non-employee director compensation in comparison to an industry peer group for 2016 that was selected based upon Geron’s current market capitalization, revenue, stage of development and size of company. Based on this review, and Radford’s recommendation, the Board approved an amendment toextent permitted by the Director Compensation Policy, the cash compensation payable to increasea non-employee director who has properly formally elected to receive such cash compensation instead in the sizeform of the Initial Grant described above from 70,000 to 100,000 shares of Common Stock and the size of the Annual Grant from 35,000will be used to 50,000purchase shares of Common Stock effective February 11, 2016.from Geron under the Directors Market Value Plan on the date that such cash compensation is payable to the non-employee director under the Director Compensation Policy.
Effect of Certain Corporate and Termination Events
2018 Plan. 2011 Plan. As set forth in each option agreement under the 20112018 Plan, the vesting for each Initial Grant and Annual Grant will accelerate in full in the event of a Change in Control of Geron (as defined in the 20112018 Plan and described below under the sectionsub-section entitled “Compensation Discussion and Analysis – Severance and“Potential Payments Upon Termination or Change in Control Benefits – Equity Plans”Control”).
2006 Directors’ Plan. Prior to March 2014, equity awards were granted under the 2006 Directors’ Plan. Under the 2006 Directors’ Plan, In addition, in the event a non-employee director experiences a termination of service as a result of such director’s total and permanent disability (as defined in Section 22(e)(3) of the dissolutionInternal Revenue Code of 1986, as amended (the “Code”)) or liquidationdeath, the portion of the Company, a sale of all or substantially all of the assets of the Company, the merger or consolidation of the Company with or into another corporation in which the Company is not the surviving corporation or any other capital reorganization in which more than 50% of the shares of the Company entitled to vote are exchanged, each non-employeeoutstanding option held by such director shall have a reasonable time within which to exercise the option, including any part of the option that would not otherwise be exercisable, prior tohave vested during the effectiveness of such dissolution, liquidation, sale, merger or reorganization, at the end of which time the option shall terminate. In addition, except as otherwise provided in an award agreement, unvested shares subject to awards of restricted stock and restricted stock units will become fully vested immediately prior to36 months after the date of such dissolution, liquidation, sale, merger, consolidation or reorganization.director’s termination of service, will automatically vest.
Option Grants to Non-Employee Directors in 20152018
The following table sets forth the following information with respect to non-employee directors (seven(six persons) for the fiscal year ended December 31, 2015:2018: (i) stock options granted under the 20112018 Plan; and (ii) the grant date fair value of stock options granted.
Option Awards | |||||||||||||
Granted | Grant Date Fair Value of | ||||||||||||
Grant | During 2015 | Option Awards Granted | |||||||||||
Director | Date | (#) | During 2015 ($)(1) | ||||||||||
Bradbury, Daniel | 5/18/15 | (2) | 35,000 | $ | 96,229 | ||||||||
Eastham, Karin | 5/18/15 | (2) | 35,000 | $ | 96,229 | ||||||||
Hofstaetter, Thomas(3) | — | — | — | ||||||||||
Huh, Hoyoung | 5/18/15 | (2) | 35,000 | $ | 96,229 | ||||||||
Lawlis, V. Bryan | 5/18/15 | (2) | 35,000 | $ | 96,229 | ||||||||
Molineaux, Susan | 5/18/15 | (2) | 35,000 | $ | 96,229 | ||||||||
Spiegel, Robert | 5/18/15 | (2) | 35,000 | $ | 96,229 |
Non-Employee Director |
| Grant Date(3) |
|
| Option Awards Granted During 2018 (#) |
|
| Grant Date Fair Value of Option Awards Granted During 2018 ($)(1) |
| ||
Bradbury, Daniel (2) |
| 5/15/18 |
|
|
| 70,000 |
|
|
| 164,395 |
|
Eastham, Karin |
| 5/15/18 |
|
|
| 70,000 |
|
|
| 164,395 |
|
Huh, Hoyoung (4) |
| 5/15/18 |
|
|
| 70,000 |
|
|
| 164,395 |
|
Lawlis, V. Bryan |
| 5/15/18 |
|
|
| 70,000 |
|
|
| 164,395 |
|
Molineaux, Susan |
| 5/15/18 |
|
|
| 70,000 |
|
|
| 164,395 |
|
Spiegel, Robert |
| 5/15/18 |
|
|
| 70,000 |
|
|
| 164,395 |
|
(1) | Amounts represent the grant date fair value of each stock option granted in |
26
(3) | Stock option vests on the earlier of: (i) the date of the next |
(4) | Effective December 26, 2018, Dr. |
For the fiscal year ending December 31, 2018, Dr. Spiegel exercised options to purchase 175,000 shares of ContentsCommon Stock and realized a value of $473,950 upon exercise. No other non-employee directors exercised any options in 2018.
Outstanding Equity Awards at Fiscal Year-End for Non-Employee Directors
The following table sets forth stock options outstanding for each non-employee director as of December 31, 2015.2018.
Option Awards Outstanding | |||||||||
as of December 31, 2015 | |||||||||
Director | Exercisable (#) | Unexercisable (#) | |||||||
Bradbury, Daniel | 140,000 | 35,000 | |||||||
Eastham, Karin | 215,500 | 35,000 | |||||||
Hofstaetter, Thomas(1) | 76,375 | — | |||||||
Huh, Hoyoung | 297,500 | 35,000 | |||||||
Lawlis, V. Bryan | 175,000 | 35,000 | |||||||
Molineaux, Susan | 140,000 | 35,000 | |||||||
Spiegel, Robert | 175,000 | 35,000 |
|
| Option Awards Outstanding as of December 31, 2018 |
| |||||
Non-Employee Director |
| Exercisable (#) |
|
| Unexercisable (#) |
| ||
Bradbury, Daniel (1) |
|
| 275,000 |
|
|
| 70,000 |
|
Eastham, Karin |
|
| 350,500 |
|
|
| 70,000 |
|
Huh, Hoyoung (2) |
|
| 432,500 |
|
| — |
| |
Lawlis, V. Bryan |
|
| 310,000 |
|
|
| 70,000 |
|
Molineaux, Susan |
|
| 275,000 |
|
|
| 70,000 |
|
Spiegel, Robert |
|
| 135,000 |
|
|
| 70,000 |
|
(1) | In connection with his decision not to stand for re-election due to his new responsibilities as a chief executive officer for another public company, Mr. Bradbury will cease being a director and a member of the Audit Committee and the Nominating and Corporate Governance Committee of the Company effective June 6, 2019, the date of the Annual Meeting. |
(2) | Effective December 26, 2018, Dr. |
27
APPROVAL OF AN AMENDMENT TO OUR
RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board has determined that it is in the Company’s best interests and in the best interests of our stockholders to amend our Restated Certificate of Incorporation to increase our authorized number of shares of Common Stock from 300,000,000 shares to 450,000,000 shares. On January 30, 2019, the Board adopted resolutions approving the proposed amendment to our Restated Certificate of Incorporation, in substantially the form of Appendix 1 hereto. At that time, the Board declared the proposed amendment and increase of the Common Stock to be advisable and in the best interests of the Company and our stockholders and is accordingly submitting the proposed amendment and increase of the Common Stock for approval by our stockholders.
If stockholders approve this proposal, we expect to file the amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the total number of authorized shares of our Common Stock as soon as practicable following stockholder approval. In this regard, upon filing of the amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, Section A of Article IV of the Restated Certificate of Incorporation would be amended as follows, with the proposed additions double-underlined and proposed deletions stricken through:
“(A) Class of Stock. The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is Three Hundred Three Million (303,000,000)Four Hundred Fifty-Three Million (453,000,000) shares. Three Hundred Million (300,000,000)Four Hundred Fifty Million (450,000,000) shares shall be Common Stock, par value $0.001 per share, and Three Million (3,000,000) shares shall be Preferred Stock, par value $0.001 per share.”
Of the 300,000,000 shares of our Common Stock currently authorized, as of the close of business on April 8, 2019, there were _____ shares of Common Stock issued and outstanding, which does not include the following:
_____ shares of our Common Stock were issuable upon the exercise of options outstanding, having a weighted-average exercise price of $_____ per share;
537,893 shares of our Common Stock were issuable upon the exercise of an outstanding warrant with an exercise price of $3.98 per share; and
an aggregate of _____ shares of our Common Stock were reserved for future issuance under our 2014 Employee Stock Purchase Plan, the 2018 Plan, the Directors Market Value Plan, and 2018 Inducement Award Plan.
The proposed amendment to our Restated Certificate of Incorporation would increase the number of shares of Common Stock that we are authorized to issue from 300,000,000 shares of Common Stock to 450,000,000 shares of Common Stock, representing an increase of 150,000,000 shares of authorized Common Stock, with a corresponding increase in the total authorized capital stock, which includes Common Stock and Preferred Stock, from 303,000,000 shares to 453,000,000 shares.
28
Reasons for the Increase in Authorized Shares
To date, we have not derived any revenue from sales of any products. Our operations to date have been limited to organizing and staffing our company, acquiring, developing and securing our technology, undertaking non-clinical studies and early stage clinical trials of our sole product candidate, imetelstat, and past product candidates that we have subsequently discontinued, and engaging in research and development under collaboration agreements. Since our inception, we primarily have financed our operations through the sale of equity securities, interest income on our marketable securities and payments we received under our collaborative and licensing arrangements. We have no credit facility or committed sources of capital. Until we can generate sufficient product revenues, if ever, we expect to finance future cash needs through public or private equity or equity-linked offerings, debt financings or collaboration and licensing arrangements (which arrangements can also involve the possibility of an equity investment).
As of the date of this proxy statement, the Board has no definitive plans, arrangements or understandings to issue any of the additional shares of Common Stock that would be available as a result of the approval of this Proposal 2, other than pursuant to our various employee and director equity plans and pursuant to our At Market Issuance Sales Agreement, or the Sales Agreement, with B. Riley FBR, Inc. under which we may elect to issue and sell shares of our Common Stock having an aggregate offering price of up to approximately $62.8 million as of the date of this proxy statement. While as of the date of this proxy statement we have sufficient authorized shares of Common Stock to effect sales under the Sales Agreement and to issue shares under our various employee and director equity plans, our Board believes it would be appropriate to have the additional shares available to provide additional flexibility to promptly and appropriately use our Common Stock for business and financial purposes in the future as well as to have sufficient shares available to provide appropriate equity incentives for our employees and other eligible service providers. The additional shares of Common Stock, if approved, may be used for various purposes without further stockholder approval. These purposes may include raising capital; providing equity incentives to employees, officers, directors, consultants and/or advisors; establishing licensing arrangements with other companies; expanding our business through the acquisition of other businesses, products or technologies; and other purposes.
For example, we will require substantial additional capital in order to continue to conduct the research and development and clinical and regulatory activities necessary to bring imetelstat to market, and to establish sales and marketing capabilities. Before imetelstat may be marketed and sold in the United States and in other countries, we must successfully conduct extensive clinical development of imetelstat at a substantial cost and obtain the requisite regulatory approvals, and we do not expect imetelstat to be commercially available for many years, if at all. In any event, successful drug development and commercialization requires significant amounts of capital that we do not currently have. Accordingly, if the Board determines that raising additional capital through issuing the additional shares of Common Stock is desirable, we want to be able to act quickly if market conditions are favorable. Given the number of shares of our Common Stock currently available for issuance, the Company might not be able to raise future capital without first obtaining stockholder approval for an increase in the number of authorized shares of Common Stock. The cost, prior notice requirements and delay involved in obtaining stockholder approval at the time that corporate action may be necessary or desirable could eliminate the Company’s ability to opportunistically capitalize on market windows. In addition, our success depends in part on our continued ability to attract, retain and motivate highly qualified management and clinical personnel, and if this proposal is not approved by our stockholders, the lack of unissued and unreserved authorized shares of Common Stock to provide future equity incentive opportunities that the Compensation Committee deems appropriate could adversely impact our ability to achieve these goals. In summary, if stockholders do not approve this proposal, we may not be able to access the capital markets; continue to conduct the research and development and clinical and regulatory activities necessary to bring imetelstat to market; enter into licensing arrangements; attract, retain and motivate employees, officers, directors, consultants and/or advisors; and pursue other business opportunities integral to our growth and success, all of which could severely harm our business and our prospects.
The Board believes that the proposed increase in authorized Common Stock will make sufficient shares available to provide the additional flexibility necessary to pursue our strategic objectives. Over the past several
29
years, our authorized Common Stock has allowed us the flexibility to pursue a number of financing transactions that were key to enabling our support of the imetelstat program while at the same time enabling us to continue to provide the employee equity incentives that we deem necessary to attract and retain key employees. Unless stockholders approve this proposal, we may not have sufficient unissued and unreserved authorized shares of Common Stock to support the growth needed to continue the development of our sole product candidate, imetelstat, by engaging in similar transactions in the future, and to respond to compensatory needs by implementing new or revised equity compensation plans or arrangements, all of which could severely harm our business and our prospects.
Effects of the Increase in Authorized Shares
The additional Common Stock to be authorized by adoption of the amendment would have rights identical to the current outstanding Common Stock of the Company. Adoption of the proposed amendment and issuance of the Common Stock would not affect the rights of the holders of currently outstanding Common Stock, except for effects incidental to increasing the number of shares of the Common Stock outstanding, such as dilution of the earnings per share and voting rights of current holders of Common Stock. The additional shares of Common Stock authorized by the approval of this proposal could be issued by the Board without further vote of our stockholders except as may be required in particular cases by our Restated Certificate of Incorporation, applicable law, regulatory agencies or Nasdaq rules. Under our Restated Certificate of Incorporation, stockholders do not have preemptive rights to subscribe to additional securities that may be issued by us, which means that current stockholders do not have a prior right thereunder to purchase any new issue of Common Stock in order to maintain their proportionate ownership interests in the Company.
The increase in our authorized shares of Common Stock could also have an anti-takeover effect, in that additional shares could be issued (within the limits imposed by applicable law) in one or more transactions that could make a change in control or takeover of the Company difficult. For example, additional shares could be issued by us so as to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company. Similarly, the issuance of additional shares to certain persons allied with our management could have the effect of making it more difficult to remove our management by diluting the stock ownership or voting rights of persons seeking to cause such removal. Although this proposal to approve the amendment of the Restated Certificate of Incorporation to increase the total number of authorized shares of Common Stock has been prompted by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at us), and the Board does not intend or view the proposed increase in the number of authorized shares of our Common Stock as an anti-takeover measure, stockholders should nevertheless be aware that approval of this proposal could facilitate future efforts by us to deter or prevent changes in control, including transactions in which our stockholders might otherwise receive a premium for their shares over then-current market prices.
Vote Required
The affirmative vote of the holders of a majority of outstanding shares of Common Stock will be required to approve this proposal. Abstentions will have the same effect as a vote against this proposal.
The Board of Directors Unanimously Recommends That
Stockholders Vote FOR Proposal 2
30
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
As required by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Board is requesting stockholders to vote, on a non-binding advisory basis, to approve the compensation paid to Geron’s Named Executive Officers, as disclosed in this Proxy Statement in the sections entitled, “Compensation Discussion and Analysis” and “Executive Compensation Tables.”Statement. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their views on the compensation of Geron’s Named Executive Officers.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and our executive compensation philosophy, policies and practices described in this Proxy Statement. The overall compensation of our Named Executive Officers subject to the vote is disclosed in this Proxy Statement in the sections entitled “Compensation Discussion and Analysis” and “Executive Compensation Tables and Related Narrative Disclosure.”
The Compensation Committee continually reviews theour executive compensation program for our executive officers, including the Named Executive Officers, to determine whether the compensationsuch program achieves our desired goals of aligning our executive compensation structure with the Company’s stockholders’ interests and current market practices. As part of its ongoing review, the Compensation Committee considered the “say-on-pay” advisory vote from our 2015 Annual Meeting of Stockholders (where approximately 91.3% of the stockholders voting on the advisory proposal supported the proposal). We believe the outcome of the 2015 “say-on-pay” advisory vote reflects our stockholders’ support of our executive compensation approach, specifically the changes we implemented in the past, as discussed below. Accordingly, no design changes were made to the executive compensation program due to the 2015 “say-on-pay” advisory vote. The Compensation Committee values the opinions of our stockholders and will continue to monitor the outcome of future “say-on-pay” proposals, as well as feedback received throughout the year from our stockholders, when making compensation decisions for our executive officers.
In 2013, the Compensation Committee conducted a comprehensive stockholder outreach program, and in response, made several changes to the Company’s executive compensation program. Some of the key changes made to the executive compensation program included: i) implementing a “double-trigger” requirement in order for cash severance to be paid under our Amended Severance Plan; ii) implementing anti-hedging and anti-pledging clauses in our Insider Trading Policy; and iii) amending all executive officer employment agreements to include clawback provisions requiring relinquishment of bonuses in the event an executive officer has engaged in any misconduct or in any act or omission that would constitute cause for termination of employment. In addition, the Compensation Committee continues to ensure that its compensation disclosures describe the relationship between pay and performance by providing strategic context for the corporate goal achievements.
As discussed in detail in the section entitled “Compensation Discussion and Analysis” of this Proxy Statement, Geron’s executive compensation strategy and structure is designed to: i) reward successful executionto motivate our executive team to create long-term value for our stockholders through the achievement of strategic business strategy; ii)objectives, while effectively managing the risks and challenges inherent in a clinical-stage biotechnology company. As the long-term success of Geron depends on the talents of our employees, the compensation structure plays a significant role in our ability to attract, retain and retain qualified management; and iii) align management and stockholder interests. The Compensation Committee strives to actmotivate the highest quality workforce in a competitive employment environment in the long-term best interests of Geron and our stockholders. As described in the section entitled “Compensation Discussion and Analysis”, the Compensation Committee
structured our 2015 executive compensation program to emphasize pay for performance and to be competitive with the companies with whom we compete for executive talent.San Francisco Bay Area while also promoting a high-performance culture. The Compensation Committee believes thatthe emphasis on pay for performance in Geron’s executive compensation program is strongly alignedaligns with the long-term interests of our stockholders. Please read the “Compensation Discussion and Analysis” section of thethis Proxy Statement for additional details about our executive compensation program, including information about the 20152018 compensation of our Named Executive Officers.
Advisory Vote and Board Recommendation
We requestrecommend stockholder approval of the 20152018 compensation of our Named Executive Officers as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules, which disclosure includes the section entitled “Compensation Discussion and Analysis,” and the compensation tables and accompanying narrative disclosures within the section entitled “Executive Compensation Tables”Tables and Related Narrative Disclosure” of this Proxy Statement. This vote is not intended to address any specific element of compensation, but rather the overall compensation of our Named Executive Officers and the compensation philosophy, policies and practices described in this Proxy Statement.
Accordingly, the Board recommends that stockholders vote in favor of the following resolution:
“RESOLVED, that the stockholders approve, on a non-binding advisory basis, the compensation paid to Geron’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure set forth in the Proxy Statement relating to the Company’s 20162019 Annual Meeting of Stockholders.”
Approval of the above resolution requires the affirmative vote of the holders of a majority of the shares having voting power present in person or represented by proxy at this meeting.the Annual Meeting. Abstentions will have the same effect as a vote against this proposal, and broker non-votes will have no effect on the outcome of this proposal.
Stockholders are not being asked to approve or disapprove the Board’s recommendation. 31
As this is an advisory vote, the outcome of the vote is non-binding on us with respect to future executive officer compensation decisions, including those related to our Named Executive Officers, or otherwise. However, the Board and the Compensation Committee will review the results of the vote and take them into account when considering future executive officer compensation policies and decisions.
The Board has approved holding a “say-on-pay” advisory vote every year. Unless the Board modifies its policy on the frequency of future “say-on-pay” advisory votes on the compensation of our Named Executive Officers, the next “say-on-pay” advisory vote on the compensation of our Named Executive Officers will be held at the 2017 Annual Meetingnext year’s annual meeting of Stockholders. In addition, our stockholders will be able to indicate by advisory vote at the 2017 Annual Meeting of Stockholders their preference as to the frequency of future advisory votes.stockholders.
The Board of Directors Unanimously Recommends
That
Stockholders VoteFORProposal 23
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis section presents and discusses executive compensation policies and practices and the compensation decisions relating to theour “Named Executive Officers” (as defined below) for the 20152018 fiscal year, and includes the following:
an executive summary | |
In addition to the historical information contained herein, thisbusiness activities which influenced 2018 compensation decisions and important features of our executive compensation program;
philosophy, objectives and key elements of our executive compensation program;
process for setting executive compensation, including the role of the Compensation DiscussionCommittee, management and Analysis also contains forward-looking statements based on current plans,independent compensation consultant;
a detailed discussion and analysis of the Compensation Committee’s specific decisions about 2018 compensation for our Named Executive Officers; and
a description of other compensation considerations expectations and determinations regarding future compensation decisions. The actual compensation program that we adopt in the future may differ materially from the current program summarized in this discussion.practices.
The following executive officers are collectively referred to herein as theour Named Executive Officers:
Dr. John A. Scarlett, President and Chief Executive Officer (also appointed Chairman of the Board as of December 27, 2018); Ms. Olivia K. Bloom, Executive Vice President, Finance, Chief Financial Officer and Treasurer; Ms. Melissa A. Kelly Behrs, Executive Vice President, Business Development and Portfolio & Alliance Management (appointed Executive Vice President and Chief Business Officer in January 2019); Dr. Andrew J. Grethlein, Executive Vice President, Development and Technical Operations (appointed Executive Vice President and Chief Operating Officer in January 2019); and Mr. Stephen N. Rosenfield, Executive Vice President, General Counsel and Corporate Secretary (appointed Executive Vice President, Chief Legal Officer and Corporate Secretary in January 2019). Executive Summary Business Highlights that Impacted 2018 Compensation Decisions Executive compensation decisions for 2018 were highly influenced by retention challenges stemming from the significant uncertainty as to whether Janssen Biotech, Inc. (“Janssen”) would decide to continue to maintain its license rights under the collaboration and license agreement (the “Collaboration Agreement”), and continue the development of imetelstat, or discontinue the development of imetelstat and terminate the Collaboration Agreement. We refer to this decision as the continuation decision, and the timing of the continuation decision was triggered by the completion of the primary analysis of the Phase 2 trial in 32 myelofibrosis, which occurred in the third quarter of 2018. Because either a positive or negative continuation decision by Janssen would have a substantial impact to our future operations and the potential long-term benefits that could be earned by our Named Executive Officers, we structured 2018 executive compensation with a particular focus on incentivizing our executives to position the Company well for either a positive or negative continuation decision by Janssen. Also, 2018 executive compensation was structured with the goal of retaining our current executive team, whose leadership was vital to maintaining continuity within the Company during the pendency of the continuation decision, and whose leadership remains vital as we transition the imetelstat program from Janssen, following their negative continuation decision and termination of the Collaboration Agreement, and prepare to advance imetelstat development on our own. In 2018, we faced additional executive retention challenges as the marketplace for qualified executive officers with broad experience in a small company environment continued to be highly competitive in the San Francisco Bay Area due in part to the robust growth in both the technology and biopharmaceutical industries as a result of numerous companies going public. Our corporate goals for 2018 primarily focused on continuing a productive collaboration with Janssen to further the imetelstat program, and preparing clinical and commercial strategies to develop imetelstat on our own in the event of a negative continuation decision by Janssen. Also in 2018, our corporate goals focused on business development activities related to completing due diligence and conducting transaction negotiations for a potential acquisition candidate. The Compensation Committee and independent members of the Board (the “Independent Board”), evaluated our achievements in 2018 and determined that we achieved only 70% of our 2018 corporate goals due to the negative continuation decision by Janssen. For details regarding our 2018 corporate goal achievements, see the sub-section entitled “Compensation Discussion and Analysis – 2018 Corporate Goal Achievement Factor.” Important Features of Our Executive Compensation Program The Compensation Committee has structured our executive compensation program to ensure that our Named Executive Officers are compensated in a manner consistent with stockholder interests, competitive pay practices and applicable requirements of regulatory bodies. The following are important features of the design and operation of our executive compensation program in 2018: 33
Clawback Terms. Our executive officer employment agreements require that an executive officer forfeit his/her entire annual performance-based bonus if we determine that such executive officer has engaged in any misconduct intended to affect the payment of his/her annual performance-based bonus, or has otherwise engaged in any act or omission that would constitute cause for termination of his/her employment, as defined by his/her employment agreement. No Tax Gross-Ups on Compensation. None of our Named Executive No Defined Retirement Benefits. We do not offer any defined benefit pension plans or health benefits during retirement. Limited Personal Benefits. Our Named Executive Officers are generally eligible for the same benefits as non-executive, salaried employees, and do not receive any personal benefits, other than limited reimbursements for housing costs and travel expenses for our Chief Executive Officer, Dr. Scarlett, for the commute from his principal residence in Texas to our headquarters in Menlo Park, California. No Hedging or Pledging. Our Insider Trading Policy prohibits employees from engaging in speculative trading activities, including hedging or pledging company securities as collateral. Accordingly, our employees, including our Named Executive Officers, may not hedge the economic risk of, or pledge ownership of, our Common Stock. Prohibition on Option Repricing. Our equity plans do not permit repricing underwater stock options without stockholder approval, and we have not repriced stock options, despite a substantial portion of our executive officer’s options being underwater. Objective Compensation Program Oversight. Our executive compensation program is administered by the Compensation Committee which is comprised entirely of independent non-employee directors. Independent Compensation Consultant Advice. The Compensation Committee engages, on an annual basis, an experienced, independent compensation consultant who reports directly to the Compensation Committee to advise on cash and equity executive compensation matters. In 2018, as in past years, the Compensation Committee engaged Radford, an Aon Hewitt Company, a subsidiary of Aon (“Radford”), to advise it on executive compensation. Compensation Risk Management. The Compensation Committee annually reviews our executive compensation program to ensure that the program design avoids inappropriate risk taking by our Named Executive Officers. Effect of At our
34 Our Executive Compensation Program Philosophy and Objectives We believe that the leadership of our current executive team has been
Our executive compensation program has the following general objectives: to pay appropriate cash and equity compensation to executive officers for retention purposes during periods of significant uncertainty and where the volatility of our business results in highly variable compensation during any given period; to attract and retain experienced executive officers by incentivizing them with competitive cash and non-cash compensation opportunities while allowing the Company to maintain a fiscally responsible position; to foster a pay for performance philosophy by rewarding executive officers only upon successful achievement of individual and corporate to align the Components
Base Salary (Fixed Cash Compensation)
performance during the past year; e) individual criticality to our Annual Performance-Based Bonuses (At-Risk Cash Compensation) Under our annual
Our corporate values are authenticity, accountability, excellence, integrity and respect. Our corporate goals generally relate to strategic and financial objectives in support of our Calculation of annual performance-based bonuses for all employees, including our Named Executive Officers, generally occurs at the beginning of each calendar year based on performance of the prior year. Payment of annual performance-based bonuses typically occurs in the first quarter of the calendar year. For further discussion of the annual performance review process and calculation of individual Named Executive Officer annual performance-based bonuses, see the sub-section entitled “2018 Annual Performance-Based Bonuses.” Long-Term Incentives (At-Risk Equity Compensation) Long-term incentives (equity awards) are designed to align 2018 Plan as equity awards. The Compensation Committee believes that strongly aligns the interests of our executive officers with those of our stockholders by placing a considerable proportion of our executive officers’ total compensation “at risk” because it is contingent on the appreciation in value of our Common Stock; supports our pay for performance philosophy by tying the value of their equity compensation to the achievement of specific and objective corporate 36 encourages our executive officers to remain in the long-term employ of our Company. While we have not adopted formal stock ownership or holding guidelines, our Named Executive Officers generally have held a substantial portion of the equity awards they have received, even long after the awards have vested, which helps to maintain the alignment between the interests of our Named Executive Officers and
Geron offers a comprehensive array of benefits to its employees, including our Named Executive Officers. These include: comprehensive medical, dental, vision coverage and life insurance; a “cafeteria” plan administered pursuant to Section 125 of the Code, which includes Geron’s medical and dental insurance, medical reimbursement, and dependent care reimbursement plans; a 401(k) plan, which is a retirement savings defined contribution plan established in accordance with Section 401(a) of the Code (in 2018, we provided a fully vested employer matching contribution in cash equal to 50% of each employee’s annual contributions); and an Employee Stock Purchase Plan, which is implemented and administered pursuant to Section 423 of the Code. Executive officers pay for 30% of their health premium cost, which is deducted from their gross salary. Other employees pay either 16% or 25% of their health premium cost. We do not offer any defined benefit pension plans or health benefits during retirement. Process for Setting Executive Compensation Role of the Compensation Committee Appointed by our Board, Compensation Committee members are independent of management and meet the Nasdaq listing standards for independence. The Compensation Committee acts on behalf of the Board to oversee the compensation policies and practices applicable to all our employees, including the administration of our equity plans and employee benefit plans. Typically, the Compensation Committee meets at least once quarterly and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with the Chief Executive Officer, Executive Director of Human Resources, Chief Legal Officer and the independent compensation consultant, Radford. The Compensation Committee also meets in executive session without the presence of any employees. Historically, the Compensation Committee makes decisions related to executive compensation after conducting multiple meetings during the fourth quarter of the calendar year and the first quarter of the ensuing year. Role of Independent Compensation Consultant The Compensation Committee actively reviews and assesses our executive compensation program in light of the highly competitive employment environment in the San Francisco Bay Area, the 37 compensation and related benefits. Since December 2011, the Compensation Committee has retained Radford as its independent compensation consultant due to its extensive analytical and compensation expertise in the biotechnology and pharmaceutical industry. Although the Company pays the costs of Radford’s services, the Compensation Committee has the sole authority to engage and terminate Radford’s services, as well as to approve their compensation. Radford makes recommendations to the Compensation Committee, but it has no authority to make compensation decisions on behalf of the Compensation Committee or the Company. The Compensation Committee, In January 2018, the Compensation Committee reviewed information from Radford about potential conflicts of interest and analyzed whether the work of Radford as a compensation consultant raised any conflict of interest, taking into consideration the following six factors:
Based on these factors, the Compensation Committee determined that there were no conflicts of interest with respect to the provision of services by Radford to the Compensation Committee. In 2018, fees paid to Radford for their services as a compensation consultant to For 2018, Radford provided the following services to the Compensation Committee: reviewed emerging trends and topics regarding executive and non-employee director compensation; recommended the composition of companies for a defined peer group to reference in determining executive and non-employee director compensation; provided compensation conducted a competitive review of
prepared an analysis of share usage under our equity incentive plan in comparison to 38 Role of
Use of Market Data and Peer Group Analysis When considering executive compensation decisions, the Compensation Committee believes it is important to be informed as to current compensation practices of comparable publicly held companies in the life sciences industry, especially to understand the demand and competitiveness for attracting and retaining an individual with each Named Executive Officer’s specific expertise and experience. In November 2017, based on the
As of January 2018, the average of the 30-day average market capitalization of these peer group companies was $464.3 million. These peer group companies had an average number of 82 full-time employees based on their most recent annual reports, compared to our 30-day average market capitalization of $303.2 million and 15 full-time employees. The market data supplied by Radford for the defined peer group provides information on the total compensation paid to executive officers in comparable positions and responsibilities. In 2018, as in prior years, the Compensation Committee believes referencing Radford’s market data, along with other factors, is important to understand when setting total compensation for our Named Executive Officers 39 the peer group compensation levels is helpful in determining market-competitive compensation for our Named Executive Officers, it is only one component in determining executive officer compensation, and the Compensation Committee has discretion in determining the nature and extent of its use. Setting Base Salaries The Compensation Committee (or the Independent Board with respect to the Chief Executive Officer,
Assessing Annual Corporate Performance At the beginning of each calendar year, the Chief Executive Officer develops, with input from our Named Executive Officers, our corporate goals with recommended weightings for each goal. The weighting for each corporate goal depends on its importance and business value for Geron and our stockholders. The Chief Executive Officer submits the corporate goals and recommended weightings to the Compensation Committee and the Independent Board for their review and approval. The Compensation Committee and Independent Board review the corporate goals and weightings and modify them as necessary prior to approval. During the first quarter of the year, as part of the annual year-end performance review process, the Compensation Committee evaluates our achievement of the corporate goals for the preceding year. To aid the Compensation Committee in its responsibilities, the Chief Executive Officer, with assistance from the Chief Legal Officer and Executive Director of Human Resources, provides the Compensation Committee with recommendations relating to the achievement of our annual corporate goals, known as the corporate goal achievement factor. The Compensation Committee does not use a rigid formula to determine the corporate goal achievement factor, and to date, has not established a minimum threshold or maximum value that may be potentially realized for the corporate goal achievement factor. The corporate goal achievement factor generally ranges from 0 to 1.0. The Compensation Committee evaluates the corporate goal achievement factor, and recommends the corporate goal achievement factor to the Independent Board, which has the final approval. To evaluate the corporate goal achievement factor, the Compensation Committee and Independent Board consider the following: the degree of success in achieving each corporate goal; the degree of difficulty in achieving the corporate goal; whether significant unforeseen obstacles or favorable circumstances altered the expected difficulty of achieving the desired results; other conditions that may have made the stated goal more or less important to our success; and any other significant company accomplishments not included in the formal goals, but nonetheless deemed important to our near- and long-term success. 40 The Compensation Committee recommends the corporate goal achievement factor to the Independent Board, which considers the recommendation of the Compensation Committee and may accept or modify such recommendation before approval. The Independent Board has the discretion to approve a corporate goal achievement factor above 1.0 in extraordinary circumstances where it determines such an increase is warranted. Determining Equity Grants The Compensation Committee (or the Independent Board with respect to our Chief Executive Officer, upon recommendation from the Compensation Committee), in consultation with Radford, determines the size of any stock option grant according to each executive officer’s position. To do so, the Compensation Committee
Equity Grant Practices Our general policy is to grant stock options and other equity awards on fixed dates determined in
The exercise price of all stock option grants, including to executive officers, is equal to the closing price of Geron Common Stock as reported by the grant. Geron’s standard vesting schedule for the first stock option grant awarded to newly hired employees, including executive officers, provides that 12.5% of the shares granted will vest six months after the vesting commencement date of the grant, and the remaining shares will vest in equal monthly installments over the following 42 months, so that vesting is complete four years from the date of grant, provided the employee continues to provide services to the Company during that time. Additional option grants made after an employee, including an executive officer, has provided services to the Company for more than six months generally vest monthly from the date of grant over four years.
We
41 Allocating Amongst Compensation The Compensation Committee defined peer group market data provided by Radford; corporate performance, including current business challenges; our level of achievement internal pay equity among Named Executive Officers; each executive officer’s individual the criticality of each executive officer’s skill set, and executive officer stock ownership information; analyses of historical executive officer compensation levels and current company-wide compensation levels; and trends for executive compensation for our industry. Each of these factors is considered in the context of our overall pay philosophy and balanced against Geron’s financial resources and ability to award cash and equity incentives. Compensation
The Compensation Committee
defined peer group. In January
the individual performance of each Named Executive Officer in internal pay equity among the Named Executive Officers; tenure, experience, skills and managerial leadership exhibited by each Named Executive Officer; expected cost of living increases in the San Francisco Bay Area; overall Company performance; and the anticipated level of difficulty in replacing an executive officer with someone of comparable experience and skill, especially given significant uncertainty relating to our future 42 Given the
The following
In keeping with of 43
The table below summarizes the corporate goals approved by the Independent Board for
2018 Individual Performance and Corporate Values Performance Factors
2018 Individual Achievements Consistent with prior years, Dr. Scarlett’s 2018 annual performance-based bonus
of the corporate goal achievement factor of 70% and Dr. Scarlett’s direct responsibility and contributions for the achievement of such goals, the Compensation Committee Ms. Bloom was awarded an individual performance factor of
supervised and controlled the Accounting/Finance function to ensure compliance with SEC, Nasdaq and PCAOB requirements, including maintenance of internal control over financial reporting, as well as directing the development of new systems in the event imetelstat development resumed wholly at Geron following a negative continuation decision from Janssen; effectively reviewed and negotiated company expenses to remain within the budgeted spending level for 2018, including calculating projections of increases in spending upon a potential negative continuation decision from Janssen; facilitated capital raising efforts by directing new shelf registration statement filing and negotiation of new At-Market (ATM) financing facility with reduced transaction fees; managed usage of ATM to raise additional capital in support of either a position or negative continuation decision from Janssen; directed and managed the Investor Relations function during internal turnover despite uncertainty surrounding Janssen decision-making and identified alternate resource to handle retail investor inquiries; supported business development efforts by performing financial and corporate governance due diligence on potential acquisition candidate and initiated building potential infrastructure to manage financial compliance and reporting on a timely basis post-acquisition; and guided the communications working group with Janssento develop and implement a communications plan upon a decision by Janssen that aligned public disclosure timelines and messaging amongst various stakeholders. Ms. Behrs was awarded an individual performance factor of
played key leadership role as a member of the imetelstat governance committees with Janssen, fostering a close, collaborative and high-quality alliance with Janssen, which continues today through numerous working groups to manage the imetelstat program transition; led the efforts for conducting an independentquantitative market research study of imetelstat in lower risk MDS, including developing quantitative surveys; assessing feedback from those surveys; and evaluating and pressure-testing assumptions in revenue forecasts; led the business development efforts in the negotiation and preparation of a definitive agreement for a potential transaction with an acquisition candidate; developed potential commercial and partnering strategies for imetelstat in the event of negative continuation decision from Janssen, and provided significant contributions to the business and financial analyses of imetelstat’s value under either positive or negative continuation decision scenarios in order to support sound strategic decision making. 47 Dr. Grethlein was awarded an individual performance factor of
played a key leadership role as a member of the imetelstat governance committees with Jansen in connection with clinical assessment of information from the primary analysis of IMbark and the data snapshot from the Phase 2 portion of IMerge; led the technical due diligence efforts of an acquisition candidate through engagement of target company’s scientific team and directed technical experts to evaluate prospective clinical applications for each of the lead programs and technology platform and the possible competitive landscapes; and served as central technical and operational lead for program transition activities, including managing our external team comprised of our CRO and consultants and directing three-way interactions amongst Janssen, Geron and our external team. Mr. Rosenfield was awarded an individual performance factor of
performed comprehensive and timely review of all public disclosure documents, including SEC filings, press releases, investor and business development presentations and conference call scripts, for completeness, accuracy and comprehension; supervised the supervised the Legal function, including overseeing imetelstat intellectual property protection under the Janssen collaboration, and managing the drafting of a definitive agreement for a potential transaction with an acquisition candidate. 48 Following are the annual
2018 Equity Awards
Consistent with the objectives of our executive compensation program to link pay with performance, align the interests of stockholders and employees, and encourage employee ownership in Geron, in overall corporate performance in the prior year; a Named Executive Officer’s recent performance history and his or her potential for future responsibility; internal pay equity among the criticality of the individual to the long-term success of the Company; equity awards previously granted to the individual; the amount of actual versus theoretical equity value per year that has been derived to date by the individual; the current actual value of unvested equity grants for each individual; the percentage of stock option grants the number of In 49 Committee increased the stock option The Compensation Committee (and the Independent Board with respect to the Our Named Executive Officers received the following stock option grants in
Following the negative continuation decision by Janssen, in November 2018, the Compensation
In accordance with Geron’s equity grant practices, the 2018 Perquisites Dr. Scarlett Employment Agreements and Severance and Change in Control Benefits We have entered into
Our Named Executive Officers are entitled to certain severance and change in control benefits under the terms of our Amended Severance Plan, their employment agreements and our equity
51 the executive officer in the event that he or she is not
Tax and Accounting Implications
As a result, compensation paid to any of
In addition to considering the tax consequences, the Compensation Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards. Forward-Looking Statements Except for the historical information contained herein, this Compensation Discussion and Analysis contains forward-looking statements, including, but not limited to, statements relating to the continued development of imetelstat by Geron; the therapeutic and commercial potential of imetelstat; potential regulatory approvals for imetelstat; our plans, considerations, expectations and determinations regarding future compensation decisions; and other statements that are not historical facts. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties, include, without limitation, risks and uncertainties related to: (i) whether the transition from Janssen to Geron proceeds expeditiously and without delay; (ii) whether the FDA or other regulatory authorities permit the ongoing or future clinical trials of imetelstat to proceed, including without limitation, the Phase 3 portion of IMerge; (iii) whether Geron is able to administer, operate and commence the Phase 3 portion of IMerge in a timely manner or at all; (iv) Geron’s lack of experience in conducting large-scale, late-stage clinical trials, such as the Phase 3 portion of IMerge; (v) the significant additional research, non-clinical testing and clinical testing that will be required before Geron can file any application with the FDA 52
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained within this Proxy Statement with management and, based on such review and discussions, our Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated into our Annual Report on Form 10-K for the year ended December 31, Submitted on March
This Section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, other than in Geron’s Annual Report on Form 10-K where it shall be deemed to be furnished, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. 53 EXECUTIVE Summary Compensation Table The following table includes information concerning compensation for the years ended December 31,
54
Grants of Plan-Based Awards for The following table sets forth information regarding grants of plan-based awards with respect to each of
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table Employment Agreements. Each of our Named Executive Officers has entered into a written employment agreement with Geron. We entered into an employment agreement with Dr. Scarlett dated September 29, 2011, in connection with the commencement of his employment with us. Dr. Scarlett’s employment agreement originally provided him with an annual base salary of $550,000, subject to increase, and an annual performance-based bonus targeted at 60% of his annual base salary. On February 11, 2014, we amended Dr. Scarlett’s employment agreement to provide for an annual base salary of $586,500, subject to increase, and to include a “clawback provision,” which clawback provision is described in more detail under the sub-section entitled “Compensation Discussion and Analysis – Compensation Recovery Provisions.” On January 31, 2018, we further amended Dr. Scarlett’s employment agreement to increase the reimbursement for housing expenses to not more than $4,000 per month. See the sub-section entitled “Compensation Discussion and Analysis – 2018 Perquisites” for more information on the reimbursement arrangements we provide to Dr. Scarlett for housing expenses and travel costs. On January 31, 2019, we amended and restated Dr. Scarlett’s employment agreement to consolidate all of the previous amendments; to provide for an annual base salary of $690,000, subject to increase; and to clarify that in the event of a covered termination or change in control transaction, Dr. Scarlett will receive the greater of the severance benefits set forth in his employment agreement or the severance benefits provided for in the Company’s Amended Severance Plan (without duplication). See the sub-section entitled “Amended Severance Plan” for further information. We entered into an employment agreement with Ms. Bloom dated December 7, 2012, in connection with her appointment as our Senior Vice President, Finance, Chief Financial Officer and Treasurer, to provide an annual base salary of $330,000 and an annual performance-based bonus targeted at 40% of her annual base salary. On September 24, 2013, we amended Ms. Bloom’s employment agreement to include a clawback provision. On February 11, 2014, in connection with her promotion to Executive Vice President, we amended Ms. Bloom’s employment agreement to provide for an annual base salary of $365,000, subject to increase, and an annual performance-based bonus targeted at 45% of her annual base salary. On January 31, 2019, we amended and restated Ms. Bloom’s employment agreement to consolidate all of the previous amendments; to provide for an annual base salary of $460,000, subject to increase; and to clarify that in the event of a covered termination or change in control transaction, Ms. Bloom will receive the greater of the severance benefits set forth 56 in her employment agreement or the severance benefits provided for in the Company’s Amended Severance Plan (without duplication). See the sub-section entitled “Amended Severance Plan” for further information. We entered into an employment agreement with Ms. Behrs effective January 31, 2013, in connection with her appointment as our Senior Vice President, Portfolio and Alliance Management, to provide an annual base salary of $341,550, subject to increase, and an annual performance-based bonus targeted at 40% of her annual base salary. On September 24, 2013, we amended Ms. Behrs’ employment agreement to include a clawback provision. On February 11, 2014, in connection with her promotion to Executive Vice President, we amended Ms. Behrs’ employment agreement to provide for an annual base salary of $352,000, subject to increase, and an annual performance-based bonus targeted at 45% of her annual base salary. On January 31, 2019, we amended and restated Ms. Behrs’ employment agreement to consolidate all of the previous amendments; incorporate her new title of Chief Business Officer; to provide for an annual base salary of $425,000, subject to increase; and to clarify that in the event of a covered termination or change in control transaction, Ms. Behrs will receive the greater of the severance benefits set forth in her employment agreement or the severance benefits provided for in the Company’s Amended Severance Plan (without duplication). See the sub-section entitled “Amended Severance Plan” for further information. In addition, we added a one-time relocation allowance of $10,000 to cover moving expenses for Ms. Behrs’ relocation from California to New Jersey in connection with her transfer to the anticipated new Geron office in New Jersey. In addition, we are providing a monthly reimbursement of up to $3,000 per month for housing costs in New Jersey. We entered into an employment agreement with Dr. Grethlein effective September 17, 2012, in connection with commencement of his employment with us, to provide an annual base salary of $355,000 and an annual performance-based bonus targeted at 45% of his annual base salary. On February 11, 2014, we amended Dr. Grethlein’s employment agreement to provide for an annual base salary of $379,000, subject to increase, and to include a clawback provision. On January 31, 2019, we amended and restated Dr. Grethlein’s employment agreement to consolidate all of the previous amendments; incorporate his new title of Chief Operating Officer; to provide for an annual base salary of $460,000, subject to increase; and to clarify that in the event of a covered termination or change in control transaction, Dr. Grethlein will receive the greater of the severance benefits set forth in his employment agreement or the severance benefits provided for in the Company’s Amended Severance Plan (without duplication). See the sub-section entitled “Amended Severance Plan” for further information. We entered into an employment agreement with Mr. Rosenfield effective February 16, 2012, in connection with commencement of his employment with us, to provide an annual base salary of $292,000, subject to increase and pro-rated to reflect Mr. Rosenfield’s 80% of a full-time work schedule, and an annual performance-based bonus targeted at 45% of his annual base salary. On September 24, 2013, we amended Mr. Rosenfield’s employment agreement to include a clawback provision. On January 31, 2019, we amended and restated Mr. Rosenfield’s employment agreement to consolidate all of the previous amendments; incorporate his new title of Chief Legal Officer; to provide for an annual base salary of $368,000, subject to increase; and to clarify that in the event of a covered termination or change in control transaction, Mr. Rosenfield will receive the greater of the severance benefits set forth in his employment agreement or the severance benefits provided for in the Company’s Amended Severance Plan (without duplication). See the sub-section entitled “Amended Severance Plan” for further information. See also the sub-section entitled “Potential Payments Upon Termination or Change in Control” with respect to severance benefits payable under the employment agreements with our Named Executive Officers
Annual Equity Awards. 57 Executive Officers are included under the Our Outstanding Equity Awards at Fiscal Year-End The following table includes information with respect to all outstanding equity awards held by our Named Executive Officers as of December 31,
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59 Option Exercises and The following table
Pension Benefits
Non-Qualified Deferred Compensation
Additional Benefits
Pay Ratio Disclosure Under SEC rules, we are required to calculate and disclose the annual total compensation of our median employee, as well as the ratio of the annual total compensation of our median employee as compared to the annual total compensation of our Chief Executive Officer (the “CEO Pay Ratio”). To identify our median employee, we used the following methodology: To determine our total population of employees, excluding our Chief Executive Officer, we included all 16 full-time employees and one part-time employee as of December 31, 2018.
60 Once the median employee was identified, we calculated the annual total compensation of this employee for fiscal 2018 in a manner consistent with that used to calculate the annual total compensation for our Named Executive Officers in the Summary Compensation Table above. For fiscal 2018, the annual total compensation (including base salary, grant date fair value of stock option awards granted during the year, and annual performance-based bonus) of the median employee of our total population of employees (other than our Chief Executive Officer) was $543,149 and the annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table above, was $2,772,509. Based on this information, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees was 5.1 to 1. The CEO Pay Ratio above represents our reasonable estimate calculated in a manner consistent with SEC rules and applicable guidance. SEC rules and guidance provide significant flexibility in how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, and as explained by the SEC when it adopted these rules, in considering the pay ratio disclosure, stockholders should keep in mind that the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures. The Compensation Committee, the Independent Board and our management did not use the CEO Pay Ratio measure in making compensation decisions for our employees or Named Executive Officers in 2018. Potential Payments Upon Termination or Change in Control
Our Named Executive Officers are entitled to certain severance benefits payable in For the purposes of our Named Executive Officers’ employment agreements, the following definitions apply: “Covered Termination” generally means an Involuntary Termination Without Cause that occurs at any time, provided that such termination constitutes a “separation from service” within the meaning of Section 409A of the Code. “Involuntary Termination Without Cause” generally means an executive officer’s dismissal or discharge other than: a) for Cause or b) following an involuntary or voluntary filing of bankruptcy, an assignment for the benefit of creditors, a liquidation of our assets in a formal proceeding or otherwise or any other event of insolvency by Geron, in any case, without an offer of comparable employment by Geron or a successor, acquirer, or affiliate of Geron. “Cause” generally means the executive officer’s:
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Amended Severance Plan In September 2002, the Board approved a Severance Plan that originally became effective on January 21, 2003 and was subsequently amended and restated in May 2013 and in January 2019 (collectively referred to herein as the “Amended Severance Plan”). The Amended Severance Plan applies to all employees, including our Named Executive Officers, who are not subject to a performance improvement plan. The Amended Severance Plan provides for cash severance benefits to be paid to employees, including our Named Executive Officers, under a “double trigger” situation, defined below as a Change in Control Under the Amended Severance Plan, the following definitions apply: “Change in Control Triggering Event” is defined as a termination without Cause in connection with a Change in Control (which has the same definition as under the 2018 Plan) or within 12 months following a Change in Control. Additionally, if an individual is terminated by the Company in connection with a Change in Control but immediately accepts employment with the Company’s successor or acquirer, they will not be deemed to have had a Change in Control Triggering Event unless:
“Cause” generally means an employee’s continued failure to satisfactorily perform duties, willful act or omission constituting dishonesty, fraud or other malfeasance against the Company, conviction of a felony, debarment by the FDA from working in or providing services to any pharmaceutical or biotechnology company or other ineligibility under any law or regulation to perform the employee’s duties to the Company, or breach of any material Company policies. “material change in terms of employment” shall occur if one of the following events occurs without the employee’s consent:
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Additionally, in order for the resignation to be deemed due to a material change in terms of their employment, the employee must provide written notice to the Company’s Chief Legal Officer within 30 days after the first occurrence of the event giving rise to a material change in their terms of employment setting forth the basis for their resignation, allow the Company at least 30 days from receipt of such written notice to cure such event, and if such event is not reasonably cured within such period, the employee’s resignation from all positions they then hold with the Company is effective not later than 90 days after the expiration of the cure period. Upon a Change in Control Triggering Event, each of our Named Executive Officers is entitled to: (i) a severance payment equal to 15 months (18 months, with respect to Dr. Scarlett) of his or her base salary then in effect as of such Change in Control Triggering Event; (ii) payment of his or her target annual bonus, at the target bonus percentage in effect immediately prior to his or her separation from service, prorated for the length of service provided in the termination year; and (iii) payment of COBRA premiums for up to 15 months (18 months, with respect to Dr. Scarlett). These benefits are consistent with severance plans offered at companies similar in size in our industry and competitive market environment. Payment of any severance benefits under the Amended Severance Plan is conditioned on the timely provision of an effective release of claims against Geron. If a Named Executive Officer is entitled to severance benefits upon a termination of employment under both the Amended Severance Plan and an employment agreement, the Named Executive Officer will receive the greater of such severance benefits (without duplication). The benefits provided under the Amended Severance Plan are not intended to be duplicative of those provided in any employment agreement. Equity Plans As set forth in each individual stock option under the 2018 Plan, in the event of a Change in Control of Geron (defined below), the vesting of each outstanding stock option held by all employees and non-employee directors will accelerate so that each stock option shall become fully exercisable for all of the outstanding shares subject to such stock option immediately prior to the consummation of such transaction and each other type of award shall be fully vested with all forfeiture restrictions on any or all of such awards to lapse. For purposes of the 2018 Plan, a “Change in Control” generally means and includes each of the following:
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In the event an employee or non-employee director experiences a termination of service as a result of the employee’s or non-employee director’s total and permanent disability (as defined in Section 22(e)(3) of the Code) or death, the 2018 Plan provides through each respective plan or the individual stock option agreement, that the portion of each outstanding stock option with time-based vesting held by such employee or non-employee director that would have vested during the 24 months after the date of such employee’s termination of service (36 months for non-employee directors), will automatically vest. The stock options that were already vested upon the date of termination and those that automatically vested in connection with an employee’s total and permanent disability or death will remain exercisable until the earlier of the second anniversary of the date of termination and the original expiration date of such stock option. For a non-employee director, the post-termination exercise period is the earlier of the third anniversary of the date of termination and the original expiration date of such stock option. In the event an employee experiences a termination of service as a result of the employee’s total and permanent disability (as defined in Section 22(e)(3) of the Code) or death, the individual stock option agreement for stock options with performance-based vesting permits the unvested portion of such stock option to continue to be eligible to vest and become exercisable upon the achievement of the performance goal set forth in the stock option grant notice to the extent such performance goal has not already been achieved as of the date of the employee’s total and permanent disability or death, if and only if the performance goal occurs within the thirty-six (36) months following the date of the employee’s total and permanent disability or death, however, not beyond the original term of the stock option. Potential Payments Table The table below summarizes potential maximum payments under the Amended Severance Plan,
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RATIFICATION OF SELECTION OF The Audit Committee of the Board has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, We have been informed by Ernst & Young LLP that, to the best of their knowledge, neither the firm nor any of its members or their associates has any direct financial interest or material indirect financial interest in Geron or our affiliates. Stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board is submitting the selection of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee and the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee and the Board in their discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of Geron and our stockholders. Vote Required Stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of the shares having voting power present in person or represented by proxy at The Board of Directors Unanimously Recommends 66 PRINCIPAL ACCOUNTANT FEES AND SERVICES The Audit Committee maintains policies and procedures for the pre-approval of work performed by the independent registered public accounting firm. Under the Audit Committee’s charter, all engagements of the independent registered public accounting firm must be approved in advance by the Audit Committee. Management recommendations will be considered in connection with such engagements, but management will have no authority to approve engagements. For each quarterly Audit Committee meeting, management prepares a schedule of all fees paid to Ernst & Young LLP during the previous quarter and estimated fees for projects contemplated in the following quarter. The Chairperson of the Audit Committee must be notified at any time the fees for a specific project exceed 20% of the approved budget for authorization to continue the project.
Audit Fees and All Other Fees The Audit Committee approved 100% of all audit and other services provided by Ernst & Young LLP in
67 AUDIT The Audit Committee of Geron Corporation’s Board of Directors is comprised of three independent directors as required by the listing standards of The members of the Audit Committee are Ms. Eastham (Chairperson), Dr. Lawlis and Mr. Bradbury. The Board has determined that all members of the Audit Committee are financially literate as required by The function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities regarding:
Management is responsible for Geron’s internal controls and financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of Geron’s financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. In this context, the Audit Committee hereby reports as follows:
Based on the reports and discussions described above, the Audit Committee recommended to the Board that the audited financial statements be included in Geron’s Annual Report on Form 10-K for the year ended December 31, Submitted on
This Section is not “soliciting material,” is not deemed filing 68 EQUITY COMPENSATION PLAN INFORMATION The following table summarizes information with respect to equity awards under Geron’s equity compensation plans at December 31, 2018:
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the amount and percentage of the outstanding shares of Common Stock, which, according to the information supplied to us, are beneficially owned by: (i) each person, or group of affiliated persons, who is known by us to be a beneficial owner of more than 5% of our outstanding Common Stock, (ii) each of our directors and nominees for director, (iii) each of our Named Executive Officers and (iv) all current directors and executive officers as a group. Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park,
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Since January 1, 2017, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which the Company was or is to be a party in which the amount involved exceeds $120,000 and in which any current director, executive officer, holder of more than 5% of our Common Stock or any immediate family member of any of the foregoing persons had or will have a direct or indirect material interest other than with respect to compensation arrangements described under the sections entitled “Executive Compensation
Policies and Procedures Our Audit Committee is responsible for reviewing and approving all related party transactions, which would include a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person” are participants involving an amount that exceeds $120,000, not including transactions involving compensation for services provided to Geron as an employee, director, consultant or similar capacity by a related person. Related parties include any of our directors or executive officers, certain of our stockholders and their immediate family members. This obligation is set forth in writing in the Audit Committee charter. A copy of the Audit Committee charter is available on the Corporate Governance page under the Investor Relations section of our website at www.geron.com. Where a transaction has been identified as a related-person transaction, management would present information regarding the proposed related-person transaction to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent body of the Board) for consideration and approval or ratification. The presentation would include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to Geron of the transaction and whether any alternative transactions were available. To identify related-person transactions in advance, the Audit Committee relies on information supplied by Geron’s executive officers and directors. In considering related-person transactions, the Audit Committee takes into account the relevant available facts and circumstances including, but not limited to:
72 In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval. In determining whether to approve, ratify or reject a related-person transaction, the Audit Committee considers, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of Geron and our stockholders, as the Audit Committee determines in the good faith exercise of its discretion. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities (collectively, “Reporting Persons”), to file with the SEC initial reports of ownership and reports of changes in ownership of Geron Common Stock and other equity securities. Reporting Persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely upon a review of the copies of such reports furnished to us and written representations from such directors, executive officers and stockholders that no other reports were required, we believe that during fiscal year ended December 31, Stockholder Nominations and Proposals for We expect to hold our To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December If you wish to bring a proposal before the stockholders or nominate a director at the name and address; the class and number of shares of the Company, owned of record or beneficially owned; any derivative, swap or other transaction which gives economic risk similar to the ownership of shares of the Company; any proxy, agreement, arrangement, understanding or relationship that confers a right to vote any shares of the Company; 73
any other information required by the SEC to be disclosed in a proxy statement or certain other filings. The stockholder’s notice must also include information for each proposed director nominee, including:
Copies of our Bylaws may be obtained from our Corporate Secretary. Director Nominees Recommended by Stockholders The Nominating and Corporate Governance Committee, to date, has not adopted a formal policy with regard to the consideration of director candidates recommended by stockholders and will consider director candidates recommended by stockholders on a case-by-case basis, as appropriate. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee should send written notice to the Nominating and Corporate Governance Committee Chairman, Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, Director Qualifications The Nominating and Corporate Governance Committee believes that nominees for election to the Board must possess certain minimum qualifications and attributes. The nominee: must meet the objective independence requirements set forth by the SEC and must exhibit strong personal integrity, character and ethics, and a commitment to ethical business and accounting practices, must not be involved in on-going litigation with the Company or be employed by an entity which is engaged in such litigation, and must not be the subject of any on-going criminal investigations, including investigations for fraud or financial misconduct. 74 In addition, the Nominating and Corporate Governance Committee may consider the following criteria, among others:
of professional experiences and perspectives and who portray characteristics of diligence, commitment, mutual respect and professionalism with an emphasis on consensus building. The Board does not follow any ratio or formula to determine the appropriate mix. Rather, it uses its judgment to identify nominees whose backgrounds, attributes and experiences, taken as a whole, will contribute to the high standards of board service at Geron. As stated in our Nominating and Corporate Governance Committee Charter and our Corporate Governance Guidelines, as part of the director search process, the Nominating and Corporate Governance Committee endeavors to consider qualified candidates, including women and minorities, who meet the relevant business and search criteria. In furtherance of the foregoing, the Company has engaged a third-party search firm to furnish a list of qualified candidates who meet the above criteria, including women and minority candidates. In connection with its annual assessment of the performance of the Board, the Board committees and individual directors, the Nominating and Corporate Governance Committee evaluates board composition, including diversity of personal background and professional experience. Directors are expected to rigorously prepare for, attend and participate in Board meetings and meetings of the General Your proxy is solicited on behalf of our
April ___, 2019 75 CERTIFICATE OF AMENDMENT The undersigned, Stephen Rosenfield, hereby certifies that: FIRST.He is the duly elected and acting Executive Vice President, Chief Legal Officer and Corporate Secretary of Geron Corporation, a Delaware corporation (the “Corporation”). SECOND.The Corporation’s Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware (the “Secretary of State”) on March 24, 1998; a Certificate of Designation was filed with the Secretary of State on March 27, 1998; a Certificate of Amendment of Restated Certificate of Incorporation was filed with the Secretary of State on December 14, 1999; a Certificate of Amendment of Restated Certificate of Incorporation was filed with the Secretary of State on June 28, 2000; a Certificate of Designation was filed with the Secretary of State on August 1, THIRD.The amendment of the Restated Certificate of Incorporation of the Corporation herein certified was duly adopted by this Corporation’s Board of Directors and approved by the Corporation’s stockholders in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware. FOURTH.Article IV, Paragraph (A) of the Corporation’s Restated Certificate of Incorporation is hereby amended to read in its entirety as follows: “(A) Class of Stock. The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is Four Hundred Fifty-Three Million (453,000,000) shares. Four Hundred Fifty Million (450,000,000) shares shall be Common Stock, par value $0.001 per share, and Three Million (3,000,000) shares shall be Preferred Stock, par value $0.001 per share.” FIFTH.All other provisions of the Second Restated Certificate of Incorporation shall remain in full force and effect. IN WITNESS WHEREOF, the undersigned has caused this Certificate of Amendment to be duly executed on behalf of the Corporation at Menlo Park, California this __ day of __ 2019.
Important Notice Regarding the Availability of PRELIMINARY PROXY – SUBJECT TO COMPLETION
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