Document:

Exhibit 10.27

 

TRANSITION AND SEPARATION AGREEMENT

 

This Transition and Separation Agreement (the “Agreement”) is made effective as of the eighth (8th) day following the date Executive signs this Agreement (the “Effective Date”) by and between Graham Cooper (“Executive”) and Geron Corporation (the “Company”), with reference to the following facts:

 

A.                                    Executive’s employment with the Company will end effective upon the Termination Date (as defined below).

 

B.                                    Executive and the Company want to end their relationship amicably and also to establish the obligations of the parties including, without limitation, all amounts due and owing to the Executive.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:

 

1.        Employment Separation Date.  Executive acknowledges and agrees that his status as an officer and employment with the Company will end effective as of December 7, 2012 (the “Termination Date”).

 

2.                    Stock Options.  The attached Exhibit A details Executive’s vested and unvested options.  Upon the Termination Date, Executive’s options shall cease vesting and any unvested options as of such date shall automatically terminate for no consideration, provided, that Executive’s outstanding vested options shall remain exercisable until the earlier of: (i) the second (2nd) anniversary of the Termination Date or (ii) the original expiration date of the applicable option.  If, by the date that is twenty-four (24) months following the Termination Date, Executive has not exercised the outstanding vested options in accordance with the procedures set forth in Executive’s option agreements; such options shall terminate and be of no further effect.  Nothwithstanding the immediately preceeding sentence, in the event Executive is in possession of material, non-public information about the Company, or the Company has prohibited Executive from selling Company stock on or within 30 days of the second anniversary of the Termination Date, then each of Executive’s outstanding options for vested shares shall remain exercisable until the earlier of (i) the date that is 30 days after the Executive is no longer in possession of material non-public information about the Company and/or the date that is 30 days after the Company removes its prohibition regarding the Executive’s ability to sell Company stock, or (ii) the original 10 year expiration date of the applicable option.  Executive’s unvested options shall be forfeited as of the Termination Date.  Executive’s outstanding incentive stock options (ISOs) (vested and unvested) will convert to nonstatutory stock options (NSOs) if not exercised by the three month anniversary of the Termination Date, in accordance with applicable law.  In addition, and notwithstanding the foregoing, Executive acknowledges that upon the execution of this Agreement, each unexercised “incentive stock option” within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), shall be deemed modified for the purposes of Section 424

 

 

of the Code, and, to the extent the exercise price thereof is less than the fair market value of a share of Company common stock on the date this Agreement is executed, such option shall no longer qualify as an incentive stock option.  This conversion shall not affect the exercisability or vesting schedule of such options.

 

3.                    Final Paycheck.  As soon as administratively practicable on or after the Termination Date, the Company will pay Executive all accrued but unpaid base salary, earned bonus and all accrued and unused vacation earned through the Termination Date, subject to standard payroll deductions and withholdings.  For clarification, the bonus payment shall be: (i) up to forty-five percent (45%) of Executive’s current annual salary on a pro-rata basis through December 7, 2012 ($157,654), less applicable withholding taxes.   Executive is entitled to these payments regardless of whether Executive executes this Agreement.

 

4.                    Separation Payment and Benefits.  Without admission of any liability, fact or claim, the Company hereby agrees, subject to Executive signing and delivering to the Company this Agreement, this Agreement becoming no longer subject to revocation as provided in Section 6(c)(iii), and Executive’s continued performance of his obligations under the Confidentiality Agreement to provide Executive the benefits set forth below.  Specifically, the Company and Executive agree as follows:

 

(a)                                 Cash Severance.  On or within twenty (20) days after the Termination Date, the Company shall pay to Executive a lump sum cash payment in an amount equal to $375,000, less applicable withholding taxes, which constitutes twelve (12) months of Executive’s base salary as in effect as of immediately prior to the Termination Date.

 

(b)                                 Additional Condition on Receipt of Cash Severance and Retention Payment.  The payments in Sections 4(a) and (4b) are subject to the provisions contained in Section 6(d).

 

(c)                                  No Access to Benefits. Executive shall not be entitled to participate in any equity incentive pool after the Termination Date.  Although Executive will be entitled to continue participating in the Company’s 401(k) plan until the Termination Date, Executive shall not be entitled to any Company match for any payments made into such plan during 2012.

 

(d)                                 Continued Healthcare.   Subject to Executive’s timely election of coverage, for the twelve (12) month period commencing on the Termination Date, the Company shall reimburse Executive’s COBRA premiums for Medical, Dental and Vision coverage  for Executive and Executive’s covered dependents as in effect immediately prior to the Termination Date.  Executive acknowledges that he shall be solely responsible for all matters relating to Executive’s continuation of health care benefit coverage, including, without limitation, Executive’s election of such coverage and his timely payment of premiums.

 

 

(e)                                  SEC Reporting.  Executive acknowledges that to the extent required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), he will have continuing obligations under Section 16(a) and 16(b) of the Exchange Act to report his transactions in Company common stock for (6) six months following the Termination Date.  Executive hereby agrees to abide by all securities laws pertaining to his trading in the common stock of the Company including, as required, seeking advance clearance from the Company for any such trade.

 

(f)                                   Other Obligations. Except as necessary to perform the Transition Services, Executive hereby agrees to return all Proprietary Information (as defined in the Confidentiality Agreement) to the Company and shall certify to the Company within thirty (30) days that all Proprietary Information has been returned to the Company or destroyed.

 

(g)                                 Taxes.  Executive understands and agrees that all payments under Section 4 of this Agreement will be subject to appropriate tax withholding and other deductions.  To the extent any taxes may be payable by the Executive for the benefits provided to him under Section 4 of this Agreement beyond those withheld by the Company, Executive agrees to pay them himself and to indemnify and hold the Company and the other entities released herein harmless for any tax claims or penalties, and associated attorneys’ fees and costs, resulting from any failure by him to make required payments.

 

(h)                                 Reimbursements.  To the extent that any reimbursements payable pursuant to this Agreement are subject to the provisions of Section 409A of the Code, such reimbursements shall be paid to Executive no later than December 31st of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

 

(i)                                     Sole Separation Benefit.  Executive agrees that the payments provided by this Section 4 are not required under the Company’s normal policies and procedures and are provided as a severance solely in connection with this Agreement.  Executive acknowledges and agrees that the payments referenced in this Section 4 constitute adequate and valuable consideration, in and of themselves, for the promises contained in this Agreement.

 

5.                                      Full Payment.  Executive acknowledges that the payment and arrangements herein shall constitute full and complete satisfaction of any and all amounts properly due and owing to Executive as a result of his employment with the Company and the termination thereof.

 

6.                                      Executive’s Release of the Company.  Executive understands that by agreeing to the release provided by this Section 6, Executive is agreeing not to sue, or otherwise file any claim against, the Company or any of its employees or other agents for any

 

 

reason whatsoever based on anything that has occurred as of the date Executive signs this Agreement.

 

(a)                                 On behalf of Executive and Executive’s heirs and assigns, Executive hereby releases and forever discharges the “Releasees” hereunder, consisting of the Company, and each of its owners, affiliates, divisions, predecessors, successors, assigns, agents, directors, officers, partners, employees, and insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which Executive now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof, including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to Executive’s hire, employment, remuneration or resignation by the Releasees, or any of them, including without limitation any and all Claims arising under federal, state, or local laws relating to employment, claims of any kind that may be brought in any court or administrative agency, any claims arising under the Age Discrimination in Employment Act (“ADEA”), as amended, 29 U.S.C. § 621, et seq.; the Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; the Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act , 31 U.S.C. § 3729 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; the Worker Adjustment and Retraining Notification Act, as amended, 29 U.S.C.  § 2101 et seq. the Fair Labor Standards Act, 29 U.S.C. § 215 et seq., the Sarbanes-Oxley Act of 2002; the California Fair Employment and Housing Act; the California Family Rights Act; the California Labor Code; California Business & Professions Code Section 17200, ordinance or statute regarding employment; Claims any other local, state or federal law governing employment; Claims for breach of contract; Claims arising in tort, including, without limitation, Claims of wrongful dismissal or discharge, discrimination, harassment, retaliation, fraud, misrepresentation, defamation, libel, infliction of emotional distress, violation of public policy, and/or breach of the implied covenant of good faith and fair dealing; and Claims for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees.

 

(b)                                 Notwithstanding the generality of the foregoing, Executive does not release any of his rights under this Agreement or the following Claims:

 

(i)                                     Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;

 

(ii)                                  Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company;

 

 

(iii)                               Claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA;

 

(iv)                              Claims to any benefit entitlements vested as the date of Executive’s employment termination, pursuant to written terms of any Company employee benefit plan;

 

(v)                                 Claims for indemnification under California Labor Code Section 2802, the Company’s Certificate of Incorporation, the Company’s Bylaws, Delaware General Corporation Law or other applicable law, and under the terms of any policy of insurance purchased by the Company; and

 

(vi)                              Executive’s right to bring to the attention of the Equal Employment Opportunity Commission claims of discrimination; provided, however, that Executive does release Executive’s right to secure any damages for alleged discriminatory treatment.

 

(c)                                  In accordance with the Older Workers Benefit Protection Act of 1990, Executive has been advised of the following:

 

i)                                         Executive has the right to consult with an attorney before signing this Agreement;

 

ii)                                      Executive has been given at least twenty-one (21) days to consider this Agreement;

 

iii)                                   Executive has seven (7) days after signing this Agreement to revoke it.  If Executive wishes to revoke this Agreement, Executive must deliver notice of Executive’s revocation in writing, no later than 5:00 p.m. on the seventh (7th) day following Executive’s execution of this Agreement to Human Resources, Geron Corporation, 149 Commonwealth Drive, Menlo Park, California  94025, fax: (650) 473-8668.

 

(d)                                 The release stated above in this Section 6 is for all Claims preceding the Effective Date.  In consideration for the promises and undertakings contained in Section  4, you also agree to execute a General Release of Claims in substantially the form set forth above on the Termination Date and agree that no Section 4 payments will be owed to you unless such subsequent General Release of Claims is executed by you.

 

7.                                      Company’s Release of the Executive. The Company voluntarily releases and discharges the Executive and his heirs, successors, administrators, representatives and assigns from all Claims which it now has or may hereafter have against the Executive, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof  including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to Executive’s employment with the Company and any and all Claims arising under federal, state, or local laws.  Notwithstanding the foregoing, nothing herein shall release or discharge any Claim by the Company against the Executive, or the right of the Company to bring any action, legal or otherwise, against the Executive as a result of any

 

 

failure by him to perform his obligations under this Agreement or the Confidentiality Agreement or as a result of any acts for which the Executive cannot be indemnified by the Company.

 

8.                                      Waiver of Unknown Claims.  EXECUTIVE AND THE COMPANY ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED OF AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

BEING AWARE OF SAID CODE SECTION, THE COMPANY AND EXECUTIVE HEREBY EXPRESSLY WAIVE ANY RIGHTS THEY OR EITHER OF THEM MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT, TO THE EXTENT OF THEIR RESPECTIVE RELEASES.

 

9.                                      Non-Disparagement, Transition, Transfer of Company Property and Limitations on Service.  Executive further agrees that:

 

a)                                     Non-Disparagement.  Executive agrees that he shall not disparage, criticize or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, partners, shareholders or employees, either publicly or privately.  The Company agrees that it shall not, and it shall instruct its officers and members of its Board of Directors to not, disparage, criticize or defame Executive, either publicly or privately.  Nothing in this Section 9(a) shall have application to any evidence or testimony required by any court, arbitrator or government agency.

 

b)                                     Transition.  Each of the Company and the Executive shall use their respective reasonable efforts to cooperate with each other in good faith to facilitate a smooth transition of Executive’s duties to other executive(s) of the Company.

 

c)                                      Transfer of Company Property.  Except as otherwise contemplated in Section 4(g) hereof, on or before the Termination Date, Executive shall turn over to the Company all files, memoranda, records, and other documents, and any other physical or personal property which are the property of the Company and which he had in his possession, custody or control at the time he signed this Agreement.

 

d)                                     Limit on Post-Termination Service.  Notwithstanding anything in this Agreement to the contrary, the aggregate level of bona-fide services to be performed under Sections 2 and 15 of this Agreement, together with any other services to be performed by Executive for the Company following the Termination Date, shall in no event exceed twenty percent (20%) of the average level of bona-fide services performed by

 

 

Executive for the Company during the thirty-six (36)-month period preceding the Termination Date.

 

10.                               Executive and Company Representations.  Executive warrants and represents that (a) he has not filed or authorized the filing of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency or court, and that if, unbeknownst to Executive, such a complaint, charge or lawsuit has been filed on his behalf, he will immediately cause it to be withdrawn and dismissed, (b) he has reported all hours worked as of the date of this Agreement and has been paid all compensation, wages, bonuses, commissions, and/or benefits to which he may be entitled and no other compensation, wages, bonuses, commissions and/or benefits are due to him, except as provided in this Agreement, (c) he has no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under the Family and Medical Leave Act or any similar state law, (d) the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Executive is a party or any judgment, order or decree to which the Executive is subject, and (e) upon the execution and delivery of this Agreement by the Company and the Executive, this Agreement will be a valid and binding obligation of the Executive, enforceable in accordance with its terms.  The Company warrants and represents that (a) it has not filed or authorized the filing of any complaints, charges or lawsuits against the Executive with any government agency or court and that if, unbeknownst to the Company, such a complaint, charge or lawsuit has been filed on its behalf, it will immediately cause it to be withdrawn and dismissed and (b) upon the execution and delivery of this Agreement by the Company and the Executive, this Agreement will be a valid and binding obligation of the Company, enforceable in accordance with its terms.

 

11.                               No Assignment.  Executive warrants and represents that no portion of any of the matters released herein, and no portion of any recovery or settlement to which Executive might be entitled, has been assigned or transferred to any other person, firm or corporation not a party to this Agreement, in any manner, including by way of subrogation or operation of law or otherwise.  If any claim, action, demand or suit should be made or instituted against the Company or any affiliate of the Company because of any actual assignment, subrogation or transfer by Executive, Executive agrees to indemnify and hold harmless the Company or any affiliate of the Company against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs.  The Company warrants and represents that no portion of any of the matters released herein, and no portion of any recovery or settlement to which the Company might be entitled, has been assigned or transferred to any other person, firm or corporation not a party to this Agreement, in any manner, including by way of subrogation or operation of law or otherwise.  If any claim, action, demand or suit should be made or instituted against the Executive or any affiliate of the Executive because of any actual assignment, subrogation or transfer by the Company, the Company agrees to indemnify and hold harmless the Executive or any affiliate of the Executive against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs.

 

 

12.                               Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of California or, where applicable, United States federal law, in each case, without regard to any conflicts of laws provisions or those of any state other than California.

 

13.                               Miscellaneous.  This Agreement, together with the Confidentiality Agreement, is the entire agreement between the parties with regard to the subject matter hereof and shall supersede in its entirety the Employment Agreement.  The Company and Executive acknowledge that the termination of the Executive’s employment with the Company is intended to constitute an involuntary separation from service for the purposes of Section 409A of the Code, and the related Department of Treasury regulations.  The Company agrees not to oppose any claim that Executive may make for unemployment compensation; provided that the Company has the right to respond truthfully to any inquiries made by the California Employment Development Department (“EDD”) regarding such a claim by Executive, and to provide all documents and information requested by the EDD.  Executive acknowledges that there are no other agreements, written, oral or implied, and that he may not rely on any prior negotiations, discussions, representations or agreements.  This Agreement may be modified only in writing, and such writing must be signed by both parties and recited that it is intended to modify this Agreement.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.  Executive shall have no duty to mitigate any breach by the Company of its obligations under Sections 2, 3 and 4 of this Agreement.

 

14.                               Indemnification.  Nothing in this Agreement shall in any way limit or terminate the Company’s continuing obligation to indemnify, defend and/or hold harmless Executive under his Idemnification Agreement with the Company (or any other applicable written indemnification obligation), or the Company’s Certificate of Incorporation, the Company’s Bylaws, Delaware General Corporation Law or other applicable legal requirement.  The Company shall maintain directors’ and officers’ liability insurance coverage for the continuing protection of the Executive, of such types and in such amounts as shall be appropriate for the size of the Company and its business risks.

 

(Signature page(s) follow)

 

 

IN WITNESS WHEREOF, the undersigned have caused this Transition and Separation Agreement to be duly executed and delivered as of the date indicated next to their respective signatures below.

 

	
DATED:
    	
December 5, 2012
    	
 
    	
 
    
	
 
    	
/s/ Graham Cooper
    
	
 
    	
Graham Cooper
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GERON CORPORATION
    
	
DATED:
    	
December 5, 2012
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John A. Scarlett
    
	
 
    	
 
    	
John A. Scarlett, M.D.
    
	
 
    	
 
    	
President and Chief Executive Officer
    

 

 

EXHIBIT A

 

GRANT STATUS AS OF TERMINATION DATE

 

A-1EXHIBIT 10.28

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made effective as of January 31, 2013 (the “Effective Date”), by and between Melissa A. Kelly Behrs (“Executive”) and Geron Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for Executive’s services; and

 

WHEREAS, Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

 

ARTICLE I
 DEFINITIONS

 

For purposes of the Agreement, the following terms are defined as follows:

 

1.1                               “Board” means the Board of Directors of the Company.

 

1.2                               “Cause” means any of the following:

 

(a)         any willful act or omission by Executive constituting dishonesty, fraud or other malfeasance against the Company;

 

(b)         Executive’s conviction of a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business;

 

(c)          Executive’s debarment by the U.S. Food and Drug Administration from working in or providing services to any pharmaceutical or biotechnology company under the Generic Drug Enforcement Act of 1992, or other ineligibility under any law or regulation to perform Executive’s duties to the Company; or

 

(d)         Executive’s breach of any of the material policies of the Company.

 

1.3                               “Change in Control” shall have the meaning set forth in the Plan.

 

1.4                               “Code” means the Internal Revenue Code of 1986, as amended.

 

1.5                               “Company” means Geron Corporation or its successors in interest.

 

1.6                               “Comparable Employment” means employment on terms which provide (a) the same or greater rate of base pay or salary as in effect immediately prior to Executive’s termination, (b) the same, equivalent or higher job title and level of responsibility as Executive had prior to Executive’s termination, (c) equivalent or higher bonus opportunity as the bonus

 

 

opportunity for the year preceding the year in which the termination occurs, and d) a principal work location that is both (i) no more than forty-five (45) miles from Executive’s principal work location immediately prior to Executive’s termination and (ii) no more than thirty (30) miles farther from Executive’s principal weekday residence than was Executive’s principal work location immediately prior to the termination.

 

1.7                               “Covered Termination” 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 the regulations promulgated thereunder, including Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”).

 

1.8                               “Involuntary Termination Without Cause” means Executive’s dismissal or discharge other than (i) for Cause, or (ii) after an involuntary or voluntary filing of a petition under chapter 7 or 11 of 11 USC Section 101 et. seq., an assignment for the benefit of creditors, a liquidation of the company’s assets in formal proceeding or otherwise or any other event of insolvency by the Company, in any case, without an offer of Comparable Employment by the Company or a successor, acquirer, or affiliate of the Company. For purposes of this Agreement, the termination of Executive’s employment due to Executive’s death or disability will not constitute a termination for Cause.

 

1.9                               “Plan” means the Company’s 2002 Equity Incentive Plan and 2011 Equity Incentive Award Plan, as amended.

 

ARTICLE II
 EMPLOYMENT BY THE COMPANY

 

2.1                               Position and Duties.  Subject to the terms set forth herein, the Company agrees to employ Executive in the position of Senior Vice President, Portfolio and Alliance Management. During the Executive’s employment, Executive will report to the Chief Executive Officer. Executive shall serve in an employee capacity and shall perform such duties as are assigned to Executive by the Chief Executive Officer and, except as otherwise instructed by the Chief Executive Officer, such other duties as are customarily associated with the position of Senior Vice President, Portfolio and Alliance Management. During Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention (except for vacation periods as set forth herein and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies or as otherwise set forth in this Agreement) to the business of the Company.

 

2.2                               Employment at Will.  Both the Company and Executive acknowledge and agree that Executive’s employment with the Company is “at-will” and not for any specified period of time, and may be terminated at any time by Executive or the Company, with or without Cause, and with or without prior notice; provided, however, that if Executive’s employment with the Company is terminated under circumstances that constitute a Covered Termination, Executive will be eligible to receive certain severance payments and benefits as set forth in Article IV below.

 

2.3                               Employment Policies.  The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including but not limited to those policies relating to protection of confidential information and assignment

 

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of inventions.  In the event of a conflict between the terms of this Agreement and the Company’s general employment policies or practices, this Agreement shall control.

 

2.4                               Indemnification.  The Company shall provide for indemnification of the Executive as set forth in the Indemnification Agreement attached hereto as Exhibit A.

 

ARTICLE III
 COMPENSATION

 

3.1                               Base Salary.  Commencing January 1, 2013, Executive shall receive for services to be rendered hereunder an annual base salary of $341,550 payable on the regular payroll dates of the Company, subject to increase in the sole discretion of the Compensation Committee of the Board (the “Base Salary”).

 

3.2                               Bonus.  Executive shall be eligible to earn, for each fiscal year of the Company ending during Executive’s employment with the Company, an annual discretionary cash bonus (an “Annual Bonus”) targeted at forty percent (40%) of Executive’s Base Salary.

 

3.3                               Long Term Incentive Compensation.  While Executive is actively employed under this Agreement, Executive shall be entitled to participate in the Company’s Long Term Incentive Compensation programs (the “Equity Programs”).  For each equity grant made under the Equity Programs, Executive will be required to sign a Stock Option Agreement in a form to be provided by the Company at the time of grant, and the terms of the equity awards under the Equity Programs will be governed in all respects by the terms of the Stock Option Agreement and the respective 2002 Equity Incentive Plan and 2011 Incentive Award Plan (collectively referred to as the “Plans”). Copies of the Plans will be made available to you upon request.  In accordance with the Company’s stock option granting practices, the Compensation Committee of the Board (the “Compensation Committee”) has the right to grant Executive an option to purchase shares of Company common stock (the “Option”).  Any such Option granted by the Compensation Committee shall vest subject to Executive’s continued service to the Company through the applicable vesting period, provided that upon occurrence of a Change of Control, subject to Executive’s continued service to the Company through the date of such Change of Control, the Option shall vest and become exercisable with respect to one hundred percent (100%) of the unvested shares subject thereto.  The Option shall be exercisable in full on the Grant Date, subject to Executive entering into a restricted stock purchase agreement with respect to any unvested shares.  Executive shall be permitted to exercise any or all of the Option, whether or not vested, subject to the Company’s right of repurchase.  The Option otherwise shall be subject to and governed in all respects by the terms of the Plans and the Stock Option Agreement to be entered into between the Company and Executive at the time of grant.

 

3.4                               Standard Company Benefits; Vacation.  Executive shall be entitled to all rights and benefits for which Executive is eligible under the terms and conditions of the Company’s benefit and compensation plans, practices, policies and programs, as  in effect from time to time, that are provided by the Company to its senior executives generally. Except as specifically provided herein, nothing in this Agreement is construed or interpreted to provide greater rights, participation, coverage or benefits under such benefit plans or programs provided to executive employees pursuant to the terms and conditions of such benefit plans and programs.    Executive will be eligible for vacation accruals in accordance with the Company’s current time off policy.

 

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ARTICLE IV
 SEVERANCE BENEFITS AND RELEASE

 

4.1                               Severance Benefits.  If Executive’s employment terminates due to a Covered Termination after the date of execution of this Agreement, Executive shall receive:

 

(i)                                    Payment of Accrued Obligations Upon Termination of Employment.  Upon a termination of Executive’s employment for any reason at any time following the Effective Date, the Company shall pay to Executive in a single lump-sum cash payment as soon as administratively practicable following the date of termination, the aggregate amount of Executive’s (A) earned but unpaid Base Salary, and (B) accrued but unpaid vacation pay.  In addition, Executive shall be promptly paid for incurred but unreimbursed business expenses upon her submission of such expenses in accordance with the Company’s expense reimbursement policies.  The amounts set forth in this Section 4.1(i) are collectively referred to as the “Accrued Obligations”.

 

(ii)                                Severance Upon a Covered Termination.  If Executive’s employment terminates due to a Covered Termination at any time after the Effective Date, then, in addition to the Accrued Obligations:

 

(a)                                 Executive shall be paid target Annual Bonus for the fiscal year in which the termination occurs, prorated for the length of service provided during the calendar year through the termination date,  payable in a single lump-sum payment within thirty (30) days following the date of termination;

 

(b)                                 Executive shall be paid an aggregate amount equal to twelve (12) months of Executive’s Base Salary in effect on the date of termination, payable to Executive in a single lump-sum amount on the sixtieth (60th) day following the date of termination;

 

(c)                                  Executive and Executive’s covered dependents will be eligible to continue their health care benefit coverage as permitted by COBRA (Internal Revenue Code Section 4980B) at the Company’s expense for the lesser of (i) twelve (12) months following the Covered Termination, or (ii) until the Executive and/or Executive’s covered dependents are no longer eligible for COBRA (for clarification and as an example, in the event Executive is covered by another health plan, etc.).  Thereafter, Executive and Executive’s covered dependents shall be entitled to maintain coverage for Executive and Executive’s eligible dependents at Executive’s own expense for the balance of the period that Executive is entitled to coverage under COBRA; and

 

(d)                                 the Option, along with any subsequent options or other exercisable equity interest in the Company held by Executive shall remain outstanding and exercisable through the earlier of (i) the second (2nd) anniversary of the date of termination or (ii) the original expiration date of the option or other equity interest.

 

Notwithstanding the foregoing, the amounts payable under this Article IV, other than the Annual Bonus, shall be reduced by the amount of severance or other cash compensation, if any, payable under the Company’s Change of Control Severance Plan attached hereto as Exhibit D, which may be amended from time-to-time by the Company at the Company’s sole discretion.  For the avoidance of doubt, all amounts payable under this Agreement shall be subject to applicable federal, state, local or foreign tax withholding requirements.

 

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4.2                               Parachute Payments.  If any payment or benefit Executive would receive in connection with a Change in Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s stock awards unless Executive elects in writing a different order for cancellation.

 

The Company for general audit purposes shall engage a nationally recognized public accounting firm (the “Accounting Firm”) to perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The Accounting Firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. If the Accounting Firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

4.3                               Release.  Notwithstanding the foregoing, Executive’s right to receive the amounts provided for in Sections 4.1(ii) and 4.2, and the Change of Control acceleration referenced in Section 3.3 above shall be subject to and conditioned upon Executive’s execution and non-revocation of a release of claims in substantially the form attached hereto as Exhibit B (the “Release”) (as such form may be modified to take into account changes in the law) within fifty (50) days following the termination date.  Such Release shall specifically relate to all of Executive’s rights and claims in existence at the time of such execution and shall confirm Executive’s obligations under the Proprietary Information Agreement (as defined below). It is understood that Executive has a certain period to consider whether to execute such Release, as set forth in the Release, and Executive may revoke such Release within seven (7) business days after execution. In the event Executive does not execute such Release within the applicable period, or if Executive revokes such Release within the subsequent seven (7) business day period, none of the aforesaid benefits set forth in Sections 4.1(ii), 4.2 and the Change of Control

 

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acceleration referenced in Section 3.3 shall be payable to Executive under this Agreement and this Agreement shall be null and void.

 

4.4                               Section 409A.  Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of the Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (a) the expiration of the six-month period measured from the date of Executive’s Separation from Service or (b) the date of Executive’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 4.4 shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due under the Agreement shall be paid as otherwise provided herein.  For purposes of Section 409A of the Code, Executive’s right to receive the payments of compensation pursuant to the Agreement shall be treated as a right to receive a series of separate payments and accordingly, each payment shall at all times be considered a separate and distinct payment.

 

4.5                               Mitigation.  Executive shall not be required to mitigate damages or the amount of any payment provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a result of employment by another employer or by any retirement benefits received by Executive after the date of the Covered Termination, or otherwise.

 

ARTICLE V
 PROPRIETARY INFORMATION OBLIGATIONS

 

5.1                               Agreement.  Executive agrees to abide by the Proprietary Information and Inventions Agreement attached hereto as Exhibit C (the “Proprietary Information Agreement”).

 

5.2                               Remedies.  Executive’s duties under the Proprietary Information and Inventions Agreement shall survive termination of Executive’s employment with the Company and the termination of this Agreement. Executive acknowledges that a remedy at law for any breach or threatened breach by Executive of the provisions of the Proprietary Information and Inventions Agreement would be inadequate, and Executive therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach.

 

ARTICLE VI
 OUTSIDE ACTIVITIES

 

6.1                               No Other Employment.  Except with the prior written consent of the Board, Executive shall not during the term of Executive’s employment with the Company, undertake or engage in any other employment, occupation or business enterprise.  Notwithstanding the foregoing, during the term of Executive’s employment with the Company, Executive may (a) undertake or engage in any other employment, occupation or business enterprise in which Executive is a passive investor, and/or (b) engage in civic and not-for-profit activities, in each

 

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case, so long as such activities do not materially interfere with the performance of Executive’s duties hereunder.

 

6.2                               No Conflicting Business Interests.  During the term of Executive’s employment by the Company, except on behalf of the Company, Executive shall not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever which were known by Executive to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that anything above to the contrary notwithstanding, Executive may own, as a passive investor, securities of any competitor corporation, so long as Executive’s direct holdings in any one such corporation shall not in the aggregate constitute more than 1% of the voting stock of such corporation.

 

ARTICLE VII
 NONINTERFERENCE

 

While employed by the Company, and for one (1) year immediately following the date on which Executive terminates employment or otherwise ceases providing services to the Company, Executive agrees not to interfere with the business of the Company by soliciting or attempting to solicit any employee of the Company to terminate such employee’s employment in order to become an employee, consultant or independent contractor to or for any competitor of the Company. Executive’s duties under this Article VII shall survive termination of Executive’s employment with the Company and the termination of this Agreement.

 

ARTICLE VIII
 GENERAL PROVISIONS

 

8.1                               Notices.  Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by telex) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll.

 

8.2                               Section 409A.  To the extend applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulations or other such guidance that may be issued after the Commencement Date (“Section 409A”).  Notwithstanding any provision of this Agreement to the contrary, in the event that following the Commencement Date, the Company determines in good faith that any compensation or benefits payable under this Agreement may not be either exempt from or compliant with Section 409A, the Company may adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to preserve the intended tax treatment of the compensation and benefits payable hereunder, including without limitation actions intended to (i) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A, provided, that this Section 8.2 does not, and shall not be construed so as to, create any obligation on the part of the

 

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Company to adopt any such amendments, policies or procedures or to take any other such actions or to create any liability on the part of the Company for any failure to do so.

 

8.3                               Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

 

8.4                               Waiver.  If either party should waive any breach of any provisions of this Agreement, they shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

8.5                               Complete Agreement.  This Agreement and Exhibits A, B, C and D hereto  constitute the entire agreement between Executive and the Company and are the complete, final, and exclusive embodiment of their agreement with regard to this subject matter (except for the Plan, any successor thereto, or any amendment to the Company’s Change of Control Severance Plan). As of the Effective Date, this Agreement supersedes any prior agreement between Executive and the Company or any predecessor employer in its entirety, including, without limitation, that certain Employment Agreement entered by Executive and the Company on January 21, 2003, as amended December 19, 2008, with regard to Executive’s employment by the Company.  Executive and the Company acknowledge and agree that this Agreement is entered into without reliance on any promise or representation other than those expressly contained herein or therein and cannot be modified or amended except in a writing signed by a duly-authorized officer of the Company.

 

8.6                               Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

 

8.7                               Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

 

8.8                               Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder, without the written consent of the Company, which shall not be withheld unreasonably.

 

8.9                               Arbitration.  In the event of any contractual, statutory or tort dispute or claim relating to or arising out of Executive’s employment relationship with the Company (including but not limited to any claims of wrongful termination or age, sex, race, or other discrimination, but not including workers’ compensation claims), Executive and the Company agree that all such disputes will be finally resolved by binding arbitration conducted by a single neutral arbitrator associated with the American Arbitration Association in Menlo Park, California. Executive and the Company hereby waive their respective rights to have any such disputes or claims tried to a judge or jury. However, the Company agrees that this arbitration provision will not apply to any

 

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claim, by either Executive or the Company, for injunctive relief. The administrative costs of any arbitration proceeding between Executive and the Company and the fees and costs of the arbitrator shall be borne by the Company.

 

8.10                        Attorneys’ Fees.  If either party hereto brings any action to enforce rights hereunder, each party in any such action shall be responsible for its own attorneys’ fees and costs incurred in connection with such action.

 

8.11                        Acknowledgement.  Executive acknowledges that Executive (a) has had the opportunity to discuss this matter with and obtain advice from independent counsel of Executive’s own choice and has been advised to do so by the Company, (b) has carefully read and fully understands all the provisions of this Agreement, and (c) is knowingly and voluntarily entering into this Agreement.  Executive represents that Executive (i) is familiar with the restrictive covenants set forth in the Proprietary Information Agreement and (ii) is fully aware of his/her obligations thereunder.

 

8.12                        Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of California.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates set forth below:

 

	
 
    	
GERON   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John A. Scarlett
    
	
 
    	
 
    	
John   A. Scarlett, MD
    
	
 
    	
 
    	
President &   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Date:
    	
January 31,   2013
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted   and agreed this 31st day of January, 2013,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Melissa Behrs
    	
 
    	
 
    
	
Melissa   A. Kelly Behrs
    	
 
    
					

 

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EXHIBIT A

 

INDEMNIFICATION AGREEMENT

 

10

 

EXHIBIT B

 

GENERAL RELEASE

 

11

 

EXHIBIT C

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

12

 

EXHIBIT D

 

AMENDED AND RESTATED SEVERANCE PLAN

 

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