UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[ ]
☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material 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) |
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
☒ | No fee required. | |||
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies: | |||
(2) | Aggregate number of securities to which transaction applies: | |||
(3) | 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): | ||||
(4) | Proposed maximum aggregate value of transaction: | |||
[_] Fee paid previously with preliminary materials:
[_] 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.
(5) | Total fee paid: | |||
☐ | Fee paid previously with preliminary materials. | |||
☐ | 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. | |||
(1) | Amount Previously Paid: | |||
(2) | Form, Schedule or Registration Statement No.: | |||
(3) | Filing Party: | |||
(4) | Date Filed: | |||
GERON CORPORATION230 Constitution149 Commonwealth Drive, Suite 2070
Menlo Park, CA 94025
March 29, 2012April 3, 2015
Dear Geron Stockholder:
You are cordially invited to attend the 20122015 Annual Meeting of Stockholders of Geron Corporation, which will be held on May 17, 201218, 2015 at 8:3:00 a.m.p.m. Pacific Time. We are pleased to announce that this year’s Annual MeetingDaylight Time at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae, California 94030. In addition, we will be held completely virtual. You will be able to attend, vote and submit your questions duringhosting 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 10445504. A live audio-only webcast via the Internetwill also be available at www.virtualshareholdermeeting.com/geron2012. For the first time, we are hosting a stockholder-only website where you will be able to learn more about recent events at Geron, participate in a stockholder survey, vote your proxy and submit questions for the Annual Meeting in advance. To access this website, have your 12-Digit Control Number available and go to www.theinvestornetwork.com/forum/gern.http://edge.media-server.com/m/p/bu3nq8gw/lan/en.
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 believe this process will expedite stockholders’ receipt of materials, lower the costs of our annual meeting and reduce the environmental impact of printing and mailing hard copies. 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, 2012,6, 2015, we will distribute to our stockholders a notice containing instructions on how to access our 20122015 Proxy Statement and our 20112014 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, 20122015 Proxy Statement, 2014 Annual Report on Form 10-K and proxy card. If you received your proxy materials by mail, the notice of Annual Meeting, 20122015 Proxy Statement, 2014 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 20122015 Proxy Statement and 20112014 Annual Report on Form 10-K, which includes information on our operations, product candidates and our audited financial statements.10-K.
At this year’s Annual Meeting, the agenda includes the following items:
● | election of Directors; |
● | advisory vote to approve named executive officer compensation; and |
● | ratification of Ernst & Young LLP as our independent registered public accounting firm. |
Election of Directors;
us. Whether or not you plan to connect toattend the meeting, via the webcast, 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.
Thank you for your ongoing support of, and continued interest in, Geron Corporation. I look forward to speaking with you over the Internet at our 2012 Annual Meeting of Stockholders.
Sincerely, |
John A. Scarlett, M.D. |
GERON CORPORATION230 Constitution149 Commonwealth Drive, Suite 2070
Menlo Park, CA 94025
_________________
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 17, 201218, 2015
To the Stockholders of Geron Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of GERON CORPORATION, a Delaware corporation (the “Company”), will be held on May 17, 2012,18, 2015, at 8:3:00 a.m.p.m. Pacific Time.To participate inDaylight Time at the Annual Meeting via live webcast, vote your shares online and submit your questions duringWestin San Francisco Airport, One Old Bayshore Highway, Millbrae, California 94030. Stockholders may also access the meeting please visit www.virtualshareholdermeeting.com/geron2012 andvia telephone by dialing 877-303-9139 (U.S.); 760-536-5195 (international). The passcode is 10445504. A live audio-only webcast will also be sure to have your 12-Digit Control Number to enter the meeting. You will not be able to attend the Annual Meeting in person.available at http://edge.media-server.com/m/p/bu3nq8gw/lan/en. The meeting will be held for the following purposes:
1. | To elect the | ||
2. | |||
To approve, on an | |||
named executive officers, as disclosed in the Proxy Statement; | |||
3. | |||
To ratify | |||
4. | 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 20, 2012,23, 2015, as the record date for the determination of stockholders entitled to notice of and to vote at thisthe 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 connect toattend the meeting, via the webcast, 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. 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 |
Menlo Park, CaliforniaMarch 29, 2012April 3, 2015
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Letter to Stockholders, Notice and 2015 Proxy Statement, and 2014 Annual Report on Form 10-K are available at
www.proxyvote.com.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
WHETHER OR NOT YOU EXPECT TO CONNECT TOATTEND THE MEETING, WE URGE YOU TO SUBMIT
YOUR PROXY PROMPTLY IN ORDER TO ASSURE THAT A QUORUM IS PRESENT.
GERON CORPORATION230 Constitution149 Commonwealth Drive, Suite 2070
Menlo Park, CA 94025
___________________
____________________
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 201218, 2015_______________________________________
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why am I receiving these materials?
We have sent you a Notice of Availability of Proxy Materials (the “Notice”) or our proxy materials, as applicable, because the Board of Directors (the “Board”) of Geron Corporation, a Delaware corporation (“Geron”, the “Company”, “we” or “us”), is soliciting your proxy to vote at our 20122015 Annual Meeting of Stockholders (the “Annual Meeting”), to be held on May 17, 2012,18, 2015, at 8:3:00 a.m.p.m. Pacific Daylight Time (the “Annual Meeting”),at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae, California 94030 or at any adjournment or postponement thereof. We invite you to attend the Annual Meeting via the Internet to vote on the proposals described in this Proxy Statement. You may vote by proxy over the Internet or by phone, or by mail if you requested printed copies of the proxy materials.
We intend to distribute the Notice and the proxy materials on or about April 4, 20126, 2015 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.
CanHow can I attend the Annual Meeting?
We will host the 2012 Annual Meeting live via the Internet.You will not be ableAll 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 in person.via telephone by dialing 877-303-9139 (U.S.); 760-536-5195 (international). The passcode is 10445504. A live audio-only webcast will also be available at http://edge.media-server.com/m/p/bu3nq8gw/lan/en via the Internet. The Annual Meeting will start at 3:00 p.m., Pacific Daylight Time, on May 18, 2015.
Any stockholderHow can listen to andI participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/geron2012. The webcast will start at 8:00 a.m., Pacific Time, on May 17, 2012. Stockholders may vote and submit questions while connected to the Annual Meeting via the Internet.
For the first time, we are hosting a stockholder-only website at www.theinvestornetwork.com/forum/gern. This website provides validated stockholders the ability to learn more about the Company, participateif I cannot attend in a stockholder survey, vote their proxy and submit questions in advance of the Annual Meeting. To access the website, you must have your 12-Digit Control Number available, which can be found on your Notice or proxy card.
What do I need in order to be able to participate in the Annual Meeting online?person?
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 10445504. We recommend that stockholders 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 held live via the Internet. You will not be able to attend the meeting in person. A summary of the information you need to attend the meeting online is provided below:
Why did I receive a Notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
We are pleased to continue to take advantage ofapply the SEC rulerules from the United States Securities and Exchange Commission (the “SEC”) that allowsallow companies to furnish their proxy materials over the Internet. If you received athe Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless you request one. Instead, the Notice of Internet Availability of Proxy Materials 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 of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials.Notice. A stockholder’s election to receive proxy materials by mail or electronically by email will remain in effect until the stockholder terminates such election.
Why did I receive a full set of proxy materials instead of a Notice regarding the Internet availability of proxy materials?
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 the 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, 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.
How can I access the proxy materials over the Internet?
You may view and also download our proxy materials, including the 20112014 Annual Report on Form 10-K, and the Notice, on our website at www.geron.com as well as www.proxyvote.com.
How do I order proxy materials if I have not received them?
This Proxy Statement and the Company’s 2011Geron’s 2014 Annual Report on Form 10-K are available at www.proxyvote.com. Internet distribution of proxy materials is designed to expedite receipt by stockholders, lower the cost of the Annual Meeting and conserve natural resources. However, if you have not received a copy of our proxy materials and would like to receive one for the Annual Meeting or for future stockholder meetings, you may request printed copies 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 put the 12-Digit Control Number located in your Notice in the subject line. |
Who can vote at the Annual Meeting?
Only holders of record at the close of business on March 20, 201223, 2015 (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, there were 132,259,325we had 157,845,799 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 2012 Annual Meeting date. A list of stockholders entitled to vote at the 2012 Annual Meeting will be available for examination at our principal executive offices at the address listed above for a period of ten (10) days prior to the 2012 Annual Meeting and during the 2012 Annual Meeting such list will be available for examination at www.virtualshareholdermeeting.com/geron2012.Meeting.
What am I voting on at the Annual Meeting?
You are being asked to vote on four (4)three proposals, as follows:
Proposal 1 | To elect | ||
of Directors until the 2018 annual meeting of stockholders; | |||
Proposal 2 | |||
To approve, on | |||
Proposal | To ratify the |
What are the choices in voting?
For Proposal 1, you may either vote “For” all nominees to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For Proposals 2 3 and 4,3, you may vote “For” the proposal or “Against” the proposal or abstain“Abstain” from voting.voting on the proposal.
What is the recommendation of the Board on each of the matters scheduled to be voted on at the Annual Meeting?
The Board of Directors recommends that you vote:
● | FOR the nominees to the Board of Directors (Proposal 1); |
● | FOR the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement (Proposal 2); and |
● | FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015 (Proposal 3). |
Could other matters be decided at the Annual Meeting?
Our bylawsBylaws 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 as of the Record Date.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 is the difference between holding shares as a stockholder of record or as a beneficial owner?
Stockholder of Record: Shares Registered in Your Name
You are a stockholder of record if at the close of business on March 20, 2012,23, 2015, your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A. As a stockholder of record, you may vote during the 2012 Annual Meeting or vote by proxy.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
You are a beneficial owner, if at the close of business on March 20, 2012,23, 2015, 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 2012 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. 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. Please seeRefer to the section below “What are broker non-votes?” below 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.
● | Via the Internet. You may vote at www.proxyvote.com, 24 hours a day, seven days a week. You will need the 12-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 May 17, 2015. |
● | 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 12-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 May 17, 2015. |
● | By Mail. If you received printed proxy materials, you may submit your vote by 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 May 17, 2015 to be voted at the Annual Meeting. |
● | During the Annual Meeting. Stockholders may also submit their vote if they attend the meeting in 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 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 of Internet Availability of Proxy Materials or voting instructions from the broker or other nominee holding your shares. You should follow the instructions in the Notice of Internet Availability of Proxy Materials 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 during the 20122015 Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent.
Table of Contentsagent, and attend the meeting in person to submit your vote.
Geron Plan Participants
Participants inAs trustee of the Geron 401(k) Plan, Prudential Bank and Trust FSB will receive a proxy that incorporates all the shares owned throughby the Geron 401(k) Plan assuming the shares are registered in the same name. Theand will vote such proxy will serve as voting instructions for the trustee ofdirected by the Geron 401(k) Plan. If the proxy is not voted, the plan trustee will vote those shares in the same proportion as other Geron 401(k) participants vote their Geron 401(k) Plan shares.sponsor.
Shares purchased through the 1996 Employee Stock Purchase Plan and the 2014 Employee Stock Purchase Plan will follow standard brokerage industry practices. Shares held in the name of the broker will be voted on behalf of the holder on certain routine matters. To the extent the brokerage firm votes shares on the behalf of the holder, the shares will be counted for the purpose of determining a quorum.
Can I vote my shares by filling out and returning the Notice?
No. The Notice will, however, provide instructions on how to vote by Internet, by telephone, or by requesting and returning a paper proxy card or voting instruction card.
How many votes are needed to approve a proposal?
A quorum of stockholders 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.
Proposal | ||||||
Number | Proposal | Vote Required | ||||
1 | To elect | The | ||||
2 | To approve, on an |
| ||||
| The affirmative vote of the holders of a majority of the | |||||
3 | To ratify the | The affirmative vote of the holders of a majority of the |
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 see the section entitled “Corporate Governance Matters – Corporate Governance Guidelines”.
What are “broker non-votes”?
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares on how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled 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 appointmentselection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20122015 (Proposal 4)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 existoccur in
connection with Proposal 4 and, to the extent deemed “routine”, Proposal 2.3. The election of directors (Proposal 1) and the advisory vote on the compensation forof our named executive officers (Proposal 3)2) are considered non-routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore there may bewe expect broker non-votes on Proposals 1 and 3. In addition, it is possible that brokers will not have discretionary voting authority with respect to the proposal to amend our Restated Certificate of Incorporation to increase the authorized number of shares from 200,000,000 to 300,000,000 shares (Proposal 2), in which case, if you do not instruct your broker on how to vote with respect to this proposal, your broker may not vote with respect to this proposal and these non-votes will be counted as broker non-votes.2.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign, date and return each proxy card to ensure that all of your shares are voted.
How will your proxy be voted?
Votes will be counted by the Inspector of Election appointed for the 2012 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 “withheld”“Withhold” votes received for the nominees. If your shares are held by your broker as your nominee (that is, in “street name”), 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. If you do not give instructions to your broker, your broker can vote your shares with respect to “routine” items, but not with respect to “non-routine” items. See “What“What are “broker non-votes?” and “Which“Which ballot measures are considered “routine” andor “non-routine”?” above for more information regarding “routine” and “non-routine” matters.
Can I revoke or change my vote after I submit my proxy?
Stockholder of Record: Shares Registered In 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 May 17, 2015 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.
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, 2014, 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 2014 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 2012 Annual Meeting. Final voting results will be published by Geron in a Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”)SEC, that we expect to file within four business days after the 2012 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 2012 Annual Meeting, we intend to file a Current Report on Form 8-K to 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, of the Company, 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 $5,500,$6,000, to render solicitation services.
When are stockholder proposals due for next year’s Annual Meeting?
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 14, 2012,8, 2015, to our Corporate Secretary at Geron Corporation, 230 Constitution149 Commonwealth Drive, Suite 2070, Menlo Park, California, 94025.94025, and must comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, if our 20132015 Annual Meeting of Stockholders is not held between April 17, 201318, 2016 and June 16, 2013,17, 2016, then the deadline will be a reasonable time prior to the time we begin to print and mailsend our proxy materials.
If you wish to bring a proposal before the stockholders or nominate a director at the 20132016 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 18, 201319, 2016 and not later than the close of business on February 17, 2013.18, 2016. However, if our 20132016 Annual Meeting of Stockholders is not held between April 18, 2016 and July 17, 2013 and June 16, 2013,2016, then the deadline will be the 90th day prior to the 2016 Annual Meeting or, if later, the 10th day following the earlier of the day on which the first public announcementdisclosure of the date of the 20132016 Annual Meeting of Stockholders was made or the day thefirst made. We also advise you to review Geron’s Bylaws, which contain additional requirements about advance notice of the 2013 Annual Meeting of Stockholders is mailed.stockholder proposals and director nominations. The chairman of the 20132016 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.
Table of Contentsproxy statement. For additional discussion, refer to the section entitled “Stockholder Nominations and Proposals for 2016 Annual Meeting” on page 54.
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 proxyProxy Statement and 2014 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, please notify your broker or our Investor Relations department. We will promptly deliver copies of the Proxy Statement and annual reportour 2014 Annual Report on Form 10-K or the Notice to any stockholder who contacts our investor relationsInvestor Relations department at (650) 473-7765 or by mail addressed to Investor Relations, Geron Corporation, 230 Constitution149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025, requesting such copies. If a stockholder is receiving multiple copies of the Proxy Statementproxy statement and annual report at the stockholder’s household and would like to receive a single copy of the Proxy Statementproxy statement and annual report for a stockholder’s household in the future, stockholders should contact their broker, other nominee record holder, or our investor relationsInvestor Relations department to request mailing of a single copy of the proxy statement and annual report.
MATTERS TO BE CONSIDERED AT THE 20122015 ANNUAL MEETING
ELECTION OF DIRECTORS
Board Structure
Our Board currently consists of eight members, seven of whichwhom are “independent,” as that term is defined by NASDAQ Rule 5606(a)5605(a)(2). On March 3, 2015, Thomas Hofstaetter, Ph.D., notified the Board of his decision to retire from our Board at the end of his term on the date of the Annual Meeting. Upon his departure, the size of our Board will be reduced to, and our Board will be comprised of, seven members, six of whom are “independent,” as that term is defined by NASDAQ Rule 5605(a)(2).
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 provide that upon expiration of the term of office for a class of directors, nominees for such class will be elected for a term of three years or until their successors are duly elected and qualified.
The term of office of the Class I directors will expire at the Annual Meeting in May 2012, and three nominees for director are to be elected2015. Effective as Class I directors. The three nominees areof the date of the Annual Meeting, Thomas Hofstaetter, Ph.D., currently a Class I director, will retire from the Board. The remaining two Class I nominees, John A. Scarlett, M.D., and Robert J. Spiegel, M.D., FACP.FACP, are currently serving as our directors. Proxies may only be voted for the two Class I directors nominated for election at the Annual Meeting. The Class II directors, Edward V. Fritzky, Hoyoung Huh, M.D., Ph.D., and Thomas D. Kiley, Esq.,Daniel M. Bradbury, have one year remaining on their terms of office. The Class III directors, Karin Eastham, and V. Bryan Lawlis, Ph.D., and Susan M. Molineaux, Ph.D., have two years remaining on their terms of office.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
For a Three Year Term Expiring at the20152018 Annual Meeting
The Board has selected threetwo nominees for Class I directors, allboth of whom are currently directors of Geron and were previously elected by the Company.stockholders.
Set forth below is a brief biography of each nominee for Class I 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 three candidates receiving the highest number of affirmative votesbiographies below also include a discussion of the shares representedspecific experience, qualifications, attributes or skills of each nominee that led the Nominating and entitledCorporate Governance Committeeand the Board to vote atconclude, as of the Annual Meeting will be elected asdate of this Proxy Statement, that each nominee for Class I directors of the Company. Accordingly, abstentions will not affect the outcome of this proposal. The election of directors is a non-routine matter on which a broker or other nominee is not empowereddirector should continue 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 approval.
Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named below. In the event that any nominee should be unavailable for electionserve as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as Geron may propose.director. Each person nominated for election has agreed to serve if elected, and managementthe Board has no reason to believe that any nominee will be unable to serve.
Set forth below is information regarding the nominees for Class I director, the periods during which they have served as a director of the Company, and information furnished by them as to principal occupations and directorships held by them in corporations whose shares are publicly registered.
Class I DirectorsDirector Nominees (Term Expiring at the 20152018 Annual Meeting)
Name | Age | Principal Occupation/Position with the Company | ||||
John A. Scarlett, M.D. | President and Chief Executive Officer | |||||
Robert J. Spiegel, M.D., FACP |
Thomas Hofstaetter, Ph.D.,has served as a director of the Company since March 2010 and was President, Chief Executive Officer and a director of VaxInnate Corporation, a privately-held biotechnology vaccine company, from January 2010 to December 2011. From September 2004 to October 2009, Dr. Hofstaetter was Senior Vice President, Corporate Development and Head of Global Business Development and a member of the Wyeth Management Committee at Wyeth, Inc., a global pharmaceutical company. At Wyeth, he closed more than 70 transactions, including acquisitions of biotechnology companies, in-licensing of products and broad technology collaborations. Wyeth merged with Pfizer, Inc. in October 2009. From December 1999 to August 2004, Dr. Hofstaetter was Senior Vice President of Corporate Development of Aventis, a global pharmaceutical company. While at Aventis, he was responsible for more than 100 transactions including research alliances, product in- and out-licensing, divestments and spin-outs. In 1978, Dr. Hofstaetter joined Behringwerke AG in Germany as a research scientist and rose to become Head of Research in 1988 and head of the Immunology/Oncology business unit in 1989. From 1991 to 1999, Dr. Hofstaetter served in various executive managerial positions around the world, including the United States, Japan, France and his native Germany, with Hoechst Pharma, a global pharmaceutical company. Dr. Hofstaetter holds a Master of Science degree in biochemistry and a Ph.D. in molecular biology, magna cum laude, from the University of Tuebingen in Germany. From 2001 to 2004, he was a director of Merial Limited, a joint venture between Aventis and Merck & Co. focusing on pharmaceutical products and vaccines for livestock, pets and wildlife. From 2000 to 2004, he was a member of the board of trustees of the New Jersey Symphony Orchestra.
The Board believes Dr. Hofstaetter’s expertise with numerous technology transactions developed through his roles as a senior executive responsible for corporate development and his significant operating and management knowledge of large, global pharmaceutical companies, qualifies Dr. Hofstaetter to be nominated as a director.
John A. Scarlett, M.D.,has served as our Chief Executive Officer and a director since September 2011 and President since January 2012. 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., a globalan 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. 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. Dr. Scarlett received hisholds a B.A. degree in chemistry from Earlham College and aan M.D. from the University of Chicago, Pritzker School of Medicine.
As the only management representative on the Board, Dr. Scarlett brings an insider’smanagement’s perspective into board discussions about theGeron’s business and strategic direction of the Company.direction. In addition, the Board believes Dr. Scarlett’s medical background and extensive drug development experience, which provides substantial understanding of ourpotential clinical product candidates, qualifyingopportunities, qualifies Dr. Scarlett to be nominated as a director.
Robert J. Spiegel, M.D., FACP, has served as a director of the CompanyGeron since May 2010. Dr. Spiegel currently serves as Chief Medical Officer of PTC Therapeutics, Inc., a biopharmaceutical company focused on the development and commercialization of treatments for rare and neglected disorders. He is also a director of TalonEdge Therapeutics, Inc. (formerly Hana Biosciences, Inc.), a biopharmaceutical oncology company Clavis Pharma ASA,focused on products for acute, fatal or debilitating conditions; Sucampo Pharmaceuticals, Inc., a pharmaceuticalglobal biopharmaceutical company based in Oslo, Norway,focused on the development and commercialization of medicines to treat gastrointestinal, ophthalmic, and oncology-based inflammatory disorders; and Avior Computing Corporation, a
governance risk and compliance process technology company. He also is an Associate Fellow at the University of Pennsylvania Center for Bioethics and an Associate Professor at the Weill Cornell Medical School. He served as a director for the Cancer Institute of New Jersey from 1999 to 2009 and as a director of Cancer Care New Jersey from 1995 to 2011. After 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. He initially joined Schering-Plough as Director of clinical research for oncology and rose to hold various positions including Senior Director of clinical research for oncology and anti-infectives, Vice President of clinical research and Senior Vice President of worldwide clinical research. During his tenure at Schering-Plough, Dr. Spiegel lead the oncology development team for over 10 years where he took several antibiotics, anti-fungals and anti-virals through successful registration worldwide, including anti-HIV indications. As Vice President and Senior Vice President of worldwide clinical research, Dr. Spiegel managed Phase 1 to Phase 3 clinical development in all therapy areas, including allergy, respiratory, cardiovascular, immunology, dermatology, oncology and infectious diseases. As Chief Medical Officer, Dr. Spiegel was involved with over 30 New Drug Applications, participated in multiple due diligence reviews and in-licensing decisions, re-engineered pharmacovigilence and risk management areas and built a quality system for all research operations. 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. He currently is an Associate Fellow at the University of Pennsylvania Center for Bioethics. Dr. Spiegel holds a B.A. from Yale University and aan M.D. from the University of Pennsylvania.
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 our programs, qualifyingimetelstat, and qualifies Dr. Spiegel to be nominated 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 and entitled to vote onat the election of directors.meeting. The threetwo nominees receiving the highest number of affirmative“FOR” votes properly cast in person or by proxy at the meeting will be elected. Shares represented by executed proxies willelected as a Class I 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 if authority to do so ison this proposal and will not withheld,be counted in determining the number of shares necessary for the election of the three nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by Geron. Abstentions and brokerelection. 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 are counted. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as our Nominating and Corporate Governance Committee and Board may propose.
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 see the section entitled “Corporate Governance Matters – Corporate Governance Guidelines”.
The Board of Directors Unanimously Recommends That Stockholders
VoteFOR the Election of Each Nominee to the Board of Directors
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Set forth below is information regardinga brief biography of each continuing director composing the continuing Class II and Class III directorsremainder of the Company,Board with terms expiring as shown, including their ages, the periods during which they have served as directors,a director of Geron, and information furnished by them as to principal occupations and public company directorships held by them in corporations whose shares are publicly registered.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 II Directors (Term Expiring at the 20132016 Annual Meeting)
Name | Age | Principal Occupation | ||||
Hoyoung Huh, M.D., Ph.D. | 45 | Independent Director | ||||
Daniel M. Bradbury | 53 | |||||
Edward V. Fritzky has served as a director of the Company since July 1998. From July 2002 to May 2005, he served as a director and advisor to Amgen Corporation, a U.S. pharmaceutical company, where he established a leading research center in Seattle. From January 1994 to July 2002, he served as Chief Executive Officer and Chairman of Immunex Corporation, a biopharmaceutical company that developed, manufactured, and marketed therapeutic products for the treatment of cancer, infectious diseases, and autoimmune disorders, during which
time he managed the company’s growth to over $15 billion in market value and completed its acquisition by Amgen in 2002. Since 2004, Mr. Fritzky has been a director of Jacobs Engineering Group, Inc., a professional technical services firm providing scientific and specialty consulting services supporting industrial, commercial and government clients. From 1998 to 2009, Mr. Fritzky was a director of Sonosite, Inc., a leading company of hand-carried ultrasound equipment. From 1992 to 1994, Mr. Fritzky served as President of Lederle Laboratories, a division of American Cyanamid, and from 1989 to 1992, as Vice President of Lederle Laboratories. While at Lederle Laboratories, Mr. Fritzky oversaw the launch of six new products. Prior to joining Lederle Laboratories, Mr. Fritzky was an executive of Searle Pharmaceuticals, Inc., a subsidiary of the Monsanto Company that manufactures, develops and markets health care products and pharmaceuticals. During his tenure at Searle, Mr. Fritzky was Vice President of Marketing in the United States and later President and General Manager of Searle Canada, Inc. and Lorex Pharmaceuticals, a joint venture between G.D. Searle & Company, a U.S. pharmaceutical company, and Synthelabo, a French pharmaceutical company, to market existing and new Synthelabo products in the United States. Mr. Fritzky served as a Trustee of the Fred Hutchinson Cancer Center from July 2001 to June 2007. Mr. Fritzky holds a B.A. from Duquesne University and is a graduate of the Advanced Executive Program, J.L. Kellogg Graduate School of Management at Northwestern University.
The Board believes Mr. Fritzky’s management and operational experience as Chairman and Chief Executive Officer of Immunex Corporation and as President of other biopharmaceutical companies, his knowledge of therapeutic product launches and the substantial understanding of the Company and its operations he has gained during his 14 years as a director of the Company, qualifies Mr. Fritzky to serve as a director.
Hoyoung Huh, M.D., Ph.D.,currently serves ashas been the Chairman of the Board since September 2011, served as our interim Executive Chairman from February 2011 to September 2011, and has served as a director of the CompanyGeron since May 2010. He is Chairman of the board of directors of CytomxCytomX Therapeutics, Inc., an emerging medical technology company, andcompany. Dr. Huh also is a director of AntriaBio, Inc., a biopharmaceutical company focused on developing novel therapeutic products for the diabetes market. Additionally, Dr. Huh serves on the boards of directors of several privately-held companies. Dr. Huh served as a director of ADDEX Pharmaceuticals, a pharmaceutical discovery and development company.company, from May 2011 to May 2014. From February 2008 to December 2011, Dr. Huh was Chairman of the board of directors of BiPar Sciences, Inc., a wholly-owned subsidiary of Sanofi-Aventis, a global pharmaceutical company developing treatments in cardiology, oncology, central nervous system disorders, metabolic diseases, ophthalmology and vaccines, since the April 2009 merger of BiPar and Sanofi-Aventis, and served as BiPar’s President and Chief Executive Officer from February 2008 to December 2009. Additionally, Dr. Huh serves on the boards of directors of several privately-held companies. Dr. Huh served on the board of directors of Facet Biotech (a wholly-owned subsidiary of Abbott, a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics) from September 2009 to April 2010. From February 2008 to May 2009, he was a member of the board of directors at Nektar Therapeutics, a clinical-stage
biopharmaceutical company developing small molecule drugs, peptides and other biologic drug candidates as treatments for oncology, pain, anti-infectives, anti-virals and immunology. From March 2005 to February 2008, Dr. Huh held positions as Nektar’s Chief Operating Officer and Senior Vice President of Business Development and Marketing where he was responsible for the company’s worldwide business development, marketing and manufacturing and led Nektar’s PEGylation business. Prior to Nektar, Dr. Huh was a partner at McKinsey & Company, a global management consulting firm, where he was 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 biochemistry from Dartmouth College and aan M.D. and Ph.D. in genetics and cell biology from Cornell University Medical College and Sloan-Kettering Institute.
The Board believes Dr. Huh’s management and operational experience 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. Huh to serve as a director and serve as Chairman of the Board.
Daniel M. Bradbury Thomas D. Kiley, Esq., served as a director of the Company since September 1992. Mr. Kiley is currently a director of Transcept Pharmaceuticals, Inc., a specialty pharmaceutical company developing therapies in the field of neuroscience, Ceres, Inc., an energy crop company, several privately-held biotechnology companies and the Hospital de la Familia Foundation. Mr. Kiley was a director of Connetics Corporation, a specialty pharmaceutical company that developed dermatology products, from 1994 to 2006 when it was acquired by Stiefel Laboratories, Inc. He has been self-employed since 1988 as an attorney, consultant and investor. From 1980 to 1988, he was
an officer of Genentech, Inc., a biotechnology company using human genetic information to develop medical treatments, serving as Vice President and General Counsel, Vice President for Legal Affairs and Vice President for Corporate Development where he managed patent litigation, developed patent strategy and negotiated numerous corporate partnership deals. From 1969 to 1980, he was with Lyon & Lyon, a Los Angeles-based law firm specializing in domestic and international intellectual property law matters and was a partner at the firm from 1975 to 1980. Mr. Kiley holds a B.S. in chemical engineering from Pennsylvania State University and a J.D. from The George Washington University.
The Board believes Mr. Kiley’s specialized knowledge of intellectual property matters for biopharmaceutical companies, his experience as a board member for other public companies and the substantial understanding of the Company and its operations he has gained during his 20 years as a director of the Company, qualifies Mr. Kiley to serve as a director.
Karin Easthamhas served as a director of the CompanyGeron since March 2009. She currentlySeptember 2012. He also serves as a director for Amylin Pharmaceuticals, Inc., a biopharmaceutical company focused on peptide hormone drug candidates formember of the treatmentboards of diabetes, obesity and other metabolic diseases;directors of Illumina, Inc., a manufacturer of life-science tools and integrated systems for the analysis of genetic variation and biological function; Corcept Therapeutics, a company focused on the discovery 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 BioMed Realty, a real estate investment trust focused on providing real estate to the life science industry, as well as being a member of the board of trustees of the Keck Graduate Institute. He also serves on the University of California San Diego, Rady School of Management’s Advisory Council, Investor Growth Capital Advisory Board and the BioMed Ventures Advisory Committee. Mr. Bradbury served as Chief Executive Officer of Amylin Pharmaceuticals, Inc., a biopharmaceutical company focused on diabetes and metabolic disorders, from March 2007 until its acquisition by Bristol-Myers Squibb Company in August 2012. Mr. Bradbury served as Amylin’s President from June 2006 until March 2007, as Chief Operating Officer from June 2003 until June 2006, as Executive Vice President from June 2000 until June 2003 and in other positions in corporate development and marketing from 1994 until 2000. 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.
The Board believes that Mr. Bradbury’s extensive experience in the biopharmaceutical industry, together with his experience in the research, development and commercialization of pharmaceutical drug products, qualifies Mr. Bradbury to serve as a director.
Class III Directors (Term Expiring at the 2017 Annual Meeting)
Name | Age | Principal Occupation | |||
Karin Eastham | 65 | Independent Director | |||
V. Bryan Lawlis, Ph.D. | 63 | President and Chief Executive Officer, Itero Biopharmaceuticals LLC | |||
Susan M. Molineaux, Ph.D. | 61 | President and Chief Executive Officer, Calithera Biosciences, Inc. |
Karin Eastham has served as a director of Geron since March 2009. Ms. Eastham also serves as a director for MorphoSys AG, a Frankfurt Stock Exchange-listed biotechnology company; Illumina, Inc., a manufacturer of life science tools and reagents; and Veracyte, Inc., a molecular diagnostics company. Ms. Eastham also served as a director of Trius Therapeutics, Inc., a biopharmaceutical company, focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. She also served asfrom 2009 until its sale in 2013; Amylin Pharmaceuticals, Inc., a director forbiopharmaceutical company, from 2005 until its sale in 2012; Genoptix, Inc., a provider of specialized laboratory service provider,services, from 2008 until March 2011 when it was acquired by Novartis. Ms. Eastham served as a director forits sale in 2011; Tercica, Inc., a biopharmaceutical company, developing endocrine products, from 2003 until its acquisitionsale in 2008 by the Ipsen Group2008; and as a director of SGX Pharmaceuticals, Inc., a biopharmaceutical company, developing anti-cancer therapies targeting specific enzymes that have been implicated in human cancers, from 2005 until its acquisitionsale in 2008 by Eli Lilly and Company.2008. From May 2004 to September 2008, Ms. Easthamshe served as Executive Vice President and Chief Operating Officer, and as a member of the Board of Trustees, of Burnham Institute for Medical Research, a non-profit corporation engaged in medical research, where she established a business development function to support translational research into commercial opportunities and managed the general and administrative operations.basic biomedical research. From April 1999 to May 2004, Ms. Eastham served as Senior Vice President, Finance, and Chief Financial Officer and Secretary of Diversa Corporation, a genomics technologybiotechnology company. While at Diversa, Ms. Eastham completed the company’s initial public offering in 2000 and participated in negotiations for several product and technology acquisitions and collaboration agreements. From April 1997 to April 1999, Ms. Eastham served as Vice President, Finance and Administration and Chief Financial Officer for
She previously held similar positions with CombiChem, Inc., a computational chemistry company. While at CombiChem, Ms. Eastham established the administrative infrastructure for the company, assisted in the completion of its initial public offering in 1998 and participated in negotiations and completion of several pharmaceutical collaborations. From October 1992 to April 1997, Ms. Eastham served as Vice President, Finance and Administration and Chief Financial Officer for Cytel Corporation, a biopharmaceutical company, where she completed several public and private financings and was responsible for all administrative and financial functions.company. Ms. Eastham also held several similar positions, with other companies, including Vice President, Finance, at Boehringer Mannheim DiagnosticsCorporation, a biopharmaceutical company, from 1976 to 1988. Ms. Eastham holds a B.S. and an M.B.A. from Indiana University and is a Certified Public Accountant.
The Board believes Ms. Eastham’s significantunderstanding of biotechnology companies combined with her business leadership and financial expertise developedexperience, her contributions to the Board’s understanding of corporate governance and strategy for life sciences companies through her experience as a financial officer for several public biotechnology companies,director in the biopharmaceutical industry and her first-hand knowledge andextensive senior management experience in auditthe biopharmaceutical industry, particularly in key corporate finance and financial control-related matters and her understanding of public and private equity financings,accounting positions, qualifies Ms. Eastham to serve as a director.
V. Bryan Lawlis, Ph.D., has served as a director of the CompanyGeron since March 2012. He currently serves as a director for BioMarin Pharmaceuticals, Inc., a biopharmaceutical company specializing in rare genetic diseases, Coherus Biosciences, a biosimilar-oriented biologics platform company, and several privately-held biotechnology companies. From August 2013 to September 2014, Dr. Lawlis served as a director for KaloBios Pharmaceuticals, Inc., a biopharmaceutical company specializing in customized antibodies for the treatment of human disease. Dr. Lawlis is a co-founder and currently serves as the President and
Chief Executive Officer of Itero Biopharmaceuticals LLC, a privately-held, early stage biopharmaceutical company that was foundedhe co-founded in 2006. Dr. Lawlis served as President and Chief Executive Officer of Aradigm Corporation, a specialty drug company focused on drug delivery technologies, from August 2004, and served on its board of directors from February 2005,2005; continuing in both capacities until August 2006. Dr. Lawlis served as Aradigm Corporation’s President and Chief Operating Officer from June 2003 to August 2004 and its Chief Operating Officer from November 2001 to June 2003. Previously, Dr. Lawlis co-founded Covance Biotechnology Services, a contract biopharmaceutical manufacturing operation, served as its President and Chief Executive Officer from 1996 to 1999, and served as Chairman from 1999 to 2001, when it was sold to Diosynth RTP, Inc., a division of Akzo Nobel, NV. From 1981 to 1996, Dr. Lawlis was employed at Genencor, Inc. and Genentech, Inc. His last position at Genentech was Vice President of Process Sciences. 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.
The Board believes Dr. Lawlis’sLawlis’ extensive experience in manufacturing biotechnology and other pharmaceutical products, research and development of drug products and managing and conducting clinical trials and drug regulatory processes, qualifies Dr. Lawlis to serve as a director.
Susan M. Molineaux, Ph.D.,has served as a director of Geron since September 2012. She has been Chief Executive Officer and President of Calithera Biosciences, Inc., a biotechnology company developing oncology therapeutics, since co-founding the company in June 2010. 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. Dr. Molineaux was responsible for leading the development of Proteolix’s second-generation proteasome inhibitor, carfilzomib (now marketed as Kyprolis), for the treatment of multiple myeloma, from discovery through completion of clinical trials for accelerated approval, until the company’s acquisition by Onyx Pharmaceuticals, Inc., a global oncology-oriented biopharmaceutical company, in November 2009. From 2000 to 2003, Dr. Molineaux served as Vice President of Biology at Rigel Pharmaceuticals, Inc., a biopharmaceutical company focused on inflammatory and autoimmune diseases. She served as Vice President of Biology at Praelux, Inc. from 1999 to 2000, and from 1994 through 1999, as Vice President of Drug Development at Praecis Pharmaceuticals, Inc., an oncology-focused biopharmaceutical company. From 1989 until 1994, she was a scientist in the Immunology group at Merck & Co., a pharmaceutical company. Dr. Molineaux holds a B.S. in biology from Smith College and a Ph.D. in molecular biology from Johns Hopkins University, and completed a postdoctoral fellowship at Columbia University. She currently serves as the Chairman of Bay Bio, Northern California’s Life Science Association, and as a member of the board of directors of We Teach Science, a San Francisco Bay Area mentoring program for students in math and science.
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 serve as a director.
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 additional corporate governance practices that we believe are in the best interest of Geron and our Company and stockholders.
Corporate Governance Guidelines
Our Board has adopted ”CorporateCorporate Governance Guidelines”Guidelines that set forth key principles to guide the Board in their exercise of responsibilities and serve the interests of Geron and our Companystockholders. In February 2014, the Board amended the Corporate Governance Guidelines to include provisions whereby any nominee for director would submit an offer of resignation for consideration by the Nominating and stockholders. These guidelinesCorporate Governance Committee of the Board, if such nominee for director in an uncontested election receives a greater number of votes “withheld” from his or her election than votes “for” such election. The Nominating and Corporate Governance Committee would 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. 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, 230 Constitution149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025. In accordance 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 our director.a director of Geron.
Board Independence
In accordance with NASDAQ ruleslisting standards and Geron’s Corporate Governance Guidelines, our Board based on the legal opinion of outside legal counsel, Latham & Watkins, 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 rules.listing standards. The Board consults with our counsel to ensure that the Board’s determinations 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, as in effect from time-to-time.
There are no family relationships among the executive officers or directors of the Company. There are no current legal proceedings or claims to which the executive officers, directors or the Company are a party. There are no current, nor in the past ten years have there been any, legal proceedings involving any director or executive officer related to, among others: (i) federal bankruptcy, (ii) criminal proceedings, (iii) federal or state securities laws, (iv) any judgment, decree or order enjoining a director or officer from acting as an investment advisor, broker or dealer of securities or engaging in any type of business practice, (v) proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business activity or (vi) any disciplinary sanctions or orders imposed by stock, commodities or derivatives exchange or other self-regulatory organization.
Board Leadership Structure
One class of the Board is elected annually, and each class of directors stands for election every three years. TheOur Board is comprised of eight directors, one of whom is an executive officer and seven of whom were affirmatively determined by the Board to be independent, meeting 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. Commencing on May 18, 2015, the date of the Annual Meeting, our Board will be comprised of seven directors: one non-independent member, Dr. Scarlett, our Chief Executive Officer, and six members who have been affirmatively determined by the Board to be independent, meeting the objective requirements set forth by the SEC and NASDAQ, and having no relationship direct or indirect, to the CompanyGeron other than as stockholders or through their service on the Board.
Board Leadership Structure
The Board has authorized ninean independent Chair, Dr. Huh, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to serve; thereset meeting agendas and to determine materials to be distributed to the Board. Accordingly, the Board Chair has substantial ability to shape the work of the Board. We believe that separation of the positions of Board Chair and Chief Executive Officer reinforces the independence of the Board in its oversight of the business and affairs of Geron. As a result, we believe that having an independent Board Chair enhances the effectiveness of the Board as a whole. In addition, we believe that having an independent Board Chair creates an environment that is currently one vacancy.more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of Geron and our stockholders.
The role of Chairman of the Board historically has been separate from the Chief Executive Officer of the Company. The Board has determined that its structure is appropriate to fulfill its duties effectively and efficiently, so that our business receives the undivided attention of the Chief Executive Officer.
In February 2011, with the appointment of David Greenwood as interim Chief Executive Officer, the Board elected to change the Board leadership structure and created two new positions – an Executive Chairman and a Lead Independent Director. Dr. Huh was appointed Executive Chairman (serving as an employee), and Dr. Barkas, formerly the Chairman of the Board, was appointed Lead Independent Director. In September 2011, the Board appointed Dr. Scarlett as Chief Executive Officer, and resumed its previous leadership structure of maintaining solely a Chairman of the Board, Dr. Huh, who no longer serves as an employee.
The Board has determined that its structure is appropriate to fulfill its duties effectively and efficiently, so that our Chief Executive Officer can focus on leading our Company, while the Chairman can focus on leading the Board in overseeing management. The Board regularly meets in executive sessionsessions without the presence of the non-independent directorsdirector or management.
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 canmay 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 the Company’sGeron’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 the Company’sour 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 the Company’sGeron’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 the Company’sour financial reporting processes and annual audit of the Company’sGeron’s financial statements, the Audit Committee also reviews with the independent auditors and the Company’s management the adequacy and effectiveness of the Company’sour policies and procedures to assess, monitor and manage business risk and the Company’sGeron’s ethical compliance program. The Audit Committee takes the appropriate actions to set the overall corporate “tone”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 the Company’sGeron’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.
Compensation Risk Assessment
The Compensation Committee annually evaluates the Company’s compensation elements of base salary, annual incentive awards, long-term incentive awards, severance and change in control benefits, other benefits and the Company’s compensation philosophy generally as it relates to all employees. The Compensation Committee reviews the following elements of the Company’s compensation practices that balance the Company’s compensation programs to mitigate the risks associated with the Company’s compensation practices:
The Compensation Committee has reviewed the Company’s compensation policies and practices as it relates 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 the Company.
Board Committees and Meetings
It is Geron’s policy to encourage directors to attend annual meetings of stockholders. All of our current directors attended our 2014 Annual Meeting. During the fiscal year ended December 31, 2011,2014, the Board held 15 meetings and acted by unanimous written consent on two occasions.nine meetings. The Board has an Audit Committee, a Compensation Committee, a Stock Option Committee, and a Nominating and Corporate Governance Committee. During the fiscal year ended December 31, 2011,2014, each of the incumbent directors attended at least 95%75% of the aggregate number of meetings of the Board and the committees on which the director served.served, held during the portion of the last fiscal year for which he or she was a director or committee member.
Audit Committee
The Audit Committee, which is comprised of Ms. Eastham, Mr. Bradbury and Messrs. Fritzky and Kiley,Dr. Lawlis, met eightseven times in 2011.2014. All of the members of the Audit Committee are, “independent,”“independent” as that term is definedrequired by NASDAQ Rule 5605(a)5605(c)(2)(A). The Board has determined that all of the members of the Audit Committee are financially literate and that at least one membertwo members of the Audit Committee, Ms. Eastham hasand Mr. Bradbury, have accounting and financial management expertise that qualifies hereach as an “Audit Committee Financial Expert,” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated by the SEC. The Audit Committee’s responsibilities include: (i) recommending the selection of the Company’ssole authority to select, oversee and replace Geron’s independent registered public accounting firm to the Board and pre-approval ofpre-approve any fees paid to such firm, (ii) consulting with the independent auditors with regard 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 the Company’sGeron’s internal controls. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ. A copy of the Audit Committee Chartercharter is available on the Internetour website at http://www.geron.com. See more information about the Audit Committee in the Audit Committee report on page 54.50.
Compensation Committee
The Compensation Committee, which is comprised of Drs. Hofstaetter, Lawlis (who joined in March 2012) and Spiegel, met seven times in 20112014. Dr. Hofstaetter will retire from the Board and acted by unanimous written consent on seven occasions. Priorthe Compensation Committee, and the Board has appointed Ms. Eastham to his death in November 2011, Dr. Barkas served on the Compensation Committee, in 2011. Eacheach case effective as of the date of our Annual Meeting, and thereafter our Compensation Committee will be comprised of Drs. Lawlis and Spiegel and Ms. Eastham. All of the current members of the Compensation Committee in 2014 are, and Ms. Eastham, who will join the Compensation Committee on the date of the Annual Meeting, is “independent,” as that term is definedrequired by NASDAQ RuleRules 5605(a)(2) and 5605(d)(2). In determining whether Drs. Hofstaetter, Lawlis and Spiegel and Ms. Eastham are 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 makesCommittee’s responsibilities include making recommendations concerning salaries and incentive compensation administers theof executive officers, administering Geron’s incentive compensation and benefit plans, of the Company, and performsperforming 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 the SEC and NASDAQ. A copy of the Compensation Committee charter is available on the Internetour website at http://www.geron.com. The
Under its charter, the Compensation Committee utilizedhas 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 consultantsconsultant in evaluating certain executive compensation in 2011.compensation. For more information aboutregarding the Compensation CommitteeCommittee’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—Analysis – Role of the Compensation Committee” on page 29.27. 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 2014, 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) of the Internal Revenue Code of 1986, as amended (the “Code”).
Compensation Committee Interlocks and Insider Participation
Drs. Barkas, Hofstaetter, Lawlis and Spiegel served on the Compensation Committee for the entire fiscal year ended December 31, 2011(except that Dr. Barkas passed away in November 2011). With the exception of Dr. Barkas’s term as acting President and Chief Executive Officer of the Company from March 1992 until May 1993, not2014. Not one of Drs. Barkas, Hofstaetter, Lawlis or Spiegel is a former or current officer or employee of Geron. Effective on the Company or anydate of its subsidiaries. In March 2012, in connection with his appointment to the Board,Annual Meeting, Dr. Lawlis was appointed toHofstaetter will retire from Compensation Committee, and Ms. Eastham will join the Compensation Committee. Ms. Eastham is not a former or current officer or employee of Geron. None of theour 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 the Company’sour Board or Compensation Committee.
Stock Option Committee
The Stock Option Committee was formed in December 1996 to provide timely option grants to employees and consultants (other than executive officers and directorsTable of the Company) and currently consists of two members, John Scarlett, Geron’s President and Chief Executive Officer, and Graham Cooper, Geron’s Executive Vice President, Finance and Business Development, and Chief Financial Officer. In 2011, the sole members of the Stock Option Committee were Thomas Okarma, David Greenwood and Dr. Scarlett (beginning in September 2011). Concurrently with the Compensation Committee, the Stock Option Committee has limited authority to administer the Company’s 2011 Incentive Award Plan. The Stock Option Committee currently has the authority to grant equity awards for up to 100,000 shares of Common Stock only to employees (other than executive officers and directors of the Company) and consultants in accordance with procedures approved by the Board. The Stock Option Committee acted by written consent on 12 occasions during 2011.Contents
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee was renamed in May 2011 in order to expand itsCommittee’s responsibilities to include overseeing all aspects of our corporate governance functions on behalf of the Board; developing, reviewing and recommending to the Board corporate governance guidelines and principles applicable to the Company; andGeron, making recommendations to the Board for candidates to be nominated for election or re-election as a director by the stockholders or by the Board.Board and the corporate governance functions described in the Nominating and Corporate Governance Committee’s charter. The current members of the Nominating and Corporate Governance Committee are Mr. FritzkyMs. Eastham and Ms. Eastham. BothDrs. Molineaux and Huh. The members of the Nominating and Corporate Governance Committee are “independent” as defined in NASDAQ Rule 5605(a)(2). Prior to his death in November 2011, Dr. Barkas served on the Nominating and Corporate Governance Committee in 2011. The Nominating and Corporate Governance Committee met on fourtwo occasions during 2011.2014. 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 potential directors. The Nominating and Corporate Governance Committee will investigate, evaluate and interview, as appropriate, a director candidate with regard to his or her individual characteristics as well as how those characteristics fit with the needs of the Board as a whole. 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 the Internetour website at http://www.geron.com. Specific qualifications and the process for identificationidentifying and recommendation ofrecommending director candidates are provided in more detail under the section entitled “Stockholder Nominations and Proposals for 2016 Annual Meeting” on page 58.
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 http://www.geron.com and to any stockholder otherwise requesting a copy. All our employees, officers, and directors, including the 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 directors or executive officers, will also 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.
In keeping with the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures for the receipt and handling of complaints received by the Companyus regarding accounting, internal accounting controls or auditing matters. Contact information for the Chairperson of the Audit Committee has been distributed to all employees to allow for the confidential, anonymous submission by itsour employees of concerns regarding accounting or auditing matters.
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 particular Board member, and delivering the communication in person or mailing it to: Board of Directors, c/o Stephen N. Rosenfield, Corporate Secretary, Geron Corporation, 230 Constitution149 Commonwealth Drive, Suite 2070, Menlo Park, CA 94025. All mail addressed in this manner will be delivered to the Chair or Chairs of the 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 means of which stockholders may communicate with the Board or its members. Please refer to our website for any changes to this process.
Cash Compensation
During 2011, annual cash compensation for non-employee directors was adjusted to reflectIn March 2014, the change in board leadership structure. In February 2011, with the appointment of an interim Chief Executive Officer,Compensation Committee recommended and the Board electedadopted a Non-Employee Director Compensation Policy (the “Director Compensation Policy”) that outlines cash and equity compensation automatically payable to change the Board leadership structure and created two new positions – an Executive Chairman and a Lead Independent Director. Dr. Huh was appointed Executive Chairman and Dr. Barkas, formerly the Chairmannon-employee members of the Board, was appointed Lead Independent Director. In September 2011,unless such non-employee director declines receipt of such cash or equity compensation by written notice to us. Based on their evaluation, Radford did not recommend any changes to the Board appointed a new Chief Executive Officercompensation arrangements for the Company which led the Board to resume its previous leadership structure of maintaining solely a Chairman of the Board, who is currently Dr. Huh.our non-employee directors in 2014. The following table describes the annual cash compensation applicable to each role performed by non-employee directors forin 2014:
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 |
(1) Committee Chair does not also receive additional Committee member compensation.
In 2014, the specified time periods in 2011:
May 2010 – Mar 2011 | Apr 2011 – Sept 2011 | Sept 2011 – Dec 2011 | |||||
Role | Annual Retainer | Annual Retainer | Annual Retainer | ||||
Board member | $20,000 | $20,000 | $20,000 | ||||
Chairman of the Board | + $10,000 | n/a | + $40,000 | ||||
Lead Independent Director | n/a | + $20,000 | n/a | ||||
Executive Chairman(1) | n/a | $250,000(1) | n/a | ||||
Audit Committee Chair | + $10,000 | + $15,000 | + $15,000 | ||||
Compensation Committee Chair | + $5,000 | + $7,500 | + $7,500 | ||||
Nominating and Corporate Governance | |||||||
Committee Chair | + $5,000 | + $7,500 | + $7,500 |
Annual non-employee director cash compensation is payable on the date of the annual meeting of stockholders with respect to the preceding 12-month period (or a pro rata portion of such amount if such director served for less than a full year),was paid quarterly in arrears in cash, or, at each director’s election, in fully vested shares of our Common Stock grantedissued under the 2006 Directors’ Stock Option2011 Plan (the “2006 Directors Plan”) based on the closing price of our Common Stock on the NASDAQ Global Select Market on the annual meeting date.date retainers would have otherwise been paid.
In addition toAdditionally, under the above annual cash compensation,Director Compensation Policy, non-employee directors also were eligible to receive the following:
Additionally, directors are eligible to receive equity grants, as more fully described below. The per-meeting compensation under (i) and (ii) above is payable in cash within ten business days after each meeting.
In March 2012, the Board engaged compensation consultants from Radford to conduct a comprehensive analysis of non-employee director compensation in comparison to industry practices. As a result of this analysis, and Radford’s recommendation, the Board adjusted its annual cash compensation to the following:
Effective April 2012 | Effective April 2012 | |||||||
Role | Base Retainer | Additional Retainer | ||||||
Board member | $42,500 | |||||||
Chairman of the Board | $ | 30,000 | ||||||
Audit Committee Chair | $ | 25,000 | ||||||
Compensation Committee Chair | $ | 15,000 | ||||||
Nominating and Corporate Governance Committee Chair | $ | 10,000 | ||||||
Audit Committee member | $ | 12,500 | ||||||
Compensation Committee member | $ | 7,500 | ||||||
Nominating and Corporate Governance Committee member | $ | 5,000 |
The annual cash compensation is paid quarterly in arrears and may be payable in cash, or, at each director’s election, in fully vested shares of Common Stock grantedbelow under the 2006 Directors Plan based onsub-section entitled “Equity Compensation.” Non-employee directors also receive reimbursement for out-of-pocket expenses incurred in connection with attendance at meetings of the closing price of our Common Stock on the NASDAQ Global Select Market.
Table of ContentsBoard.
Director Compensation Table
The following table provides compensation information for the fiscal year ended December 31, 20112014 (“fiscal 2014”), for each non-employee member of the Board.Board who served in such capacity during fiscal 2014. Dr. Scarlett does not receive any compensation for his Board service.
Fees | |||||||||||||||||
Earned | |||||||||||||||||
or Paid in | Stock | Option | |||||||||||||||
Cash | Bonus | Awards | Awards | Total | |||||||||||||
Director | ($) | ($) | ($)(1) | ($)(1) | ($) | ||||||||||||
Barkas, Alexander(3) | $ | 59,250 | $ | — | $ | 187,040 | $ | 176,339 | $ | 422,629 | |||||||
Eastham, Karin | $ | 47,250 | $ | — | $ | 44,190 | $ | 87,516 | $ | 178,956 | |||||||
Fritzky, Edward | $ | 35,500 | (2) | $ | — | $ | 83,470 | $ | 37,128 | $ | 156,098 | ||||||
Hofstaetter, Thomas | $ | 35,000 | (2) | $ | — | $ | 29,460 | $ | 71,604 | $ | 136,064 | ||||||
Homcy, Charles(4) | $ | 29,000 | $ | — | $ | 24,550 | $ | 26,520 | $ | 80,070 | |||||||
Huh, Hoyoung(5) | $ | 181,090 | $ | 71,800 | $ | 321,188 | $ | 386,061 | $ | 960,139 | |||||||
Kiley, Thomas | $ | 36,000 | (2) | $ | — | $ | 78,560 | $ | 31,824 | $ | 146,384 | ||||||
Spiegel, Robert | $ | 35,500 | (2) | $ | — | $ | 24,550 | $ | 66,300 | $ | 126,350 |
Fees | |||||||||||
Earned | |||||||||||
or Paid in | Option | ||||||||||
Cash | Awards | Total | |||||||||
Director | ($) | ($)(1) | ($) | ||||||||
Bradbury, Daniel | $ | 54,999 | (2) | $ | 48,951 | $ | 103,950 | ||||
Eastham, Karin | $ | 72,499 | (3) | $ | 48,951 | $ | 121,450 | ||||
Hofstaetter, Thomas(4) | $ | 50,000 | $ | 48,951 | $ | 98,951 | |||||
Huh, Hoyoung | $ | 77,499 | (5) | $ | 48,951 | $ | 126,450 | ||||
Lawlis, V. Bryan | $ | 62,500 | $ | 48,951 | $ | 111,451 | |||||
Molineaux, Susan | $ | 52,499 | (6) | $ | 48,951 | $ | 101,450 | ||||
Spiegel, Robert | $ | 57,501 | (7) | $ | 48,951 | $ | 106,452 |
(1) | Amounts represent the aggregate grant date fair value of stock |
the year ended December 31, | ||
(2) | ||
(3) | ||
(4) | Dr. | |
(5) | Includes $19,374 in fees paid in stock in lieu of cash through the issuance of an aggregate 9,270 shares of Geron Common Stock under the 2011 Plan. | |
(6) | ||
(7) | Includes $35,938 in fees paid in stock in lieu of cash through the issuance of an |
Equity Compensation
Terms of Awards
AsPursuant to the Director Compensation Policy, each of December 31,our non-employee directors is eligible for stock option grants on an annual basis or, for each person who first becomes a non-employee director, an initial stock option grant. Non-employee director stock options under the Director Compensation Policy are granted pursuant to the 2011 the 2006 Directors Plan provided for the automatic grant of the following types of equity awards:Plan.
First Option.Initial Grants. Each person who becomes a non-employee director, whether by election of theby Geron’s stockholders of the Company or by appointment by the Board to fill a vacancy, will automatically be granted an option to purchase 60,000 shares of Common Stock on the date such person first becomes a non-employee director (the “First Option”). The First Option shall vest annually over three years upon each anniversary date of appointment to the Board.
Subsequent Awards. Each non-employee director (other than the Chairman of the Board and any director receiving a First Option on the date of the annual meeting) will automatically be granted a subsequent option on the date of the Annual Meeting of Stockholders in each year during such director’s service on the Board (a “Subsequent Option”) to purchase 10,000 shares of Common Stock and a restricted stock award (a “Subsequent Stock Award”) of 5,000 shares of Common Stock. In the case of the Chairman of the Board, the Subsequent Option will be for 20,000 shares of Common Stock and the Subsequent Stock Award shall be for 10,000 shares of Common Stock.
Committee Chair Service Awards. On the date of each Annual Meeting of Stockholders, the Chairman of the Audit Committee will automatically be granted an option to purchase 8,000 shares of Common Stock (a “Committee Chair Service Option”), and a restricted stock award (a “Committee Chair Service Stock Award”) of 4,000 shares of Common Stock. The Committee Chair Service Option for the Compensation Committee Chairman and the Nominating and Corporate Governance Committee Chairman shall be for 4,000 shares of Common Stock and the Committee Chair Service Stock Award shall be for 2,000 shares of Common Stock.
Committee Service Awards. On the date of each Annual Meeting of Stockholders, each non-employee director serving on the Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee, other than the respective Chairmen of those Committees, will automatically be granted an option to purchase 2,000 shares of Common Stock (a “Committee Service Option”) and a restricted stock award of 1,000 shares of Common Stock (a “Committee Service Stock Award”). There is currently no stock option grant or restricted stock award contemplated for participation on other committees.
The 2006 Directors Plan provides that each Subsequent Option, Committee Chair Service Option and Committee Service Option is fully vested on the date of grant. Each Subsequent Stock Award, Committee Chair Service Stock Award and Committee Service Stock Award vests annually in four equal installments over four years commencing on the date of grant and no payment shall be required from the non-employee director in order to receive the award.
Exercise Price and Term of Options. The exercise price of all stock options granted under the 2006 Directors Plan is equal to the fair market value of a share of our Common Stock on the NASDAQ Global Select Market on the date of grant of the option.
Restricted Stock and Restricted Stock Units. In addition to the automatic grant of restricted stock awards described above, the 2006 Directors Plan, as amended, also permits the discretionary grant of restricted stock and restricted stock units.
In connection with the review of non-employee director compensation conducted in March 2012, and based on the recommendation of Radford, the compensation consultant to the Compensation Committee, the Board amended the 2006 Directors Plan to replace the First Option, the Subsequent Option, the Subsequent Stock Award, the Committee Chair Service Option, the Committee Chair Service Stock Award, the Committee Service Option and the Committee Service Stock Award with the following option grants to non-employee directors. All other provisions of the 2006 Directors Plan remain unchanged.
First Director Option. Each person who becomes a non-employee director, whether by election of the stockholders of the Company or by appointment by the Board to fill a vacancy, will automatically be granted an option to purchase 70,000 shares of Common Stock on the date such person first becomes a non-employee director (the “First Director Option”“Initial Grant”). The First Director Option shallInitial Grant will vest annually over three years upon each anniversary date of appointment to the Board.
Annual Grants. Subsequent Director Option. EachOn the date of each annual meeting of our stockholders, each non-employee director (other than any director receiving a First Optionan Initial Grant on the date of thesuch 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 a subsequentan option on the date of the Annual Meeting of Stockholders in each year during such director’s service on the Board (a “Subsequent Director Option”) to purchase 35,000 shares of Common Stock.Stock (the “Annual Grant”). The SubsequentAnnual 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, subject to the non-employee director’s continuous service.
Exercise Price and Term of Options. The exercise price of all options granted under the 2011 Plan is equal to the fair market value of a share of our Common Stock on the NASDAQ Global Select Market on the date of grant of the option. Options granted under the 2011 Plan have a term of ten years from the date of grant, unless terminated earlier.
Exercise Period Post-Termination. The options issued pursuant to the 2011 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 an additional 36 months) remain exercisable for up to a 36 month period.
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 granted under the 2011 Plan in 2014.
In February 2015, the Director Option shall vest annually over one year.Compensation Policy was amended to establish a procedure for non-employee directors to elect payments of annual director compensation in cash or equity. To receive payment of annual director compensation in equity in lieu of cash, a non-employee director must elect such payment method in January each calendar year during an open trading window, and such election will be applied to each quarter’s payment during the calendar year of such election.
Effect of Certain Corporate Events
In2011 Plan. As set forth in each option agreement under the 2011 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 2011 Plan and described below under “Compensation Discussion and Analysis – Severance and Change in Control Benefits – Equity Plans”).
2006 Directors’ Plan. Prior to March 2014, equity awards were granted under the 2006 Directors’ Plan. Under the 2006 Directors’ Plan, in the event of the dissolution or liquidation 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-employee 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 to the effectiveness of such dissolution, liquidation, sale, merger or reorganization, at the end of which time the option shall terminate, or shall receive a substitute option with comparable terms, as to an equivalent number of shares of stock of the corporation succeeding the Company or acquiring its business by reason of such dissolution, liquidation, sale, merger, consolidation or reorganization. In such an event, any unvested restricted stock awards shall immediately vest unless an award with comparable terms, as to an equivalent number of shares of stock of the corporation succeeding the Company or acquiring its business by reason of such dissolution, liquidation, sale, merger, consolidation or reorganization is substituted.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 to the date of such dissolution, liquidation, sale, merger, consolidation or reorganization.
20112014 Option Grants
The following table sets forth the following information with respect to non-employee directors (eight(seven persons) for the fiscal year ended December 31, 2011:2014: (i) stock options granted under the 2006 Directors Plan; (ii) stock awards granted under the 2006 Directors2011 Plan; and (iii)(ii) the grant date fair value of stock options and stock awards granted. As discussed above, the executive officers and employees of the Company are not eligible for grants under the 2006 Directors Plan. In 2011, additional stock options and restricted stock awards were granted to certain directors resulting from the leadership structure changes and in recognition of options that had expired unexercised during the year and stock awards with vesting based on achievement of certain performance milestones were granted to directors from the 2011 Incentive Award Plan. Also in May 2011, the vesting of certain outstanding restricted stock awards and the exercise periods of certain outstanding stock options held by Dr. Homcy were modified in connection with his retirement from the Board.
In May 2011, each director, except for Drs. Barkas, Homcy and Huh, received performance-based restricted stock awards (“PSAs”) covering 5,000 shares in the aggregate that vest during a three-year performance period based on our achievement of each of the following objectives:
For Dr. Barkas, the performance-based restricted stock awards were 5,000 shares for each of the milestones noted above and for Dr. Huh, the awards were 10,000 shares for each of the milestones noted above.
Option | Stock | ||||||||||||||||||||
Awards | Awards | Grant Date Fair Value of Option | Option Awards | ||||||||||||||||||
Granted | Granted | and Stock Awards Granted | Granted | Grant Date Fair Value of | |||||||||||||||||
Grant | During 2011 | During 2011 | During 2011 | Grant | During 2014 | Option Awards Granted | |||||||||||||||
Director | Date | (#) | (#) | ($)(1) | Date | (#) | During 2014 ($)(1) | ||||||||||||||
Barkas, Alexander | 3/9/11 | (2) | 37,500 | — | $ | 102,083 | |||||||||||||||
3/9/11 | (3) | — | 18,750 | $ | 93,750 | ||||||||||||||||
5/11/11 | (4) | 28,000 | — | $ | 74,256 | ||||||||||||||||
5/11/11 | (5) | — | 14,000 | $ | 68,740 | ||||||||||||||||
5/11/11 | (6) | — | 5,000 | $ | 24,550 | ||||||||||||||||
5/20/11 | (7) | — | 5,000 | $ | 23,250 | ||||||||||||||||
5/20/11 | (8) | — | 5,000 | $ | 23,250 | ||||||||||||||||
Bradbury, Daniel | Bradbury, Daniel | 5/20/14 | (2) | 35,000 | $48,951 | ||||||||||||||||
Eastham, Karin | Eastham, Karin | 5/11/11 | (4) | 18,000 | — | $ | 47,736 | Eastham, Karin | 5/20/14 | (2) | 35,000 | $48,951 | |||||||||
5/11/11 | (9) | 15,000 | — | $ | 39,780 | ||||||||||||||||
5/11/11 | (5) | — | 9,000 | $ | 44,190 | ||||||||||||||||
5/20/11 | (7) | — | 2,500 | $ | 11,625 | ||||||||||||||||
5/20/11 | (8) | — | 2,500 | $ | 11,625 | ||||||||||||||||
Hofstaetter, Thomas(3) | Hofstaetter, Thomas(3) | 5/20/14 | (2) | 35,000 | $48,951 | ||||||||||||||||
Huh, Hoyoung | Huh, Hoyoung | 5/20/14 | (2) | 35,000 | $48,951 | ||||||||||||||||
Lawlis, V. Bryan | Lawlis, V. Bryan | 5/20/14 | (2) | 35,000 | $48,951 | ||||||||||||||||
Molineaux, Susan | Molineaux, Susan | 5/20/14 | (2) | 35,000 | $48,951 | ||||||||||||||||
Spiegel, Robert | Spiegel, Robert | 5/20/14 | (2) | 35,000 | $48,951 |
Option | Stock | ||||||||||||
Awards | Awards | Grant Date Fair Value of Option | |||||||||||
Granted | Granted | and Stock Awards Granted | |||||||||||
Grant | During 2011 | During 2011 | During 2011 | ||||||||||
Director | Date | (#) | (#) | ($)(1) | |||||||||
Fritzky, Edward | 5/11/11 | (4) | 14,000 | — | $ | 37,128 | |||||||
5/11/11 | (5) | — | 7,000 | $ | 34,370 | ||||||||
5/11/11 | (10) | — | 7,500 | $ | 36,825 | ||||||||
5/11/11 | (11) | — | 2,500 | $ | 12,275 | ||||||||
5/11/11 | (12) | — | 4,073 | $ | 20,000 | ||||||||
5/20/11 | (7) | — | 2,500 | $ | 11,625 | ||||||||
5/20/11 | (8) | — | 2,500 | $ | 11,625 | ||||||||
Hofstaetter, Thomas | 5/11/11 | (4) | 12,000 | — | $ | 31,824 | |||||||
5/11/11 | (13) | 15,000 | — | $ | 39,780 | ||||||||
5/11/11 | (5) | — | 6,000 | $ | 29,460 | ||||||||
5/11/11 | (12) | — | 4,073 | $ | 20,000 | ||||||||
5/20/11 | (7) | — | 2,500 | $ | 11,625 | ||||||||
5/20/11 | (8) | — | 2,500 | $ | 11,625 | ||||||||
Homcy, Charles | 5/11/11 | (4) | 10,000 | — | $ | 26,520 | |||||||
5/11/11 | (5) | — | 5,000 | $ | 24,550 | ||||||||
Huh, Hoyoung | 3/9/11 | (2) | 75,000 | — | $ | 204,165 | |||||||
3/9/11 | (3) | — | 37,500 | $ | 187,500 | ||||||||
5/20/11 | (14) | 57,500 | — | $ | 144,262 | ||||||||
5/20/11 | (15) | 15,000 | — | $ | 37,634 | ||||||||
5/20/11 | (16) | — | 28,750 | $ | 133,688 | ||||||||
5/20/11 | (7) | — | 10,000 | $ | 46,500 | ||||||||
5/20/11 | (8) | — | 10,000 | $ | 46,500 | ||||||||
Kiley, Thomas | 5/11/11 | (4) | 12,000 | — | $ | 31,824 | |||||||
5/11/11 | (5) | — | 6,000 | $ | 29,460 | ||||||||
5/11/11 | (10) | — | 7,500 | $ | 36,825 | ||||||||
5/11/11 | (17) | — | 2,500 | $ | 12,275 | ||||||||
5/11/11 | (12) | — | 4,073 | $ | 20,000 | ||||||||
5/20/11 | (7) | — | 2,500 | $ | 11,625 | ||||||||
5/20/11 | (8) | — | 2,500 | $ | 11,625 | ||||||||
Spiegel, Robert | 5/11/11 | (4) | 10,000 | — | $ | 26,520 | |||||||
5/11/11 | (15) | 15,000 | — | $ | 39,780 | ||||||||
5/11/11 | (5) | — | 5,000 | $ | 24,550 | ||||||||
5/11/11 | (12) | — | 2,037 | $ | 10,000 | ||||||||
5/20/11 | (7) | — | 2,500 | $ | 11,625 | ||||||||
5/20/11 | (8) | — | 2,500 | $ | 11,625 |
(1) | Amounts represent the grant date fair value of each stock | |
(2) | Stock option vests | |
(3) |
Outstanding Equity Awards at Fiscal Year-End for Non-Employee Directors
The following table sets forth stock options and restricted stock awards having time-based vesting, outstanding for each non-employee director as of December 31, 2011.2014.
Option Awards Outstanding | Stock Awards Outstanding | ||||||||||||
as of December 31, 2011 | as of December 31, 2011 | ||||||||||||
Director | Exercisable (#) | Unexercisable (#) | Unvested (#) | ||||||||||
Barkas, Alexander | 490,656 | — | — | ||||||||||
Eastham, Karin | 90,200 | 20,300 | 68,375 | ||||||||||
Fritzky, Edward | 206,292 | 1,458 | 76,373 | ||||||||||
Hofstaetter, Thomas | 36,375 | 40,000 | 56,703 | ||||||||||
Homcy, Charles | 115,000 | — | — | ||||||||||
Huh, Hoyoung | 44,010 | 148,490 | 131,250 | ||||||||||
Kiley, Thomas | 137,625 | 1,875 | 74,436 | ||||||||||
Spiegel, Robert | 30,000 | 40,000 | 55,000 |
Option Awards Outstanding | |||||||||||
as of December 31, 2014 | Unvested Restricted Stock Awards | ||||||||||
Director | Exercisable (#) | Unexercisable (#) | Outstanding as of December 31, 2014 (#) | ||||||||
Bradbury, Daniel | 81,667 | 58,333 | — | ||||||||
Eastham, Karin | 180,500 | 35,000 | 2,250 | ||||||||
Hofstaetter, Thomas(1) | 146,375 | 35,000 | 1,500 | ||||||||
Huh, Hoyoung | 253,385 | 44,115 | 16,562 | ||||||||
Lawlis, V. Bryan | 116,667 | 58,333 | — | ||||||||
Molineaux, Susan | 81,667 | 58,333 | — | ||||||||
Spiegel, Robert | 140,000 | 35,000 | 1,250 |
Table(1) Dr. Hofstaetter is retiring from our Board effective as of Contentsthe date of the Annual Meeting.
APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TOINCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board has adopted, subject to stockholder approval, an amendment to our Restated Certificate of Incorporation to increase our authorized number of shares of Common Stock from 200,000,000 shares to 300,000,000 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. If the amendment is adopted, it will become effective upon filing of a Certificate of Amendment to our Restated Certificate of Incorporation, in substantially the form of Appendix 1 hereto, with the Secretary of State of the State of Delaware.
In addition to the 132,259,325 shares of Common Stock outstanding as of March 20, 2012, the Board has reserved 29,709,037 shares for issuance upon exercise of options and rights granted under our stock option and stock purchase plans and up to approximately 7,006,305 shares of Common Stock which may be issued upon exercise of warrants and future milestone obligations.
Although at present the Board has no plans to issue additional shares of Common Stock other than as described above, it desires to have such shares available to provide additional flexibility to use its capital stock for business and financial purposes in the future. The additional shares may be used, without further stockholder approval, for various purposes including, without limitation, raising capital, providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies and expanding our business through the acquisition of other businesses or technologies.
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.
Vote Required and Board Recommendation
Stockholders are requested in this proposal to approve this amendment to our Restated Certificate of Incorporation. The affirmative vote of a majority of the outstanding shares of Common Stock will be required to approve this proposal. Accordingly, proxies reflecting abstentions or broker non-votes, if any, as to this proposal will be treated as votes against the amendment.
The Board of Directors Unanimously Recommends ThatStockholders VoteFOR Proposal 2
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 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.” 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.
The Compensation Committee continually reviews the compensation program for our executive officers, including the Named Executive Officers, to determine whether the compensation 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 2014 Annual Meeting of Stockholders (where approximately 81.6% of the stockholders voting on the advisory proposal supported the proposal). We believe the outcome of the 2014 “say-on-pay” advisory vote reflects our stockholders’ support of our executive compensation approach, specifically the changes we implemented in the previous year, as discussed below. Accordingly, no significant design changes were made to the executive compensation program due to the 2014 “say-on-pay” advisory vote. We value 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.
Based on feedback from stockholders in 2013 and early 2014 and a low approval rate for the “say-on-pay” proposal at the 2013 Annual Meeting of Stockholders, the Compensation Committee conducted a comprehensive stockholder outreach program in 2013 to gain a full understanding regarding the concerns of stockholders, 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” section of this Proxy Statement, Geron’s executive compensation strategy and structure is based on the following principles: a)designed to i) reward successful execution of business strategy; b)ii) attract and retain qualified talent;management; and c)iii) align management and stockholder interests. The executive compensation program is designed to achieve four primary objectives:
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 challenge of recruiting, motivating and retaining executive officer in an industry with much longer business cycles than other commercial industries, and evolving compensation governance and best practices. In reconciling these areas, the Compensation Committee strives to act in the long-term best interests of Geron and our stockholders. As described in the Companysection entitled “Compensation Discussion and its stockholdersAnalysis”, we structured our 2014 executive compensation program to emphasize pay for performance and to be competitive with the companies with whom we compete for executive talent. The Compensation Committee believes that Geron’s executive compensation programs areprogram is strongly aligned with the long-term interests of our stockholders. In determining whether to approve this proposal,Please read the Compensation Committee believes that stockholders should consider the following:
Table of ContentsOfficers.
Advisory Vote and Board Recommendation
We request stockholder approval of the 20112014 compensation of our Named Executive Officers as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules (whichwhich disclosure includes the section entitled “Compensation Discussion and Analysis,” and the compensation tables and theaccompanying narrative disclosures that accompanywithin the compensation tables within thesection entitled “Executive Compensation Tables” section of this Proxy Statement).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 20122015 Annual Meeting of Stockholders.”
Approval of the above resolution requires the affirmative vote of the holders of a majority of the votes castshares present in person or represented by proxy at this 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 disprovedisapprove the Board’s recommendation. As this is an advisory vote, the outcome of the vote is non-binding toon 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, the next “say-on-pay” advisory vote will be held at the 20132016 Annual Meeting of Stockholders.
The Board of Directors Unanimously Recommends That
Stockholders VoteFOR Proposal 32
COMPENSATION DISCUSSION AND ANALYSIS
Overview
This Compensation Discussion and Analysis describes oursection presents and discusses executive compensation program as it relatespolicies and practices and the compensation decisions relating to our Namedthe “Named Executive Officers asOfficers” (as defined below. below) for the 2014 fiscal year, and includes the following:
● | an executive summary of the compensation program for the Named Executive Officers; |
● | an overview of the executive compensation program; |
● | the role of the Compensation Committee; |
● | a detailed discussion and analysis of the Compensation Committee’s specific decisions about the 2014 compensation for the Named Executive Officers; |
● | a description of the employment agreements for the Named Executive Officers; and |
● | a summary of the potential severance benefits for the Named Executive Officers in the event of a change in control. |
In addition to the historical information contained herein, this Compensation Discussion and Analysis we present and discuss:
This Compensation Discussion and Analysisalso contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs.decisions. The actual compensation programsprogram that we adopt in the future may differ materially from currently planned programsthe current program summarized in this discussion.
The following executive officers are collectively referred to herein as the Named Executive Officers:
● | Dr. John A. Scarlett, President and Chief Executive Officer; |
● | 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; |
● | Dr. Andrew J. Grethlein, Executive Vice President, Development and Technical Operations; and |
● | Mr. Stephen N. Rosenfield, Executive Vice President, General Counsel and Corporate Secretary. |
Executive Summary
2011Effect of Prior Year Stockholder Advisory Vote on Executive Compensation
At our 2014 Annual Meeting of Stockholders held in May 2014, we sought an advisory vote from our stockholders regarding the compensation of our named executive officers (commonly referred to as a “say-on-pay” proposal). The 2014 “say-on-pay” proposal was a yearapproved, with approximately 81.6% of significant change forvotes cast supporting the Companyproposal. The Compensation Committee considers the results of the advisory vote as it narrowedcompletes its focusannual review of each pay element and the compensation packages provided to our Named Executive Officers and other executive officers. The Compensation Committee considered the oncology therapeutic areaoutcome of the 2014 “say-on–pay” vote and incorporateddid not make further changes to Geron’s executive compensation program for 2014 as a new management team. result of the vote.
Business Highlights that Impacted 2014 Compensation Decisions
In November 2011, we announced a decision2014, executive compensation decisions were highly influenced by retention challenges stemming from the significant uncertainty relating to focus exclusively on the developmentour future in light of our oncology programs. As a consequence, we discontinued furtherdependence on one product candidate, imetelstat, the need to motivate executive officers and employees to pursue new development of our stem cell programs and intend to divest these programsopportunities for imetelstat despite the continued challenges in 2012. The decision to narrow our technology and therapeutic focus was made after a strategic review of the costs, value inflection timelines and clinical, manufacturing and regulatory complexities associated with our research and clinical-stage assets. By narrowing our focus to the oncology therapeutic area, we anticipate having sufficient financial resources to reach important near-term oncology value inflection points for stockholders with minimal near-term financing requirements.
Even with the significant changes in management and strategic focus, the clinical development, ofespecially the Company’s lead oncology programs continued to advance in 2011. Two randomized Phase 2full clinical trials of imetelstat in solid tumors continued enrollment throughout 2011: a study in patients with metastatic breast cancer (B014) and a study in patients with advanced non-small cell lung cancer (B012). These two trials require that a sufficient number of progression events occur in order to perform the planned data analyses. We anticipate an accrual of such events that will allow us to report top-line data from these two Phase 2 trialshold placed by the end of 2012. Two single-arm Phase 2 trials ofUnited States Food and Drug Administration (the “FDA”) on our investigational new drug application (“IND”) for imetelstat in hematological malignancies were initiated in the first quarter of 20112014 and the competitive local market environment for qualified biotechnology employees. Accordingly, our 2014 goals were designed to evaluatefocus our resources and efforts on raising and maintaining adequate capital to support the impact of the drug on cancer progenitor cells: a study in patients with essential thrombocythemia (B015) and an exploratory study in patients with multiple myeloma (B013). Top-line data from these two trials are expected to be available by the end of 2012. Twothen-planned Phase 2 clinical trialstrial of GRN1005 were launchedimetelstat and achieving regulatory clearance to re-start clinical development of imetelstat in the fourth quarterUnited States (“U.S.”) for the treatment of 2011. Both trials, GRABM-B (GRN1005 Against Brain Metastases – Breast Cancer)hematologic myeloid malignancies. As a result, our 2014 activities centered on raising funds through an equity financing, managing our operating spend to conserve our cash resources, and GRABM-L (GRN1005 Against Brain Metastases – Lung Cancer),conducting extensive follow-up activities to collect, analyze and collate key nonclinical and clinical data, which were initiatedsubmitted to the FDA and led to the release of the full clinical hold on our IND for imetelstat.
Key 2014 company achievements included: i) raising approximately $96.8 million in December 2011. We expect top-line datanet proceeds in February 2014 from these trialsan underwritten public offering of Common Stock; ii) transfer to be availableGeron of the IND supporting the investigator-sponsored trial in myelofibrosis being conducted at Mayo Clinic (the “MF Pilot Study”) as well as sponsorship of MF Pilot Study; iii) removal of the full clinical hold by the end ofFDA on the second quarter of 2013.
The compensation decisionsCompany’s IND for imetelstat in 2011 were influenced by a challenging market environment for the Companylate October 2014; and the industry, the strategic decisioniv) executing an exclusive global collaboration and license agreement with Janssen Biotech, Inc. (“Janssen”) to focus exclusively on our oncology programsdevelop and management transitions during the year. Highlights of significant compensation actions include:
Executive Management Changes in 2011 and 2012
In February 2011, the Board implemented a new leadership structure for the Company by appointing: (i) Mr. Greenwood as President, Interim Chief Executive Officer, Chief Financial Officer, and a member of the Board, (ii) Hoyoung Huh, M.D., Ph.D., as Executive Chairman of the Board and (iii) Alexander E. Barkas, Ph.D., as Lead Independent Director of the Board. In conjunction with the implementation of the new leadership structure, Dr. Okarma, left the Company as President and Chief Executive Officer and as a member of the Board, effective February 8, 2011.
In September 2011, John A. Scarlett, M.D., was appointed Chief Executive Officer.
In connection with the November 2011 decision to discontinue the Company’s stem cell programs, a total of 66 positions were eliminated, which included positions held by Jane S. Lebkowski, Ph.D., Senior Vice President and Chief Scientific Officer, and Katharine E. Spink, Ph.D., Senior Vice President, Alliance Management and Cell Therapy Product Development. Drs. Lebkowski and Spink left the CompanyAnalysis – 2014 Corporate Goal Achievement Factor” on December 31, 2011.
Mr. Greenwood left the Company as President and Chief Financial Officer on December 31, 2011. In January 2012, Dr. Scarlett was appointed as President, in addition to his role as Chief Executive Officer. In January 2012, Graham K. Cooper was appointed Executive Vice President, Finance and Business Development, and Chief Financial Officer. Mr. Cooper will provide direction for all financial matters for Geron and be responsible for new business opportunities and investor relations for the Company.page 31.
ThisThe Compensation Committee and the Board evaluated our efforts and results of these key achievements in 2014 and determined that we exceeded our 2014 corporate goals. The Compensation Committee and the Board also determined that our Named Executive Officers, including our Chief Executive Officer, made crucial efforts towards achievement of these corporate goals, as well as leading individual, team, departmental and functional performance and achievements, despite challenges during the year.
Emphasis on Pay for Performance
We structure a significant portion of our executive officers’ total compensation to be variable, at risk and tied directly to our measurable performance. For 2014, 89.3% of our Chief Executive Officer’s total compensation was linked to performance, as reported in the “Summary Compensation Table”. “Total compensation” referred to in this Compensation Discussion and Analysis section discussesconsists of annual base salary, annual incentive bonus and the value of equity awards.
Our annual incentive bonus for our Chief Executive Officer is entirely dependent upon our achievement of annual corporate goals established for the year by the Board. Our annual incentive bonus for our other Named Executive Officers is dependent upon achievement of our annual corporate goals as well as each executive officer’s achievement against their individual goals and demonstration of our corporate values. None of our Named Executive Officers are entitled to guaranteed or minimum bonuses under our annual incentive bonus plan.
Our long-term incentive awards for 2014 consist of stock options, which only provide value if the market price of our stock increases and if the executive officer continues in our employment. Therefore, these awards strongly align our executive officers’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value, keeping the executive officers’ total compensation opportunity competitive and encouraging our executive officers to remain in the long-term employ of our Company.
The Compensation Committee believes that this structure, which puts a considerable proportion of the executive officers’ total compensation “at risk,” contingent on the appreciation of our Common Stock, achievement of specific corporate goals, and continued employment, strongly aligns the interests of our executive officers with those of our stockholders, ties their compensation to the most concrete measure of performance against critical corporate goals and promotes retention.
Market Positioning
The Compensation Committee actively reviews and assesses our executive compensation policiesprogram in light of the highly competitive employment environment in the San Francisco Bay Area, the challenge of recruiting, motivating and programs and the compensation decisions made in 2011 for the followingretaining executive officers collectively referredin an industry with much longer business cycles than other commercial industries, and evolving compensation governance and best practices.
The Compensation Committee utilizes Radford, an independent compensation consultant, to herein asassess our executive compensation program against market data. The Compensation Committee generally referenced total compensation in the “Named50thto 60thpercentile paid to executive officers in comparable positions and responsibilities in our peer group companies based on the market data provided by Radford, along with other factors, in setting our Named Executive Officers”:
Commitment to Compensation Governance
We are committed to having strong governance standards with respect to our compensation program, procedures and practices, which include:
● | 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 executive and equity compensation matters. |
Dr. Stephen M. Kelsey, Executive Vice President, HeadTable of Research & Development, and Chief MedicalContentsOfficer;
● | Responsible Internal Pay Equity.For 2014, our Chief Executive Officer’s total cash compensation was less than two times the average total cash compensation of our other Named Executive Officers, which reflects internal fairness and an important benchmark to avoid excessive compensation of the Chief Executive Officer. |
● | Limited Personal Benefits.Our executive officers are eligible for the same benefits as non-executive, salaried employees, and do not receive any personal benefits other than reimbursements for housing costs and travel expenses for Dr. Scarlett, our President and Chief Executive Officer, for the commute from his principal residence in Texas to our headquarters in Menlo Park, California. |
● | No Tax Gross-Ups on Compensation. None of our executive officers receive tax related gross-ups on any element of compensation. |
● | No Single-Trigger Change in Control Cash Benefits.Executive officer employment agreements and our Amended Severance Plan (as defined under the sub-section entitled “Severance and Change in Control Benefits”) permit payment of cash benefits in connection with a Change in Control (as defined under the sub-section entitled “Severance and Change in Control Benefits”) only if an executive officer’s position is terminated or the executive officer resigns due to a material adverse change in his or her employment terms. |
● | Clawback Terms.Executive officer employment agreements require that an executive officer forfeit his/her entire annual incentive bonus if we determine that such executive officer has engaged in any misconduct intended to affect the payment of his or her annual incentive bonus, or has otherwise engaged in any act or omission that would constitute cause for termination of his/her employment, as defined by his or her employment agreement. |
● | No Retirement Benefits.We do not offer any pension plans or health benefits during retirement. |
● | 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 executive officers, may not hedge the economic risk of, or pledge ownership of, our Common Stock. |
Overview of Ourthe Executive Compensation Program
Philosophy &and Objectives
The overall objective of our compensation program is to support our business objectives by attracting, retaining and engaging the highest caliber of employees, including executive officers, and other employees, while maintaining a fiscally responsible position in a highly competitive employment environment. Consistent with this overall objective, the goals of ourthe executive compensation program are to:
● | pay appropriate cash and equity compensation to executive officers for retention purposes during periods of significant uncertainty (e.g., in the first quarter of 2014, the FDA placed the IND for the Company’s sole product candidate, imetelstat, on full clinical hold); |
● | attract and retain executive officers that can capably lead by incentivizing them with competitive cash and non-cash compensation opportunities; |
● | enable a high performing culture by employing and retaining successful and experienced executive officers; |
● | encourage and inspire executive officers to achieve key corporate strategic and financial objectives by linking incentive award opportunities to the achievement of individual and corporate goals; and |
● | align the interests of executive officers with stockholders by motivating executive officers to focus on achievements that will result in an increase in value for our stockholders and reward executive officers for excellence in performance. |
OurThe Compensation Committee reviews and approves allthe compensation of our compensation policies relating to executive officers (except for the Chief Executive Officer, whose compensation is approved by the Board)Board upon recommendation from the Compensation Committee), including executive officer salaries, bonusannual incentive bonuses, equity awards and equity incentive compensation.any other benefits. As discussed in further detail below, our 2011the 2014 compensation program for ourthe Named Executive Officers (as defined above) consisted of, and was intended to strike an appropriate balance among base salary, annual cash incentive bonuses and equity incentive awards. The Compensation Committee strives to act in the best interestinterests of the CompanyGeron and itsour stockholders, as well as to ensure that the elements of compensation do not, individually or in the aggregate, encourage excessive risk taking.
Components
The components of ourthe executive compensation program consist primarily of base salary, annual cash incentive bonuses, equity awards and broad-based benefits. To provide competitive total direct compensation to our executive officers, we utilize a mix of cash (base salaries and annual incentives)incentive bonuses) and long-term incentives (equity awards) that are competitive with the market. The Compensation Committee has structured the Company’sour executive compensation program as follows to ensure that our executive officers are compensated in a manner consistent with stockholder interests, competitive pay practices and applicable requirements of regulatory bodies.
The Compensation Committee does not have any formal policies for allocating compensation among the various components of compensation. Instead, the Compensation Committee uses its judgment to establish for each Named Executive Officer a mix of current, short-term and long-term incentive compensation, and cash and equity compensation that it believes appropriate to achieve the compensation and corporate objectives described above. However, because we believe it is important to our success to aggressively pursue long-term goals, to avoid excessive risk taking, to preserve our cash resources, and to further our pay-for-performance philosophy, a significant portion of our Named Executive Officers’ total compensation is comprised of performance-based bonus opportunities and long-term equity awards, which align the Named Executive Officers’ incentives with the interests of our stockholders.
Base Salary
Base Salary.Basesalaries serve to provide fixed cash compensation to our executive officers for performing daily responsibilities, and also provide stability and security. We establish base salaries for our executive officers when they join our Company or upon promotion. In addition, base salaries for executive officers are reviewed and determined by the Compensation Committee onan(or the Board with respect to our Chief Executive Officer, upon recommendation from the Compensation Committee) on an annual basis.basis, in consultation with our independent compensation consultant, Radford, based on each executive officer’s position and specific responsibilities, individual performance, level of experience, achievement of corporate and strategic goals, and a review of competitive salary, total compensation market data, and cost of living increases in the San Francisco Bay Area. Any increasesincrease in base salary arebeyond a cost of living increase is based on an evaluation of the individual’s performanceas well asperformance, changes in responsibilities or position and the individual’s criticality to the Company’sour future plans. MeritIncreases in base salary, including cost of living increases, typically takeeffect as ofon January 1st of each calendar year.
Annual Incentive Bonuses
Under our annual incentive bonus plan, every employee, including executive officers, has an established annual incentive bonus target, which is equal to a percentage of the new fiscal year.
For more senior employees and executive officers, the corporate goal achievement factor is weighted more heavily and thus has greater influence on the annual incentive bonus, as performance from these individuals has a discretionary basis atlarger impact on corporate goal achievement. This practice is designed to create a direct link between executive compensation and operational and financial goals to provide motivation for executive officers to implement strategic initiatives intended to meet or exceed pre-established corporate goals.
At the end ofeachbeginning of each year, in accordancethe Chief Executive Officer develops, with pre-defined target payouts,input from our executive management, the criteria set forth in Geron’s compensationguidelinesannual corporate goals, which generally relate to our operational and basedfinancial performance, together with recommended weightings for each goal, and presents the annual corporate goals and recommended weightings to the Compensation Committee and the Board. The weighting for each corporate goal depends on its importance and business value for Geron and our stockholders. The Board approves or adjusts the corporate goals and weightings.
As part of the annual year-end performance review process, the Compensation Committee, taking into consideration recommendations from the Chief Executive Officer, evaluates our overall achievement of the corporate goals during the preceding year and individualother significant company accomplishments, while taking into consideration the degree of difficulty in achieving the corporate goals and any particular events or circumstances that impacted performance. The corporate goal achievement factor generally ranges from 0 to 1.0 and is approved by the Board upon recommendation from the Compensation Committee based upon the Board’s assessment of the Company’s achievement of that year’s annual corporate goals. The 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.
The Chief Executive Officer’s annual incentive bonus is based entirely on the corporate goal achievement factor. The annual incentive bonus for each of our Named Executive Officers, other than the Chief Executive Officer, is based on the corporate goal achievement factor, the individual performance factor and the corporate values performance factor. The Chief Executive Officer presents to the Compensation Committee written assessments of the performance and achievements, including support of our corporate values, for each of the executive officers (other than himself) for the prior year and recommends the individual performance factor and the corporate values performance factor for each executive officer (other than himself). The Compensation Committee reviews and approves or adjusts the
individual performance factor and the corporateEquity Awards
Equity Incentive Compensation.Long-term incentive awards, comprised of stock option grants andrestricted stock awards are designed to encourage high performance by and long-term investment by ourtenure for executive officers,thereby strongly aligning executives’executive officers’ interests with the interests of our stockholders. To further ourcompensation philosophyWe granted equity awards in the form of linking long-term compensationstock options in 2014. Stock option grants under our 2011 Plan encourage employee ownership in Geron, link pay with performance and align the CompensationCommitteeinterests of stockholders and employees. Primarily through sustained growth by and positive price per share performance in our stock, employees, including the Named Executive Officers, may realize gains from equity-based awards. The Compensation Committee (and the Board, with respect to our Chief Executive Officer) determines the size of any stock option grant according to each executive officer’s position. To do so, the Compensation Committee references the 50thto 60thpercentile of the total compensation (base salary, annual incentive bonus and equity awards value) paid to comparable executive officers based on the market data provided by Radford. The Compensation Committee also takes into account each Named Executive Officer’s recent performance history, his or her potential for future responsibility, and criticality of his or her work. Other factors may include equity awards previously granted, performance-based restrictedthe 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 with exercise prices greater than Geron’s current stock price and the number of stock option grants that have expired unexercised as a result of market conditions. The Compensation Committee has the discretion to give relative weight to each of these factors as it sets the size of the stock option grant to appropriately create an opportunity for reward based on increasing stockholder value. There is no set formula for the granting of stock options or other equity awards (PSAs)to employees, including
the Named Executive Officers. For non-executive employees, the Chief Executive Officer and other executive officers determine the size of any stock option grant or other equity award according to each position and/or the individual’s past performance and criticality of the individual’s work.
The Compensation Committee grants equity awards to newly hired and existing executive officers, except the Chief Executive Officer, with respect to whom the Board determines equity awards based on the recommendation of the Compensation Committee. Our general policy is to grant stock options and other equity awards on fixed dates determined in 2010advance, although there are occasions when grants are made on other dates. All required approvals are obtained in advance of or on the actual grant date. Other than stock option grants to new hires, stock option grants to executive officers are generally approved once a year (typically near the beginning of the year) unless an executive officer is promoted, in which case a grant will normally be made at the time of such promotion, or, in rare circumstances, for recognition of outstanding performance. With respect to annual stock option grants to our continuing executive officers, these grants are typically approved early in each fiscal year and 2011prior to certainemployees, includingthe full release of our annual financial and operating results for that year. Since our full annual financial and operating results are typically not disclosed prior to approval of annual stock option grants for our executive officers, and membersin 2015, we adopted an equity incentive grant policy that provides that if at the time the Compensation Committee (or the Board, in the case of the Board. The vestingChief Executive Officer) approves annual equity awards to our executive officers (and other employees) our trading window is closed, then the annual equity awards that are approved for these PSAs isbasedexecutive officers (and other employees) will be granted on the achievementsecond trading day following the filing date with SEC of certain corporate objectivesour next quarterly or annual report that occurs after the date on which such grants are approved by the Board or the Compensation Committee, as applicable. Accordingly, our equity incentive grant policy provides the market with an opportunity to absorb the financial and other information included in our annual and periodic reports before annual equity awards are effective. As a result, the timing of annual equity awards to our continuing executive officers is not coordinated in a manner that intentionally benefits our executive officers; rather, the policy is designed with the objective to generally allow the market price thresholds of our common stock to reflect our then-current results and prospects at the time the equity grant becomes effective and the exercise price is set.
The exercise price of all stock option grants is equal to the closing price of Geron Common Stock. These PSAs either will not vest at all or will vest 100% upon achievement of the specifiedperformance criteriaStock as certifiedreported by the Compensation Committee.
Geron’s standard vesting schedule for the first stock option grant awarded to allnewly hired employees, including executive officers.Theseofficers, provides that 12.5% of the shares granted will vest six months after the 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.
Broad-Based Benefits and Other Compensation
Benefit programs include a variety of health insurances,insurance plans, 401(k) plan Employee Stock Purchase Planandwith Company matching contributions at Board-approved levels, employee stock purchase plan and flexible spending 125 cafeteria plan covering health and dependent care services. These benefits are offered to all employees, including executive officers. We currently donotdo not offer pension or other retirement benefits to employees. Executive officers receive limited perquisitesconsisting of tax and financial planning services, andCurrently, Dr. Scarlett also receives housing and travelreimbursementtravel expense reimbursements for the commute from his principal residence in Texas.
Role of the Compensation Committee
The Compensation Committee acts on behalf of the Board with respect to overseeing our compensation policiesprogram and programspolicies and in determining compensation for executive officers.officers, including the Named Executive Officers, other than our Chief Executive Officer. Compensation Committee members are independent of the Company’s management and undermeet the NASDAQ listing standards.standards for independence. 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, General Counsel and Radford. The Compensation Committee also meets in executive session without the presence of any employees. The Compensation Committee exercises independent judgment in allocating between cash and non-cashequity compensation. In setting the annual level of cash and equity compensation for our executive officers, the Compensation Committee typically considers various factors. Thesefactors, which include: corporate performance, our achievement toward meeting annual corporate goals, each executive officer’s individual performance, the criticality of each executive officer’s skill set, and market data for our industry and defined peer group, and each executive officer’s tenure.industry. Each of these factors is balanced against the Company’sGeron’s ability to award cash and equity incentives. The Compensation Committee has the authority to retain special counsel and other experts, including compensation consultants, such as Radford, to support their responsibilities in determining executive officer compensation and related programs. In addition,benefits. Since December 2011, the Compensation Committee may receivehas retained Radford as its independent compensation consultant due to its extensive analytical and consulting work in the biotech/pharmaceutical industry. In this capacity, Radford has provided documentary support, including industry data from third-party salary survey sources, and recommendations related to cash and equity compensation for executive officers and members of the Board.
In February 2014, the Compensation Committee reviewed information from Radford about potential conflicts of interest and analyzed whether the work of Radford as a compensation consultant has raised any conflict of interest, taking into consideration the following factors: i) the provision of other services to Geron by Radford or any other AON Hewitt Company; ii) the amount of fees Geron paid to Radford or any other AON Hewitt Company as a percentage of the firm’s total revenue; iii) Radford’s policies and procedures that are designed to prevent conflicts of interest; iv) any business or personal relationship of Radford, any other AON Hewitt Company or the individual compensation advisors employed by Radford with an executive officer of the Company; v) any business or personal relationship of the individual compensation advisors with any member of the Compensation Committee; and vi) any Geron Common Stock owned by the individual compensation advisors employed by Radford. Based on these factors, the Compensation Committee determined that there were no conflicts of interest with respect to Radford providing services to the Compensation Committee. In 2014, the Company paid $45,000 to Radford for their services as a compensation consultant to the Compensation Committee regarding executive and Board compensation.
The Compensation Committee reviews, and thereafter recommends to the Board, both the establishment and achievement of annual corporate goals for the annual incentive bonus plan. With respect to achievement of annual corporate goals, the Board considers the recommendations of the Compensation Committee and may accept or modify such as Radford.
recommendations before approval. To aid the Compensation Committee in its responsibilities, the Chief Executive Officer, with input and assistance byfrom the General Counsel and senior human resources personnel,Executive Director of Human Resources, provides the Compensation Committee with a variety of information, including analyses and recommendations relating to the Company’s performance,achievement of our annual corporate goals, individual performance of executive officers and cash and equity compensation recommendations for every employee, including alleach executive officer. The Compensation Committee does not consult with any other executive officer with regard to its decisions concerning compensation for executive officers. In making such decisions, the Compensation Committee gives considerable weight to the Chief Executive Officer’s performance evaluations of the executive officers, since he has direct knowledge of the criticality of their work, performance and contributions. The Chief Executive Officer does not participate in the Compensation Committee’s or Board’s deliberations or decisions with regard to his own compensation, which must be approved by the Board.
At the Compensation Committee’s request, the Chief Executive Officer reviews the performance of the other executive officers with the Compensation Committee, but no other executive officer has any input into executive compensation decisions. The Compensation Committee gives considerable weight to the Chief Executive Officer’s performance evaluations of the other executive officers since he has direct knowledge of each executive’s performance and contributions.Peer Group
In 2011, the Compensation Committee reviewed independent survey data, such as the Radford Global Life Sciences compensation survey. The Compensation Committee also reviewed publicly available data from companies with which Geron competes for talent, which included Gilead Sciences, Inc.; Biogen Idec, Inc.; Affymax, Inc.; Amylin Pharmaceuticals Inc. and BioMarin Pharmaceuticals, Inc.
The Compensation Committee believes that it is important when making its compensation decisions to be informed as to the current practices of comparable publicly held companies. Therefore, in December 2011,January 2014, the Compensation Committee determined that defining a definitive group of peer companies was necessarydesirable to provide benchmarks to reference in connection with making 2014 executive officer employee and non-employee director compensation matters anddecisions. Accordingly, the Compensation Committee engaged Radford to recommend adetermine an appropriate comparable peer group.group for such purposes. Based on Radford’s recommendations, in January 2014 the Compensation Committee approved a specific peer group in January 2012. This peer group, which the Committee uses to review executive officer compensation, consistsconsisting of 1917 publicly traded, U.S-basedU.S.-based biotechnology/pharmaceutical companies. TheThese peer group companies were selected because a majority of these companies are pre-commercial in nature, andthem did not have commercialized products or services, had market capitalizations between approximately $250 million and $1.3 billion, headcount rangeof fewer than 200 employees and annual research and development expenditures that rangeranging from approximately $30 million to $80 million. These parameters represented approximately one-half of, to two times to those comparable parameters of Geron.Geron at the time the peer group was approved in January 2014. The compensation practices of the 2014 peer group companies is herein referred to as the “market data.” The companies comprising our 2012the 2014 peer group are:were:
Insmed Incorporated | Sunesis Pharmaceuticals, Inc. | |||
Anacor Pharmaceuticals, Inc. | Neurocrine Biosciences, Inc. | XenoPort, Inc. | ||
XOMA Corporation | ||||
Raptor Pharmaceuticals Corp. | ||||
Dynavax Technologies Corporation | Rigel Pharmaceuticals, Inc. | |||
Sangamo Biosciences, Inc. |
Executive EquityThe Compensation
Stock option grants and restricted stock awards (including performance-based restricted stock awards) from Committee’s general compensation decision making strategy for 2014, in consultation with Radford, was to generally reference the 2002 Equity Incentive Plan and 2011 Incentive Award Plan encourage employee ownership50th to 60th percentile of the market data in Geron, link paycombination with performance and align interests of stockholders and employees. Without sustained growth and positive stock price performance, all our employees, includingmultiple other factors, such as the executive officers, carryofficers’ respective levels of experience and responsibility, prior performance, specific skills or competencies, internal pay equity, the risk that they will not be abledesired pay mix (including the other compensation elements provided to realize significant gains from their equity-based awards.the executive officers), and our budget, in determining the total target compensation (consisting of base salary, annual incentive bonus and value of equity awards) for all Named Executive Officers for 2014. The Compensation Committee determinesbelieves this strategy was necessary and appropriate in 2014 in order to retain top executive talent in the size of any stock option grant and restricted stock award according to each executive officer’s position within the Company and sets a level it considers appropriate to create an opportunity for reward predicated on increasing stockholder value. competitive environment in which we operate.
Compensation Risk Assessment
The Compensation Committee takes into account each executive officer’s performance historyannually evaluates Geron’s compensation elements of base salary, annual incentive bonuses, equity awards, severance and his or her potential for future responsibilitychange in control benefits, other benefits and promotion. Other factors include long-term incentives previously granted,Geron’s compensation philosophy generally as it relates to all employees. The Compensation Committee reviews the amountfollowing elements of actual versus theoretical equity value per yearGeron’s compensation practices that has been derivedcomprise our compensation program to date bymitigate the individual, the current actual value of the unvested equity grants for each individual, the percentage of stock option grantsrisks associated with exercise prices greater than the Company’s stock price and the number of stock option grants that have expired unexercised as a result of market conditions. our compensation practices:
● | performance assessment based upon a mix of individual and corporate performance and achievement; |
● | annual incentive bonuses determined by performance with no minimum payments; |
● | utilization of a combination of cash and equity awards to encourage short-term and long-term incentives; |
● | absence of employment agreements or contracts that contain multi-year guarantees of salary increases, non-performance-based bonuses or equity compensation; and |
● | emphasis on equity amongst our employees and in comparison with external benchmarks. |
The Compensation Committee has the discretionreviewed our compensation policies and practices as they relate to give relative weightall employees and has determined that such policies and practices do not present any risks that are reasonably likely to each of these factors. There is no set formula for the granting of stock options or other equity awards to individual executive officers or employees.
Equity Grant Practices and Vesting Conditions
In 2011, stock option grants to newly hired employees were madehave a material adverse effect on the third Wednesday of the month following the new employee’s hire date, except for Dr. Scarlett, where the Board granted his stock option on the date of his appointment as Chief Executive Officer. To facilitate stock option grants to newly hired employees, the Compensation Committee authorized the Stock Option Committee to approve individual grants of equity awards up to 100,000 shares to non-executive employees. Equity awards greater than 100,000 shares or for executiveGeron.
officers are approved by the Compensation Committee. In 2011, the sole members of the Stock Option Committee were Dr. Okarma, Mr. Greenwood and Dr. Scarlett (beginning in September 2011). In 2012, Mr. Cooper joined Dr. Scarlett as a member of the Stock Option Committee. The exercise price of all stock options is equal to the closing price of Geron Common Stock as reported by the NASDAQ Global Select Market on the date of grant so that the recipient will not earn any compensation from his or her options unless our share price increases above the exercise price; thus aligning the interests of our stockholders, and our employees and executive officers, during their employment, for the long-term success of the Company. Geron’s standard practice is to grant options that vest monthly over four years from the date of grant, provided the employee continues to provide services to the Company.
Annual equity awards to all employees, including executive officers, are typically granted on the same date of the Annual Meeting of Stockholders, which is also the date that non-employee board members receive their equity awards in accordance with the 2006 Directors Plan. The exercise price for the annual stock option grants is equal to the closing price of Geron Common Stock as reported by the NASDAQ Global Select Market on the date of grant and the vest schedule is monthly over four years from the date of grant, provided the employee continues to provide services to the Company. For restricted stock awards, the vesting schedule is typically annually over four years from the date of grant, provided the employee continues to provide services to the Company.
2011 Corporate Performance
Each year, the Chief Executive Officer presents corporate goals to the Compensation Committee and Board, and the Board approves the goals and assigned weightings. Achievement of these goals impact payouts under our cash incentive program. The weightings for each corporate goal vary year-to-year depending on its importance and business value for the Company and for our stockholders. As part of the annual year-end performance reviews for executive officers, the Compensation Committee (with input from the Chief Executive Officer) evaluates the Company’s overall performance for the given year with respect to the corporate goals and other significant Company performance accomplishments, while taking into consideration the degree of difficulty in achieving the goals and any particular events or circumstances that impacted performance. For 2011, the Compensation Committee evaluated the status of Geron’s development programs, clinical progress and corporate development activities. This necessarily involved a subjective assessment of corporate performance by the Compensation Committee. Moreover, the Compensation Committee did not base its considerations on a single performance area, but rather considered the entire mix of accomplishments, challenges and efforts in evaluating Company performance and recommending a corporate performance factor to the Board for their approval. The table below summarizes our corporate performance, including weightings and our Compensation Committee’s and Board’s assessment of Company performance that was used to calculate the overall corporate performance factor of 75% for 2011.
2011 Weighting | 2011 Result | Total | |||||||||
Corporate Performance Category | Description | (A) | (B) | (A x B) | |||||||
Clinical Development | Progress of product candidates to and | ||||||||||
through clinical trials | |||||||||||
a) Imetelstat | 20% | 85% | 0.170 | ||||||||
b) GRN1005 | 15% | 100% | 0.150 | ||||||||
c) GRNOPC1 | 15% | 67% | 0.100 | ||||||||
Product Development | Research and development, including | ||||||||||
process improvements | |||||||||||
a) Oncology | 5% | 100% | 0.050 | ||||||||
b) Stem cells | 5% | 50% | 0.025 | ||||||||
Corporate Development | Execution of strategic transactions to | ||||||||||
provide external funding over the next | |||||||||||
three years | |||||||||||
a) Public sources | 10% | 100% | 0.100 | ||||||||
b) Private sources | 20% | 0% | 0.000 | ||||||||
Administration | Cash management to preserve capital | 10% | 100% | 0.100 | |||||||
Additional Achievements | Corporate restructuring and | 0.055 | |||||||||
organizational re-alignment | |||||||||||
Total Corporate Performance Factor | 0.750 |
Highlights of 2011 accomplishments taken into account by the Compensation Committee and Board in determining overall achievement of the corporate goals and by the Compensation Committee in determining individual performance for the Named Executive Officers, included the following:
Clinical Development
Product Development
Corporate Development
Administration
Additional Accomplishments
20112014 Compensation Decisions
Base Salaries
Consistent with practices in 2009 and 2010, no adjustments were made to incumbent executive officerIn the first quarter of 2014, the Compensation Committee performed their annual analysis of base salaries for all of our executive officers. The Compensation Committee reviewed the market data provided by Radford and noted that the market data showed that each of our Named Executive Officers’ base salaries at the end of 2013 was between the 25th to 75th percentile of the market data. Given the desire to have competitive positioning of base salaries and in 2011,discretionary consideration of the performance of each of the Named Executive Officers during 2013, the Compensation Committee and, with respect to Dr. Scarlett, the Board, approved average salary increases of 3.2% as a cost of living adjustment for each of the Named Executive Officers, except for Mr. Greenwood,Ms. Bloom, who received an annuala 10.6% increase to her base salary of $500,000 with his appointment to President and Interimensure that her total cash compensation in 2014 as Chief ExecutiveFinancial Officer in February 2011.
In September 2011, Dr. Scarlett was appointed Chief Executive Officer and a director of the Company. In accordancecommensurate with the termsmarket data.
The following 2014 base salaries for the Named Executive Officers were effective as of his negotiated employment agreement, Dr. Scarlett receives an annual base salary of $550,000. In January 2012, the Board appointed Dr. Scarlett as President, and he receives no additional compensation for this appointment.1, 2014.
2013 | Salary | 2014 | |||||||
Named Executive Officer | Base Salary | Increase (%) | Base Salary | ||||||
John A. Scarlett, M.D. | $569,250 | 3.0% | $586,500 | ||||||
Olivia K. Bloom | $330,000 | 10.6% | $365,000 | ||||||
Melissa A. Kelly Behrs | $341,550 | 3.1% | $352,000 | ||||||
Andrew J. Grethlein, Ph.D. | $367,425 | 3.2% | $379,000 | ||||||
Stephen N. Rosenfield, J.D. | $377,775 | (1) | 3.2% | $390,000 | (1) |
(1) | We employ Mr. Rosenfield at 80% full-time equivalent. Thus, the actual base salary paid to Mr. Rosenfield is 80% of the amounts presented in the table. |
2014 Annual Cash IncentivesIncentive Bonuses
We have established a bonus structure for all employees, including executive officers, that provides bonuses depending on whether we achieve pre-established corporate goals related to operational and financial performance, as well as achievement of individual objectives. By using an appropriate amount of performance-based compensation, we believe our bonus structure creates a direct link between executive compensation and operational and financial performance to provide further motivation for our executive officers to implement strategic initiatives in order to meet or exceed pre-established corporate goals. Every employee, including executive officers, has an established potential award, which is equal to a percentage of the employee’s base salary. The percentage increases with increasing rank in the Company. TheNamed Executive Officers’ 2014 annual incentive bonus targets, for executive officers in 2011 ranged from 40% to 60%as a percentage of base salary depending on the executive officer’s position. The executive officers’ 2011 bonus targets were setposition, remained at the same historical levels as inthat we have applied since 2010. In connection with Dr. Scarlett’s negotiated employment agreement, he is eligibleThese annual incentive bonus targets continue to receive an annual bonusgenerally reference the 50th to 60th percentile of up to 60%market data for total compensation (consisting of his annual base salary, payable atannual incentive bonus and value of equity awards) for executive officers in comparable positions and responsibilities in our peer group companies. The annual incentive bonus target percentage for the discretion of the Board.
Each employee’s bonus amountexecutive vice president position is calculated using individual45% and corporate performance factors with increasing weight on Company performance for more senior employees. There are no minimum payouts and the only multipliers that would increase a bonus amount above the targets apply to the individual performance component. The corporate performance factor ranges from 0 to 1.0 and is assigned by the Compensation Committee (as discussed above) based upon its qualitative assessment of Company performance against corporate goals. Individual performance factors for 2011 ranged from 0 to 1.25 and were based on a supervisor’s assessment of an employee’s performance. As noted below, the Chief Executive Officer reviews the performanceposition is 60%. For 2014, Dr. Scarlett’s annual incentive bonus payout was 100% dependent upon achievement of theour corporate goals. For 2014, other executive officers andthan Dr. Scarlett, each Board member conducts an independent assessment of the ChiefNamed Executive Officer’s performance, which is submitted to the Compensation Committee for tabulation and evaluation. The Compensation Committee may approve anannual incentive bonus payout was 50% dependent upon achievement of our corporate goals, 30% dependent on individual performance, factor above 1.25and 20% dependent upon evaluationindividual support and manifestation of appropriate criteria.
our corporate values. The Compensation Committee’s assessment oftable below summarizes the executive officer’s level of attainment of individual performance goals becomes the individual performance factor used in the calculation of theannual incentive bonus for the end of the year (as described in the table set forth below which illustrates the calculation of the 2011 bonus awardedtargets as a percentage of salary).annual salary for each of our Named Executive Officers for 2014.
Annual Incentive Bonus | |||
Named Executive Officer | Target as a % of Salary | ||
John A. Scarlett, M.D. | 60% | ||
Olivia K. Bloom | 45% | ||
Melissa A. Kelly Behrs | 45% | ||
Andrew J. Grethlein, Ph.D. | 45% | ||
Stephen N. Rosenfield, J.D. | 45% |
2014 Corporate Goal Achievement Factor
The table below summarizes the corporate goals approved by the Board for 2014, including assigned weightings, and the Compensation Committee’s and Board’s assessment of our level of achievement of those goals in 2014. The corporate goals in 2014 were designed to focus our resources and efforts on raising and maintaining adequate capital to support the then-planned Phase 2 clinical trial of imetelstat and achieving regulatory clearance to re-start clinical development of imetelstat in the U.S. for the treatment of hematologic myeloid malignancies. As a result, many of our 2014 activities centered on raising funds through an equity financing, managing our operating spend to conserve our cash resources, and conducting extensive clinical follow-up activities, including establishing relationships with industry experts to analyze and collate key nonclinical and clinical data, which were submitted to the FDA and led to the release of the full clinical hold on our IND for imetelstat. Based on the achievements noted below, the Board deemed these corporate goals to be fully achieved for 2014.
2014 Corporate Goals | Weighting (A) | Highlights of Company Performance | Percent Achievement (B) | Total (A x B) |
1)Prepare proposed plan to re-start clinical development in the U.S., European Union or both and present to the Board no later than September 2014. | 20% | ●Developed a comprehensive plan that provided clinical follow-up information from patients in the previously ongoing Geron-sponsored Phase 2 trials, data from nonclinical toxicology studies, and engaged industry experts to analyze and collate data that would be provided to the FDA to seek release of the full clinical hold. | 100% | 20% |
2)Make “Go/No-Go” recommendation by September 2014 to pursue Clinical Trial Authorization submission(s) in the European Union. | 10% | ●Presented to the Board the clinical and regulatory implications of pursuing independent clinical trial authorization in the European Union. ●Concluded that moving forward with such a submission pending FDA action while on clinical hold was not advantageous. | 100% | 10% |
3)Submit package to FDA to address clinical hold issues by mid-November 2014. | 15% | ●Submitted a complete response to the FDA in early October 2014 that included the required clinical follow-up and nonclinical data. | 100% | 15% |
4)Achieve regulatory clearance to re-start clinical development in the U.S. (e.g., partial lift of the full clinical hold on Geron’s IND for imetelstat) by end of 2014. | 20% | ●The FDA removed the full clinical hold on our IND for imetelstat on October 31, 2014, and deemed acceptable, our proposed clinical development plan for imetelstat that is focused on high-risk myeloid malignancies. | 100% | 20% |
2014 Corporate Goals | Weighting (A) | Highlights of Company Performance | Percent Achievement (B) | Total (A x B) |
5)Raise at least $50 million through an equity financing, usage of the at-the-market equity facility and/or partnering by end of the second quarter of 2014. | 25% | ●Raised $96.8 million in net proceeds through an underwritten public offering of Geron Common Stock in the first quarter of 2014. | 100% | 25% |
6)Conduct at least two meetings with 40 institutional investors by the end of the fourth quarter of 2014. | 5% | ●Conducted more than 100 meetings with over 70 institutional investors. | 100% | 5% |
7)Manage expenditures to Board-approved budget. | 5% | ●Controlled expenses to be in line with established budget to maintain sufficient cash resources to advance development of imetelstat. | 100% | 5% |
Total | 100% | 100% |
The Board determined the Company had additional accomplishments in 2014 beyond the pre-established corporate goals stated above. These additional achievements included:
● | negotiating and executing a global strategic collaboration and license agreement with Janssen for imetelstat which included cash consideration comprised of a $35 million upfront payment, up to a potential total of $900 million for the achievement of development, regulatory and commercial milestones, and tiered royalties on worldwide net sales; |
● | negotiating and completing successful transfer to Geron of the IND supporting the MF Pilot Study as well as sponsorship of MF Pilot Study, enabling access to study data critical to completion of Janssen’s due diligence process and closure of the Janssen transaction; |
● | raised capital in excess of $50 million corporate goal through combination of successful public offering of Common Stock and receipt of $35 million in upfront payment under the Janssen collaboration; and |
● | retained key managers and leaders during the uncertain period of the full clinical hold imposed by the FDA on our IND for imetelstat. |
As a result of these additional extraordinary accomplishments, the Board approved a discretionary increase to the 2014 corporate goal achievement factor of 0.2, raising the overall 2014 corporate goal achievement factor to 1.2.
Individual Performance and Corporate Values Performance Factors
For all employees in 2014, including the Named Executive Officers other than the Chief Executive Officer, actual individual performance factors ranged from 1.0 to 1.3. Each Named Executive Officer’s 2014 individual performance factor was based on overall performance and achievement, which reflected: his or her support of the 2014 corporate goals; and individual, team, departmental and functional performance and achievements, including performance and achievements beyond the original pre-established corporate, individual, team, departmental and functional goals.
Our corporate values are authenticity, accountability, excellence, integrity and respect. The Compensation Committee determined that the actual individual corporate values performance factor was 1.0 for each of the Named Executive Officers, whose actions during 2014 demonstrated their full support and manifestation of our corporate values.
The following are the annual incentive bonus targets and weighting percentages used to calculate the 20112014 annual incentive bonus for each of the Named Executive Officers as well as the 20112014 actual bonus percentage awarded.
(A) | (B) | (C) | (D) | (E) | = (A*B*C) | ||||||||
+ (A*D*E) | |||||||||||||
Bonus | |||||||||||||
Bonus | Corporate | Corporate | Individual | Individual | Awarded | ||||||||
Potential as a | Performance | Performance | Performance | Performance | as a % of | ||||||||
Officer and Position | % of Salary | Weighting | Factor | Weighting | Factor | Salary | |||||||
John A. Scarlett, M.D. | |||||||||||||
President and Chief Executive Officer(1) | 60% | 80% | N/A | 20% | N/A | N/A | |||||||
David L. Greenwood(2) | |||||||||||||
Former President and Chief Financial Officer | 60% | 80% | 0.75 | 20% | 1.00 | 48% | |||||||
Stephen M. Kelsey, M.D., F.R.C.P., F.R.C.Path. | |||||||||||||
Executive Vice President, Head of R&D, and | |||||||||||||
Chief Medical Officer | 45% | 80% | 0.75 | 20% | 1.35 | 39% | |||||||
Melissa A. Behrs | |||||||||||||
Senior Vice President, Strategic Portfolio | |||||||||||||
Management, Product Development and | |||||||||||||
Manufacturing | 40% | 80% | 0.75 | 20% | 1.20 | 34% | |||||||
David J. Earp, J.D., Ph.D. | |||||||||||||
Senior Vice President, Corporate Transactions, and | |||||||||||||
Chief Legal Officer | 40% | 80% | 0.75 | 20% | 1.20 | 34% | |||||||
Thomas B. Okarma, Ph.D., M.D.(3) | |||||||||||||
Former President and Chief Executive Officer | 60% | 80% | N/A | 20% | N/A | N/A | |||||||
Jane S. Lebkowski, Ph.D.(2) | |||||||||||||
Former Senior Vice President and | |||||||||||||
Chief Scientific Officer | 40% | 80% | 0.75 | 20% | 1.00 | 32% | |||||||
Katharine E. Spink, Ph.D.(2) | |||||||||||||
Former Senior Vice President, | |||||||||||||
Alliance Management and Cell Therapy | |||||||||||||
Product Development | 40% | 80% | 0.75 | 20% | 1.00 | 32% |
(A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | = (A*B*(C+D)) | |||||||||||||
+ (A*E*F) | |||||||||||||||||||||
2014 | + (A*G*H) | ||||||||||||||||||||
Annual | Discretionary | Annual | |||||||||||||||||||
Incentive | 2014 | Additional | 2014 | Incentive | |||||||||||||||||
Bonus | Corporate | Corporate | Corporate | 2014 | Corporate | Bonus | |||||||||||||||
Target | Goal | Goal | Goal | Individual | Individual | Corporate | Values | Awarded | |||||||||||||
as a | Achievement | Achievement | Achievement | Performance | Performance | Values | Performance | as a % of | |||||||||||||
Named Executive Officer | % of Salary | Weighting | Factor | Factor | Weighting | Factor | Weighting | Factor | Salary | ||||||||||||
John A. Scarlett, M.D. | 60% | 100% | 1.0 | 0.2 | N/A | N/A | N/A | N/A | 72.0% | ||||||||||||
Olivia K. Bloom | 45% | 50% | 1.0 | 0.2 | 30% | 1.2 | 20% | 1.0 | 52.2% | ||||||||||||
Melissa A. Kelly Behrs | 45% | 50% | 1.0 | 0.2 | 30% | 1.3 | 20% | 1.0 | 53.6% | ||||||||||||
Andrew J. Grethlein, Ph.D. | 45% | 50% | 1.0 | 0.2 | 30% | 1.2 | 20% | 1.0 | 52.2% | ||||||||||||
Stephen N. Rosenfield, J.D. | 45% | 50% | 1.0 | 0.2 | 30% | 1.2 | 20% | 1.0 | 52.2% |
Assessment & Achievement of 2011 Individual Executive Officer Goals
The Chief Executive Officer evaluates individual performance for the other executive officers through written evaluations. He provides the evaluations toFor 2014, the Compensation Committee along with hisconsidered Dr. Scarlett’s recommendations for each executive officer’sNamed Executive Officer’s individual performance factor. The Compensation Committee reviews theand corporate values performance factors, and assessment of each executive officer. The Compensation Committee obtains reviews of the Chief Executive
Officer from each Board member to evaluate the Chief Executive Officer, and makes a recommendation to the Board on his individual performance factor. For his service in 2011, Dr. Scarlett agreed that he would not receive a annual incentive award in 2011. The Compensation Committee will assess Dr. Scarlett’s performance from September 2011 through December 2012 when considering his annual incentive awarddetermined for 2012.
For 2011, the Compensation Committee concurred with Dr. Scarlett’s recommendation for each executive officer’s achievement of his or her individual performance goals and concluded that each Named Executive Officer on an overall basis had achieved his or hertheir individual goals, which included support of theand corporate initiatives mentioned above and also departmental and functional goals,values performance factors, as describeddiscussed in detail below.
Dr. KelseyMs. Bloom was awarded an individual performance factor of 1.35. Dr. Kelsey’s1.2 and a corporate values performance factor of 1.0 based primarily on the following achievements included:
● | executed financing initiatives to support our strategic plans, which resulted in raising approximately $96.8 million in net proceeds from an underwritten public offering of Common Stock in the first quarter of 2014; |
● | provided analytical financial contributions that resulted in an executed global strategic collaboration and license agreement with Janssen in the second half of 2014; |
● | completed the distribution of the Asterias Series A common stock to Geron stockholders, which required resolution of timing and securities registration filings with Asterias, the SEC and NASDAQ; |
● | developed and directed a successful investor relations strategy that effectively maintained investor interest and support during the FDA full clinical hold of the imetelstat program; and |
● | monitored and controlled operating expenses to stay within budgeted spending levels, including analysis of budget changes in light of the full clinical hold. |
Ms. Behrs was awarded an individual performance factor of 1.20. Ms. Behr’s1.3 and a corporate values performance factor of 1.0 based primarily on the following achievements included:and contributions she made during 2014:
● | performed key role in leading teams to complete Janssen technical and business due diligence requirements across all aspects of the imetelstat program, including data, documents, and responses related to clinical, regulatory, pharmacokinetics, translational research, nonclinical, quality control and compliance, intellectual property, and contractual aspects of the imetelstat program; |
● | negotiated and executed a global strategic collaboration and license agreement with Janssen; |
● | negotiated and completed successful transfer to Geron of the IND for the MF Pilot Study and sponsorship of MF Pilot Study, enabling access to study data critical to the completion of the Janssen due diligence process; |
● | provided senior level Program Management leadership and hands-on support for the imetelstat teams to ensure successful completion of 2014 corporate goals for the imetelstat program; and |
● | led the preparation of the initial action plan to collect clinical and nonclinical information requested by the FDA to address clinical hold issues, including leading the Nonclinical Toxicology Working Group in the successful preparation of an assessment of liver findings in our imetelstat chronic toxicology nonclinical findings. |
Dr. EarpGrethlein was awarded an individual performance factor of 1.20. 1.2 and a corporate values performance factor of 1.0 based primarily on the following achievements and contributions he made during 2014:
● | led a full strategic assessment of pursuing a clinical trial authorization submission in the European Union, including making extensive presentations to the Board to enable the Board to reach a “No-Go” decision in a timely and strategically sound manner; |
● | oversaw the Development, Quality and Product Development & Manufacturing functions to fully achieve their internal goals, focusing attention on the critical details and technical execution in providing a comprehensive response to the FDA regarding the full clinical hold for imetelstat ahead of schedule; |
● | planned and directed activities of key functions that enabled achievement of regulatory clearance to re-start clinical development of imetelstat in the United States; and |
● | provided extensive technical analysis and input that resulted in an executed global strategic collaboration and license agreement with Janssen in the second half of 2014. |
Mr. Rosenfield was awarded an individual performance factor of 1.2 and a corporate values performance factor of 1.0 based primarily on the following achievements and contributions he made during 2014:
● | rendered expert legal advice and guidance to management, the Board and Board committees and, in particular, regarding the implications of the complex business strategies contemplated throughout the year; |
● | provided risk management and detailed strategic and tactical legal and business counsel, as particularly evidenced by careful and timely review of key SEC documents, including preparation and review of all risk factors called out in such documents, and other documents, including press releases, Form 8-Ks and analyst, partnering and investor presentations; |
● | provided expert leadership and counsel regarding corporate law, securities law, contracts, employment matters, and intellectual property matters; |
● | supervised the Human Resources function and oversaw structuring of additional compensation elements that had higher retention value and which led to greater employee satisfaction (which was of particular importance during the FDA full clinical hold of our IND for imetelstat); and |
● | supervised the Legal function and assured continuation of all key activities within the department at a high level, including very significant contributions of those employees to the execution of the Janssen collaboration and license agreement in the second half of 2014. |
2014 Annual Incentive Bonus for Chief Executive Officer
Dr. Earp’s achievements included:
The individual performance factors awarded to Mr. Greenwood, Dr. Lebkowski and Dr. Spink at 1.0 each were assigned in connection with their separations from the Company and their separation agreements. For a further description of the benefits paid under the separation agreements, see the “Severance and Change in Control Benefits” section below.
Annual Equity Compensation
In May 2011,20% additional discretionary corporate factor, the Compensation Committee recommended and the Board determined that Dr. Scarlett should receive 120% of his 2014 target annual incentive bonus.
2014 Equity Awards
The Compensation Committee granted a mix of stock options and restricted stock awards to all Geron employees including executive officers. Theon February 10, 2014, except for the Chief Executive Officer whose stock options were granted by the Board on February 11, 2014. To determine the appropriate size of the February 2014 option grants to each of the Named Executive Officers, the Compensation Committee first pre-approved aan option grant benchmarking guideline provided by Radford that was based on employee level and individual performance ratings at the end of 2010.level. This guideline determined the maximumrecommended a target number of options and restricted stock awards that could be awarded to an employee, including executive officers. Option grantsthe Named Executive Officers, based on an individual’s position. For the Named Executive Officers,
equity awards were awardedtargeted to all executive officers at one halfreference the maximum guideline in 2011. Restricted stock awards for employees, including executive officers, were equal50th to one-half the number of shares60th percentile of the employee’s option grant.
Additionally, themarket data provided by Radford for equity awards based on employee level. The Compensation Committee approveddetermined that the grant of performance-based restricted stock awards (PSAs) to certain employees, including executive officers and members of the Board, in connection with the clinical development of GRN1005. The vesting of each PSA is linked to the achievement of specific corporate objectives during a defined performance period, which must be certified by the Compensation Committee. Allocation of the PSAs amongst employees, including executive officers and members of the Board, was based on the potential contributions, accountability and influence an individual had on the outcome of the particular performance milestones. Performance criteria for the 2011 PSA grants are:
In September 2011, the Board approved the terms of the employment agreement for Dr. Scarlett. After considering the new hire equity awards granted to currentthe Named Executive Officers in 2014 should continue to consist of stock options rather than restricted stock awards that vest over time because stock options deliver future value only if the value of our stock increases above the exercise price. The Compensation Committee believed that this structure was the best approach for 2014 for incentivizing our executive officers and executive officersto increase stockholder value.
Each of competitive companies and equity awards granted inour Named Executive Officers received the past to Dr. Okarma, former President and Chief Executive Officer, the Board approved afollowing stock option grants in February 2014:
Named Executive Officer | 2014 Stock Option Grant (# of shares) | ||||
John A. Scarlett, M.D. | 1,340,000 | ||||
Olivia K. Bloom | 400,000 | ||||
Melissa A. Kelly Behrs | 400,000 | ||||
Andrew J. Grethlein, Ph.D. | 400,000 | ||||
Stephen N. Rosenfield, J.D. | 400,000 |
The exercise price for the February 2014 stock option grants was equal to the closing price of Geron Common Stock as reported by the NASDAQ Global Select Market on the date of grant and the vesting schedule is monthly over four years from the date of 1,000,000 sharesgrant, provided the employee continues to Dr. Scarlett.
provide services to Geron. See the section entitled “Grants of Plan-Based Awards”Awards for 2014” on page 4442 for additional information regarding stock option grants, restricted stock awards and performance-based restricted stock awards to Named Executive Officers in 2011.2014.
Other Compensation
Geron offers a comprehensive array of benefit programs to its employees, including Named Executive Officers. These include:
● comprehensive medical, dental, vision coverage and life insurance; ● a “cafeteria” plan administered pursuant to Section 125 of the Code. The cafeteria plan 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. For 2014, 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.
The Company doesWe do not offer any pension plans or health benefits during retirement.
Perquisites
Executive officers receive limited perquisites consisting of tax and financial planning services. We believe that providing these benefits is a relatively inexpensive way to enhance the competitiveness of the executive’s compensation package.
In accordance with the terms of his employment agreement, Dr. Scarlett receives reimbursement for housing expenses (not to exceed $2,000 per month) and travel costs (not to exceed $20,000 per year) in connection with the commute from his personal residence in Texas.Texas to our headquarters in Menlo Park, California. These commuting expense benefits were negotiated with Dr. Scarlett at the time of his initial employment and were deemed a reasonable expense and necessary inducement to his commencement of employment with us. Dr. Scarlett does not receive separate compensation for serving as a member of theour Board.
Severance and Change in Control BenefitsEmployment Agreements
In September 2002,We have entered into a written employment agreement with each of the Board approved a ChangeNamed Executive Officers setting forth the terms of Control Severance Plan (the “Severance Plan”) that became effective on January 21, 2003 and was subsequently revised in October 2006 and December 2008.their employment. The Severance Plan applies to all employees, and providesagreements also provide for each employee to receive acertain severance paymentbenefits upon a triggering event following a change in control. A triggering event is defined as an event where (i) an employee is terminated bycovered termination of the Company without causeNamed Executive Officer’s employment, and for accelerated vesting of options in connection with a change in control transaction, which terms are further described below under the section entitled “Severance and Change in Control Benefits.” Each of our Named Executive Officers is employed “at will”.
We entered into an employment agreement with Dr. Scarlett dated September 29, 2011, in connection with 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 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 that provides that Dr. Scarlett’s annual bonus is subject to forfeiture or within 12 months following a change in control; or (ii) an employee is not offered comparable employment (new or continuing) byrepayment to the Company should the Company determine, in its reasonable discretion, that Dr. Scarlett has engaged in any misconduct intended to affect the payment of his annual discretionary bonus, or has otherwise engaged in any act or omission that would constitute cause for termination of employment (the “clawback provision”).
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 discretionary bonus targeted at 40% of her annual base salary. On September 24, 2013, we amended Ms. Bloom’s employment agreement to provide that Ms. Bloom’s annual discretionary bonus is subject to forfeiture or repayment to the Company’s successorCompany pursuant to the same clawback provision described above for Dr. Scarlett, but with respect to Ms. Bloom. 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 discretionary bonus targeted at 45% of her annual base salary.
We entered into an employment agreement with Ms. Behrs effective January 31, 2013, to provide an annual base salary of $341,550, subject to increase, and an annual discretionary bonus targeted at 40% of her annual base salary. On September 24, 2013, we amended Ms. Behrs’ employment agreement to provide that Ms. Behrs’ annual discretionary bonus is subject to forfeiture or acquirer within 30 days afterrepayment to the Company pursuant to the same clawback provision described above for Dr. Scarlett, but with respect to Ms. Behrs. 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 discretionary bonus targeted at 45% of her annual base salary.
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 discretionary 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 provide that Dr. Grethlein’s annual discretionary bonus is subject to forfeiture or repayment to the Company pursuant to the same clawback provision described above for Dr. Scarlett, but with respect to Dr. Grethlein.
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, pro-rated to reflect Mr. Rosenfield’s 80% of a full-time work schedule, and an annual discretionary bonus targeted at 45% of his annual base salary. On September 24, 2013, we amended Mr. Rosenfield’s employment agreement to provide that Mr. Rosenfield’s annual discretionary bonus is subject to forfeiture or repayment to the Company pursuant to the same clawback provision described above for Dr. Scarlett, but with respect to Mr. Rosenfield.
Severance and Change in Control Benefits
Our Named Executive Officers are entitled to certain severance and change in control or anybenefits under the terms of our Amended Severance Plan, their employment offer is rejected; or (iii) after accepting (or continuing) employment with the Company after aagreements and our equity plans. These severance and change in control an employee resigns within six months following a change in control due to a material change in the terms of employment. Severance payments range from three to 18 months of base salary, depending on the employee’s position with the Company, payable in a lump sum payment. The severance payment would be 18 months for the Chief Executive Officer and 15 months for the Named Executive Officers. In addition to a cash payment, the Company will also pay health insurance premiums under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for each employee through the earlier of the end of his or her severance period or the time that the employee obtains other coverage. Change in control provisions in the Severance Plan are intended to allow executive officersemployees, including Named Executive Officers, to focus their
attention on ourthe business operations of Geron in the face of the potentially disruptive impact of a proposed change in control transaction, to assess takeover bids objectively without regard to the potential impact on their own job security and to allow for a smooth transition in the event of a change in control of Geron.
The Compensation Committee believes that the Company.severance benefits we offer remain essential to fulfill the objective to recruit, retain and develop key management talent in the competitive market. These arrangements enable us to recruit and retain high-quality new management talent because they provide reasonable protection to the executive officer in the event that he or she is not retained under limited circumstances. We do not provide for any excise tax gross-ups in the Amended Severance Plan or in any individual agreement with a Named Executive Officer.
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, most recently in May 2013 (collectively referred to herein as the “Amended Severance Plan”). The May 2013 amendment included modifications that require a “double trigger” for cash severance benefits to be paid to employees, including Named Executive Officers in the event of a Change in Control, as defined below, so that benefits are paid only upon a Change in Control and a termination of employment, such termination being either by the Company or because the employee resigns due to a material change in their employment terms. Prior to the May 2013 amendment, the Amended Severance Plan had provided a “single trigger” for payment of cash severance benefits upon a Change in Control. The “single trigger” was removed from the Amended Severance Plan in response to stockholders feedback and because the Board believes that a “double trigger” provides reasonable protection of their interests in connection with any potential change in control.
The Amended Severance Plan applies to all employees, including the Named Executive Officers, who are not subject to a performance improvement plan. Severance benefits provided under the employment agreements with the Named Executive Officers are generally reduced by the same type of severance payments the Named Executive Officer is entitled to receive under the Amended Severance Plan in order to prevent duplication of benefits.
The Amended Severance Plan provides for severance benefits to the Named Executive Officers only if there is a Change in Control triggering event. Under the Amended Severance Plan, upon a Change in Control triggering event, each of our Named Executive Officers is entitled to a 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 and payment of COBRA premiums for up to 15 months (18 months, with respect to Dr. Scarlett).
A Change in Control triggering event is defined by the Amended Severance Plan as a termination without Cause in connection with a Change in Control (which has the same definition as under the 2011 Plan described below) 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: i) such individual is subsequently terminated without Cause by the successor or acquirer within the 12 months following the Change in Control; ii) such individual resigns employment with the Company because in connection with a Change in Control he or she is offered terms of employment (new or continuing) by the Company or the Company’s successor or acquirer within 30 days after the Change in Control that results in a material change in the terms of employment; or iii) after accepting (or continuing) employment with the Company or the Company’s successor or acquirer after a Change in Control, such individual resigns employment within 12 months following the Change in Control due to a material change in terms of employment as defined below.
For purposes of the Amended Severance Plan a “material change in terms of employment” shall occur if one of the following events occurs without the employee’s consent: i) base salary is materially reduced from that in effect immediately prior to the Change in Control; ii) if as of the Change in Control they are employed at the director level or above, they are subject to a material reduction in their duties (including responsibilities and/or authority); iii) their principal work location is to be moved to a location that is either more than 45 miles from their principal work location immediately prior to the Change in Control or more than 30 miles farther from their principal weekday residence than was their principal work location immediately prior to the Change in Control; or iv) the Company or the Company’s successor or acquirer materially breaches the terms of any employment or similar
service agreement with the employee. 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 General Counsel 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 resignation from all positions they then hold with the Company is effective not later than 90 days after the expiration of the cure period.
For purposes of the Amended Severance Plan, “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.
Payment of any benefits under the Amended Severance Plan is conditioned on the timely provision of an effective release of claims against Geron.
Employment Agreements
Under Dr. Scarlett’s employment agreement, in the event of a Covered Termination (as defined below) and subject to his provision of a release of claims against Geron, Dr. Scarlett will be entitled to: i) any unpaid annual incentive bonus to which he would have become entitled for any fiscal year that ends on or before the termination date had he remained employed through the payment date, payable in a single lump-sum payment; ii) a lump-sum severance payment equal to 24 months of his base salary then in effect as of such termination; iii) continued healthcare coverage as permitted under COBRA for a period of one year following a Covered Termination at the same cost as in effect immediately prior to such termination; and iv) the vested portion of any stock options or other exercisable equity interest in Geron will remain outstanding until the earlier of the second anniversary of the date of termination and the original expiration date of such award. In addition, Dr. Scarlett’s employment agreement provides that the initial option granted to him will vest in full upon a change in control if he is providing services through the date of such change in control. In addition, other stock options granted to Dr. Scarlett will vest in full upon a Change in Control (as defined in the relevant equity plan under which the options were granted) if Dr. Scarlett is providing services through the date of such Change in Control. As described above, Dr. Scarlett is also eligible to participate in Geron’s Amended Severance Plan, provided that any severance benefits payable under Dr. Scarlett’s employment agreement, other than annual discretionary bonuses and extended exercisability of any stock options or equity awards, shall be reduced by the amount of severance or other cash payable to Dr. Scarlett under the Amended Severance Plan.
Under the employment agreements for each of the other Named Executive Officers, in the event of a Covered Termination and subject to a release of claims against Geron, each Named Executive Officer will be entitled to a lump-sum severance payment equal to 12 months of base salary then in effect as of such termination, a pro-rated portion of any target annual incentive bonus, continued COBRA coverage for a period of one year following a Covered Termination, and the vested portion of any stock options or other exercisable equity interest in Geron in either case shall remain outstanding until the earlier of the second anniversary of the date of termination and the original expiration date of such award. In addition, stock options granted to each of the Named Executive Officers will vest in full upon a Change in Control (as defined in the relevant equity plan under which the options were granted) if the Named Executive Officer is providing services through the date of such Change in Control. As described above, each of the Named Executive Officers is also eligible to participate in Geron’s Amended Severance Plan, provided that any severance benefits payable under the Named Executive Officer’s employment agreements, other than annual discretionary bonuses and extended exercisability of any stock options or equity awards, shall be reduced by the amount of severance or other cash payable to the Named Executive Officers under the Amended Severance Plan.
For the purposes of the Named Executive Officers’ employment agreements, a “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, and “Involuntary Termination Without Cause” generally means an executive officer’s dismissal or discharge other than: i) for cause
or ii) 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.
For purposes of the Named Executive Officers’ employment agreements, “Cause” generally means the executive officer’s: i) willful act or omission constituting dishonesty, fraud or other malfeasance against the Company; ii) conviction of a felony; iii) 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 iv) breach of any material Company policies.
Equity Plans
As set forth in each individual stock option or restricted stock award agreement under the 2011 Plan, in the event of a Change in Control of Geron (defined below), the vesting of each outstanding option and award held by all employees and outside directors will accelerate so that each option shall become fully exercisable for all of the outstanding shares subject to such 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 2011 Plan, a “Change in Control” generally means and includes each of the following: a) as a result of any merger or consolidation, the voting securities of Geron outstanding immediately prior thereto represent (either by remaining outstanding or by being converted into voting securities of the surviving or acquiring entity) less than 49% of the combined voting power of the voting securities of Geron or such surviving or acquiring entity outstanding immediately after such merger or consolidation; b) during any period of 24 consecutive calendar months, the individuals who at the beginning of such period constitute the board of directors, and any new directors whose election by such board of directors or nomination for election by stockholders was approved by a vote of at least two-thirds of the members of such board of directors who were either directors on such board of directors at the beginning of the period or whose election or nomination for election as directors was previously so approved, for any reason cease to constitute at least a majority of the members thereof; c) any individual, entity or group becomes the beneficial owner of more than 20% of the then outstanding shares of Geron Common Stock; d) any sale of all or substantially all of the assets of Geron; or e) the complete liquidation or dissolution of Geron.
In the event of a merger, acquisition or similar change in control, of the Company, the 1992 Stock Option Plan, the 1996 Directors’ Stock Option Plan, the 2002 Equity Incentive Plan and the 2006 DirectorsDirectors’ Plan andprovide through each respective plan or the 2011 Incentive Award Plan provideindividual stock option or restricted stock award agreements or both, that each outstanding option and award held by all employees or outside directors will accelerate so that each option will be fully exercisable for all of the shares subject to such option immediately prior to the effective date of the transaction and each other type of award shall be fully vested. In addition, upon the occurrence of such transaction, the 2002 Equity Incentive Plan and the 2006 Directors Plan and the 2011 Incentive AwardDirectors’ Plan provide that all of the outstanding repurchase rights of the CompanyGeron with respect to shares of Common Stock acquired upon exercise of options granted, as well as shares of restricted stock under the 2002 Equity Incentive Plan and the 2006 Directors Plan and the 2011 Incentive AwardDirectors’ Plan, will terminate.
In January 2003, the Company entered into employment agreements with certain executive officers and key employees which were amended in 2008 to comply with the requirements of Code Section 409A. These agreements provide for severance pay, in lump-sum payment, equal to a percentage of annual salary and accrued bonus plus benefits continuation for one year to the affected executive officer in the event his or her employment is terminated involuntarily without cause. Payments under these agreements are to be reduced by the amount of any payments made under the Severance Plan previously described. The employment agreements provide that such executive officers may not interfere with the business of the Company by soliciting or attempting to solicit any employee of the Company to terminate his or her employment in order to become an employee, consultant or independent contractor to or for any competitor of the Company and most provide a general release of claims. Currently, the only Named Executive Officers with such employment agreements are Ms. Behrs and Dr. Earp, and each is entitled to a severance payment of 110% of their respective base salary.
In September 2011, the Company entered into an employment agreement with Dr. Scarlett, in connection with his appointment as Chief Executive Officer of the Company. Under Dr. Scarlett’s employment agreement, in the event of a Covered Termination (as defined under the agreement): (i) he will be entitled to a lump-sum severance payment equal to twenty-four (24) months of his base salary then in effect as of such termination and any unpaid Annual Bonus, (ii) Dr. Scarlett and his covered dependents will also be eligible to continued healthcare coverage as permitted by COBRA for a period of one (1) year following a Covered Termination at the same cost as in effect immediately prior to such termination; and (iii) the vested portion of any stock options or other exercisable
equity interest in the Company shall remain outstanding until the earlier of the second anniversary of the date of termination and the original expiration date of such award. Dr. Scarlett will also be eligible to participate in Geron’s Severance Plan in the event of a change in control.
The Compensation Committee believes that severance benefits such as these remain essential to fulfill our objective to recruit, retain and develop key management talent in the competitive market. These arrangements enable the Company to recruit and retain high-quality new management talent because they provide reasonable protection to the executive officer in the event that he or she is not retained under limited circumstances.
In conjunction with the implementation of the new leadership structure, Thomas B. Okarma, Ph.D., M.D., left as Geron’s President and Chief Executive Officer and as a member of the Board, effective February 8, 2011. On February 11, 2011, the Company and Dr. Okarma entered into a Transition and Separation Agreement (the “Okarma Agreement”), effective as of February 19, 2011, that provided for, among other things, a lump-sum cash severance payment of $802,500 and up to 12 months of continued health care coverage under COBRA which he was entitled to receive in connection with his termination of employment under his 2003 employment agreement, and the full acceleration of vesting and exercisability of previously unvested stock options. In addition, the exercise period of all stock options held by Dr. Okarma was extended to the earlier of February 8, 2014 or the original expiration date of such stock option. As consideration, Dr. Okarma provided the Company with a general release of claims against the Company. In addition, pursuant to the Okarma Agreement, Dr. Okarma agreed to serve as a non-exclusive independent consultant to the Company until July 9, 2013 and will receive for such services an aggregate of $401,250 in consulting fees, payable in quarterly installments, and a lump-sum cash payment of $72,000 that is intended to compensate Dr. Okarma for expenses incurred by him in connection with office space and administrative support during the consulting period. Dr. Okarma was also entitled to vesting of service-based restricted stock awards that vested in full on August 8, 2011. Unvested shares of performance-based restricted stock awards held by Dr. Okarma will remain eligible for vesting based on his continued service as a consultant and in accordance with the original terms of the award if the respective performance conditions are achieved by July 9, 2013. The Company was also obligated to pay Dr. Okarma $24,000 to compensate him for healthcare benefits not covered by Medicare and up to $12,500 for the reimbursement of legal fees. The indemnification and confidentiality provisions of his 2003 employment agreement with the Company remain in full force and effect.
In connection with the appointment of David L. Greenwood in February 2011 as President, Interim Chief Executive Officer and Chief Financial Officer of the Company, the Company entered into a new employment agreement with Mr. Greenwood. Under Mr. Greenwood’s employment agreement, in the event of a Covered Termination (as defined under the agreement): (i) he was entitled to a lump-sum severance payment equal to 150% of his annual base salary in effect and (ii) continued healthcare coverage as permitted by COBRA for a period of two (2) years following a Covered Termination at the same cost as in effect immediately prior to such termination. On December 31, 2011, Mr. Greenwood’s employment with the Company terminated due to a Covered Termination. On January 30, 2012, the Company and Mr. Greenwood entered into a Transition and Separation Agreement (the “Greenwood Agreement”), effective February 7, 2012, that provides for, among other things, a lump-sum cash severance payment of $750,000 and 12 months of continued health care coverage under COBRA, consistent with Mr. Greenwood’s 2011 employment agreement. In addition, Mr. Greenwood received a lump-sum cash bonus payment of $235,800 for 2011, and the exercise period of all exercisable stock options held by Mr. Greenwood was extended to the earlier of December 31, 2013 or the original expiration date of such stock options. The Company is also obligated to pay Mr. Greenwood up to $5,000 for the reimbursement of legal fees in connection with the Greenwood Agreement. The Greenwood Agreement also provides that the indemnification and confidentiality provisions of Mr. Greenwood’s 2011 employment agreement remain in full force and effect. In consideration of the entry into the Greenwood Agreement and the separation benefits described above, Mr. Greenwood provided the Company with a general release of claims against the Company. In addition pursuant to the Greenwood Agreement, Mr. Greenwood agreed to serve as an independent consultant to the Company until March 31, 2012. As provided in the agreement, the term was extended to June 30, 2012. The Company and Mr. Greenwood may each terminate the Greenwood Agreement at any time with thirty (30) days advance notice. The Greenwood Agreement provides that Mr. Greenwood will receive a consulting fee of $400 per hour. Under the Greenwood Agreement, consistent with the terms of our 2002 Equity Incentive Plan and 2011 Incentive Award Plan and the original terms of the awards and options previously granted to him, Mr. Greenwood is entitled to continued vesting of currently unvested restricted stock awards and unvested stock options during the period that Mr. Greenwood continues to serve as
a consultant to the Company and his performance-based restricted stock awards will remain eligible for vesting, in each case, conditioned on Mr. Greenwood’s continued service as a consultant and subject to vesting in accordance with the original terms of the award.
On November 14, 2011, the Company announced its decision to exclusively focus on its oncology programs and discontinue further development of its stem cell programs. In connection with that decision, 66 positions were eliminated, including those held by Jane S. Lebkowski, Ph.D., Senior Vice President and Chief Scientific Officer, and Katharine E. Spink, Ph.D., Senior Vice President, Alliance Management and Cell Therapy Product Development.
On December 29, 2011, the Company and Dr. Lebkowski entered into a Transition and Separation Agreement (the “Lebkowski Agreement”), effective January 10, 2012, that provides for, among other things, a lump-sum cash severance payment of $368,500 and 12 months of continued health care coverage under the provisions of COBRA, consistent with Dr. Lebkowski’s 2003 employment agreement. In addition, Dr. Lebkowski received a lump-sum cash bonus payment of $107,200 for 2011, and the exercise period of all exercisable stock options held by Dr. Lebkowski was extended to the earlier of December 31, 2013 or the original expiration date of such stock options. The Lebkowski Agreement also provides that the indemnification and confidentiality provisions of Dr. Lebkowski’s 2003 employment agreement remain in full force and effect. In consideration of the entry into the Lebkowski Agreement and the separation benefits described above, Dr. Lebkowski provided the Company with a general release of claims against the Company. In addition, on December 29, 2011, the Company and Dr. Lebkowski entered into a Consulting Agreement effective January 14, 2012 (the “Lebkowski Consulting Agreement”), pursuant to which Dr. Lebkowski agreed to serve as an independent consultant to the Company until March 31, 2012. As provided in the agreement, the term was extended to June 30, 2012. The Company and Dr. Lebkowski may each terminate the Lebkowski Consulting Agreement at any time with thirty (30) days advance notice. The Lebkowski Consulting Agreement provides that Dr. Lebkowski will receive a consulting fee of $400 per hour. Under the Lebkowski Consulting Agreement, Dr. Lebkowski is entitled to continued vesting of currently unvested restricted stock awards and unvested stock options during the period that Dr. Lebkowski continues to serve as a consultant to the Company and her performance-based restricted stock awards will remain eligible for vesting, in each case, conditioned on Dr. Lebkowski’s continued service as a consultant and subject to vesting in accordance with the original terms of the award.
On December 31, 2011, the Company and Dr. Spink entered into a Transition and Separation Agreement (the “Spink Agreement”), effective December 31, 2011, that provides for, among other things, a lump-sum cash severance payment of $319,000 and 12 months of continued health care coverage under COBRA. In addition, Dr. Spink received a lump-sum cash bonus payment of $92,800 for 2011, and the exercise period of all exercisable stock options held by Dr. Spink was extended to the earlier of December 31, 2013 or the original expiration date of such stock options. The Spink Agreement also provides that the indemnification and confidentiality provisions of Dr. Spink’s Proprietary Information and Inventions Agreement executed on November 4, 2003, remain in full force and effect. In consideration of the entry into the Spink Agreement and the separation benefits described above, Dr. Spink provided the Company with a general release of claims against the Company. In addition, on December 31, 2011, the Company and Dr. Spink entered into a Consulting Agreement effective January 14, 2012 (the “Spink Consulting Agreement”), pursuant to which Dr. Spink agreed to serve as an independent consultant to the Company until March 31, 2012. As provided under the agreement, the term was extended to until June 30, 2012. The Company and Dr. Spink may each terminate the Spink Consulting Agreement at any time with thirty (30) days advance notice. The Spink Consulting Agreement provides that Dr. Spink will receive a consulting fee of $400 per hour. Under the Spink Consulting Agreement, Dr. Spink is entitled to continued vesting of currently unvested restricted stock awards and unvested stock options during the period that Dr. Spink continues to serve as a consultant to the Company and her performance-based restricted stock awards will remain eligible for vesting, in each case, conditioned on Dr. Spink’s continued service as a consultant and subject to vesting in accordance with the original terms of the award.
Tax and Accounting Implications for Executive Compensation
The Compensation Committee is responsible to addressfor addressing the issues raised by Section 162(m) of the Code, which makes certain “non-performance-based” compensation to certain executivesexecutive officers of the CompanyGeron in excess of $1,000,000 non-deductible to the Company.us. To qualify as “performance-based” under Section 162(m), compensation payments must be determined pursuant to a plan, by a committee of at least two “outside” directors (as defined in the regulations promulgated under the Code) and must be based on achieving objective performance goals. In addition, the material terms of the plan must be disclosed to and approved by stockholders and the outside directors or the Compensation Committee, as applicable, must certify that the performance goals were achieved before payments can be awarded.
The Compensation Committee will continue to examine the effects of Section 162(m), to monitor the level of compensation paid to our executive officers and take appropriate action in response to the provisions of Section 162(m), to the extent practicable while maintaining competitive compensation practices. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Compensation Committee reserves the right to recommend and award compensation that is not deductible under Section 162(m).
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 equityequity-based awards, its decisions in determining the size and form of different equity-based awards.
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, 2011.2014.
Submitted on March 22, 201216, 2015 by the members of the Compensation Committee of the Board of Directors:
Robert J. Spiegel, M.D., FACP | Compensation Committee Chair |
Thomas Hofstaetter, Ph.D. | Compensation Committee Member |
V. Bryan Lawlis, Ph.D. | Compensation Committee Member |
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, (the “Exchange Act”), or the Securities Act of 1933, as amended, (the “Securities Act”),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.
20112014 Summary Compensation Table
The following table includes information concerning compensation for the years ended December 31, 2011, 20102014, 2013 and 20092012 to theour Principal Executive Officer, Principal Financial Officer theand our three other most highly compensated executive officers of the Company and up to two additional individuals who would have been oneas of our three most highly compensated executive officers except for the fact that they were not serving as executive officers at December 31, 20112014 (our “Named Executive Officers”).
All | |||||||||||||||||||||||
Stock | Option | Other | |||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Total | ||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($)(2) | ($)(2) | ($)(3) | ($) | ||||||||||||||||
John A. Scarlett, M.D.(4) President and Chief Executive Officer | 2011 | $ | 141,731 | $ | — | $ | — | $ | 1,165,900 | $ | 12,091 | $ | 1,319,722 | ||||||||||
David L. Greenwood(5) | 2011 | $ | 491,337 | $ | 235,800 | $ | 967,875 | $ | 659,220 | $ | 794,278 | $ | 3,148,510 | ||||||||||
Former President, and Chief | 2010 | 415,000 | 165,100 | 555,975 | 215,558 | 38,498 | 1,390,131 | ||||||||||||||||
Financial Officer | 2009 | 415,000 | 164,300 | 570,500 | 606,356 | 36,817 | 1,792,973 | ||||||||||||||||
Stephen M. Kelsey, M.D., F.R.C.P, | 2011 | $ | 400,000 | $ | 156,600 | $ | 174,375 | $ | 188,168 | $ | 43,155 | $ | 962,298 | ||||||||||
F.R.C.Path., Executive Vice President, | 2010 | 400,000 | 159,100 | 555,975 | 215,558 | 36,697 | 1,367,330 | ||||||||||||||||
Head of R&D, and Chief Medical Officer | 2009 | 272,821 | 158,400 | 193,600 | 735,060 | 12,101 | 1,371,982 | ||||||||||||||||
Melissa A. Behrs | 2011 | $ | 320,000 | $ | 107,500 | $ | 238,313 | $ | 125,445 | $ | 39,449 | $ | 830,707 | ||||||||||
Senior Vice President, Strategic | 2010 | 320,000 | 113,200 | 400,450 | 172,446 | 38,219 | 1,044,315 | ||||||||||||||||
Portfolio Management, Product | 2009 | 320,000 | 112,600 | 423,800 | 249,676 | 37,067 | 1,143,143 | ||||||||||||||||
Development and Manufacturing | |||||||||||||||||||||||
David J. Earp, J.D., Ph.D. | 2011 | $ | 325,000 | $ | 109,200 | $ | 392,925 | $ | 125,445 | $ | 37,425 | $ | 989,995 | ||||||||||
Senior Vice President, Corporate | 2010 | 325,000 | 114,900 | 400,450 | 143,705 | 36,195 | 1,020,250 | ||||||||||||||||
Transactions, and Chief Legal Officer | 2009 | 325,000 | 114,400 | 423,800 | 463,684 | 35,781 | 1,362,665 | ||||||||||||||||
Thomas B. Okarma, Ph.D., M.D(6) | 2011 | $ | 56,587 | $ | — | $ | — | $ | — | $ | 1,089,866 | $ | 1,146,453 | ||||||||||
Former President and Chief | 2010 | 535,000 | 283,800 | 666,800 | 287,410 | 16,368 | 1,789,378 | ||||||||||||||||
Executive Officer | 2009 | 535,000 | 282,500 | 717,200 | 1,551,558 | 15,742 | 3,102,000 | ||||||||||||||||
Jane S. Lebkowski, Ph.D.(7) | 2011 | $ | 335,000 | $ | 107,200 | $ | 416,175 | $ | 125,445 | $ | 405,187 | $ | 1,389,007 | ||||||||||
Former Senior Vice President and | 2010 | 335,000 | 118,500 | 489,850 | 143,705 | 35,827 | 1,122,882 | ||||||||||||||||
Chief Scientific Officer | 2009 | 335,000 | 117,900 | 423,800 | 374,514 | 35,200 | 1,286,414 | ||||||||||||||||
Katharine E. Spink, Ph.D.(8) | 2011 | $ | 296,054 | $ | 92,800 | $ | 116,250 | $ | 125,445 | $ | 353,730 | $ | 984,279 | ||||||||||
Former Senior Vice President, | |||||||||||||||||||||||
Alliance Management and Cell | |||||||||||||||||||||||
Therapy Product Development |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||
John A. Scarlett, M.D. | 2014 | $ | 586,500 | $ | 70,380 | (4) | $ | 5,001,416 | $ | 351,900 | $ | 60,807 | $ | 6,071,003 | |||||||||||||
President and Chief Executive Officer | 2013 | 569,250 | — | 1,308,242 | 341,550 | 59,299 | 2,278,341 | ||||||||||||||||||||
2012 | 550,000 | 39,600 | (5) | 410,111 | 290,400 | 54,842 | 1,344,953 | ||||||||||||||||||||
Olivia K. Bloom(6) | 2014 | $ | 365,000 | $ | 16,425 | (4) | $ | 1,468,600 | $ | 174,105 | $ | 12,126 | $ | 2,036,256 | |||||||||||||
Executive Vice President, Finance, | 2013 | 330,000 | — | 462,899 | 135,960 | 28,297 | 957,156 | ||||||||||||||||||||
Chief Financial Officer and Treasurer | 2012 | 259,038 | — | 174,602 | 114,654 | 30,524 | 578,818 | ||||||||||||||||||||
Melissa A. Kelly Behrs | 2014 | $ | 352,000 | $ | 15,840 | (4) | $ | 1,468,600 | $ | 172,656 | $ | 33,467 | $ | 2,042,563 | |||||||||||||
Executive Vice President, Bus. Dev. and | 2013 | 341,550 | — | 417,480 | 148,916 | 38,310 | 946,256 | ||||||||||||||||||||
Portfolio & Alliance Management | 2012 | 330,000 | — | 243,630 | 132,000 | 36,255 | 741,885 | ||||||||||||||||||||
Andrew J. Grethlein, Ph.D.(7) | 2014 | $ | 379,000 | $ | 17,055 | (4) | $ | 1,468,600 | $ | 180,783 | $ | 34,379 | $ | 2,079,817 | |||||||||||||
Executive Vice President, Development | 2013 | 367,425 | — | 294,630 | 170,301 | 34,219 | 866,575 | ||||||||||||||||||||
and Technical Operations | 2012 | 103,542 | — | 649,140 | 44,577 | 4,347 | 801,606 | ||||||||||||||||||||
Stephen N. Rosenfield, J.D.(8) | 2014 | $ | 312,000 | (9) | $ | 14,040 | (4) | $ | 1,468,600 | $ | 148,824 | $ | 13,347 | $ | 1,956,811 | ||||||||||||
Executive Vice President, General | 2013 | 302,220 | (9) | — | 415,916 | 146,199 | 19,039 | 883,374 | |||||||||||||||||||
Counsel and Corporate Secretary | 2012 | 255,500 | (9) | — | 685,510 | 133,371 | 112,900 | 1,187,281 |
(1) | ||
Amounts represent the aggregate grant date fair value of stock |
| ||
(2) | Amounts disclosed under “Non-Equity Incentive Plan Compensation” column represent the annual incentive bonuses earned pursuant to our annual incentive bonus plan. For further discussion see the section entitled “Compensation Discussion and Analysis – 2014 Annual Incentive Bonuses” on page 30. | |
(3) | Amounts shown include: |
Severance/ | |||||||||||||||||||||||||||||
Housing | COBRA | ||||||||||||||||||||||||||||
and | Continuation/ | ||||||||||||||||||||||||||||
Travel | 401(k) | Tax Return | Consulting | ||||||||||||||||||||||||||
Allowance | Premiums | Match | Preparation | Fees | Total | ||||||||||||||||||||||||
Name | Year | ($) | ($) | ($)(a) | ($) | ($) | ($) | ||||||||||||||||||||||
John A. Scarlet, M.D. | 2011 | $ | 8,409 | $ | 3,682 | $ | — | $ | — | $ | — | $ | 12,091 | ||||||||||||||||
David L. Greenwood | 2011 | $ | — | $ | 14,728 | $ | 22,000 | $ | 2,550 | $ | 755,000 | $ | 794,278 | ||||||||||||||||
2010 | — | 13,868 | 22,000 | 2,630 | — | 38,498 | |||||||||||||||||||||||
2009 | — | 13,242 | 22,000 | 1,575 | — | 36,817 | |||||||||||||||||||||||
Stephen M. Kelsey, M.D., | 2011 | $ | — | $ | 20,275 | $ | 22,000 | $ | 880 | $ | — | $ | 43,155 | ||||||||||||||||
F.R.C.P, F.R.C.Path. | 2010 | — | 19,045 | 16,500 | 1,152 | — | 36,697 | ||||||||||||||||||||||
2009 | — | 12,101 | — | — | — | 12,101 | |||||||||||||||||||||||
Melissa A. Behrs | 2011 | $ | — | $ | 20,449 | $ | 16,500 | $ | 2,500 | $ | — | $ | 39,449 | ||||||||||||||||
2010 | — | 19,219 | 16,500 | 2,500 | — | 38,219 | |||||||||||||||||||||||
2009 | — | 18,067 | 16,500 | 2,500 | — | 37,067 | |||||||||||||||||||||||
David J. Earp, J.D., Ph.D. | 2011 | $ | — | $ | 20,275 | $ | 16,500 | $ | 650 | $ | — | 37,425 | |||||||||||||||||
2010 | — | 19,045 | 16,500 | 650 | — | 36,195 | |||||||||||||||||||||||
2009 | — | 18,081 | 16,500 | 1,200 | — | 35,781 | |||||||||||||||||||||||
Thomas B. Okarma, | 2011 | $ | — | $ | 6,921 | $ | — | $ | — | $ | 1,082,945 | $ | 1,089,866 | ||||||||||||||||
Ph.D., M.D. | 2010 | — | 13,868 | — | 2,500 | — | 16,368 | ||||||||||||||||||||||
2009 | — | 13,242 | — | 2,500 | — | 15,742 | |||||||||||||||||||||||
Jane S. Lebkowski, Ph.D. | 2011 | $ | — | $ | 14,687 | $ | 22,000 | $ | — | $ | 368,500 | $ | 405,187 | ||||||||||||||||
2010 | — | 13,827 | 22,000 | — | — | 35,827 | |||||||||||||||||||||||
2009 | — | 13,200 | 22,000 | — | — | 35,200 | |||||||||||||||||||||||
Katharine E. Spink, Ph.D. | 2011 | $ | — | $ | 18,230 | $ | 16,500 | $ | — | $ | 319,000 | $ | 353,730 |
Housing | ||||||||||||||||||
and Travel | Insurance | 401(k) | ||||||||||||||||
Reimbursements | Premiums | Match | Total | |||||||||||||||
Named Executive Officer | ($) | ($) | ($)(a) | ($) | ||||||||||||||
John A. Scarlett, M.D. | $ | 44,000 | $ | 16,807 | $ | — | $ | 60,807 | ||||||||||
Olivia K. Bloom | $ | — | $ | 3,376 | $ | 8,750 | $ | 12,126 | ||||||||||
Melissa A. Kelly Behrs | $ | — | $ | 22,808 | $ | 10,659 | $ | 33,467 | ||||||||||
Andrew J. Grethlein, Ph.D. | $ | — | $ | 22,879 | $ | 11,500 | $ | 34,379 | ||||||||||
Stephen N. Rosenfield, J.D. | $ | — | $ | 1,847 | $ | 11,500 | $ | 13,347 |
____________________ | |||
(a) | Under Geron’s 401(k) Plan, all participating employees may contribute up to the annual Internal Revenue Service contribution limit. In December |
| |||
(4) | ||
(5) | ||
(6) | ||
(7) | Dr. | |
(8) | ||
(9) | The actual base salary amount reflects Mr. Rosenfield’s employment at 80% full-time equivalent. |
Grants of Plan-Based Awards for 20112014
The following table sets forth information regarding grants of plan-based awards with respect to the stock options and restricted stock awards granted during the year ended December 31, 2011 to each of the Named Executive Officers as listed infor the Summary Compensation Table shown under the caption “Executive Compensation Tables.”fiscal year ended December 31, 2014:
All | ||||||||||||||||||||||||||||
All | Other | |||||||||||||||||||||||||||
Other | Stock | |||||||||||||||||||||||||||
Option | Awards: | Exercise | ||||||||||||||||||||||||||
Awards: | Number | or Base | Grant Date | |||||||||||||||||||||||||
Estimated Future | Number of | of | Price | Fair Value of | ||||||||||||||||||||||||
Payouts Under Equity | Securities | Shares of | of Stock | Stock and | ||||||||||||||||||||||||
Incentive Plan Awards | Underlying | Stock or | Option | Option | ||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Options | Units | Awards | Awards | |||||||||||||||||||||
Name | Date | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($)(1) | ||||||||||||||||||||
John A. Scarlett, M.D. | 9/29/11 | (2) | — | — | — | 1,000,000 | — | $ | 2.16 | $ | 1,165,900 | |||||||||||||||||
David L. Greenwood | 3/9/11 | (8) | — | — | — | 150,000 | — | $ | 5.00 | $ | 408,330 | |||||||||||||||||
3/9/11 | (9) | — | — | — | — | 75,000 | — | 375,000 | ||||||||||||||||||||
5/20/11 | (3) | — | — | — | 100,000 | — | 4.65 | 250,890 | ||||||||||||||||||||
5/20/11 | (4) | — | — | — | — | 50,000 | — | 232,500 | ||||||||||||||||||||
5/20/11 | (7) | — | — | — | — | 77,500 | — | 360,375 | ||||||||||||||||||||
5/20/11 | (5) | — | 20,000 | — | — | — | — | 93,000 | ||||||||||||||||||||
5/20/11 | (6) | — | 20,000 | — | — | — | — | 93,000 | ||||||||||||||||||||
Stephen M. Kelsey, M.D., | 5/20/11 | (3) | — | — | — | 75,000 | — | $ | 4.65 | $ | 188,168 | |||||||||||||||||
F.R.C.P, F.R.C.Path. | 5/20/11 | (4) | — | — | — | — | 37,500 | — | 174,375 | |||||||||||||||||||
5/20/11 | (5) | — | 40,000 | — | — | — | — | 186,000 | ||||||||||||||||||||
5/20/11 | (6) | — | 40,000 | — | — | — | — | 186,000 | ||||||||||||||||||||
Melissa A. Behrs | 5/20/11 | (3) | — | — | — | 50,000 | — | $ | 4.65 | $ | 125,445 | |||||||||||||||||
5/20/11 | (4) | — | — | — | — | 25,000 | — | 116,250 | ||||||||||||||||||||
5/20/11 | (7) | — | — | — | — | 26,250 | — | 122,063 | ||||||||||||||||||||
5/20/11 | (5) | — | 20,000 | — | — | — | — | 93,000 | ||||||||||||||||||||
5/20/11 | (6) | — | 20,000 | — | — | — | — | 93,000 | ||||||||||||||||||||
David J. Earp, J.D., Ph.D. | 5/20/11 | (3) | — | — | — | 50,000 | — | $ | 4.65 | $ | 125,445 | |||||||||||||||||
5/20/11 | (4) | — | — | — | — | 25,000 | — | 116,250 | ||||||||||||||||||||
5/20/11 | (7) | — | — | — | — | 59,500 | — | 276,675 | ||||||||||||||||||||
5/20/11 | (5) | — | 5,000 | — | — | — | — | 23,250 | ||||||||||||||||||||
5/20/11 | (6) | — | 5,000 | — | — | — | — | 23,250 | ||||||||||||||||||||
Jane S. Lebkowski, Ph.D. | 5/20/11 | (3) | — | — | — | 50,000 | — | $ | 4.65 | $ | 125,445 | |||||||||||||||||
5/20/11 | (4) | — | — | — | — | 25,000 | — | 116,250 | ||||||||||||||||||||
5/20/11 | (7) | — | — | — | — | 64,500 | — | 299,925 | ||||||||||||||||||||
5/20/11 | (5) | — | 5,000 | — | — | — | — | 23,250 | ||||||||||||||||||||
5/20/11 | (6) | — | 5,000 | — | — | — | — | 23,250 | ||||||||||||||||||||
Katharine E. Spink, Ph.D. | 5/20/11 | (3) | — | — | — | 50,000 | — | $ | 4.65 | $ | 125,445 | |||||||||||||||||
5/20/11 | (4) | — | — | — | — | 25,000 | — | 116,250 | ||||||||||||||||||||
5/20/11 | (5) | — | 5,000 | — | — | — | — | 23,250 | ||||||||||||||||||||
5/20/11 | (6) | — | 5,000 | — | — | — | — | 23,250 |
All | |||||||||||||||||||||
Estimated | Other | ||||||||||||||||||||
Possible | Option | ||||||||||||||||||||
Payouts Under | Awards: | Grant Date | |||||||||||||||||||
Non-Equity | Number of | Exercise | Fair Value of | ||||||||||||||||||
Incentive Plan | Securities | Price | Stock | ||||||||||||||||||
Awards | Underlying | of Stock | Option | ||||||||||||||||||
Grant | Target(1) | Options | Options | Awards | |||||||||||||||||
Named Executive Officer | Date | ($) | (#) | ($/Sh) | ($)(2) | ||||||||||||||||
John A. Scarlett, M.D. | 2/11/14 | (3) | — | 1,340,000 | $ | 5.09 | $ | 5,001,416 | |||||||||||||
— | $ | 351,900 | — | — | — | ||||||||||||||||
Olivia K. Bloom | 2/10/14 | (4) | — | 400,000 | $ | 5.01 | $ | 1,468,600 | |||||||||||||
— | $ | 164,250 | — | — | — | ||||||||||||||||
Melissa A. Kelly Behrs | 2/10/14 | (4) | — | 400,000 | $ | 5.01 | $ | 1,468,600 | |||||||||||||
— | $ | 158,400 | — | — | — | ||||||||||||||||
Andrew J. Grethlein, Ph.D. | 2/10/14 | (4) | — | 400,000 | $ | 5.01 | $ | 1,468,600 | |||||||||||||
— | $ | 170,550 | — | — | — | ||||||||||||||||
Stephen N. Rosenfield, J.D. | 2/10/14 | (4) | — | 400,000 | $ | 5.01 | $ | 1,468,600 | |||||||||||||
— | $ | 140,400 | — | — | — |
Table of Contents____________________
(1) | This column sets forth the target amount of each Named Executive Officer’s annual incentive bonus award for the fiscal year ended December 31, 2014 under our annual incentive bonus plan. Accordingly, the amounts set forth in this column do not represent actual compensation earned by the Named Executive Officers for the fiscal year ended December 31, 2014. For the actual compensation paid to our Named Executive Officers for the fiscal year ended December 31, 2014, see the section entitled “2014 Summary Compensation Table” on page 40. For further discussion see the section entitled “Compensation Discussion and Analysis – 2014 Annual Incentive Bonuses” on page 30. |
(2) | Amounts represent the grant date fair value of each stock |
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(3) | Stock option vests in a series of 48 equal consecutive monthly installments commencing |
(4) |
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Stock option vests in a series of 48 equal consecutive monthly installments commencing | |
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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. Descriptions of our employment agreements with our Named Executive Officers are included under the section entitled “Compensation Discussion and Analysis – Employment Agreements” on page 38. Our Named Executive Officers are entitled to certain severance benefits payable in connection with a Covered Termination and upon a change in control of Geron under their employment agreements as described under the section entitled “Compensation Discussion and Analysis – Severance and Change in Control Benefits” on page 36.
Severance Plan. Our Amended Severance Plan provides for all of our employees, including each of our Named Executive Officers, to receive a cash severance payment and other benefits on a “double-trigger” basis. Description of our Amended Severance Plan is included under the section entitled “Compensation Discussion and Analysis – Severance and Change in Control Benefits” on page 36.
Annual Incentive Bonuses. We provide for annual incentive bonuses to reward executive officers for performance in the prior fiscal year. For more information regarding our annual incentive bonus plan, see the section entitled “Compensation Discussion and Analysis – 2014 Annual Incentive Bonuses” on page 30.
Equity Awards. All stock options awarded to our Named Executive Officers during 2014 were granted under our 2011 Plan. Descriptions of the terms of the stock options granted to our Named Executive Officers are included under the section entitled “Compensation Discussion and Analysis – Components – 2014 Equity Awards” on page 34. Events that can accelerate the vesting of our stock options are described under the section entitled “Compensation Discussion and Analysis – Severance and Change in Control Benefits” on page 36.
Our 2011 Plan was approved by our Board and our stockholders in 2011 and replaced our Amended and Restated 2002 Equity Incentive Plan. The 2011 Plan provides for the grant of stock options, restricted stock, restricted stock units, performance awards and other stock and cash awards. The exercise price of a stock option may not be less than 100% of the closing price of Geron Common Stock as reported by the NASDAQ Global Select Market on the date of grant. Stock options generally have a term of ten years, but may terminate sooner in connection with the holder’s termination of service with us. Stock options vest based on conditions determined by the Compensation Committee or the Board, which typically include continued service, but may also include performance goals and/or other conditions. All equity awards granted under the 2011 Plan are subject to acceleration under certain change in control circumstances described under the section entitled “Compensation Discussion and Analysis – Severance and Change in Control Benefits” on page 36.
Outstanding Equity Awards Value at Fiscal Year-End
The following table includes information with respect to the value of all outstanding equity awards previously awarded to theheld by our Named Executive Officers as of December 31, 2011.2014.
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||||||
Equity | Plan | ||||||||||||||||||||||||||||||||||||
Incentive | Awards: | ||||||||||||||||||||||||||||||||||||
Market | Plan | Market or | |||||||||||||||||||||||||||||||||||
Value | Awards: | Payout | |||||||||||||||||||||||||||||||||||
of | Number | Value of | |||||||||||||||||||||||||||||||||||
Shares | of | Unearned | |||||||||||||||||||||||||||||||||||
or | Shares, | Shares, | |||||||||||||||||||||||||||||||||||
Number | Number | Units | Units or | Units or | |||||||||||||||||||||||||||||||||
of | of | Number of | of | Other | Other | ||||||||||||||||||||||||||||||||
Securities | Securities | Shares or | Stock | Rights | Rights | ||||||||||||||||||||||||||||||||
Underlying | Underlying | Units of | That | That | That | ||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Option | Stock | Have | Have | Have | |||||||||||||||||||||||||||||||
Options | Options | Exercise | Option | That Have | Not | Not | Not | ||||||||||||||||||||||||||||||
Grant | Exercisable | Unexercisable | Price | Expiration | Grant | Not Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||
Name | Date | (#) | (#) | ($) | Date | Date | (#) | ($)(1) | (#) | ($)(1) | |||||||||||||||||||||||||||
John A. Scarlett, M.D. | 9/29/11 | (2) | — | 1,000,000 | $ | 2.16 | 9/29/21 | ||||||||||||||||||||||||||||||
David L. Greenwood(3) | 6/27/02 | 50,000 | — | $ | 8.23 | 6/27/12 | 5/28/08 | (6) | 9,375 | $ | 13,875 | ||||||||||||||||||||||||||
9/5/02 | 145,000 | — | $ | 3.76 | 9/5/12 | 5/29/09 | (6) | 18,750 | $ | 27,750 | |||||||||||||||||||||||||||
5/30/03 | 75,000 | — | $ | 5.08 | 5/30/13 | 5/19/10 | (6) | 28,125 | $ | 41,625 | |||||||||||||||||||||||||||
5/27/04 | 75,000 | — | $ | 7.56 | 5/27/14 | 7/9/10 | (7) | 20,000 | $ | 29,600 | |||||||||||||||||||||||||||
5/6/05 | 85,000 | — | $ | 6.40 | 5/6/15 | 7/9/10 | (8) | 20,000 | $ | 29,600 | |||||||||||||||||||||||||||
5/24/06 | 125,000 | — | $ | 6.63 | 5/24/16 | 7/9/10 | (9) | 140,000 | $ | 207,200 | |||||||||||||||||||||||||||
5/23/07 | 75,000 | — | $ | 9.32 | 5/23/17 | 7/9/10 | (10) | 120,000 | $ | 177,600 | |||||||||||||||||||||||||||
5/28/08 | (5) | 67,188 | 7,812 | $ | 3.97 | 5/28/18 | 3/9/11 | (6) | 75,000 | $ | 111,000 | ||||||||||||||||||||||||||
5/28/08 | 221,341 | — | $ | 3.97 | 5/28/18 | 5/20/11 | (6) | 50,000 | $ | 74,000 | |||||||||||||||||||||||||||
5/29/09 | (5) | 48,438 | 26,562 | $ | 6.52 | 5/29/19 | 5/20/11 | (13) | 77,500 | $ | 114,700 | ||||||||||||||||||||||||||
5/29/09 | 35,000 | — | $ | 6.52 | 5/29/19 | 5/20/11 | (11) | 20,000 | $ | 29,600 | |||||||||||||||||||||||||||
5/29/09 | 20,000 | — | $ | 6.52 | 5/29/19 | 5/20/11 | (12) | 20,000 | $ | 29,600 | |||||||||||||||||||||||||||
5/29/09 | 40,000 | — | $ | 6.52 | 5/29/19 | ||||||||||||||||||||||||||||||||
5/19/10 | (5) | 29,688 | 45,312 | $ | 5.29 | 5/19/20 | |||||||||||||||||||||||||||||||
3/9/11 | (5) | 31,250 | 118,750 | $ | 5.00 | 3/9/21 | |||||||||||||||||||||||||||||||
5/20/11 | (5) | 14,583 | 85,417 | $ | 4.65 | 5/20/21 | |||||||||||||||||||||||||||||||
Stephen M. Kelsey, M.D., | 5/20/09 | (4) | 133,333 | 66,667 | $ | 6.76 | 5/20/19 | 5/19/10 | (6) | 28,125 | $ | 41,625 | |||||||||||||||||||||||||
F.R.C.P, F.R.C.Path. | 5/19/10 | (5) | 29,688 | 45,312 | $ | 5.29 | 5/19/20 | 7/9/10 | (7) | 140,000 | $ | 207,200 | |||||||||||||||||||||||||
5/20/11 | (5) | 10,938 | 64,062 | $ | 4.65 | 5/20/21 | 7/9/10 | (8) | 20,000 | $ | 29,600 | ||||||||||||||||||||||||||
7/9/10 | (9) | 20,000 | $ | 29,600 | |||||||||||||||||||||||||||||||||
7/9/10 | (10) | 120,000 | $ | 177,600 | |||||||||||||||||||||||||||||||||
5/20/11 | (6) | 37,500 | $ | 55,500 | |||||||||||||||||||||||||||||||||
5/20/11 | (11) | 40,000 | $ | 59,200 | |||||||||||||||||||||||||||||||||
5/20/11 | (12) | 40,000 | $ | 59,200 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Market | ||||||||||||||||||||||||||||||
Value of | ||||||||||||||||||||||||||||||
Shares or | ||||||||||||||||||||||||||||||
Number of | Units of | |||||||||||||||||||||||||||||
Shares or | Stock | |||||||||||||||||||||||||||||
Number of Securities | Units of | That | ||||||||||||||||||||||||||||
Underlying | Option | Stock | Have | |||||||||||||||||||||||||||
Unexercised Options | Exercise | Option | That Have | Not | ||||||||||||||||||||||||||
Grant | Exercisable | Unexercisable | Price | Expiration | Grant | Not Vested | Vested | |||||||||||||||||||||||
Named Executive Officer | Date | (#) | (#) | ($/Sh) | Date | Date | (#) | ($)(1) | ||||||||||||||||||||||
John A. Scarlett, M.D. | 9/29/11 | (2) | 812,500 | 187,500 | $ | 2.16 | 9/29/21 | |||||||||||||||||||||||
5/17/12 | (3) | 326,146 | 178,854 | $ | 1.41 | 5/17/22 | ||||||||||||||||||||||||
2/13/13 | (3) | 614,167 | 725,833 | $ | 1.50 | 2/13/23 | ||||||||||||||||||||||||
2/11/14 | (3) | 279,167 | 1,060,833 | $ | 5.09 | 2/11/24 | ||||||||||||||||||||||||
Olivia K. Bloom | 5/6/05 | 30,000 | — | $ | 6.40 | 5/6/15 | 5/20/11 | (4) | 6,250 | $20,313 | ||||||||||||||||||||
5/24/06 | 33,750 | — | $ | 6.63 | 5/24/16 | |||||||||||||||||||||||||
5/23/07 | 20,000 | — | $ | 9.32 | 5/23/17 | |||||||||||||||||||||||||
5/28/08 | 20,000 | — | $ | 3.97 | 5/28/18 | |||||||||||||||||||||||||
5/28/08 | 10,829 | — | $ | 3.97 | 5/28/18 | |||||||||||||||||||||||||
5/29/09 | 20,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||
5/29/09 | 7,500 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||
5/29/09 | 20,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||
5/19/10 | 20,000 | — | $ | 5.29 | 5/19/20 | |||||||||||||||||||||||||
5/20/11 | (3) | 44,792 | 5,208 | $ | 4.65 | 5/20/21 | ||||||||||||||||||||||||
5/17/12 | (3) | 138,854 | 76,146 | $ | 1.41 | 5/17/22 | ||||||||||||||||||||||||
2/12/13 | (3) | 183,333 | 216,667 | $ | 1.51 | 2/12/23 | ||||||||||||||||||||||||
2/10/14 | (3) | 83,333 | 316,667 | $ | 5.01 | 2/10/24 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||
Equity | Plan | |||||||||||||||||||||||||||||||||||
Incentive | Awards: | |||||||||||||||||||||||||||||||||||
Market | Plan | Market or | ||||||||||||||||||||||||||||||||||
Value | Awards: | Payout | ||||||||||||||||||||||||||||||||||
of | Number | Value of | ||||||||||||||||||||||||||||||||||
Shares | of | Unearned | ||||||||||||||||||||||||||||||||||
or | Shares, | Shares, | ||||||||||||||||||||||||||||||||||
Number | Number | Units | Units or | Units or | ||||||||||||||||||||||||||||||||
of | of | Number of | of | Other | Other | |||||||||||||||||||||||||||||||
Securities | Securities | Shares or | Stock | Rights | Rights | |||||||||||||||||||||||||||||||
Underlying | Underlying | Units of | That | That | That | |||||||||||||||||||||||||||||||
Unexercised | Unexercised | Option | Stock | Have | Have | Have | ||||||||||||||||||||||||||||||
Options | Options | Exercise | Option | That Have | Not | Not | Not | |||||||||||||||||||||||||||||
Grant | Exercisable | Unexercisable | Price | Expiration | Grant | Not Vested | Vested | Vested | Vested | |||||||||||||||||||||||||||
Name | Date | (#) | (#) | ($) | Date | Date | (#) | ($)(1) | (#) | ($)(1) | ||||||||||||||||||||||||||
Melissa A. Behrs | 4/8/02 | 15,000 | — | $ | 7.49 | 4/8/12 | 5/28/08 | (6) | 6,250 | $ | 9,250 | |||||||||||||||||||||||||
9/5/02 | 18,961 | — | $ | 3.76 | 9/5/12 | 5/29/09 | (6) | 12,500 | $ | 18,500 | ||||||||||||||||||||||||||
5/30/03 | 17,968 | — | $ | 5.08 | 5/30/13 | 5/19/10 | (6) | 18,750 | $ | 27,750 | ||||||||||||||||||||||||||
5/27/04 | 37,500 | — | $ | 7.56 | 5/27/14 | 7/9/10 | (7) | 105,000 | $ | 155,400 | ||||||||||||||||||||||||||
5/6/05 | 60,000 | — | $ | 6.40 | 5/6/15 | 7/9/10 | (8) | 15,000 | $ | 22,200 | ||||||||||||||||||||||||||
5/24/06 | 60,000 | — | $ | 6.63 | 5/24/16 | 7/9/10 | (9) | 15,000 | $ | 22,200 | ||||||||||||||||||||||||||
5/23/07 | 50,000 | — | $ | 9.32 | 5/23/17 | 7/9/10 | (10) | 90,000 | $ | 133,200 | ||||||||||||||||||||||||||
5/28/08 | (5) | 44,792 | 5,208 | $ | 3.97 | 5/28/18 | 5/20/11 | (6) | 25,000 | $ | 37,000 | |||||||||||||||||||||||||
5/28/08 | 14,167 | — | $ | 3.97 | 5/28/18 | 5/20/11 | (13) | 26,250 | $ | 38,850 | ||||||||||||||||||||||||||
5/29/09 | (5) | 32,292 | 17,708 | $ | 6.52 | 5/29/19 | 5/20/11 | (11) | 20,000 | $ | 29,600 | |||||||||||||||||||||||||
5/29/09 | 20,000 | — | $ | 6.52 | 5/29/19 | 5/20/11 | (12) | 20,000 | $ | 29,600 | ||||||||||||||||||||||||||
5/19/10 | (5) | 19,792 | 30,208 | $ | 5.29 | 5/19/20 | ||||||||||||||||||||||||||||||
5/19/10 | (14) | 7,500 | 2,500 | $ | 5.29 | 5/19/20 | ||||||||||||||||||||||||||||||
5/20/11 | (5) | 7,292 | 42,708 | $ | 4.65 | 5/20/21 | ||||||||||||||||||||||||||||||
David J. Earp, J.D., Ph.D. | 6/27/02 | 36,000 | — | $ | 8.23 | 6/27/12 | 5/28/08 | (6) | 6,250 | $ | 9,250 | |||||||||||||||||||||||||
9/5/02 | 65,000 | — | $ | 3.76 | 9/5/12 | 5/29/09 | (6) | 12,500 | $ | 18,500 | ||||||||||||||||||||||||||
5/30/03 | 37,500 | — | $ | 5.08 | 5/30/13 | 5/19/10 | (6) | 18,750 | $ | 27,750 | ||||||||||||||||||||||||||
5/27/04 | 50,000 | — | $ | 7.56 | 5/27/14 | 7/9/10 | (7) | 15,000 | $ | 22,200 | ||||||||||||||||||||||||||
5/6/05 | 60,000 | — | $ | 6.40 | 5/6/15 | 7/9/10 | (8) | 15,000 | $ | 22,200 | ||||||||||||||||||||||||||
5/24/06 | 93,750 | — | $ | 6.63 | 5/24/16 | 7/9/10 | (9) | 105,000 | $ | 155,400 | ||||||||||||||||||||||||||
5/23/07 | 50,000 | — | $ | 9.32 | 5/23/17 | 7/9/10 | (10) | 90,000 | $ | 133,200 | ||||||||||||||||||||||||||
5/28/08 | (5) | 44,792 | 5,208 | $ | 3.97 | 5/28/18 | 5/20/11 | (6) | 25,000 | $ | 37,000 | |||||||||||||||||||||||||
5/29/09 | (5) | 32,292 | 17,708 | $ | 6.52 | 5/29/19 | 5/20/11 | (13) | 59,500 | $ | 88,060 | |||||||||||||||||||||||||
5/29/09 | 35,000 | — | $ | 6.52 | 5/29/19 | 5/20/11 | (11) | 5,000 | $ | 7,400 | ||||||||||||||||||||||||||
5/29/09 | 20,000 | — | $ | 6.52 | 5/29/19 | 5/20/11 | (12) | 5,000 | $ | 7,400 | ||||||||||||||||||||||||||
5/29/09 | 25,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||||||||
5/19/10 | (5) | 19,792 | 30,208 | $ | 5.29 | 5/19/20 | ||||||||||||||||||||||||||||||
5/20/11 | (5) | 7,292 | 42,708 | $ | 4.65 | 5/20/21 | ||||||||||||||||||||||||||||||
Thomas B. Okarma, Ph.D., | 6/27/02 | 60,000 | — | $ | 8.23 | 6/27/12 | 7/9/10 | (7) | 67,500 | $ | 99,900 | |||||||||||||||||||||||||
M.D.(15) | 9/5/02 | 245,000 | — | $ | 3.76 | 9/5/12 | 7/9/10 | (8) | 67,500 | $ | 99,900 | |||||||||||||||||||||||||
5/30/03 | 100,000 | — | $ | 5.08 | 5/30/13 | 7/9/10 | (9) | 67,500 | $ | 99,900 | ||||||||||||||||||||||||||
5/27/04 | 100,000 | — | $ | 7.56 | 5/27/14 | 7/9/10 | (10) | 135,000 | $ | 199,800 | ||||||||||||||||||||||||||
5/6/05 | 110,000 | — | $ | 6.40 | 5/6/15 | |||||||||||||||||||||||||||||||
5/24/06 | 175,000 | — | $ | 6.63 | 5/24/16 | |||||||||||||||||||||||||||||||
5/23/07 | 100,000 | — | $ | 9.32 | 5/23/17 | |||||||||||||||||||||||||||||||
5/28/08 | 100,000 | — | $ | 3.97 | 5/28/18 | |||||||||||||||||||||||||||||||
5/28/08 | 285,000 | — | $ | 3.97 | 5/28/18 | |||||||||||||||||||||||||||||||
5/29/09 | 100,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||||||||
5/29/09 | 35,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||||||||
5/29/09 | 300,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||||||||
5/19/10 | 100,000 | — | $ | 5.29 | 5/19/20 |
Option Awards | Stock Awards | ||||||||||||||||||||||
Market | |||||||||||||||||||||||
Value of | |||||||||||||||||||||||
Shares or | |||||||||||||||||||||||
Number of | Units of | ||||||||||||||||||||||
Shares or | Stock | ||||||||||||||||||||||
Number of Securities | Units of | That | |||||||||||||||||||||
Underlying | Option | Stock | Have | ||||||||||||||||||||
UnexercisedOptions | Exercise | Option | That Have | Not | |||||||||||||||||||
Grant | Exercisable | Unexercisable | Price | Expiration | Grant | Not Vested | Vested | ||||||||||||||||
Named Executive Officer | Date | (#) | (#) | ($/Sh) | Date | Date | (#) | ($)(1) | |||||||||||||||
Melissa A. Kelly Behrs | 5/6/05 | 60,000 | — | $6.40 | 5/6/15 | 5/20/11 | (4) | 6,250 | $20,313 | ||||||||||||||
5/24/06 | 60,000 | — | $6.63 | 5/24/16 | |||||||||||||||||||
5/23/07 | 50,000 | — | $9.32 | 5/23/17 | |||||||||||||||||||
5/28/08 | 50,000 | — | $3.97 | 5/28/18 | |||||||||||||||||||
5/28/08 | 14,167 | — | $3.97 | 5/28/18 | |||||||||||||||||||
5/29/09 | 50,000 | — | $6.52 | 5/29/19 | |||||||||||||||||||
5/29/09 | 20,000 | — | $6.52 | 5/29/19 | |||||||||||||||||||
5/19/10 | 50,000 | — | $5.29 | 5/19/20 | |||||||||||||||||||
5/19/10 | 10,000 | — | $5.29 | 5/19/20 | |||||||||||||||||||
5/20/11 | (3) | 44,792 | 5,208 | $4.65 | 5/20/21 | ||||||||||||||||||
5/17/12 | (3) | 193,750 | 106,250 | $1.41 | 5/17/22 | ||||||||||||||||||
2/12/13 | (3) | 137,500 | 162,500 | $1.51 | 2/12/23 | ||||||||||||||||||
2/10/14 | (3) | 83,333 | 316,667 | $5.01 | 2/10/24 | ||||||||||||||||||
Andrew J. Grethlein, Ph.D. | 9/19/12 | (5) | 337,500 | 262,500 | $1.70 | 9/19/22 | |||||||||||||||||
2/12/13 | (3) | 137,500 | 162,500 | $1.51 | 2/12/23 | ||||||||||||||||||
2/10/14 | (3) | 83,333 | 316,667 | $5.01 | 2/10/24 | ||||||||||||||||||
Stephen N. Rosenfield, J.D. | 11/1/11 | (6) | 36,000 | — | $2.22 | 11/1/21 | |||||||||||||||||
2/16/12 | (7) | 301,042 | 123,958 | $2.14 | 2/16/22 | ||||||||||||||||||
5/17/12 | (8) | 129,167 | 70,833 | $1.41 | 5/17/22 | ||||||||||||||||||
2/12/13 | (3) | 192,500 | 227,500 | $1.51 | 2/12/23 | ||||||||||||||||||
2/10/14 | (3) | 83,333 | 316,667 | $5.01 | 2/10/24 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||
Equity | Plan | |||||||||||||||||||||||||||||||||||
Incentive | Awards: | |||||||||||||||||||||||||||||||||||
Market | Plan | Market or | ||||||||||||||||||||||||||||||||||
Value | Awards: | Payout | ||||||||||||||||||||||||||||||||||
of | Number | Value of | ||||||||||||||||||||||||||||||||||
Shares | of | Unearned | ||||||||||||||||||||||||||||||||||
or | Shares, | Shares, | ||||||||||||||||||||||||||||||||||
Number | Number | Units | Units or | Units or | ||||||||||||||||||||||||||||||||
of | of | Number of | of | Other | Other | |||||||||||||||||||||||||||||||
Securities | Securities | Shares or | Stock | Rights | Rights | |||||||||||||||||||||||||||||||
Underlying | Underlying | Units of | That | That | That | |||||||||||||||||||||||||||||||
Unexercised | Unexercised | Option | Stock | Have | Have | Have | ||||||||||||||||||||||||||||||
Options | Options | Exercise | Option | That Have | Not | Not | Not | |||||||||||||||||||||||||||||
Grant | Exercisable | Unexercisable | Price | Expiration | Grant | Not Vested | Vested | Vested | Vested | |||||||||||||||||||||||||||
Name | Date | (#) | (#) | ($) | Date | Date | (#) | ($)(1) | (#) | ($)(1) | ||||||||||||||||||||||||||
Jane S. Lebkowski, | 6/27/02 | 36,000 | — | $ | 8.23 | 6/27/12 | 5/28/08 | (6) | 6,250 | $ | 9,250 | |||||||||||||||||||||||||
Ph.D.(16) | 9/5/02 | 70,000 | — | $ | 3.76 | 9/5/12 | 5/29/09 | (6) | 12,500 | $ | 18,500 | |||||||||||||||||||||||||
5/30/03 | 37,500 | — | $ | 5.08 | 5/30/13 | 5/19/10 | (6) | 18,750 | $ | 27,750 | ||||||||||||||||||||||||||
5/27/04 | 50,000 | — | $ | 7.56 | 5/27/14 | 7/9/10 | (7) | 20,000 | $ | 29,600 | ||||||||||||||||||||||||||
5/6/05 | 60,000 | — | $ | 6.40 | 5/6/15 | 7/9/10 | (8) | 130,000 | $ | 192,400 | ||||||||||||||||||||||||||
5/24/06 | 75,000 | — | $ | 6.63 | 5/24/16 | 7/9/10 | (9) | 30,000 | $ | 44,400 | ||||||||||||||||||||||||||
5/23/07 | 50,000 | — | $ | 9.32 | 5/23/17 | 7/9/10 | (10) | 120,000 | $ | 177,600 | ||||||||||||||||||||||||||
5/28/08 | (5) | 44,792 | 5,208 | $ | 3.97 | 5/28/18 | 5/20/11 | (6) | 25,000 | $ | 37,000 | |||||||||||||||||||||||||
5/28/08 | 45,000 | — | $ | 3.97 | 5/28/18 | 5/20/11 | (13) | 64,500 | $ | 95,460 | ||||||||||||||||||||||||||
5/29/09 | (5) | 32,292 | 17,708 | $ | 6.52 | 5/29/19 | 5/20/11 | (11) | 5,000 | $ | 7,400 | |||||||||||||||||||||||||
5/29/09 | 10,000 | — | $ | 6.52 | 5/29/19 | 5/20/11 | (12) | 5,000 | $ | 7,400 | ||||||||||||||||||||||||||
5/29/09 | 20,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||||||||
5/29/09 | 25,000 | — | $ | 6.52 | 5/29/19 | |||||||||||||||||||||||||||||||
5/19/10 | (5) | 19,792 | 30,208 | $ | 5.29 | 5/19/20 | ||||||||||||||||||||||||||||||
5/20/11 | (5) | 7,292 | 42,708 | $ | 4.65 | 5/20/21 | ||||||||||||||||||||||||||||||
Katharine E. Spink, | 12/17/03 | 30,000 | — | $ | 10.01 | 12/17/13 | 5/28/08 | (6) | 1,093 | $ | 1,618 | |||||||||||||||||||||||||
Ph.D.(17) | 5/27/04 | 4,849 | — | $ | 7.56 | 5/27/14 | 5/29/09 | (6) | 12,500 | $ | 18,500 | |||||||||||||||||||||||||
5/6/05 | 12,000 | — | $ | 6.40 | 5/6/15 | 5/19/10 | (6) | 18,750 | $ | 27,750 | ||||||||||||||||||||||||||
5/24/06 | 13,130 | — | $ | 6.63 | 5/24/16 | 5/20/11 | (6) | 25,000 | $ | 37,000 | ||||||||||||||||||||||||||
5/23/07 | 7,000 | — | $ | 9.32 | 5/23/17 | 7/9/10 | (7) | 10,000 | $ | 14,800 | ||||||||||||||||||||||||||
5/28/08 | (5) | 7,839 | 911 | $ | 3.97 | 5/28/18 | 7/9/10 | (8) | 90,000 | $ | 133,200 | |||||||||||||||||||||||||
5/29/09 | (5) | 32,292 | 17,708 | $ | 6.52 | 5/29/19 | 7/9/10 | (9) | 35,000 | $ | 51,800 | |||||||||||||||||||||||||
5/19/10 | (5) | 19,792 | 30,208 | $ | 5.29 | 5/19/20 | 7/9/10 | (10) | 90,000 | $ | 133,200 | |||||||||||||||||||||||||
5/20/11 | (5) | 7,292 | 42,708 | $ | 4.65 | 5/20/21 | 5/20/11 | (11) | 5,000 | $ | 7,400 | |||||||||||||||||||||||||
5/20/11 | (12) | 5,000 | $ | 7,400 |
(1) | |
(2) | Stock option vests as follows: 125,000 shares on March 29, 2012, and the remaining 875,000 shares in a series of 42 equal consecutive monthly installments commencing |
(3) | |
Stock option vests in a series of 48 equal consecutive monthly installments commencing | |
Restricted stock award vests in a series of four equal consecutive annual installments commencing on the date of grant, provided the executive officer continues to provide services to the Company. | |
Stock option was granted in connection with Mr. Rosenfield’s consulting agreement prior to his employment with the Company. | |
(7) | Stock option vests as follows: 53,125 shares on August 16, 2012 and the remaining 371,875 shares in a series of |
Option Exercises and Restricted Stock Awards Vested in 20112014
The following table includes certain information with respect to the options exercised andvesting of restricted stock awards vestedheld by the Named Executive Officers during the fiscal year ended December 31, 2011.2014. No options were exercised by the Named Executive Officers during the fiscal year ended December 31, 2014.
Option Awards | Stock Awards | |||||||||||||
Number of | Value | Number of | Value | |||||||||||
Shares Acquired | Realized on | Shares Acquired | Realized on | |||||||||||
On Exercise | Exercise | On Vesting | Vesting | |||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||
John A. Scarlett, M.D. | — | $— | — | $ | — | |||||||||
David L. Greenwood | — | $— | 75,000 | $ | 334,219 | |||||||||
Stephen M. Kelsey, M.D., F.R.C.P, F.R.C.Path. | — | $— | 39,375 | $ | 186,319 | |||||||||
Melissa A. Behrs | — | $— | 55,000 | $ | 245,063 | |||||||||
David J. Earp, J.D., Ph.D. | — | $— | 55,000 | $ | 245,063 | |||||||||
Thomas B. Okarma, Ph.D., M.D. | — | $— | 170,000 | $ | 447,100 | |||||||||
Jane S. Lebkowski, Ph.D. | — | $— | 55,000 | $ | 245,063 | |||||||||
Katharine E. Spink, Ph.D. | — | $— | 44,469 | $ | 197,931 |
Number of | Value | |||||||||
Shares Acquired | Realized on | |||||||||
On Vesting | Vesting | |||||||||
Named Executive Officer | (#)(1) | ($)(2) | ||||||||
John A. Scarlett, M.D. | — | $ | — | |||||||
Olivia K. Bloom | 28,000 | $ | 58,783 | |||||||
Melissa A. Kelly Behrs | 44,375 | $ | 93,119 | |||||||
Andrew J. Grethlein, Ph.D. | — | $ | — | |||||||
Stephen N. Rosenfield, J.D. | — | $ | — |
(1) | Represents the vesting of previously granted restricted stock awards. | |
(2) | The value realized is based upon the closing market price of our Common Stock on the vesting date multiplied by the number of shares of restricted stock vested. |
Pension Benefits
None of the Named Executive Officers participates in or has an account balance under any pension or qualified or non-qualified defined benefit retirement plans sponsored by the Company.
Non-Qualified Deferred Compensation
None of the Named Executive Officers participates in or has an account balance under non-qualified defined contribution plans or other non-qualified deferred compensation plans maintained by the Company.
Additional Benefits
The Named Executive Officers are eligible to participate in our benefit plans generally available to all employees, as described in “Compensation Discussion and Analysis – Other Compensation.”
Potential Payments Upon Termination or Change in Control
See discussion of potential payments upon termination or change in control in the section entitled, “Compensation Discussion and Analysis—Analysis – Severance and Change in Control Benefits.”
The table below summarizes the potential maximum payments under the Amended Severance Plan, or individual employment agreements, as applicable, for the Named Executive Officers and our equity plans if a qualifying termination and/or change in control event occurred on December 31, 2011:2014.
Before Change in | ||||||||||||||||||
Control | After Change in Control | Change in | ||||||||||||||||
Termination | Termination Without | Control | ||||||||||||||||
Without Cause or | Cause or | Without | ||||||||||||||||
Officer and Position | Benefit | for Good Reason(1) | for Good Reason(2)(3) | Termination(3) | ||||||||||||||
John A. Scarlett, M.D. | Severance | $ | 1,100,000 | $ | 825,000 | |||||||||||||
President and Chief Executive Officer | Benefits | 14,728 | 29,328 | |||||||||||||||
Option and | ||||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | — | $ | — | ||||||||||||||
Total | $ | 1,114,728 | $ | 854,328 | $ | — | ||||||||||||
David L. Greenwood(4) | Severance | $ | 755,000 | $ | — | |||||||||||||
Former President and Chief | Benefits | 14,728 | — | |||||||||||||||
Financial Officer | Option and | |||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | — | $ | 886,150 | ||||||||||||||
Total | $ | 769,728 | $ | — | $ | 886,150 | ||||||||||||
Stephen M. Kelsey, M.D., F.R.C.P, | ||||||||||||||||||
F.R.C.Path. | Severance | $ | — | $ | 500,000 | |||||||||||||
Executive Vice President, | Benefits | — | 33,957 | |||||||||||||||
Head of R&D, and Chief Medical Officer | Option and | |||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | 659,525 | $ | 659,525 | ||||||||||||||
Total | $ | — | $ | 1,193,482 | $ | 659,525 | ||||||||||||
Melissa A. Behrs | Severance | $ | 352,000 | $ | 400,000 | |||||||||||||
Senior Vice President, Strategic | Benefits | 20,449 | 34,175 | |||||||||||||||
Portfolio Management, Product | Option and | |||||||||||||||||
Development and Manufacturing | Restricted | |||||||||||||||||
Stock Vesting | — | 523,550 | $ | 523,550 | ||||||||||||||
Total | $ | 372,449 | $ | 957,725 | $ | 523,550 | ||||||||||||
David J. Earp, J.D., Ph.D. | Severance | $ | 357,500 | $ | 406,250 | |||||||||||||
Senior Vice President, | Benefits | 20,275 | 33,957 | |||||||||||||||
Corporate Transactions, | Option and | |||||||||||||||||
and Chief Legal Officer | Restricted | |||||||||||||||||
Stock Vesting | — | 528,360 | $ | 528,360 | ||||||||||||||
Total | $ | 377,775 | $ | 968,567 | $ | 528,360 |
Covered | Termination | Change in | |||||||||||||||
Termination | Without Cause or | Control | |||||||||||||||
(No Change in | for Good Reason | Without | |||||||||||||||
Named Executive Officer | Benefit | Control)(1) | (Change in Control)(2)(3) | Termination(3) | |||||||||||||
John A. Scarlett, M.D. | Severance | $ | 1,595,280 | $ | 1,595,280 | ||||||||||||
Continued | |||||||||||||||||
Healthcare | |||||||||||||||||
Benefits | 22,495 | 33,742 | |||||||||||||||
Option and | |||||||||||||||||
Restricted | |||||||||||||||||
Stock Vesting | — | 4,364,200 | $ | 4,364,200 | |||||||||||||
Total | $ | 1,617,775 | $ | 5,993,222 | $ | 4,364,200 |
Before Change in | ||||||||||||||||||
Control | After Change in Control | Change in | ||||||||||||||||
Termination | Termination Without | Control | ||||||||||||||||
Without Cause or | Cause or | Without | ||||||||||||||||
Officer and Position | Benefit | for Good Reason(1) | for Good Reason(2)(3) | Termination(3) | ||||||||||||||
Thomas B. Okarma, Ph.D., M.D.(5) | Severance | $ | 886,981 | $ | — | |||||||||||||
Former President and Chief | Benefits | 24,000 | — | |||||||||||||||
Executive Officer | Option and | |||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | — | $ | 499,500 | ||||||||||||||
Total | $ | 910,981 | $ | — | $ | 499,500 | ||||||||||||
Jane S. Lebkowski, Ph.D.(6) | Severance | $ | 368,500 | $ | — | |||||||||||||
Former Senior Vice President and | Benefits | 14,687 | — | |||||||||||||||
Chief Scientific Officer | Option and | |||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | — | $ | 646,760 | ||||||||||||||
Total | $ | 383,187 | $ | — | $ | 646,760 | ||||||||||||
Katharine E. Spink, Ph.D.(7) | Severance | $ | 319,000 | $ | — | |||||||||||||
Former Senior Vice President, Alliance | Benefits | 18,230 | — | |||||||||||||||
Management and Cell Therapy | Option and | |||||||||||||||||
Product Development | Restricted | |||||||||||||||||
Stock Vesting | — | — | $ | 432,668 | ||||||||||||||
Total | $ | 337,230 | $ | — | $ | 432,668 |
Covered | Termination | Change in | ||||||||||||||||
Termination | Without Cause or | Control | ||||||||||||||||
(No Change in | for Good Reason | Without | ||||||||||||||||
Named Executive Officer | Benefit | Control)(1) | (Change in Control)(2)(3) | Termination(3) | ||||||||||||||
Olivia K. Bloom | Severance | $ | 529,250 | $ | 620,500 | |||||||||||||
Continued | ||||||||||||||||||
Healthcare | ||||||||||||||||||
Benefits | 3,376 | 4,220 | ||||||||||||||||
Option and | ||||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | 1,111,913 | $ | 1,111,913 | ||||||||||||||
Total | $ | 532,626 | $ | 1,736,633 | $ | 1,111,913 | ||||||||||||
Melissa A. Kelly Behrs | Severance | $ | 510,400 | $ | 598,400 | |||||||||||||
Continued | ||||||||||||||||||
Healthcare | ||||||||||||||||||
Benefits | 30,822 | 38,527 | ||||||||||||||||
Option and | ||||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | 1,094,313 | $ | 1,094,313 | ||||||||||||||
Total | $ | 541,222 | $ | 1,731,240 | $ | 1,094,313 | ||||||||||||
Andrew J. Grethlein, Ph.D. | Severance | $ | 549,550 | $ | 644,300 | |||||||||||||
Continued | ||||||||||||||||||
Healthcare | ||||||||||||||||||
Benefits | 30,893 | 38,616 | ||||||||||||||||
Option and | ||||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | 1,452,000 | $ | 1,452,000 | ||||||||||||||
Total | $ | 580,443 | $ | 2,134,916 | $ | 1,452,000 | ||||||||||||
Stephen N. Rosenfield, J.D. | Severance | $ | 452,400 | $ | 530,400 | |||||||||||||
Continued | ||||||||||||||||||
Healthcare | ||||||||||||||||||
Benefits | 1,847 | 2,309 | ||||||||||||||||
Option and | ||||||||||||||||||
Restricted | ||||||||||||||||||
Stock Vesting | — | 1,607,630 | $ | 1,607,630 | ||||||||||||||
Total | $ | 454,247 | $ | 2,140,339 | $ | 1,607,630 |
(1) | Amounts represent |
(2) | Amounts represent lump-sum severance payments, target annual incentive bonus or accrued annual incentive bonus, continued healthcare benefits and the intrinsic value of acceleration of stock option and restricted stock vesting, as applicable, that could be paid to the Named Executive Officer under such Named Executive Officer’s employment agreement and/or our Amended Severance Plan in the event of the Covered Termination or Change in Control triggering event on December 31, 2014, as applicable. Any payments made under the Named Executive Officer’s employment agreement would be deducted from payments due under the Amended Severance Plan. |
(3) | Amounts represent |
The following table summarizes information with respect to equity awards under Geron’s equity compensation plans at December 31, 2011:2014:
Number of | Weighted- | Number of securities | Number of | Weighted- | Number of securities | ||||||||||||||||||||||||
securities to be | average | remaining available for | securities to be | average | remaining available for | ||||||||||||||||||||||||
issued upon exercise | exercise price | future issuance under | issued upon exercise | exercise price | future issuance under | ||||||||||||||||||||||||
of outstanding | of outstanding | equity compensation | of outstanding | of outstanding | equity compensation | ||||||||||||||||||||||||
options, warrants | options, warrants | plans (excluding securities | options, warrants | options, warrants | plans (excluding securities | ||||||||||||||||||||||||
and rights | and rights | reflected in column (a)) | and rights(1) | and rights | reflected in column (a))(1) | ||||||||||||||||||||||||
(a) | (b) | (c) | (a) | (b) | (c) | ||||||||||||||||||||||||
Equity compensation plans approved by | |||||||||||||||||||||||||||||
security holders | 14,355,548 | (1) | $ | 5.51 | 14,948,042 | (2) | 16,958,944 | (2) | $ | 3.16 | 14,360,508 | (3) | |||||||||||||||||
Equity compensation plans not approved by | |||||||||||||||||||||||||||||
security holders | 595,000 | (3) | $ | 4.48 | — | 470,000 | (4) | $ | 3.75 | — | |||||||||||||||||||
Total | 14,950,548 | $ | 5.47 | 14,948,042 | 17,428,944 | $ | 3.18 | 14,360,508 |
(1) | The table does not include information regarding Geron’s 401(k) Plan. The Geron 401(k) Plan permits us to make matching contributions on behalf of plan participants, which matching contributions can be made in Common Stock that vests ratably over four years for each year of service completed by the employee, commencing from the date of hire, until it is fully vested when the employee has completed four years of service. As of December 31, 2014, there were approximately 893,548 shares of Common Stock held in this plan. |
(2) | Consists of |
Consists of | |
Represents outstanding warrants issued in conjunction with consulting services. For further details, see Note |
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On the recommendation of theThe Audit Committee of the Board has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2012,2015, and has further directed that management submit the selection of the independent registered public accounting firm for ratification by theour stockholders at the Annual Meeting. Ernst & Young LLP has served as our independent registered public accounting firm since 1992. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions from stockholders.
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 the CompanyGeron or itsour 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 theour stockholders for ratification as a matter of good corporate practice. If theour 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 interestinterests of the CompanyGeron and itsour stockholders.
Vote Required and Board Recommendation
Stockholder ratification of Ernst & Young LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of the votes castshares present in person or represented by proxy at this 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.
The Board of Directors Unanimously Recommends That
Stockholders VoteFOR Proposal 43
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. 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. 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.
Upon recommendation by the Audit Committee, the Board selected Ernst & Young LLP to act in the same capacity for the fiscal year ending December 31, 2012.2015. We have been informed by Ernst & Young LLP, to the best of their knowledge, that neither the firm nor any of its members or their associates has any financial interest, direct or indirect in the CompanyGeron or itsour affiliates.
Audit Fees and All Other Fees
The Audit Committee approved 100% of all audit, tax and other services provided by Ernst & Young LLP in 20112014 and 2010.2013. The total fees paid to Ernst & Young LLP for the last two fiscal years are as follows:
Fiscal Year Ended | Fiscal Year Ended | ||||
December 31, 2011 | December 31, 2010 | ||||
Audit Fees(1) | $488,164 | $653,693 | |||
Tax Fees(2) | 9,813 | 33,146 | |||
All Other Fees | 1,995 | 1,995 |
Fiscal Year Ended | Fiscal Year Ended | ||||||||
December 31, 2014 | December 31, 2013 | ||||||||
Audit Fees(1) | $ | 615,679 | $ | 541,321 | |||||
Audit Related Fees | — | — | |||||||
Tax Fees | — | — | |||||||
All Other Fees(2) | 1,995 | 1,305 |
(1) | Audit Fees include the integrated audit of annual | |
(2) |
The Audit Committee of Geron Corporation’s Board of Directors is comprised of three independent directors as required by the listing standards of the NASDAQ Global Select Market (NASDAQ).NASDAQ. The Audit Committee operates pursuant to a written charter adopted and amended by the Board in May 2011.2014. A copy of the Audit Committee’s amended and restated charter is available on our website at http://www.geron.com.
The members of the Audit Committee are Ms. Eastham (Chairperson), Dr. Lawlis and Messrs. Fritzky and Kiley.Mr. Bradbury. The Board has determined that all members of the Audit Committee are financially literate as required by NASDAQ. The Board has also determined that Ms. Eastham is anand Mr. Bradbury are audit committee financial expertexperts as defined by NASDAQ.
The function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities regardingregarding: (i) the quality and integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the qualifications and independence of the independent registered public accounting firm serving as our auditors and (iv) the performance of the independent registered public accounting firm.
Management is responsible for the Company’sGeron’s internal controls and financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of the Company’sGeron’s consolidated 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:
1) | The Audit Committee has reviewed and discussed the audited financial statements of the Company as of and for the fiscal year ended December 31, | ||
2) | The Audit Committee has discussed with the independent auditors the matters required to be discussed by | ||
3) | The Audit Committee has received the written disclosures and the letter from the independent auditors required by | ||
4) | The Audit Committee has considered whether the independent |
Based on the reports and discussions described above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’sGeron’s Annual Report on Form 10-K for the year ended December 31, 2011,2014, for filing with the SEC.
Submitted on March 19, 20125, 2015 by the members of the Audit Committee of the Company’sGeron’s Board of Directors.
Karin Eastham (Chairperson) | |
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, (the “Exchange Act”), or the Securities Act of 1933, as amended, (the “Securities Act”), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
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 the Company,us, are beneficially owned by: (i) each person, or group of affiliated persons, who is known by us to the best of our knowledge based exclusively on Schedules 13G filed with the Securities and Exchange Commission (SEC), is thebe a beneficial owner of more than 5% of our outstanding Common Stock, (ii) each person who served as a director in 2011, three of whom are alsoour directors and nominees for election as directors,director, (iii) each of our Named Executive Officer,Officers, as defined on page 2822 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, 230 Constitution149 Commonwealth Drive, Suite 2070, Menlo Park, CA 94025. Except for information based on Schedules 13G, as indicated in the footnotes, beneficial ownership is stated as of February 10, 2012.11, 2015.
Beneficial Ownership(1) | ||||
Number of | Percent of | |||
Beneficial Owner | Shares | Total | ||
Directors/Nominees and Named Executive Officers: | ||||
Alexander E. Barkas, Ph.D.(2) | 767,160 | * | ||
Karin Eastham(3) | 184,500 | * | ||
Edward V. Fritzky(4) | 400,375 | * | ||
Thomas Hofstaetter, Ph.D.(5) | 118,016 | * | ||
Charles J. Homcy, M.D.(6) | 177,751 | * | ||
Hoyoung Huh, M.D., Ph.D.(7) | 185,104 | * | ||
Thomas D. Kiley, Esq.(8) | 472,175 | * | ||
Robert J. Spiegel, M.D., FACP(9) | 87,037 | * | ||
Melissa A. Behrs(10) | 844,296 | * | ||
David J. Earp, J.D., Ph.D.(11) | 1,114,048 | * | ||
David L. Greenwood(12) | 1,952,928 | 1.46% | ||
Stephen M. Kelsey, M.D., F.R.C.P., F.R.C.Path.(13) | 694,745 | * | ||
Jane S. Lebkowski, Ph.D.(14) | 1,202,035 | * | ||
Thomas B. Okarma, Ph.D., M.D.(15) | 2,584,560 | 1.92% | ||
John A. Scarlett, M.D.(16) | 200,000 | * | ||
Katharine E. Spink, Ph.D.(17) | 488,479 | * | ||
All directors and executive officers as a group (14 persons) | 4,975,972 | 3.69% | ||
5% Beneficial Holders: | ||||
BlackRock, Inc.(18) | 8,118,503 | 6.13% | ||
40 East 52ndStreet, New York, NY 10022 |
Beneficial Ownership(1) | |||||||
Number of | Percent of | ||||||
Beneficial Owner | Shares | Total | |||||
Directors/Nominees and Named Executive Officers: | |||||||
Daniel M. Bradbury(2) | 235,305 | * | |||||
Karin Eastham(3) | 219,547 | * | |||||
Thomas Hofstaetter, Ph.D.(4) | 172,939 | * | |||||
Hoyoung Huh, M.D., Ph.D.(5) | 379,223 | * | |||||
V. Bryan Lawlis, Ph.D.(6) | 140,000 | * | |||||
Susan M. Molineaux, Ph.D.(7) | 102,761 | * | |||||
Robert J. Spiegel, M.D., FACP(8) | 188,739 | * | |||||
Melissa A. Kelly Behrs(9) | 1,023,495 | * | |||||
Olivia K. Bloom(10) | 825,506 | * | |||||
Andrew J. Grethlein, Ph.D.(11) | 650,183 | * | |||||
Stephen N. Rosenfield, J.D.(12) | 858,312 | * | |||||
John A. Scarlett, M.D.(13) | 2,446,460 | 1.53 | % | ||||
All directors and executive officers as a group (12 persons)(14) | 7,242,470 | 4.42 | % | ||||
5% Beneficial Holders: | |||||||
FMR LLC(15) | 23,540,143 | 14.94 | % | ||||
245 Summer Street, Boston, MA 02210 | |||||||
BlackRock, Inc.(16) | 11,201,887 | 7.11 | % | ||||
55 East 52ndStreet, New York, NY 10022 | |||||||
State Street Corporation(17) | 8,018,906 | 5.09 | % | ||||
One Lincoln Street, Boston, MA 02111 |
* | Represents beneficial ownership of less than 1% of Common Stock. | |
(1) | Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of Common Stock | |
(2) | ||
(3) |
(4) | |||
Consists of 21,094 shares held by the Molineaux Family Trust and 81,667 shares issuable upon the exercise of outstanding options held by Dr. Molineaux exercisable within 60 days of February 11, 2015. | |||
(8) | |||
(11) | Consists of 2,267 shares held directly by Andrew J. Grethlein and 647,916 shares issuable upon the exercise of outstanding options held by Dr. | ||
(12) | |||
(13) | |||
(14) | Consists of shares beneficially owned by our current directors and executive officers as described in footnotes (2) through (13). | ||
(15) | The indicated ownership is based solely on a Schedule 13G/A filed with the SEC by FMR LLC on February 13, 2015, reporting beneficial ownership as of December 31, 2014. The Schedule 13G/A filed by the reporting person provides information only as of December 31, 2014, and, consequently, the beneficial ownership of the above-mentioned reporting person may have changed between December 31, 2014 and February 11, 2015. | ||
(16) | The indicated ownership is based solely on a Schedule 13G/A filed with the SEC by BlackRock, Inc. on January 26, 2015, reporting beneficial ownership as of December 31, 2014. The Schedule 13G/A filed by the reporting person provides information only as of December 31, 2014, and, consequently, the beneficial ownership of the above-mentioned reporting person may have changed between December 31, 2014 and February 11, 2015. | ||
(17) | |||
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 captionsections entitled “Executive Compensation Tables,Tables” and “Compensation of Directors,” the indemnification agreements described below, and as described below under “Participation in Public Offering.”
Certain Transactions With or Involving Related Persons
Participation in Public Offering
On February 4, 2014, we completed an underwritten public offering of 25,875,000 shares of our Common Stock at a price to the transactions described below.public of $4.00 per share. Net cash proceeds from the public offering were approximately $96.8 million, after deducting the underwriting discounts and commissions and offering expenses payable by us. Based on information provided to us, FMR LLC, which beneficially owns more than 5% of our outstanding Common Stock, purchased 5,625,000 shares in the public offering from the underwriters for a total purchase price of $22.5 million (based on the price to the public of $4.00 per share). To our knowledge, no other holder of 5% of our outstanding Common Stock participated in the offering. None of our directors or executive officers participated in the offering, nor did any of such persons have a direct or indirect material interest in the offering. Since this offering was public, with the price to the public in the offering determined by a book building process with the underwriters, the offering was not specifically reviewed in advance as a related-party transaction. However, the offering was approved by our Board and a Pricing Committee of our Board, and consistent with our Audit Committee charter, the Audit Committee subsequently reviewed the offering.
Indemnity Agreements
We have entered into indemnity agreements with all of our officers and directors which provide, among other things, that we will indemnify such executive officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines, settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason for his or her position as a director, officer or other agent of the Company, and otherwise to the full extent permitted under Delaware law and our Bylaws.
Policies and Procedures
Our Audit Committee is responsible for reviewing and approving in advance, all related party transactions.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 our website at http://www.geron.com inthe Corporate Governance page under the Investor Relations section under “Corporate Governance.” To identify related party transactions, each year, our directors and officers complete Director and Officer Questionnaires identifying any transactions with us in which the executive officer or director or their family members have an interest. We review related party transactions due to the potential for a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere, with our interests. In addition, our Nominating and Corporate Governance Committee Charter determines, on an annual basis, which members of our Board meet the definition of independent director as defined in NASDAQ Rule 5605(a)(2). This obligation is set forth in writing in the Nominating and Corporate Governance Committee charter. A copy of the Nominating and Corporate Governance Committee charter is available on our website at http://www.geron.comwww.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: (a) the risks, costs and benefits to Geron, (b) the impact on a director’s independence in the Investor Relations section under “Corporate Governance.” Our Nominatingevent the related
person is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products and Corporate Governance(e) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. 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 reviewsconsiders, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of Geron and discusses any relationships with directors that would potentially interfere with his or herour stockholders, as the Audit Committee determines in the good faith exercise of independent judgment in carrying out the responsibilities of a director. Finally, our Code of Conduct establishes the corporate standards of behavior for all our employees, officers, and directors and sets our expectations of contractors and agents. The Code of Conduct is available on our website at http://www.geron.com in the Investor Relations section under “Corporate Governance.” Our Code of Conduct requires any person who becomes aware of any departure from the standards in our Code of Conduct to report his or her knowledge promptly to a supervisor or an attorney in the legal department.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)“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 of the Company.securities. Reporting Persons are required by SEC regulations to furnish the Companyus with copies of all Section 16(a) forms they file.
To our knowledge, based solely onupon 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, 2011,2014, all Reporting Persons complied with the applicable filing requirement.Section 16(a) reporting requirements.
Stockholder Nominations and Proposals for 20132016 Annual Meeting
We expect to hold our 20132016 Annual Meeting of Stockholders in May 2013.2016. All proposals or director nominations of stockholders intended to be presented at the 20132016 Annual Meeting of Stockholders must be directed to the attention of our Corporate Secretary, at the address set forth on the first page of this Proxy Statement.
A stockholder’s notice to include anyTo be considered for inclusion in next year’s proxy materials, your proposal in the 2013 Annual Meeting of Stockholders must be deliveredsubmitted in writing by December 8, 2015, to our Corporate Secretary not less than 90 daysat Geron Corporation, 149 Commonwealth Drive, Suite 2070, Menlo Park, California, 94025, and not more than 120 days beforemust comply with all applicable requirements of Rule 14a-8 promulgated under the anniversary date of the immediately preceding annual meeting. For the 2013 Annual Meeting of Stockholders, the notice must be delivered between January 18, 2013 and February 17, 2013.Exchange Act. However, if the 2013our 2016 Annual Meeting of Stockholders is not within 30 daysheld between April 18, 2016 and June 17, 2016, then the deadline will be a reasonable time prior to the time we begin to print and send our proxy materials.
If you wish to bring a proposal before the stockholders or nominate a director at the 2016 Annual Meeting of MayStockholders, 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 19, 2016 and not later than the close of business on February 18, 2016. However, if the 2016 Annual Meeting of Stockholders is not held between April 18, 2016 and July 17, 2013,2016, the notice must be delivered no later than the close90th day prior to the 2016 Annual Meeting of business onStockholders or, if later, the 10th day following the earlier of the day on which the first public announcementdisclosure of the date of the 2013 Annual Meeting of Stockholders was made or the day the notice of the 20132016 Annual Meeting of Stockholders is mailed.made. In addition, our Bylaws provide that the stockholder’s notice must include certain information for the person making the proposal or the nomination for director, including:
● | 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 ownership of shares of the Company; |
● | any proxy, agreement, arrangement, understanding or relationship that confers a right to vote any shares of the Company; |
Table of shares of the Company, owned of record or beneficially owned;
Contents
● | any agreement, arrangement, understanding or relationship, engaged in to increase or decrease the level of risk related to, the voting power with respect to, and certain other arrangements or agreements with respect to, shares of the Company; |
● | any performance-related fees that the proposing/nominating person is entitled, based on any increase or decrease in the value of any shares of the Company; and |
● | 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 the following information for each proposed director nominee:
● | the same information as for the nominating person set forth above; |
● | all information required to be disclosed in a proxy statement in connection with election of directors; and |
● | financial or other relationships between the nominating person and the nominee during the past three years. |
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 submit a proposed nominee torecommend individuals for consideration by the Nominating and Corporate Governance Committee should send written notice to the Nominating and Corporate Governance Committee Chairman, Geron Corporation, 230 Constitution149 Commonwealth Drive, Suite 2070, Menlo Park, CA 94025, within the time periods set forth above. Such notification should set forth all information relating to such nominee as is required to be disclosed in solicitations of proxies for elections of directors pursuant to Regulation 14A under the Exchange Act, including such person’s written consent to being named in a proxy statement as a nominee and to serving as a director if elected, the name and address of such stockholder or beneficial owner on whose behalf the nomination is being made, and the class and number of shares of the Company, owned beneficially and of record by such stockholder or beneficial owner.owner, and all information regarding the nominee that would be required to be included in the Company’s proxy statement by the rules of the SEC, including the nominee’s age, business experience for the past five years and any directorships held by the nominee during the past five years. The Nominating and Corporate Governance Committee will considerdoes not intend to alter the manner in which it evaluates candidates based on whether the candidate was recommended by a stockholder nominees on the same terms as nominees selected by the Nominating and Corporate Governance Committee.or not.
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: 1) must meet the objective independence requirements set forth by the SEC and NASDAQ, 2) must exhibit strong personal integrity, character and ethics, and a commitment to ethical business and accounting practices, 3) must not be involved in on-going litigation with the Company or be employed by an entity which is engaged in such litigation and 4) must not be the subject of any on-going criminal investigations, including investigations for fraud or financial misconduct. In addition, the Nominating and Corporate Governance Committee may consider the following criteria, among others:
(i) | experience in corporate management, such as serving as an officer or former officer of a publicly held company, and a general understanding of marketing, finance and other elements relevant to the success of a publicly traded company in today’s business environment; |
(ii) | experience in our industry and with relevant social policy concerns; | ||
(iii) | experience as a board member of other publicly held companies; | ||
(iv) | expertise in an area of our operations; and | ||
(v) | practical and mature business judgment, including the ability to make independent analytical inquiries. |
The Nominating and Corporate Governance Committee does not specifically consider diversity in identifying nominees for election as a director. However, specific experience or expertise that could assist the CompanyGeron in developing itsour clinical product candidatesopportunity provides added value and insight to the Board. In general, the Nominating and Corporate Governance Committee aspires the Board to be comprised of individuals that represent a diversity of professional experience perspective and experience,perspective 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 the Company.Geron.
Directors are expected to rigorously prepare for, attend and participate in Board meetings and meetings of the Committees of the Board on which they serve, to ask direct questions and require straight answers, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities and duties as directors. Each Board member is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as an outstanding director.
General
Your proxy is solicited on behalf of our Board of Directors. Unless otherwise directed, proxies will be voted at the Annual Meeting (or an adjournment or postponement thereof), “FOR” all of the nominees listed in Proposal 1 and “FOR” Proposals 2 and 3. If any matter other than those described in this Proxy Statement were to be properly submitted for a vote at the Annual Meeting, or with respect to any adjournment or postponement thereof, the proxy holders appointed by the Board will have the discretion to vote on those matters for you as they see fit. By Order of the Board of Directors, Stephen N. Rosenfield |
March 29, 2012
APPENDIX 1
CERTIFICATE OF AMENDMENTOF THE RESTATED CERTIFICATE OF INCORPORATIONOF GERON CORPORATION,a Delaware corporation
The undersigned, Stephen Rosenfield, hereby certifies that:
FIRST. He is the duly elected and acting Executive Vice President, General Counsel
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, 2001; a Certificate of Designation was filed with the Secretary of State on August 1, 2001; a Certificate of Amendment of the Restated Certificate of Incorporation was filed with the Secretary of State on May 22, 2002; and a Certificate of Amendment of the Restated Certificate of Incorporation was filed with the Secretary of State on May 25, 2006.April 3, 2015
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 Three Hundred Three Million (303,000,000) shares. Three Hundred Million (300,000,000) 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 __ 2012.
|
GERON CORPORATION |
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DETACH AND RETURN THIS PORTION ONLY | |||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED |
GERON CORPORATION | |||||||
The Board of Directors recommends you vote FOR the following: | For All | Withhold All | For All Except | ||||
1. | To elect the two nominees for director named below to hold office as Class I members of the Board of Directors until the 2018 annual meeting of stockholders. | ☐ | ☐ | ☐ | |||
Nominees: | |||||||
01) | John A. Scarlett, M.D. | ||||||
02) | Robert J. Spiegel, M.D., FACP | ||||||
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||
The Board of Directors recommends you vote FOR proposals 2 and 3. | For | Against | Abstain | |||
2. | To approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed in the accompanying Proxy Statement. | ☐ | ☐ | ☐ | ||
3. | To ratify the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2015. | ☐ | ☐ | ☐ | ||
NOTE:In their discretion, the proxies are authorized to vote on such other matters as may come before the meeting and any adjournment(s) or postponement(s) thereof. | ||||||
NOTE:This proxy should be marked, dated and signed by the stockholder(s) exactly as his or her name appear(s) hereon, and returned in the enclosed envelope. |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Letter to Stockholders, Notice and 20122015 Proxy Statement, and 20112014 Annual Report
are available at www.proxyvote.com.www.proxyvote.com.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
GERON CORPORATION20122015 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2015
The undersigned stockholder of Geron Corporation, a Delaware corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated March 29, 2012,April 3, 2015, and hereby appoints John A. Scarlett, M.D., and Stephen N. Rosenfield, or either of them, as proxies and attorneys-in-fact with full power to each of substitution, on behalf and in the name of the undersigned to represent the undersigned at the 20122015 Annual Meeting of Stockholders of Geron Corporation to be held on May 17, 2012,18, 2015, at 8:3:00 a.m.p.m. Pacific Daylight Time at the Westin San Francisco Airport, One Old Bayshore Highway, Millbrae, California 94030 and at any adjournment(s) or postponement(s) thereof, and to vote all shares of Common Stock that the undersigned would be entitled to vote if then and there personally present, on the matters set forth on the reverse side, and in their discretion, upon such other matter or matters that may properly come before the meeting and any adjournment(s) or postponement(s) thereof. The 2012 Annual Meeting will be held completely virtual. You will be able to attend, vote and submit your questions during the meeting via live webcast via the Internet at www.virtualshareholdermeeting.com/geron2012.
This proxy will be voted as directed or, if no contrary direction is indicated, will be voted as follows:
● | "FOR" the election of the two nominees for director named in the accompanying Proxy Statement to hold office as Class I members of the Board of Directors until the 2018 annual meeting of stockholders; |
● | "FOR" proposal 2, to approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed in the accompanying Proxy Statement; |
● | "FOR" proposal 3, 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, 2015; |
"FOR" the election as directors of the three nominees as Class I Directors;
and as said proxies deem advisable on such other matters as may come before the meeting and any adjournment(s) or postponement(s) thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
VOTE BY INTERNETBefore The Meeting- Go towww.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go towww.virtualshareholdermeeting.com/geron2012
You may attend the Meeting via the Internet and vote during the Meeting. Have the information available that is printed in the box marked by the arrow below and follow the instructions.
VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer.