SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED
IN PROXY STATEMENT
SCHEDULE 14A
INFORMATION
Proxy Statement
Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
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by Rule 14a-6(e)(2))
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by Rule 14a-6(e)(2))
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BioTime, Inc.
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 |
 |
May 6, 2010
Dear Shareholder:
You are cordially
invited to attend the Annual Meeting of Shareholders of BioTime, Inc. which will
be held on Thursday, June 10, 2010 at 3:00 p.m. at the Harvard Club of New York
City, 35 West 44th
Street, New York, New York 10036.
The Notice and Proxy
Statement on the following pages contain details concerning the business to come
before the meeting. Management will report on current operations, and there will
be an opportunity for discussion concerning BioTime and its activities. Please
sign and return your proxy card in the enclosed envelope to ensure that your
shares will be represented and voted at the meeting even if you cannot attend.
You are urged to sign and return the enclosed proxy card even if you plan to
attend the meeting.
I look forward to
personally meeting our shareholders.
 |
| Judith Segall |
| Vice President and Secretary |
|
|
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To Be Held June 10, 2010
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
BioTime, Inc. will be held at the Harvard Club of New York City at 35 West
44th Street, New
York, New York on June 10, 2010 at 3:00 p.m. for the following purposes:
1. To elect eight (8) directors to
hold office until the next Annual Meeting of Shareholders and until their respective
successors are duly elected and qualified. The nominees of the Board of
Directors are: Neal C. Bradsher, Arnold I. Burns, Robert N. Butler, Abraham E.
Cohen, Alfred D. Kingsley, Pedro Lichtinger, Judith Segall, and Michael D. West;
2. To ratify the appointment of Rothstein, Kass & Company, P.C. as
BioTime’s independent auditors for the fiscal year ending December 31, 2010; and
3. To transact such other business as may properly come before the
meeting or any adjournments of the meeting.
The Board of Directors has fixed the close of business on April 26, 2010
as the record date for determining shareholders entitled to receive notice of
and to vote at the Annual Meeting or any postponement or adjournment of the
meeting.
Whether or not you expect to attend the meeting in person, you are urged
to sign and date the enclosed form of proxy and return it promptly so that your
shares of stock may be represented and voted at the meeting. If you should be
present at the meeting, your proxy will be returned to you if you so request.
WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING, PLEASE SUBMIT YOUR PROXY PROMPTLY BY FOLLOWING THE INSTRUCTIONS ON THE
PROXY CARD.
Important Notice Regarding the Availability of
Proxy Materials
for the Shareholder Meeting to be Held June 10, 2010.
The Letter to Shareholders, Notice of Meeting and Proxy Statement, and Annual Report on
Form 10-K are available at: https://materials.proxyvote.com/09066L
for the Shareholder Meeting to be Held June 10, 2010.
The Letter to Shareholders, Notice of Meeting and Proxy Statement, and Annual Report on
Form 10-K are available at: https://materials.proxyvote.com/09066L
|
By Order of the
Board of Directors,
|
 |
| Judith Segall |
| Vice President and Secretary |
| Alameda, California |
| May 6, 2010 |
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 10, 2010
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS
AND THE ANNUAL MEETING
AND THE ANNUAL MEETING
Q: Why have I received this proxy statement?
We are holding our Annual Meeting of
Shareholders (the “Meeting”) for the purposes stated in the accompanying Notice
of Annual Meeting, which include electing directors and ratifying the
appointment of our independent auditors. At the Meeting, our management will
also report on current operations, and there will be an opportunity for
discussion concerning BioTime and its activities. This proxy statement contains
information about those matters, relevant information about the Meeting, and
other information that we are required to include in a proxy statement under the
Securities and Exchange Commission’s (“SEC”) regulations.
Q: Who is soliciting my proxy?
The accompanying proxy is solicited by the Board of Directors of BioTime,
Inc., a California corporation having its principal offices at 1301 Harbor Bay
Parkway, Suite 100, Alameda, California 94502, for use at the Annual Meeting of
Shareholders to be held at 3:00 p.m. on Thursday, June 10, 2010 at the Harvard
Club of New York City, 35 West 44th Street, New York, New
York 10036.
Q: Who is entitled to vote at the Meeting?
Only shareholders of record at the close of business on April 26, 2010
are entitled to notice of and to vote at the Meeting. On that date, there were
33,996,017 BioTime common shares issued and outstanding, which constitutes the
only class of BioTime voting securities outstanding.
Q: What percentage of the vote is required to elect directors or to
approve the other matters that are being presented for a vote by shareholders?
Directors will be elected by a plurality of the votes cast at the
Meeting. The other matters to be presented for a vote at the Meeting will
require the affirmative vote of a majority of the shares present and voting on
the matter, provided that the affirmative vote cast constitutes a majority of a
quorum. A quorum consists of a majority of the outstanding shares.
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Q: How many votes do my shares represent?
Each BioTime common share is entitled to one vote in all matters that may
be acted upon at the Meeting, except that shareholders may elect to cumulate
votes in the election of directors. Under cumulative voting, each shareholder
may give one candidate, or may distribute among two or more candidates, a number
of votes equal to the number of directors to be elected multiplied by the number
of common shares owned. Shareholders may not cumulate votes unless at least one
shareholder gives notice of his or her intention to cumulate votes at the
Meeting. The enclosed proxy confers discretionary authority to cumulate votes.
Q: What are my choices when voting?
In the election of directors, you may vote for all nominees, or you may
withhold your vote from one or more nominees. For each of the other proposals,
you may vote for the proposal, vote against the proposal, or abstain from voting
on the proposal. Properly executed proxies in the accompanying form that are
received at or before the Meeting will be voted in accordance with the
directions noted on the proxies.
Q: What if I abstain from voting on a matter?
If you check the “abstain” box in the proxy form, or if you attend the
meeting without submitting a proxy and you abstain from voting on a matter, or
if your shares are subject to a broker non-vote on a matter, your shares will
not be deemed to have voted on that matter in determining whether the matter has
received an affirmative vote sufficient for approval.
Q: Can I change my vote after I submit my proxy form?
You may revoke your proxy at any time before it is voted. If you wish to
revoke your proxy you must do one of the following things:
- deliver to the Secretary of
BioTime a written revocation; or
- deliver to the Secretary of
BioTime a signed proxy bearing a date subsequent to the date of the proxy
being revoked; or
- attend the Meeting and vote in person.
Q: Can I still attend and vote at the Meeting if I submit a proxy?
You may attend the Meeting and vote in person whether or not you have
previously submitted a proxy. If you previously gave a proxy, your attendance at
the Meeting will not revoke your proxy unless you also vote in person at the
Meeting.
3
If you are a shareholder of record, you may vote your shares at the
Meeting by completing a ballot at the Meeting. However, if you are a “street
name” holder, you may vote your shares in person only if you obtain a signed
proxy from your broker or nominee giving you the right to vote the
shares.
Even if you currently plan to attend the Meeting, we recommend that you
also submit your proxy first so that your vote will be counted if you later
decide not to attend the Meeting.
Q: What are the Board of Directors’ recommendations?
The Board of Directors recommends that our shareholders vote FOR (1) each
nominee for election as director, and (2) approval of the appointment of
Rothstein, Kass & Company, P.C. as our independent auditors for the fiscal
year ending December 31, 2010.
Q: What if I do not specify how I want my shares voted?
If you sign and return a proxy form that does not specify how you want
your shares voted on a matter, your shares will be voted FOR (1) each
nominee for election as director, and (2) approval of the appointment of
Rothstein, Kass & Company, P.C. as our independent auditors for the fiscal
year ending December 31, 2010.
Q: What if any matters not mentioned in the Notice of Annual Meeting or
this proxy statement come up for vote at the Meeting?
The Board of Directors does not intend to present any business for a vote
at the Meeting other than the matters set forth in the accompanying Notice of
Annual Meeting of Shareholders. As of the date of this proxy statement, no
shareholder has notified us of any other business that may properly come before
the Meeting. If other matters requiring the vote of the shareholders properly
come before the Meeting, then it is the intention of the persons named in the
attached form of proxy to vote the proxy held by them in accordance with their
judgment on such matters.
The enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Meeting: (1)
matters that the Board of Directors did not know a reasonable time before the
mailing of the notice of the Meeting are to be presented at the Meeting; and (2)
matters incidental to the conduct of the Meeting.
4
Q: Who will bear the cost of soliciting proxies for use at the Meeting?
BioTime will bear all of the costs of the solicitation of proxies for use
at the Meeting. In addition to the use of the mails, proxies may be solicited by
a personal interview, telephone, and telegram by our directors, officers, and
employees, who will undertake such activities without additional compensation.
Banks, brokerage houses, and other institutions, nominees, or fiduciaries will
be requested to forward the proxy materials to the beneficial owners of the
common shares held of record by such persons and entities and will be reimbursed
for their reasonable expense incurred in connection with forwarding such
material.
Q: How can I attend and vote at the Meeting?
If you plan on attending the Meeting in person, please read the “How to
Attend the Annual Meeting” section of this proxy statement for information about
the documents you will need to bring with you to gain admission to the Meeting
and to vote your shares in person.
This proxy statement and the accompanying form of proxy are first being
sent or given to our shareholders on or about May 6, 2010.
Q: Can I vote by telephone or on the Internet?
If you are a shareholder of record,
you may enter your vote instruction by telephone at 1-800-PROXIES, or via the
Internet at WWW.VOTEPROXY.COM and follow the simple instructions. Use the
Company Number and Account Number shown on your proxy card.
If you are a “street name” holder, you may vote electronically through
www.ProxyVote.com or a toll-free telephone voting system. Follow the
instructions and use the Control Number shown on your proxy card or in your
email notification.
5
ELECTION OF DIRECTORS
At the Meeting, eight directors will be elected to hold office until the
next Annual Meeting of Shareholders, and until their successors have been duly
elected and qualified. All of the nominees named below are incumbent directors.
One of our incumbent directors, Valeta A. Gregg, Ph.D. will be retiring
from the Board of Directors at the Meeting. We thank Dr. Gregg for her years of
service on our Board.
It is the intention of the persons named in the enclosed proxy, unless
the proxy specifies otherwise, to vote the shares represented by such proxy
FOR the election of the nominees listed below. In
the unlikely event that any nominee should be unable to serve as a director,
proxies may be voted in favor of a substitute nominee designated by the Board of
Directors.
Directors and Nominees
The names and ages of our directors
are:
Neal C. Bradsher, CFA, 44, joined the Board of Directors during July 2009. Mr. Bradsher has
been President of Broadwood Capital, Inc., a private investment firm, since
2002. Previously, he was a Managing Director at Whitehall Asset Management, Inc.
from 1999 to 2002. Earlier in his career Mr. Bradsher was a Managing Director at
Campbell Advisors, as well as a senior equity analyst at Alex Brown & Sons
and Hambrecht & Quist. Mr. Bradsher holds a B.A. degree in economics from
Yale College and is a Chartered Financial Analyst. Mr. Bradsher is also a
director of Questcor Pharmaceuticals, Inc.
Mr. Bradsher brings to the Board a wealth of experience in finance,
management, and corporate governance attained through his successful investments
in other companies, including companies in the pharmaceutical, medical device,
health care services, and health care information systems sectors. He has worked
with several health care companies to improve their management and governance,
and he currently serves as a director of Questcor Pharmaceuticals, Inc, which is
engaged in the development and marketing of pharmaceutical products. Entities
that Mr. Bradsher controls have invested in most of BioTime's financing
transactions over the last several years. Mr. Bradsher is the President of the
general partner of Broadwood Partners, LP, currently one of our largest
shareholders.
Arnold I. Burns,
79, joined the Board of Directors during July 2009. Mr. Burns has been Chairman
of QuanStar Group, LLC, a strategic management consulting firm, since 2004. Mr.
Burns was a managing director of Arnhold and S. Bleichroeder, Inc. from 1999 to
2002, and Natixis Bleichroeder, Inc. during 2002. Mr. Burns was a practicing
attorney for nearly 40 years. From 1989 to 1999 he was a partner in the New York
law firm of Proskauer Rose, LLP, and from 1986-1988 he was Deputy United States
Attorney General, the Chief Operating Officer of the Department of Justice. Mr.
Burns holds a J.D. degree from Cornell Law School.
6
Mr. Burns brings to the Board many years of experience in the fields of
law, finance, and management. Mr. Burns was a practicing attorney for nearly 40
years. As Chief Operating Officer of the Department of Justice, he was
responsible for the management of a large, nationwide organization within the
Executive Branch of government. As a private consultant, Mr. Burns provides
advice to business clients regarding strategic relationships for growing
businesses.
Robert N. Butler, MD, 83, joined the Board of Directors during July 2008. Dr. Butler is the
founder, Chief Executive Officer, and President of the International Longevity
Center-USA, a non-profit international research, policy, and education
organization formed to educate individuals on how to live longer and better, and
advise society on how to maximize the benefits of today's age boom. Dr. Butler
was the first director of the National Institute on Aging of the National
Institutes of Health, where he helped educate the nation about the dangers of
Alzheimer’s disease. At the Mount Sinai School of Medicine, he founded the
nation’s first department of geriatrics where he is Professor of Geriatrics and
Adult Development. Dr. Butler won the Pulitzer Prize for his book Why Survive? Being Old in America and is co-author with Myrna I. Lewis of
Aging and Mental Health as well as The New Love and Sex after 60. His latest books are The Longevity Revolution (2008) and The Longevity Prescription
(2010).
Dr. Butler is a leading expert in geriatrics and diseases associated with
the aging process, such as Alzheimer’s and other degenerative conditions that
may be addressed by regenerative medicine. Dr. Butler also brings to our Board
experience in helping to formulate public policy related to geriatrics and
medicine.
Abraham E. Cohen,
73, joined the Board of Directors during July 2009. Mr. Cohen is an independent
international business consultant and is Chairman and President of Kramex
Company, a privately owned consulting firm. From 1982 to 1992, Mr. Cohen served
as Senior Vice-President of Merck & Co., and from 1977 to 1988 as President
of the Merck Sharp & Dohme International Division. Mr. Cohen serves as a
director of the following other public companies: Chugai Pharmaceutical Co.,
Ltd., MannKind Corporation, Teva Pharmaceutical Industries, Ltd., and
Vasomedical, Inc.
We asked Mr. Cohen to join our Board of Directors after his long career
in the pharmaceutical industry, where he played a key role in the development of
international business for Merck & Co. While at Merck, Mr. Cohen played a
key role in the development of Merck’s international business, initially in
Asia, then in Europe and, subsequently, as President of Merck Sharp & Dohme,
which manufactures and markets human health products outside the United States.
We have expanded our global focus in recent years and we are actively seeking
opportunities in overseas markets and we believe that Mr. Cohen’s guidance,
based on his many years of experience in the international pharmaceutical
industry will be of great value to our efforts to grow our
business.
7
Alfred D. Kingsley,
66, joined the Board of Directors and became Chairman of the Board during July
2009. Mr. Kingsley has been general partner of Greenway Partners, L.P., a
private investment firm, and President of Greenbelt Corp., a business consulting
firm, since 1993. Greenbelt Corp. served as our financial advisor from 1998
until June 30, 2009. Mr. Kingsley was Senior Vice-President of Icahn and Company
and its affiliated entities for more than 25 years. Mr. Kingsley holds a BS
degree in economics from the Wharton School of the University of Pennsylvania,
and a J.D. degree and LLM in taxation from New York University Law School.
Mr. Kingsley’s long career in corporate finance and mergers and
acquisitions includes substantial experience in helping companies to improve
their management and corporate governance, and to restructure their operations
in order to add value for shareholders. Mr. Kingsley developed an intimate
knowledge of our business in his role as our financial advisor before he joined
our Board. In that role, Mr. Kingsley was instrumental in structuring our equity
and debt financings, and in the transition of our business focus into the field
of human embryonic stem cell technology.
Pedro Lichtinger,
55, joined the Board of Directors during August 2009. Mr. Lichtinger served as
an executive of Pfizer, Inc. from 1995 to 2009, including as President of
Pfizer's Global Primary Care Unit from 2008 to 2009, Area President, Europe from
2006 to 2008, President, Global Animal Health from 1999 to 2006, and Regional
President Europe Animal Health from 1995 to 1999. Before joining Pfizer, Mr.
Lichtinger was an executive of Smith Kline Beecham, last serving as Senior
Vice-President Europe Animal Health from 1987 to 1995. Mr. Lichtinger holds an
MBA degree from the Wharton School of Business and an Engineering degree from
the National University of Mexico.
Mr. Lichtinger brings to our Board more than 20 years of experience in
the pharmaceutical industry, where he played a key role in the development of
international business for two leading pharmaceutical companies, Pfizer and
Smith Kline Beecham. We believe that Mr. Lichtinger’s experience in the
international pharmaceutical industry will be of great value in our efforts to
find and capitalize on opportunities in overseas markets. Mr. Lichtinger was
responsible for more than $23 billion of revenues by Pfizer in 2008.
Judith Segall, 56,
is our Vice-President of Administration and Corporate Secretary, and has served
on the Board of Directors from 1990 through 1994, and from 1995 through the
present date. Ms. Segall received a B.S. in Nutrition and Clinical Dietetics
from the University of California at Berkeley in 1989.
As one of our co-founders, Ms. Segall has served on our Board and as an
executive for nearly 20 years. During that time, she has developed a wealth of
knowledge concerning our business operations, financial structure, and
institutional relationships, particularly our relationships with the
manufacturers and distributors of Hextend®.
8
Michael D. West, Ph.D., 56, became our Chief Executive Officer during October 2007, and has
served on the Board of Directors since 2002. Prior to becoming our Chief
Executive Officer, Dr. West served as Chief Executive Officer, President, and
Chief Scientific Officer of Advanced Cell Technology, Inc., a company engaged in
developing human stem cell technology for use in regenerative medicine. Dr. West
also founded Geron Corporation of Menlo Park, California, and from 1990 to 1998
he was a Director and Vice-President, where he initiated and managed programs in
telomerase diagnostics, oligonucleotide-based telomerase inhibition as
anti-tumor therapy, and the cloning and use of telomerase in telomerase-mediated
therapy wherein telomerase is utilized to immortalize human cells. From 1995 to
1998 he organized and managed the research between Geron and its academic
collaborators James Thomson and John Gearhart that led to the first isolation of
human embryonic stem and human embryonic germ cells. Dr. West received a B.S.
Degree from Rensselaer Polytechnic Institute in 1976, an M.S. Degree in Biology
from Andrews University in 1982, and a Ph.D. from Baylor College of Medicine in
1989 concentrating on the biology of cellular aging.
Dr. West is an internationally renowned pioneer and expert in stem cell
research, and has extensive academic and business experience in age-related
degenerative diseases, telomerase molecular biology, and human embryonic stem
cell research and development. Dr. West brings to our Board the proven ability
to conceive of and manage innovative research and development programs that have
made scientifically significant discoveries in the field of human embryonic stem
cells, and the ability to build companies focused on the great potential of
regenerative medicine.
Director Independence
Our Board of Directors has determined that Neal C. Bradsher, Arnold I.
Burns, Robert N. Butler, Abraham E. Cohen, Pedro Lichtinger, and Valeta Gregg,
qualify as “independent” in accordance with Section 803(A) of the NYSE Amex
Company Guide. The members of our Audit Committee also meet the independence
standards under Section 803(B)(2) of the NYSE Amex Company Guide and Section
10A-3 under the Securities Exchange Act of 1934, as amended. Our independent
directors received no compensation or remuneration for serving as directors
except as disclosed under “CORPORATE GOVERNANCE--Compensation of Directors.”
The only compensation or remuneration that BioTime has provided to Mr.
Bradsher, Mr. Burns, Dr. Butler, Mr. Cohen, Mr. Lichtinger, and Dr. Gregg during
their tenure as directors has been compensation as non-employee directors. None
of these directors, nor any of the members of their families, have participated
in any transaction with us that would disqualify them as “independent” directors
under the standard described above.
Michael D. West and Judith Segall do not qualify as “independent” because
they are our full-time employees. Alfred D. Kingsley does not qualify as
“independent” because he is the principal shareholder and president of Greenbelt
Corp., which received more than $200,000 of compensation from us in one or more
of the preceding three fiscal years for services rendered as our financial
advisor.
9
CORPORATE GOVERNANCE
Directors’ Meetings
During the fiscal year ended December 31, 2009, the Board of Directors
met eight times. No director attended fewer than 75% of the meetings of the
Board or any committee on which they served.
Directors are also encouraged to attend our annual meetings of
shareholders, although they are not formally required to do so. All of the
directors attended the last annual meeting, except Robert N. Butler, who was
unable to attend.
Meetings of Non-Management
Directors
Our non-management directors regularly meeting in executive session,
without any directors who are BioTime officers or employees present, following
regular meetings of the Board, which occur at least once each calendar quarter.
These meetings allow the non-management directors to engage in open and frank
discussions about corporate governance and about our business, operations,
finances, and management performance.
Shareholder Communications with
Directors
If you wish to communicate with the Board of Directors or with individual
directors, you may do so by following the procedure described on our website
www.biotimeinc.com.
Code of Ethics
We have adopted a Code of Ethics that applies to our principal executive
officers, our principal financial officer and accounting officer, our other
executive officers, and our directors. The purpose of the Code of Ethics is to
promote (i) honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships; (ii) full, fair, accurate, timely, and understandable disclosure
in reports and documents that we file with or submit to the SEC and in our other
public communications; (iii) compliance with applicable governmental rules and
regulations; (iv) prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and (v) accountability for
adherence to the Code. A copy of our Code of Ethics has been posted on our
internet website and can be found at www.biotimeinc.com.
10
Board Leadership
Structure
Our leadership structure bifurcates the roles of
Chief Executive Officer and Chairman of the Board. In other words, although
Michael D. West is our Chief Executive Officer and is a member of our Board,
Alfred D. Kingsley currently serves as Chairman of the Board. Although Mr.
Kingsley is not a BioTime executive officer or employee, he plays an active role
in the structuring and oversight of BioTime financings and the growth of our
business. This structure allows our Chief Executive Officer to focus on
innovation in our stem cell research programs, building our intellectual
property portfolio, and fostering relationships within the bioscience industry.
The Chairman of the Board serves as an active liaison between the Board and our
Chief Executive Officer and BioTime’s other senior management. The Chairman of
the Board also interfaces with our other non-management directors with respect
to matters such as the members and chairs of Board committees, other corporate
governance matters, financing, and strategic planning.
The Board’s Role in Risk
Management
The Board has an active role, as a whole, in
overseeing management of the risks of our business. The Board regularly reviews
information regarding our credit, liquidity, and operations, as well as the
risks associated with our research and development activities and our plans to
expand our business. The Audit Committee provides oversight of our financial
reporting processes and the annual audit of our financial statements. In
addition, the Audit Committee also reviews and must approve any business
transactions between BioTime and its executive officers, directors, or
shareholders who beneficially own 5% or more of our common
shares.
Committees of the
Board
The
Board of Directors has an Audit Committee, a Nominating/Corporate Governance
Committee, and a Compensation Committee. The charters of each of these
committees require the members to be directors who are independent in accordance
with Section 803(A) of the AMEX listing standards and Section 10A-3 under the
Securities Exchange Act of 1934, as amended.
Audit
Committee
The
members of the Audit Committee are Arnold I. Burns, Robert N. Butler, and
Abraham E. Cohen. Mr. Burns is the Chairman of the Committee. The purpose of the
Audit Committee is to recommend the engagement of our independent auditors, to
review their performance and the plan, scope, and results of the audit, and to
review and approve the fees we pay to our independent auditors. The Audit
Committee also will review our accounting and financial reporting procedures and
controls, and all transactions between us and our executive officers, directors,
or shareholders who beneficially own 5% or more of our common
shares.
11
The Audit Committee operates under a
written charter adopted by the Board of Directors. A copy of the Audit Committee
Charter has been posted on our internet website and can be found at www.biotimeinc.com.
Nominating/Corporate Governance Committee and Nominating Policies and
Procedures
The members of the Nominating/Corporate
Governance Committee are Neal C. Bradsher, Arnold I. Burns, Robert N. Butler,
and Abraham E. Cohen. Mr. Bradsher is the Chairman of the Committee. The purpose
of the Nominating/Corporate Governance Committee is to recommend to the
Board of Directors individuals qualified to serve as directors and on committees
of the Board. The Nominating/Corporate Governance Committee will also consider
nominees proposed by shareholders, provided that they notify the Committee of
the nomination in writing at least 120 days before the date of the next annual
meeting and they and the nominee provide the Committee with all information that
the Committee may reasonably request regarding the nominee, no later than 90
days prior to the annual meeting. A copy of the Nominating/Corporate Governance
Committee Charter has been posted on our internet website and can be found at
www.biotimeinc.com.
The Nominating/Corporate Governance
Committee has not set any specific minimum qualifications that a prospective
nominee would need in order to be recommended by the Committee or to serve on
the Board or Directors. Rather, in evaluating any new nominee or incumbent
director, the Committee will consider whether the particular person has the
management, financial, scientific, legal, and industry knowledge, skills,
experience, and expertise needed to manage our affairs in light of the skills,
experience, and expertise of the other members of the Board as a whole. The
Committee will also consider whether a nominee or incumbent director has any
conflicts of interest with BioTime that might conflict with our Code of Ethics
or that might otherwise interfere with their ability to perform their duties in
a manner that is in the best interest of BioTime and its shareholders. The
Committee will also consider whether including a prospective director on the
Board will result in a Board composition that complies with (a) applicable state
corporate laws, (b) applicable federal and state securities laws, and (c) the
rules of the SEC and any stock exchange on which BioTime shares may be
listed.
The Board of Directors and the
Nominating/Corporate Governance Committee have not adopted specific policies
with respect to a particular mix or diversity of skills, experience, expertise,
perspectives, and background that nominees should have. However, the present
Board was assembled with a focus on attaining a Board comprised of people with
substantial experience in bioscience, the pharmaceutical industry, medicine,
finance, and law. The Board believes that this interdisciplinary approach will
best suit our needs, as we expand our initiatives in the field of regenerative
medicine. The Board is also cognizant of the value of experience in
international markets and operations given the growing globalization of the
pharmaceutical industry and world-wide focus on stem cell research.
Some of the factors considered by
the Committee and the Board in selecting the Board’s nominees for election at
the Meeting are discussed in this proxy statement under “ELECTION OF
DIRECTORS—Directors and Nominees.”
12
Compensation
Committee
The members of the Compensation
Committee are Arnold I. Burns, Robert N. Butler, and Pedro Lichtinger. Dr.
Butler is the Chairman of the Committee. The Compensation Committee will oversee
our compensation and employee benefit plans and practices, including executive
compensation arrangements and incentive plans and awards of stock options under
our 2002 Stock Option Plan. The Compensation Committee will recommend to the
Board of Directors the terms and amount of executive compensation and grants of
options to key employees, consultants, and independent contractors. A copy of
the Compensation Committee Charter has been posted on our internet website and
can be found at www.biotimeinc.com.
Report of the
Audit Committee on the Audit of Our Financial
Statements
The members of the Audit Committee
held discussions with our management and representatives of Rothstein, Kass
& Company, P.C., our independent public auditors, concerning the audit of
our financial statements for the year ended December 31, 2009. The independent
public auditors are responsible for performing an independent audit of our
consolidated financial statements and issuing an opinion on the conformity of
those audited financial statements with generally accepted accounting
principles.
The Audit Committee members reviewed
and discussed with management and representatives of the auditors the audited
financial statements contained in our Annual Report on Form 10-K for the year
ended December 31, 2009. The Audit Committee members also discussed with the
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61 (Communications with Audit Committees). Our auditors submitted to the
Audit Committee the written disclosures and the letter mandated by applicable
requirements of the Public Company Accounting Oversight Board regarding the
independent accountant’s communications with the Audit Committee concerning
independence. Based on the reviews and discussions referred to above, the Audit
Committee unanimously approved the inclusion of the audited financial statements
in our Annual Report on Form 10-K for the year ended December 31, 2009, filed
with the SEC.
The Audit Committee also met on a
quarterly basis with the auditors to review and discuss our financial statements
for the quarter and the adequacy of internal financial and reporting
controls.
The Audit Committee: Arnold I. Burns
(Chairman), Robert N. Butler, Abraham E.
Cohen.
13
Compensation
of Directors
Directors and members of committees
of the Board of Directors who are our employees are entitled to receive
compensation as employees but are not compensated for serving as directors or
attending meetings of the Board or committees of the Board. All directors are
entitled to reimbursements for their out-of-pocket expenses incurred in
attending meetings of the Board or committees of the Board.
Two non-employee directors each
received $7,500 in cash and options to purchase 10,000 common shares, which are
fully vested and exercisable, under our 2002 Stock Option Plan (the “2002
Plan”), for their service on the Board from January 1, 2009 through June 30,
2009.
During the third and fourth quarters
of 2009, the Board implemented a revised compensation plan for non-employee
directors. Non-employee directors, other than the Chairman of the Board of
Directors, will receive an annual fee of $15,000 in cash, plus $1,000 for each
regular or special meeting of the Board attended, and options to purchase 20,000
common shares under our 2002 Plan. The Chairman of the Board of Directors will
receive an annual fee of $80,000 in cash, plus $1,000 for each regular or
special meeting of the Board attended, and options to purchase 50,000 common
shares under the 2002 Plan.
The annual fee of cash will be paid,
and the stock options granted will vest and become exercisable, in four equal
quarterly installments, provided that the non-employee director remains a
director on the last day of the applicable quarter. The options will expire if
not exercised five years from the date of grant.
Non-employee directors who serve on
the Audit Committee, Nominating/Corporate Governance Committee, or the
Compensation Committee shall receive, in addition to other fees payable to
non-employee directors, the following annual fees:
- Audit Committee Chairman:
$10,000
- Audit Committee Member other than Chairman:
$7,000
- Nominating/Corporate Governance Committee Chairman:
$7,500
- Nominating/Corporate Governance Committee Member other than Chairman:
$5,000
- Compensation Committee Chairman: $7,500
- Compensation Committee Member other than Chairman: $5,000
14
The following table summarizes certain information
concerning the compensation paid during the past fiscal year to each of the
current members of the Board who were not our employees on the date the
compensation was earned:
DIRECTOR COMPENSATION
| Fees Earned or Paid | ||||||||||
| Name | in Cash | Option Awards | Total | |||||||
| Neal C. Bradsher | $ | 14,375 | $ | 38,300 | (1) | $ | 52,675 | |||
| Arnold I. Burns | $ | 16,250 | $ | 38,300 | (1) | $ | 54,550 | |||
| Robert N. Butler | $ | 23,875 | $ | 66,340 | (1) (2) | $ | 90,215 | |||
| Abraham E. Cohen | $ | 15,500 | $ | 38,300 | (1) | $ | 53,800 | |||
| Valeta Gregg | $ | 20,000 | $ | 66,340 | (1) (2) | $ | 86,340 | |||
| Alfred D. Kingsley | $ | 45,000 | $ | 95,750 | (1) | $ | 140,750 | |||
| Pedro Lichtinger | $ | 11,750 | $ | 56,080 | (3) | $ | 67,830 | |||
(1) During July 2009, our independent directors
each received an award of stock options entitling them to purchase 20,000 common
shares at a fixed price as partial compensation for serving on the Board of
Directors for a period of one year, except that Alfred Kingsley received 50,000
stock options as partial compensation for serving in his capacity as Chairman of
the Board. The options will vest and become exercisable in equal monthly
installments over a one-year period, but must be reported here at the aggregate
grant date fair value, as if all options were fully vested and exercisable at
the date of grant. We use the Black-Scholes-Merton Pricing Model to compute
option fair values. With respect to these options, we used the following
variables: stock price of $2.35, exercise price of $2.30, expected term of 5
years, volatility of 114.84%, and a bond equivalent yield discount rate of
2.43%.
(2) During August 2009, Robert Butler and Valeta
Gregg each received an award of stock options entitling them to purchase 10,000
common shares at a fixed price as partial compensation for serving on the Board
of Directors for the first half of 2009. The options were fully vested and
exercisable at the date of grant. We use the Black-Scholes-Merton Pricing Model
to compute option fair values. With respect to these options, we used the
following variables: stock price of $3.44, exercise price of $3.45, expected
term of 5 years, volatility of 115.30%, and a bond equivalent yield discount
rate of 2.69%.
(3) During August 2009, Pedro Lichtinger joined
our Board of Directors, and he received an award of stock options entitling him
to purchase 20,000 common shares at a fixed price as partial compensation for
serving on the Board for a period of one year. The options will vest and become
exercisable in equal monthly installments over a one-year period, but must be
reported here at the aggregate grant date fair value, as if all options were
fully vested and exercisable at the date of grant. We use the
Black-Scholes-Merton Pricing Model to compute option fair values. With respect
to these options, we used the following variables: stock price of $3.44,
exercise price of $3.45, expected term of 5 years, volatility of 115.30%, and a
bond equivalent yield discount rate of 2.69%.
Executive
Officers
Michael West, Robert Peabody, Steven
Seinberg, and Walter Funk are our only executive officers. There are no family
relationships among our directors or officers.
15
Robert W. Peabody, CPA, 55, is
our Senior Vice-President and Chief Operating Officer. Prior to joining BioTime
in October 2007, Mr. Peabody served as Vice-President of Grant Administration
for Advanced Cell Technology, Inc., and also served on their board of directors
from 1998 to 2006. Prior to joining ACT, Mr. Peabody spent 14 years as a
Regional Controller for Ecolab, Inc., a Fortune 500 specialty chemical
manufacturer and service company. Mr. Peabody, along with Dr. West, was a
co-founder of Geron Corporation of Menlo Park, CA. He has also been an audit
manager for Ernst and Young where he was on the audit staff serving the firm's
clients whose shares are publicly traded. Mr. Peabody received a Bachelor Degree
in Business Administration from the University of Michigan and is a Certified
Public Accountant.
Steven A. Seinberg, J.D., 43,
has been our Chief Financial Officer and Treasurer since August 2001. Prior to
assuming these positions, Mr. Seinberg worked for over five years as BioTime’s
Director of Financial and Legal Research, a position that involved, among other
duties, contract modifications and management of our intellectual property
portfolio. Mr. Seinberg received a J.D. from Hastings College of the Law in San
Francisco in 1994.
Walter Funk, Ph.D., 49, became
our Vice-President of Stem Cell Technology during August 2009. Before joining
BioTime, Dr. Funk was a managing director of Parallax Venture Partners, a
venture capital firm focused on investing in early stage biotechnology
companies. Before co-founding Parallax Venture Partners in 2007, Dr. Funk served
for approximately five years as Vice-President of Research of Nuvelo, Inc., a
biotechnology and drug development company. Previously, Dr. Funk was Director of
DNA Sequencing at Hyseq, Inc., and was a research scientist at Geron Corp.
where, among other projects, he detailed descriptions of gene expression
patterns in human embryonic stem cells. Dr. Funk received his Ph.D. in
Biochemistry from the University of British Columbia.
Other Key
Employees
Judith Segall, 56, is our Vice-President of Administration and
Corporate Secretary, and has served on the Board of Directors from 1990 through
1994, and from 1995 through the present date. Ms. Segall received a B.S. in
Nutrition and Clinical Dietetics from the University of California at Berkeley
in 1989.
Hal Sternberg, Ph.D., 55, has
been our Vice-President of Research since 1990. Dr. Sternberg was a visiting
scientist and research Associate at the University of California at Berkeley
from 1985-1988, where he supervised a team of researchers studying Alzheimer’s
Disease. Dr. Sternberg received his Ph.D. from the University of Maryland in
Biochemistry in 1982.
16
EXECUTIVE
COMPENSATION
Insider
Participation in Compensation Decisions
The Board of Directors, as a whole,
is responsible for approval of all executive compensation. Our Board of
Directors did not have a standing Compensation Committee during the year ended
December 31, 2008 or until August of 2009 when the Compensation Committee was
reconstituted after several independent directors joined the Board. All of the
members of the Compensation Committee qualify as “independent” in accordance
with Section 803(A) of the NYSE Amex Company Guide. The Compensation Committee
will recommend to the Board of Directors the terms and amount of executive
compensation and grants of options to key employees, consultants, and
independent contractors. Executive officers who also serve on the Board of
Directors do not vote on matters pertaining to their own personal
compensation.
Compensation
Policies
Our compensation policies have been
influenced by the need to attract and retain executives with the scientific and
management expertise to conduct our product development program in a highly
competitive industry dominated by larger, more highly capitalized companies.
Executive compensation is also influenced by the cost of living in the San
Francisco Bay Area. These factors have been balanced against our financial
position and capital resources.
Executive compensation may reflect
three major components: (i) base salary; (ii) annual variable performance awards
payable in cash and tied to the attainment of company objectives and the
officer's achievement of personal goals; and (iii) long-term stock-based
incentive awards (stock options) designed to strengthen the mutuality of
interests between the executive officers and the shareholders. During the fourth
quarter of 2009, the Compensation Committee reviewed the annual salaries of our
executive officers and determined that their salaries were less than executive
officers of similar experience would receive in the San Francisco Bay Area.
Accordingly, based upon a recommendation from the Compensation Committee,
during the fourth quarter of 2009 the annual salaries of Michael D. West, our
Chief Executive Officer, Robert W. Peabody, our Senior Vice President and Chief
Operating Officer, Steven Seinberg, our Chief Financial Officer, and Hal
Sternberg, our Vice-President of Research, were fixed at $350,000, $230,000,
$120,000 and $145,000, respectively, by the Board.
An annual bonus may be earned by each
executive officer based upon the achievement of personal and company performance
goals, as determined by the Board of Directors upon recommendation of the
Compensation Committee. Because we are still conducting research and
development, and have not attained a level of profitability, the use of
performance milestones based upon profit levels and return on equity as the
basis for incentive compensation has not been considered appropriate. Instead,
the incentive awards in the past have been tied to the achievement of personal
and company performance targets. Performance goals have varied from year to year
according to the stage of our operations and financial position. Important
milestones that have been considered by the Board in determining incentive
bonuses in the past have been (i) procuring additional capital, (ii) licensing
products and technology, (iii) completing specified research and development
goals, and (iv) achieving organizational goals. Personal goals are related to
the functional responsibility of each executive officer.
17
During December 2009, our Chief Executive Officer,
Michael D. West, was awarded an annual incentive bonus of $50,000, and our Vice
President and Chief Operating Officer, Robert W. Peabody, was awarded an annual
incentive bonus of $30,000.
During 2009, the Board approved funding a cash bonus
pool of $50,000 as an incentive for employees, and delegated to the Chief
Executive Officer the authority to make bonus awards from that cash pool to
employees, including officers, based on his determination that the employee’s
performance merits an incentive award.
Compensation of Our Chief Executive
Officer
During October 2007, we entered into an employment
agreement with our Chief Executive Officer, Dr. Michael West, pursuant to which
he was entitled to receive an annual salary of $250,000. Effective December 1,
2009, Dr. West’s annual salary was increased to $350,000. In addition to his
annual salary, Dr. West is entitled to receive an annual bonus equal to the
lesser of (A) $65,000 or (B) the sum of 65% of Consulting Fees and 6.5% of Grant
Funds we receive during each fiscal year; provided that (x) we obtained the
grant that is the source of the Grant Funds during the term of his employment,
(y) the grant that is the source of the Grant Funds is not a renewal, extension,
modification, or novation of a grant (or a new grant to fund the continuation of
a study funded by a prior grant from the same source) obtained by us prior to
his employment, and (z) the grant that is the source of the Grant Funds was not
obtained by us substantially through the efforts of any consultant or
independent contractor compensated by us for obtaining the grant. Grant Funds
means money actually paid to us during a fiscal year as a research grant by any
federal or state government agency or any not for profit non-government
organization, and expressly excludes (1) license fees, (2) royalties, (3)
Consulting Fees, (4) capital contributions to us or any of our subsidiaries, or
any joint venture of any kind (regardless of the legal entity through which the
joint venture is conducted) to which we are a party, and (5) any other payments
received by us from a business or commercial enterprise for research and
development of products or technology pursuant to a contract or agreement for
the commercial development of a product or technology. Consulting Fees means
money we receive under a contract that entitles us to receive a cash fee for
providing scientific and technical advice to third parties concerning stem
cells.
Dr.
West was granted an option to purchase 1,500,000 common shares under our 2002
Plan. The exercise price of the Dr. West’s option is $0.50. The option will vest
(and thereby become exercisable) at the rate of 1/60th of the number of option
shares at the end of each full month of employment. Vesting will depend on Dr.
West’s continued employment by us through the applicable vesting date, and will
be subject to the terms and conditions of the 2002 Plan and a Stock Option
Agreement consistent with the 2002 Plan and Dr. West’s Employment Agreement. The
unvested portion of the option shall not be exercisable.
18
The vested portion of the option
shall expire on the earliest of (A) seven years from the date of grant, (B)
three months after Dr. West ceases to be employed by us for any reason other
than his death or disability, or (C) one year after he ceases to be employed by
us due to his death or disability; provided that if he dies during the three
month period described in clause (B), the expiration date of the vested portion
of the option shall be one year after the date of his death. No portion of the
option shall be exercisable after it has expired.
Dr. West’s option was initially
paired with certain stock appreciation rights ("SARs") with respect to 976,500
shares, but the SARs expired in accordance with their terms during October 2009
when our shareholders approved amendments to our 2002 Plan increasing the number
of common shares available under the 2002 Plan from 2,000,000 to 6,000,000
shares.
In the event that Dr. West’s
employment is terminated for “cause,” as defined in his Employment Agreement, or
as a result of his death or disability, or his resignation, he will be entitled
to receive payment for all unpaid salary, accrued but unpaid bonus, if any, and
vacation accrued as of the date of his termination of employment.
If we terminate Dr. West’s
employment without “cause,” he will be entitled to additional benefits,
consisting of payment of either three months base salary, if he was employed by
us for less than two years, or six months base salary if he was employed by us
for at least two years. In addition, 50% of the then unvested shares subject to
Dr. West’s option will vest if he was employed by us for at least two years.
However, if a termination of Dr. West’s employment without “cause” occurs within
twelve months following a “Change of Control,” Dr. West will be entitled to four
months base salary if he was employed by us for less than two years, or twelve
months base salary if he was employed by us for at least two years; and 50% of
the then unvested shares subject to Dr. West’s option will vest if he was
employed by us for less than two years, or 100% of the then unvested shares
subject to his option will vest if he was employed by us for at least two
years.
“Change of Control” means (A) the
acquisition of our voting securities by a person or an Affiliated Group
entitling the holder to elect a majority of our directors; provided, that an
increase in the amount of voting securities held by a person or Affiliated Group
who on the date of the Employment Agreement beneficially owned (as defined in
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the
regulations thereunder) more than 10% of our voting securities shall not
constitute a Change of Control; and provided, further, that an acquisition of
voting securities by one or more persons acting as an underwriter in connection
with a sale or distribution of voting securities shall not constitute a Change
of Control, (B) the sale of all or substantially all of our assets; or (C) a
merger or consolidation in which we merge or consolidate into another
corporation or entity in which our stockholders immediately before the merger or
consolidation do not own, in the aggregate, voting securities of the surviving
corporation or entity (or the ultimate parent of the surviving corporation or
entity) entitling them, in the aggregate (and without regard to whether they
constitute an Affiliated Group) to elect a majority of the directors or persons
holding similar powers of the surviving corporation or entity (or the ultimate
parent of the surviving corporation or entity). A Change of Control shall not be
deemed to have occurred if all of the persons acquiring our voting securities or
assets, or merging or consolidating with us, are one or more of our direct or
indirect subsidiaries or parent corporations. "Affiliated Group" means (A) a
person and one or more other persons in control of, controlled by, or under
common control with, such person; and (B) two or more persons who, by written
agreement among them, act in concert to acquire voting securities entitling them
to elect a majority of our directors. “Person” includes both people and
entities.
19
Compensation
of Our Senior Vice-President and Chief Operating
Officer
During October 2007, we also entered
into an employment agreement with Robert W. Peabody, our Senior Vice-President
and Chief Operating Officer, under which he was entitled to receive an annual
salary of $160,000. Effective December 1, 2009, Mr. Peabody’s salary was
increased to $230,000. In addition to his annual salary, Mr. Peabody is entitled
to receive an annual bonus equal to the lesser of (A) $45,000 or (B) the sum of
35% of Consulting Fees and 3.5% of Grant Funds determined on the same basis used
to determine the annual bonus under Dr. West’s employment agreement. Mr. Peabody
was granted an option to purchase 500,000 common shares under the 2002 Plan. The
exercise price of Mr. Peabody’s option is $0.50. The option vesting and
expiration provisions, and the termination and severance compensation provisions
of Mr. Peabody’s employment agreement, are the same as those in Dr. West’s
employment agreement.
Mr. Peabody’s option was initially
paired with SARs with respect to 325,530 shares. However, SARs expired in
accordance with their terms during October 2009 when our shareholders approved
amendments to the 2002 Plan increasing the number of common shares available
under the 2002 Plan from 2,000,000 to 6,000,000 shares.
Compensation
of Our Vice-President of Stem Cell Research
During August 2009, we entered into
an employment agreement with Walter Funk, Ph.D., our Vice-President of Stem Cell
Research, under which he will receive an annual salary of $150,000. The company
also granted Dr. Funk a stock option to purchase 275,000 common shares at an
exercise price of $3.46. The option will vest (and thereby become exercisable)
at the rate of 1/48th of the number of option shares at the end of each full
month of employment. Vesting will depend on Dr. Funk’s continued employment by
us through the applicable vesting date, and will be subject to the terms and
conditions of the 2002 Plan and a Stock Option Agreement consistent with the
2002 Plan and Dr. Funk’s Employment Agreement. The unvested portion of the
option shall not be exercisable.
If we terminate Dr. Funk’s
employment with or without “cause,” he will be entitled to receive payment for
all unpaid salary, accrued but unpaid bonus, if any, and vacation accrued as of
the date of his termination of employment. Also, if we terminate Dr. Funk’s
employment without “cause,” in addition to the above, he will be entitled to
payment in an amount equal to three months base salary, which may be paid in a
lump sum or, at BioTime’s election, in installments consistent with the payment
of his salary during his employment, subject to such payroll deductions and
withholdings as are required by law, and he will also be entitled to accelerated
vesting of fifty percent (50%) of the then unvested portion of his option
shares.
20
However, if a termination of Dr.
Funk’s employment without “cause” occurs within twelve months following a
“Change of Control,” then instead of the above, Dr. Funk will be entitled to
receive payment for all unpaid salary, accrued but unpaid bonus, if any, and
vacation accrued as of the date of his termination of employment; a lump sum
payment of three months base salary, subject to such payroll deductions and
withholdings as are required by law; and accelerated vesting of one hundred
percent (100%) of the then unvested portion of his option
shares.
Compensation
of other Executive Officers
During the fourth quarter of 2009,
the annual salaries of Steven Seinberg, our Chief Financial Officer, and Hal
Sternberg, our Vice-President of Research, were fixed at $120,000 and $145,000,
respectively.
The following table summarizes
certain information concerning the compensation paid during the past two fiscal
years to our Chief Executive Officer, our Senior Vice-President and Chief
Operating Officer, our Vice President of Stem Cell Research, and our
Vice-President of Research, who were our only executive officers whose
compensation exceeded $100,000 during 2009:
SUMMARY COMPENSATION TABLE
| All other | ||||||||||||||||||||
| Name and principal position | Year | Salary | Bonus | Option Awards | compensation | Total | ||||||||||||||
| Michael D. West | 2009 | $ | 258,333 | $ | 87,917 | (1) | - | $ | 34,000 | (2) | $ | 380,250 | ||||||||
| Chief Executive Officer | 2008 | $ | 250,000 | - | $ | 24,500 | (2) | $ | 274,500 | |||||||||||
| Robert W. Peabody | 2009 | $ | 165,833 | $ | 58,500 | (1) | - | $ | 11,217 | (3) | $ | 235,550 | ||||||||
| Senior Vice-President and Chief Operating Officer | 2008 | $ | 160,000 | - | - | $ | 8,000 | (3) | $ | 168,000 | ||||||||||
| Hal Sternberg | 2009 | $ | 101,667 | $ | 12,250 | - | $ | 1,321 | (4) | $ | 115,238 | |||||||||
| Vice-President of Research | 2008 | $ | 80,000 | - | - | - | $ | 80,000 | ||||||||||||
| Walter Funk | ||||||||||||||||||||
| Vice-President of Stem Cell Research | 2009 | $ | 62,500 | $ | 2,250 | $ | 932,525 | (5) | - | $ | 997,275 | |||||||||
____________________
(1) As a result of receiving a research grant from
the California Institute of Regenerative Medicine, Dr. West and Mr. Peabody
earned bonuses of $37,917 and $26,250, respectively, under the terms of their
employment agreements. During December 2009, Dr. West was awarded an annual
incentive bonus of $50,000, and Mr. Peabody was awarded an annual incentive
bonus of $30,000. An annual bonus may be earned by each executive officer based
upon the achievement of personal and company performance goals, as determined by
the Board of Directors upon recommendation of the Compensation
Committee.
(2) During 2009 and 2008, Dr. West received other
compensation that included a $1,000 per month car allowance and employer
contributions of $22,000 and $12,500, respectively, to his 401k
plan.
21
(3) During 2009 and 2008, Mr. Peabody received
other compensation consisting of employer contributions of $11,217 and $8,000,
respectively, to his 401k plan.
(4) During 2009, Dr. Sternberg received other
compensation consisting of an employer contribution of $1,321 to his 401k
plan.
(5) Dr. Funk became our Vice-President of Stem
Cell Research in August 2009 and received an award of stock options entitling
him to purchase 275,000 common shares at a fixed price. The options will vest
and become exercisable in equal monthly installments over a four-year period,
but must be reported here at the aggregate grant date fair value, as if all
options were fully vested and exercisable at the date of grant. We use the
Black-Scholes-Merton Pricing Model to compute option fair values. With respect
to Dr. Funk’s options, we used the following variables: stock price of $3.80,
exercise price of $3.46, expected term of 7 years, volatility of 115.393%, and a
bond equivalent yield discount rate of 3.3%.
Stock
Options
The following table summarizes
certain information concerning stock options held as of December 31, 2009 by our
Chief Executive Officer and each of our other executive officers whose
compensation exceeded $100,000 during 2009:
OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END
| Option Awards | ||||||||||
| Number of | Number of | |||||||||
| Securities | Securities | |||||||||
| Underlying | Underlying | |||||||||
| Unexercised | Unexercised | Option | Option | |||||||
| Options | Options | Exercise | Expiration | |||||||
| Name | Exercisable | Unexercisable | Price | Date | ||||||
| Michael West | 20,000 | (1) | - | $ | 1.26 | March 20, 2010 | ||||
| 20,000 | (1) | - | $ | 0.34 | March 27, 2011 | |||||
| 20,000 | (1) | - | $ | 0.74 | June 1, 2014 | |||||
| 650,000 | (2) | 850,000 | $ | 0.50 | October 9, 2014 | |||||
| Robert W. Peabody | 216,658 | (3) | 283,342 | $ | 0.50 | October 9, 2014 | ||||
| Hal Sternberg | 80,000 | (4) | - | $ | 0.32 | November 23, 2011 | ||||
| Walter Funk | 34,375 | (5) | 240,625 | $ | 3.46 | August 3, 2016 | ||||
____________________
(1) These options were granted to Dr. West during
his service as a non-employee director, and were all fully vested and
exercisable as of December 31, 2009. During March 2010, Dr. West exercised the
option to purchase 20,000 common shares that was scheduled to expire on March
20, 2010.
(2) These options become exercisable at the rate
of 25,000 common shares per month during the term of Dr. West’s
employment.
(3) These options become exercisable at the rate
of 8,333 common shares per month during the term of Mr. Peabody’s
employment.
(4) These options were granted to Dr. Sternberg
during the course of his employment, and are all fully vested and
exercisable.
(5) These options become exercisable at the rate
of 5,729 common shares per month during the term of Dr. Funk’s
employment.
22
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of March 31, 2010
concerning beneficial ownership of common shares by each shareholder known by us
to be the beneficial owner of 5% or more of our common shares. Information
concerning certain beneficial owners of more than 5% of the common shares is
based upon information disclosed by such owners in their reports on Schedule 13D
or Schedule 13G.
Security Ownership of Certain Beneficial
Owners
| Number of Shares | Percent of Total | |||
| Alfred D. Kingsley (1) | 10,571,866 | 28.64 | % | |
| Gary K. Duberstein | ||||
| Greenbelt Corp. | ||||
| Greenway Partners, L.P. | ||||
| Greenhouse Partners, L.P. | ||||
| 150 E. 57th Street | ||||
| New York, New York 10022 | ||||
| Neal C. Bradsher (2) | 8,335,300 | 22.20 | % | |
| Broadwood Partners, L.P. | ||||
| Broadwood Capital, Inc. | ||||
| 724 Fifth Avenue, 9th Floor | ||||
| New York, NY 10019 | ||||
| George Karfunkel (3) | 4,997,217 | 13.83 | % | |
| 59 Maiden Lane | ||||
| New York, NY 10038 | ||||
(1) Includes 2,066,185 shares presently owned by
Greenbelt Corp, 337,632 shares that may be acquired by Greenbelt Corp. upon the
exercise of certain warrants, 550,287 shares owned by Greenway Partners, L.P.,
353,705 shares that may be acquired by Greenway Partners, L.P. upon the exercise
of certain warrants, 4,935,432 shares owned solely by Alfred D. Kingsley,
2,278,189 shares that may be acquired by Mr. Kingsley upon the exercise of
warrants, 37,500 shares that may be acquired by Mr. Kingsley upon the exercise
of certain stock options, 12,256 shares owned solely by Gary K. Duberstein, and
680 shares that may be acquired by Mr. Duberstein upon the exercise of certain
warrants. Excludes 12,500 shares that may be acquired upon the exercise of
certain stock options that are not presently exercisable and that will not
become exercisable within 60 days. Mr. Kingsley and Mr. Duberstein control
Greenbelt Corp. and may be deemed to beneficially own the warrants and shares
that Greenbelt Corp. beneficially owns. Greenhouse Partners, L.P. is the general
partner of Greenway Partners, L.P., and Mr. Kingsley and Mr. Duberstein are the
general partners of Greenhouse Partners, L.P. Greenhouse Partners, L.P., Mr.
Kingsley, and Mr. Duberstein may be deemed to beneficially own the shares that
Greenway Partners, L.P. owns. Mr. Duberstein disclaims beneficial ownership of
the shares and warrants owned solely by Mr. Kingsley, and Mr. Kingsley disclaims
beneficial ownership of the shares owned solely by Mr. Duberstein.
(2) Includes 4,669,249 shares owned by Broadwood
Partners, L.P., 3,608,143 shares that may be acquired by Broadwood Partners,
L.P. upon the exercise of certain warrants, 37,358 shares owned by Neal C.
Bradsher, 5,550 shares that may be acquired by Mr. Bradsher upon the exercise of
certain warrants, and 15,000 shares that may be acquired upon the exercise of
certain stock options. Excludes 5,000 shares that may be acquired upon the
exercise of certain stock options that are not presently exercisable and that
will not become exercisable within 60 days. Broadwood Capital, Inc. is the
general partner of Broadwood Partners, L.P., and Mr. Bradsher is the President
of Broadwood Capital, Inc. Mr. Bradsher and Broadwood Capital, Inc. may be
deemed to beneficially own the shares that Broadwood Partners, L.P. owns.
(3) Includes 2,782,217 shares owned by George
Karfunkel, and 2,215,000 shares that may be acquired by Mr. Karfunkel upon the
exercise of certain warrants.
23
Security Ownership of
Management
The following table sets forth information as of March 31, 2010
concerning beneficial ownership of common shares by each member of the Board of
Directors, certain executive officers, and all officers and directors as a
group.
| Number of | Percent of | ||
| Shares | Total | ||
| Alfred D. Kingsley (1) | 10,571,866 | 28.64% | |
| Neal C. Bradsher (2) | 8,335,300 | 22.20% | |
| Michael D. West (3) | 835,000 | 2.40% | |
| Judith Segall (4) | 667,669 | 1.95% | |
| Robert W. Peabody (5) | 258,333 | * | |
| Steven A. Seinberg (6) | 82,500 | * | |
| Walter Funk (7) | 60,938 | * | |
| Robert N. Butler, M.D. (8) | 50,000 | * | |
| Valeta Gregg (9) | 35,000 | * | |
| Arnold I. Burns (10) | 25,000 | * | |
| Abraham E. Cohen (11) | 15,000 | * | |
| Pedro Lichtinger (12) | 15,000 | * | |
| All officers and directors as a group (12 persons) (13) | 20,951,606 | 49.72% |
* Less than
1%
(1) Includes 2,066,185
shares presently owned by Greenbelt Corp, 337,632 shares that may be acquired by
Greenbelt Corp. upon the exercise of certain warrants, 550,287 shares owned by
Greenway Partners, L.P., 353,705 shares that may be acquired by Greenway
Partners, L.P. upon the exercise of certain warrants, 4,935,432 shares owned
solely by Alfred D. Kingsley, 2,278,189 shares that may be acquired by Mr.
Kingsley upon the exercise of warrants, 37,500 shares that may be acquired by
Mr. Kingsley upon the exercise of certain stock options, 12,256 shares owned
solely by Gary K. Duberstein, and 680 shares that may be acquired by Mr.
Duberstein upon the exercise of certain warrants. Excludes 12,500 shares that
may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days. Mr.
Kingsley and Mr. Duberstein control Greenbelt Corp. and may be deemed to
beneficially own the warrants and shares that Greenbelt Corp. beneficially owns.
Greenhouse Partners, L.P. is the general partner of Greenway Partners, L.P., and
Mr. Kingsley and Mr. Duberstein are the general partners of Greenhouse Partners,
L.P. Greenhouse Partners, L.P., Mr. Kingsley, and Mr. Duberstein may be deemed
to beneficially own the shares that Greenway Partners, L.P. owns. Mr. Duberstein
disclaims beneficial ownership of the shares and warrants owned solely by Mr.
Kingsley, and Mr. Kingsley disclaims beneficial ownership of the shares owned
solely by Mr. Duberstein.
(2) Includes 4,669,249
shares owned by Broadwood Partners, L.P., 3,608,143 shares that may be acquired
by Broadwood Partners, L.P. upon the exercise of certain warrants, 37,358 shares
owned by Neal C. Bradsher, 5,550 shares that may be acquired by Mr. Bradsher
upon the exercise of certain warrants, and 15,000 shares that may be acquired
upon the exercise of certain stock options. Excludes 5,000 shares that may be
acquired upon the exercise of certain stock options that are not presently
exercisable and that will not become exercisable within 60 days. Broadwood
Capital, Inc. is the general partner of Broadwood Partners, L.P., and Mr.
Bradsher is the President of Broadwood Capital, Inc. Mr. Bradsher and Broadwood
Capital, Inc. may be deemed to beneficially own the shares that Broadwood
Partners, L.P. owns.
(3) Includes 815,000
shares that may be acquired upon the exercise of certain stock options that are
presently exercisable or that may become exercisable within 60 days. Excludes
725,000 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(4) Includes 205,000
shares that may be acquired upon the exercise of certain stock options, and
45,337 shares that may be acquired upon the exercise of certain
warrants.
24
(5) Includes 258,333
shares that may be acquired upon the exercise of certain stock options that are
presently exercisable or that may become exercisable within 60 days. Excludes
241,667 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(6) Includes 80,000
shares that may be acquired upon the exercise of certain options.
(7) Includes 60,938
shares that may be acquired upon the exercise of certain options that are
presently exercisable or that may become exercisable within 60 days. Excludes
214,063 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(8) Includes 50,000
shares that may be acquired upon the exercise of certain options that are
presently exercisable or that may become exercisable within 60 days. Excludes
5,000 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(9) Includes 35,000
shares that may be acquired upon the exercise of certain options that are
presently exercisable or that may become exercisable within 60 days. Excludes
5,000 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(10) Includes 15,000
shares that may be acquired upon the exercise of certain options that are
presently exercisable or that may become exercisable within 60 days. Excludes
5,000 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(11) Includes 15,000
shares that may be acquired upon the exercise of certain options that are
presently exercisable or that may become exercisable within 60 days. Excludes
5,000 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(12) Includes 15,000
shares that may be acquired upon the exercise of certain options that are
presently exercisable or that may become exercisable within 60 days. Excludes
5,000 shares that may be acquired upon the exercise of certain stock options
that are not presently exercisable and that will not become exercisable within
60 days.
(13) Includes 8,231,007
shares that may be acquired upon the exercise of certain options and warrants.
Excludes certain shares that may be acquired upon the exercise of certain
options that are not presently exercisable and will not become exercisable
within 60 days.
Certain Relationships and Related
Transactions
Certain Transactions
During April 1998, we entered into a financial advisory services
agreement with Greenbelt Corp., a corporation controlled by Alfred D. Kingsley
and Gary K. Duberstein, who are also BioTime shareholders. Until 2009, the
agreement was renewed annually. We paid Greenbelt $90,000 in cash and issued
200,000 common shares for services rendered for the twelve months ending March
31, 2007. Greenbelt permitted us to defer until October 2007 paying certain cash
fees that otherwise would have been payable earlier in the year. In return for
allowing the deferral, we issued Greenbelt an additional 60,000 common shares.
For the 2008 calendar year, we agreed to pay Greenbelt $135,000 in cash and to
issue 300,000 common shares. Greenbelt permitted us to defer paying the entire
$135,000 cash fee until January 2009. In return for allowing the deferral, we
issued Greenbelt an additional 60,000 common shares during January 2009.
Greenbelt and BioTime agreed to terminate their agreement effective June 30,
2009, in connection with Alfred D. Kingsley joining the BioTime Board of
Directors, and BioTime agreed to pay Greenbelt $90,000 for services rendered
from January 1 through June 30, 2009. We have agreed to file a registration
statement, at our expense, to register Greenbelt’s shares for sale under the
Securities Act of 1933, as amended (the “Securities Act”), upon Greenbelt’s
request. We also agreed to indemnify Greenbelt and its officers, affiliates,
employees, agents, assignees, and controlling person from any liabilities
arising out of or in connection with actions taken on our behalf under the
agreement.
25
During April 2006, we entered into our Credit Agreement with Alfred D.
Kingsley, Cyndel & Co., Inc., and George Karfunkel, under which we could
borrow up to $500,000 for working capital purposes at an interest rate of 10%
per annum. In consideration for making the line of credit available, we issued
to the lenders a total of 99,999 common shares.
In October 2007, the Credit Agreement was amended to increase the line of
credit to $1,000,000, to increase the interest rate to 12% per annum, and to
extend the maturity date to April 30, 2008. The loan payable to Cyndel &
Co., Inc. was paid in full, and Broadwood Partners, L.P. joined the lender
group. In consideration for extending the maturity date of the new line of
credit, we issued to the lenders a total of 200,000 common shares.
The Credit Agreement was amended again during March and November of 2008
when additional lenders, including Greenway Partners, L.P., joined the lender
group, and the amount of the line of credit was increased and the maturity date
was extended. A subsequent amendment to the Credit Agreement during April 2009
extended the maturity date of the line of credit to December 1,
2009.
On November 15, 2008, George Karfunkel exercised his option to convert
his loan in the amount of $250,000 and related interest accrued in the amount of
$16,025 to BioTime common shares in accordance with the terms of the Credit
Agreement. Mr. Karfunkel made a new loan in the amount of $500,000 under the
Credit Agreement during 2009.
Under the Credit Agreement, we issued common shares to all lenders who
agreed to provide loans and to extend the maturity date of their outstanding
loans. From January 1, 2007 through April 15, 2009, we issued 230,348 common
shares to Broadwood Partners, L.P., 117,243 common shares to Alfred D. Kingsley,
77,405 common shares to Greenway Partners, L.P., 6,144 common shares to
Greenbelt Corp., and 396,502 common shares to George Karfunkel under the Credit
Agreement.
During August 2009, we completed an exchange offer with the lenders under
our Credit Agreement, through which we issued 1,989,515 common shares and
100,482 common share purchase warrants, and we paid $294,351 in interest, to
lenders in exchange for $3,349,259 of Credit Agreement promissory notes. The
warrants issued in the exchange offer are exercisable at a price of $2.00 per
share, subject to adjustment under the terms of a warrant agreement governing
the warrants, and will expire at 5:00 p.m., New York time, on October 31, 2010.
The following table shows the largest principal amount of our
indebtedness under the Credit Agreement to certain shareholders and the total
amount of interest incurred on their loans during the past three fiscal years. A
portion of the interest shown in the table as accrued during 2007 was paid in
November 2007, and a portion was paid in April 2008. A portion of the interest
shown in the table as accrued during 2008 was paid when due on April 15, 2009.
All interest accrued during 2009 was paid during 2009. In addition, under the
terms of the exchange offer, we paid interest that would have accrued had the
promissory notes been held until the December 1, 2009 maturity
date.
26
| Name | Principal Amount of Loan | Interest | |||||||||||||||
| 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | ||||||||||||
| Alfred D. Kingsley | $ | 250,000 | $ | 250,000 | $ | 175,000 | $ | 18,833 | $ | 28,750 | $ | 9,833 | |||||
| Greenbelt Corp. | $ | 100,000 | $ | -- | $ | -- | $ | 7,533 | $ | -- | $ | -- | |||||
| Greenway Partners, L.P. | $ | 204,154 | $ | 300,000 | $ | -- | $ | 15,380 | $ | 20,683 | $ | -- | |||||
| Broadwood Partners, L.P. | $ | 1,025,000 | $ | 1,025,000 | $ | 175,000 | $ | 77,217 | $ | 49,558 | $ | 2,917 | |||||
| George Karfunkel | $ | 500,000 | $ | 250,000 | $ | 100,000 | $ | 49,833 | $ | 24,025 | $ | 2,817 | |||||
The following table shows the number of common shares and warrants issued
to certain shareholders in exchange for their Credit Agreement promissory notes:
| Number of | Number of | Amount of Notes | |||||
| Name | Shares | Warrants | Exchanged | ||||
| Alfred D. Kingsley | 166,667 | 7,500 | $ | 250,000 | |||
| Greenbelt Corp. | 57,143 | 3,000 | $ | 100,000 | |||
| Greenway Partners, L.P. | 136,103 | 6,125 | $ | 204,167 | |||
| Broadwood Partners, L.P. | 638,096 | 30,750 | $ | 1,025,000 | |||
| George Karfunkel | 285,715 | 15,000 | $ | 500,000 | |||
During 2008, we issued a warrant to purchase 100,000 of our common shares
at an exercise price of $0.68 per share, expiring July 30, 2013, to the
International Longevity Center-USA, a non-profit institution for which Robert N.
Butler, M.D., serves as President, Chief Executive Officer, and a member of its
board of directors.
During May and July 2009, we sold 2,200,000 common shares and 2,200,000
stock purchase warrants to Broadwood Partners, L.P. for $4,000,000, and we
concurrently sold a like number of shares and warrants at the same price to
George Karfunkel. The warrants and entitle Broadwood Partners and Mr. Karfunkel
to purchase common shares at an exercise price of $2.00 per share. The warrants
will expire on October 31, 2010 and may not be exercised after that date. We
have agreed to file a registration statement to register the warrants and shares
issuable upon the exercise of the warrants for sale under the Securities Act,
subject to certain limitations. We have also agreed to file a registration
statement to register the common shares, or to permit the investors to include
the common shares in any future registration statements that we may file, after
May 15, 2010, subject to certain limitations.
Since July 1 2009, Alfred Kingsley has made available to us the use of
approximately 900 square feet of office space in New York City. We pay the
office building owner $5,050 per month for the use of the space.
27
During October and December, 2009, our subsidiary, OncoCyte Corporation
raised $4,000,000 through the sale of 6,000,000 shares of its common stock, no
par value, to George Karfunkel and his son Bernard Karfunkel, who now hold 26%
of the outstanding shares of OncoCyte.
Approval by the Board of Directors and Audit
Committee
The transactions described above have been approved by the Board. The
Audit Committee approved our agreement with Greenbelt for the 12 months ended
March 31, 2008, and approved the April 2006 Credit Agreement. Following approval
by the Audit Committee, the Board approved the transactions. However, we did not
have a sufficient number of independent directors to serve on our Audit
Committee from October 2007 until August 2009, and during that time period all
proposed transactions between us and our officers, directors, or shareholders
who beneficially own 5% or more of our outstanding common shares were reviewed
directly by the Board, and the Board determined whether to approve or withhold
approval of each transaction. The Board applied such criteria as it determined
to be appropriate in connection with its evaluation of each proposed transaction
on a transaction by transaction basis, and did not have any written guidelines,
other than our Code of Ethics, governing the Board’s exercise of its discretion.
During August 2009, we reconstituted our Audit Committee with independent
directors. The Audit Committee will review and determine whether to approve all
future proposed transactions between us and our officers, directors, or
shareholders who beneficially own 5% or more of our outstanding common shares.
The Audit Committee will report its decision and any related recommendation to
the Board of Directors with respect to the proposed transaction, as required by
the Audit Committee charter.
Our Code of Ethics provides that our officers and employees should avoid
engaging in transactions on our behalf with any person or entity in which they
or a member of their family has a substantial economic or beneficial interest or
in which they or any member of their family serve as a trustee or in a similar
fiduciary capacity. Directors are required to disclose to the Board of Directors
any interest they may have in any such transaction at the time it is approved by
the Board of Directors.
28
Except for our Code of Ethics and the charter of our Audit Committee, we
do not have any other written policies for evaluating transactions with our
officers, directors, and beneficial owners of more than 5% of our common shares
and their affiliates. However, all of these transactions have been approved by
the Board of Directors as whole, without the vote of any director who is party
to the transaction or who has a financial interest in the transaction through an
affiliate. Our transactions with directors, shareholders, and their affiliates
have primarily involved financings. In approving any such transactions the
directors considered such factors as they deem relevant to the particular
transaction, including prevailing conditions in the capital markets, the prices
at which our common shares and warrants trade in the market, the immediacy of
our need for capital, the terms and conditions of the transaction, alternative
sources of financing that may be available from third parties, and the terms
available from other parties. For example, participation in loans under our
Credit Agreement was made available to the beneficial owners of more than 5% of
our common shares on the same terms as unaffiliated private investors.
Similarly, during 2009 we agreed to sell common shares and warrants to Broadwood
Partners, L.P. on the same terms as George Karfunkel, who at the time
beneficially owned less than 5% of our common shares.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), requires our directors and executive officers and persons who
own more than ten percent (10%) of a registered class of our equity securities
to file with the SEC initial reports of ownership and reports of changes in
ownership of common shares and other BioTime equity securities. Officers, directors and greater than ten
percent beneficial owners are required by SEC regulations to furnish us with
copies of all reports they file under Section 16(a).
To our knowledge, based solely on our review of the copies of such
reports furnished to us, all Section 16(a) filing requirements applicable to our
officers, directors, and greater than ten percent beneficial owners were
complied with during the fiscal year ended December 31, 2009, except that a
total of nine Forms 4 were not filed on time on behalf of the following persons:
Alfred D. Kingsley (one late filing), Gary K. Duberstein (two late filings),
Greenbelt Corp. (one late filing), Greenway Partners, LP (two late filings),
Broadwood Partners, LP (one late filing), Robert N. Butler (one late filing),
and Valeta Gregg (one late filing), and a Form 5 was not filed on time on behalf
of the following persons: Alfred D. Kingsley, Gary K. Duberstein, and Greenway
Partners, LP. There were no known failures to file any required reports.
29
RATIFICATION OF THE SELECTION OF OUR
INDEPENDENT AUDITORS
The Board has selected Rothstein, Kass & Company, P.C. (“RKCO”) as
our auditors. The Board proposes and recommends that the shareholders ratify the
selection of the firm of RKCO to serve as our independent auditors for the
fiscal year ending December 31, 2010. RKCO has served as our independent
auditors since February 2007. Approval of the selection of RKCO to serve as our
auditors requires the affirmative vote of a majority of the shares present and
voting on the matter at the Meeting, provided that the affirmative vote cast
constitutes a majority of a quorum. Unless otherwise directed by the
shareholders, proxies will be voted FOR approval of the
selection of RKCO to audit our consolidated financial statements.
The Board of Directors Recommends a Vote “FOR”
Ratification of the Selection of
Rothstein, Kass & Company, P.C. as Our Independent Auditors
Rothstein, Kass & Company, P.C. as Our Independent Auditors
We expect that a representative of RKCO will attend the Meeting, and will
have an opportunity to make a statement if he or she so desires and may respond
to appropriate questions from shareholders.
Rothstein, Kass and Company (“RKCO”) audited our annual financial
statements for the fiscal years ended December 31, 2008 and December 31,
2009.
Audit Fees. RKCO
billed us $102,500 in 2008 and $99,500 in 2009 for the audit of our annual
financial statements and for the review of our financial statements included in
our quarterly reports on Form 10-QSB and Form 10-Q.
Audit-Related Fees. There were no audit-related fees charged to us by RKCO during the fiscal
years ended December 31, 2008 and 2009.
Tax Fees. RKCO
billed us $6,500 and $7,500, respectively, for review and preparation of U.S.
federal, state, and local tax returns during the fiscal years ended December 31,
2008 and December 31, 2009, respectively.
Other Fees. There
were no other fees charged to us by RKCO during the fiscal years ended December
31, 2008 and 2009.
The prior approval of the Board of Directors is required for the
engagement of our auditors to perform any non-audit services for us. Other than
de minimis services incidental to audit services,
non-audit services shall generally be limited to tax services such as advice and
planning and financial due diligence services. All fees for such non-audit
services must be approved by the Board of Directors, except to the extent
otherwise permitted by applicable SEC regulations.
30
PROPOSALS OF SHAREHOLDERS
Shareholders who intend to present a proposal for action at our 2011
Annual Meeting of Shareholders must notify the our management of such intention
by notice received at our principal executive offices not later than January 6,
2011 for such proposal to be included in our proxy statement and form of proxy
relating to such meeting.
ANNUAL REPORT
Our Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 2009, without exhibits, may be
obtained by a shareholder without charge, upon written request to the Secretary
of BioTime.
We may deliver only one annual report and proxy statement to multiple
shareholders sharing an address, unless we receive notice from the instructions
to the contrary from those shareholders. We will deliver separate copies of the
proxy statement and annual report to each shareholder sharing a common address
if they notify us that they wish to receive separate copies. If you wish to
receive a separate copy of the proxy statement or annual report, you may contact
us by telephone at (510) 521-3390, or by mail at 1301 Harbor Bay Parkway, Suite
100, Alameda, California 94502. You may also contact us at the above phone
number or address if you are presently receiving multiple copies of the proxy
statement and annual report but would prefer to receive a single copy instead.
| By Order of the Board of Directors, |
 |
| Vice President and Secretary |
May 6, 2010
31
HOW TO ATTEND THE ANNUAL
MEETING
If you are a “shareholder of record” (meaning that you have a stock
certificate registered in your own name), your name will appear on our
shareholder list. You will be admitted to the Meeting upon showing your proxy
card, driver’s license, or other identification.
If you are a “street name” shareholder (meaning that your shares are held
in an account at a broker-dealer firm) your name will not appear on our
shareholder list. If you plan to attend the Meeting, you should ask your broker
for a “legal proxy.” You will be admitted to the Meeting by showing your legal
proxy. You probably received a proxy form from your broker along with your proxy
statement, but that form can only be used by your broker to vote your shares,
and it is not a “legal proxy” that will permit you to vote your shares directly
at the Meeting. If you cannot obtain a legal proxy in time, you will be admitted
to the Meeting if you bring a copy of your most recent brokerage account
statement showing that you own BioTime stock. However, if you do not obtain a
legal proxy, you can only vote your shares by returning to your broker, before
the Meeting, the proxy form that accompanied your proxy statement.
32
ANNUAL MEETING OF SHAREHOLDERS
OF
BIOTIME, INC.
June 10,
2010
Important Notice Regarding the
Availability of Proxy Materials
for the Shareholder Meeting to be Held June 10, 2010.
The Letter to Shareholders, Notice of Meeting and Proxy Statement, and Annual
Report on Form 10-K are available at: https://materials.proxyvote.com/09066L
for the Shareholder Meeting to be Held June 10, 2010.
The Letter to Shareholders, Notice of Meeting and Proxy Statement, and Annual
Report on Form 10-K are available at: https://materials.proxyvote.com/09066L
As an alternative to
completing this form, you may enter your vote instruction
by telephone at 1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM
and follow the simple instructions. Use the Company Number and
Account Number shown on your proxy card.
by telephone at 1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM
and follow the simple instructions. Use the Company Number and
Account Number shown on your proxy card.
Please sign, date
and mail
your proxy card in the
envelope provided as soon
as possible.
your proxy card in the
envelope provided as soon
as possible.
ê Please detach along perforated line
and mail in the envelope provided. ê
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" PROPOSAL NUMBER 2
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
|
|
FOR | AGAINST | ABSTAIN | |||
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2. RATIFYING APPOINTMENT OF INDEPENDENT
AUDITORS
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1. ELECTION OF
DIRECTORS:
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| NOMINEES: | ||||||
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FOR ALL NOMINEES | O NEAL C. BRADSHER O ARNOLD I. BURNS O ROBERT N. BUTLER O ABRAHAM E. COHEN O ALFRED D. KINGSLEY O PEDRO LICHTINGER O JUDITH SEGALL O MICHAEL D. WEST |
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WITHHOLD AUTHORITY FOR ALL NOMINEES |
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FOR
ALL EXCEPT (See instructions below) |
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INSTRUCTIONS: To
withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and
fill in the circle next to each nominee you wish to withhold, as shown
here: l
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I WISH TO ATTEND AND VOTE SHARES AT MEETING
c
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To change the address on your
account, please check the box at right and indicate your new address in
the address space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method.
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| Signature of Shareholder | Date: | ||
| Signature of Shareholder | Date: | ||
| Note: |
Please sign exactly as your name or names appear on
this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please
give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If
signer is a partnership, please sign in partnership name by authorized
person.
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PROXY FOR BIOTIME, INC.
ANNUAL MEETING OF SHAREHOLDERS
ANNUAL MEETING OF SHAREHOLDERS
June 10, 2010
This Proxy is Solicited by the Board of Directors of
BioTime, Inc.
The undersigned appoints Michael D. West and Alfred
D. Kingsley, and each of them, with full power of substitution, as the
undersigned's lawful agent and proxy to attend the Annual Meeting of
Shareholders of BioTime, Inc. on June 10, 2010 and any adjournment thereof and
to represent and vote all BioTime, Inc. common shares standing in the name of
the undersigned upon the books of the corporation.
Shares represented by this proxy will be voted in
accordance with the instructions of the undersigned specified below. If this
card contains no specific voting instructions the undersigned's shares will be
voted FOR the election of directors and FOR proposal 2. This proxy also authorizes each of the persons named
above to vote at his discretion on (1) any other matter that the Board of
Directors did not know a reasonable time before the mailing of the notice of
annual meeting are to be presented at the meeting, and (2) matters incidental to
the conduct of the meeting.
(Continued and to be signed on the reverse
side)