def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
GEOVAX LABS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
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GEOVAX LABS, INC.
1900 Lake Park Drive
Suite 380
Smyrna, Georgia 30080
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
To Our Stockholders:
The Annual Meeting of Stockholders of GeoVax Labs, Inc. will be held on Tuesday,
August 24, 2010, at 1:00 p.m. (Eastern Daylight Time), at the offices of Womble Carlyle Sandridge &
Rice, PLLC, 271 17th Street, NW, Suite 2400, Atlanta, Georgia 30363. For the purposes
of considering and voting upon:
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A proposal to elect seven directors to serve until the 2011 Annual Meeting of Stockholders; |
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A proposal to ratify the appointment of Porter Keadle Moore LLP as the independent
registered public accounting firm of GeoVax Labs, Inc. for the fiscal year ending December
31, 2010; and |
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Such other business as properly may come before the Annual Meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to be presented to a
vote of the stockholders at the Annual Meeting. |
Stockholders of record at the close of business on July 2, 2010 are entitled to
notice of the Annual Meeting and at any continuation or adjournment thereof.
The Company is using the U.S. Securities and Exchange Commission rule that allows us
to furnish proxy materials over the Internet. On or about July 14, 2010, the Company started
mailing to its stockholders a Notice of Internet Availability of Proxy Materials (a Notice). The
Notice contains instructions on how to access this Proxy Statement and our Annual Report and vote
online or by telephone. The Notice also contains instructions on how stockholders can receive a
paper copy of the Companys proxy materials, including this Proxy Statement, the Companys Annual
Report and a form of proxy card or voting instruction card. Stockholders who receive a paper copy
of the Companys proxy materials, including a Proxy Statement, the Companys Annual Report and a
form of proxy card or instruction card may vote online, by telephone or by mail.
Please vote as promptly as possible, whether or not you plan to attend the Annual
Meeting. Your promptness in voting will assist us in ensuring that a quorum is present or
represented. Even though you vote, you may nevertheless attend the Annual Meeting and vote your
shares in person if you wish. If you want to revoke your proxy at a later time for any reason, you
may do so in the manner described in the attached Proxy Statement.
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By Order of the Board of Directors,
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Mark W. Reynolds |
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Corporate Secretary |
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July 14, 2010
Smyrna, Georgia
TABLE OF CONTENTS
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Notice of Annual Meeting of Stockholders and Proxy Statement |
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About This Proxy Statement |
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Proposal I: Election Of Directors |
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Corporate Governance |
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Security Ownership of Principal Stockholders, Directors, and Executive Officers |
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Compensation Discussion and Analysis |
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Summary Compensation Table |
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Grants of Plan-Based Awards |
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Outstanding Equity Awards at Fiscal Year-End |
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Director Compensation |
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Certain Relationships and Related Transactions |
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Compensation Committee Report |
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Proposal II: Ratification of Appointment of the Independent Registered Public Accounting Firm |
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Report of the Audit Committee |
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Other Matters |
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GEOVAX LABS, INC.
1900 Lake Park Drive
Suite 380
Smyrna, Georgia 30080
PROXY STATEMENT
For The
ANNUAL MEETING OF STOCKHOLDERS
To Be Held August 24, 2010
ABOUT THIS PROXY STATEMENT
This Proxy Statement is furnished by GeoVax Labs, Inc., a Delaware corporation, in
connection with the solicitation of your proxy by the Companys Board of Directors for use at our
Annual Meeting of Stockholders to be held at the offices of Womble Carlyle Sandridge & Rice, PLLC,
271 17th Street, NW, Suite 2400, Atlanta, Georgia 30363, on Tuesday, August 24, 2010, at
1:00 p.m. local time and at any continuation or adjournment thereof.
Important Notice Regarding the Availability of Proxy Materials
The Notice of Annual Meeting of Shareholders, Proxy Statement, Form of Proxy and
2009 Annual Report are available at www.proxyvote.com.
This year, the Company is again using the U.S. Securities and Exchange Commission
(SEC) rule that allows us to furnish our proxy materials over the Internet. On or about July 14,
2010, the Company started mailing to its stockholders a Notice of Internet Availability of Proxy
Materials (a Notice). The Notice contains instructions on how to access this Proxy Statement and
Annual Report on Form 10-K (Annual Report) and vote online or by telephone. The Notice also
contains instructions on how stockholders can receive a paper copy of the Companys proxy
materials, including this Proxy Statement, the Companys Annual Report on Form 10-K and a form of
proxy card or voting instruction card. Stockholders who receive a paper copy of the Companys proxy
materials, including a Proxy Statement, the Companys Annual Report and a form of proxy card or
instruction card may vote online, by telephone or by mail. By furnishing its proxy materials over
the Internet, the Company is lowering the costs and reducing the environmental impact of the Annual
Meeting.
The Proposals
At the Annual Meeting, the stockholders will be asked to consider and vote upon the
following proposals, which we refer to as the Proposals:
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A proposal to elect seven directors to serve until the 2011 Annual Meeting of Stockholders; |
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A proposal to ratify the appointment of Porter Keadle Moore LLP as the independent
registered public accounting firm of GeoVax Labs, Inc. for the fiscal year ending December
31, 2010; and |
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Such other business as properly may come before the Annual Meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to be presented to a
vote of the stockholders at the Annual Meeting. |
1
Voting
Stockholders of record may vote:
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By Internet Over the Internet, by going to www.proxyvote.com. Have your
proxy card in hand when you access the website and follow the instructions to obtain your records
and create an electronic voting instruction form. |
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By Telephone Over the telephone, by dialing 1-800-690-6903 from any touch-tone
telephone. Have your proxy card in hand when you call and follow the instructions. |
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By Mail By mail using the enclosed proxy card. Please complete, sign and date your
proxy card and return it promptly in the envelope provided or mail it to Vote Processing, c/o
Broadbridge, 91 Mercedes Way, Edgewood, New York 11717. When the proxy card is properly executed,
dated, and timely returned, the shares it represents will be voted in accordance with its
instructions. |
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By Attending the Meeting in Person By attending the meeting in person and voting.
Please contact Jennifer Nelms at 678-384-7220 or jnelms@geovax.com in order to obtain
directions to the Annual Meeting. |
Internet and telephone voting facilities will close at 11:59 p.m., Eastern Daylight
Time, on August 23, 2010.
A large number of banks, brokerage firms and other nominees participate in online
programs which provide eligible beneficial owners who hold their shares in street name rather
than as a stockholder of record, with the opportunity to vote over the Internet or by telephone.
Street name stockholders who elected to access the proxy materials electronically over the
Internet through an arrangement with their brokerage firm, bank or other nominee should receive
instructions from their brokerage firm, bank or other nominee on how to access the stockholder
information and voting instructions. If you hold your shares in street name and the voting
instruction form that you receive from your brokerage firm, bank or other nominee does not
reference Internet or telephone information, or if you prefer to vote by mail, please complete and
return the paper voting instruction form. In order to vote shares held in street name in person
at the Annual Meeting, a proxy issued in the owners name must be obtained from the record holder
(typically your brokerage firm, bank or other nominee) and presented at the Annual Meeting.
Stockholders of record and street name stockholders who vote over the Internet or
by telephone need not return a proxy card or voting instruction form by mail, but may incur costs,
such as usage charges, from telephone companies or Internet service providers, for which the
stockholder is responsible.
Broker non-votes are proxies received from banks, brokerage firms or other
nominees holding shares on behalf of their street name clients who have not been given specific
voting instructions from such clients with respect to matters such as the Proposals. The banks,
brokerage firms or other nominees do not have the authority to vote your shares in their discretion
on the election of directors, and may not vote them on the election
of directors unless given specific voting instructions
from you. If you hold your shares in street name and do not provide voting instructions to your
brokerage firm, bank or other nominee with respect to the election of
directors,
your shares will not be voted on that Proposal.
Revocability of Proxy
If you give us a proxy you will have the power to revoke it at any time before it is
exercised. The proxy may be revoked before it is exercised by sending a written revocation or a
duly executed proxy bearing a later date to us at our principal executive offices located at 1900
Lake Park Drive, Suite 380, Smyrna, Georgia 30080; Attention: Corporate Secretary. The proxy may
also be revoked by attending the meeting and voting in person.
When the proxy is properly executed, dated and returned, the shares it represents
will be voted in accordance with any directions noted on it. If no instructions are indicated, the
proxy will be voted FOR the approval of the Proposals. We currently know of no other matters to be
considered at the Annual Meeting of Stockholders. If, however, any other matters come before the
Annual Meeting of Stockholders, or any adjournment or adjournments thereof, the persons named in
the proxy will vote the proxy in accordance with their best judgment on any such matter.
2
Record Date, Voting Rights and Outstanding Shares
The Board of Directors fixed July 2, 2010 as the record date (the Record Date) for
determining holders of our common stock, $0.001 par value per share, who are entitled to vote at
the meeting. As of the Record Date, we had 15,654,846 shares of common stock outstanding and
entitled to vote. Each share of common stock entitles the record holder to one vote on each matter
to be voted upon at the meeting. A majority of the shares of common stock issued and outstanding
and entitled to vote at the meeting will constitute a quorum at the meeting. If a quorum is not
present or represented at the Annual Meeting, the Chairman of the meeting or the stockholders
holding a majority of the shares of Common Stock entitled to vote, present in person or represented
by proxy, have the power to adjourn the meeting from time to time without notice, other than an
announcement at the meeting, until a quorum is present or represented. Directors, officers and
employees of the Company may solicit proxies for the reconvened meeting in person or by mail,
telephone or telegram. At any such reconvened meeting at which a quorum is present or represented,
any business may be transacted that might have been transacted at the meeting as originally
scheduled. Cumulative voting is not permitted.
Unless otherwise indicated on the proxy, your shares will be voted FOR the
election of the seven director-nominees named on the proxy, and FOR the proposal to ratify the
selection of our independent registered accountants. Proxies cannot be voted for a greater number
of persons than the number of director-nominees named.
Solicitation
The cost of preparing, assembling and mailing this Proxy Statement and the form of
proxy will be borne by the Company. Directors, officers and employees of the Company may also
solicit proxies personally or by mail, telephone or facsimile. No compensation will be paid for
such solicitations. In addition, the Company will bear the reasonable expenses of brokerage houses
and other custodians, nominees and fiduciaries who, at the request of the Company, may send proxies
and proxy solicitation material to their clients and principals.
Quorum and Approval of Proposals
For there to be a quorum at the meeting, a majority of the shares of common stock
entitled to vote at the meeting must be present in person or represented by proxy. Shares held of
record by stockholders or their nominees who do not vote by proxy or attend the Annual Meeting in
person will not be considered present or represented at the Annual Meeting and will not be counted
in determining the presence of a quorum. Properly completed and executed proxies that reflect
abstentions or broker non-votes will be counted for purposes of determining whether a quorum is
present. We encourage you to provide voting instructions to your bank, broker or other nominee to
ensure that your shares will be voted at the meeting in the manner that you desire.
Each share of common stock is entitled to one vote. The election of directors will
be determined by a plurality of the votes cast at the Annual Meeting if a quorum is present.
Shareholders do not have cumulative voting rights in connection with the election of directors.
This means that the seven nominees receiving the highest number of FOR votes will be elected as
directors. Withheld votes and broker non-votes, if any, are not treated as votes cast, and
therefore will have no effect on the proposal to elect directors. The affirmative vote of a
majority of all votes cast is required for the ratification of the selection of our independent
registered accountants. Abstentions and broker non-votes are not considered as votes cast, and
therefore will have no effect on the outcome of the votes on the ratification of our independent
registered public accounting firm.
3
PROPOSAL I
ELECTION OF DIRECTORS
Our bylaws provide that the members of the Board of Directors are to be elected at
each annual meeting of stockholders and are to serve until the next annual meeting of stockholders
or until their successors are duly elected and qualified.
Director Nominees
In accordance with the recommendation of the Nominating and Governance Committee of
the Board of Directors, the Board of Directors has nominated Donald G. Hildebrand, Robert T.
McNally, Ph.D., Harriet L. Robinson, Ph.D., Steven S. Antebi, David A. Dodd, Dean G. Kollintzas,
and John N. Spencer, Jr. for reelection as directors of GeoVax to serve until the 2011 Annual
Meeting of Stockholders, until each of their successors are elected and qualified, or until their
earlier death, resignation or removal. Information concerning the nominees and our executive
officers is set forth below under Directors and Executive Officers.
We believe that the nominees will be available and able to serve as directors. In
the event that any nominee is unable to serve (which is not anticipated), the holder of your proxy
will cast votes for such other persons as they may select.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES SET
FORTH IN THIS PROXY STATEMENT. THE PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
SET FORTH ABOVE.
Directors and Executive Officers
The following table sets forth certain information with respect to our directors and executive
officers.
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Donald G. Hildebrand
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69 |
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Chairman of the Board of Directors |
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Robert T. McNally, Ph.D.
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62 |
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President and Chief Executive Officer, Director |
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Mark J. Newman, Ph.D.
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55 |
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Vice President, Research and Development |
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Mark W. Reynolds, CPA
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48 |
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Chief Financial Officer and Corporate Secretary |
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Harriet L. Robinson, Ph.D.
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72 |
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Chief Scientific Officer, Director |
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Steven S. Antebi (1) (2)
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67 |
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Director |
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David A. Dodd (1) (3)
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60 |
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Director |
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Dean G. Kollintzas (1) (2) (3)
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Director |
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John N. Spencer, Jr., CPA (2)(3)
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69 |
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Director |
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Member of the Compensation Committee of the Board of Directors. |
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Member of the Audit Committee of the Board of Directors. |
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Member of the Nominating and Governance Committee of the Board of Directors. |
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Donald G. Hildebrand. Mr. Hildebrand joined the Board of Directors as Chairman and became our
President and Chief Executive Officer upon consummation of the merger with GeoVax, Inc. in
September 2006. Effective April 1, 2008, upon the appointment of Dr. Robert T. McNally as our
President and Chief Executive Officer, Mr. Hildebrand executed a consulting agreement with the
Company and remained as Chairman of the Board. Mr. Hildebrand is a founder of GeoVax, Inc., our
wholly-owned subsidiary, and served as its President and Chief Executive Officer and as a member of
its Board of Directors from its inception in 2001 to April 2008. Prior to founding GeoVax,
Mr. Hildebrand was North American President and Chief Executive Officer of Rhone Merieux, Inc., a
subsidiary of Rhone Merieux, S.A., a world leader in the biopharmaceutical and animal health
industries. In 1997, Mr. Hildebrand also became Global Vice President of Merial Limited, a position
that he held until retiring in 2000. Mr. Hildebrand received his bachelor of science in
microbiology from the University of Wisconsin. The Board of Directors has concluded that
Mr. Hildebrand should serve on the Board of Directors by virtue of his prior experience in the
vaccine industry and his intimate knowledge of the Companys history and technology resulting from
his prior service as its President and Chief Executive Officer.
Robert T. McNally, Ph.D. Dr. McNally joined the Board of Directors in December 2006 and was
appointed as our President and Chief Executive Officer effective April 1, 2008. From 2000 to March
2008, Dr. McNally served as Chief Executive Officer of Cell Dynamics LLC, a cGMP laboratory
services company. Previously, Dr. McNally was Senior Vice President of Clinical Research for
CryoLife, Inc., a pioneering company in transplantable human tissues. Dr. McNally is a Fellow of
the American Institute for Medical and Biological Engineering, serves on the advisory boards of the
Petit Institute for Bioengineering and Dupree College of Management at the Georgia Institute of
Technology, and is a former Chairman of Georgia Bio, a trade association. Dr. McNally graduated
with a Ph.D. in biomedical engineering from the University of Pennsylvania. The Board of Directors
has concluded that Dr. McNally should serve on its Board of Directors by virtue of his prior
business and scientific experience, including his experience as Chief Executive Officer of Cell
Dynamics, LLC and as Senior Vice President of Clinical Research for CryoLife, Inc., and due to his
intimate involvement with the Companys ongoing operations as its President and Chief Executive
Officer.
Mark J. Newman, Ph.D. Dr. Newman joined the Company as Vice President, Research and
Development in January 2010. Prior to joining GeoVax, Dr. Newman served in similar positions at
PaxVax, Inc. (from March 2009 to December 2009), Pharmexa A/S (from January 2006 to December 2008),
and Epimmune, Inc. (from February 1999 to December 2005). He has also served in senior scientific
management roles at Vaxcel, Inc., Apollon, Inc. and Cambridge Biotech Corp. Dr. Newmans experience
includes directing research, pre-clinical development and early stage clinical testing of protein,
peptide, plasmid DNA and viral vectored vaccines and multiple vaccine adjuvants. He has co-authored
more than 100 scientific papers, reviews and book chapters during his professional career, and is a
named co-inventor on six issued U.S. patents and one European patent, all related to vaccine
technologies. He has also been awarded multiple federal government and foundation grants and
contracts to support research and early stage clinical development in the field of vaccines.
Dr. Newman is a graduate of the Ohio State University (B.Sc. and M.Sc.) and received his Ph.D. in
Immunology from the John Curtin School of Medical Research, the Australian National University. He
completed four years of post-doctoral training at Cornell University, the National Cancer
Institute, and the NIH and served as a full time member of the Louisiana State University faculty
prior to joining the biotech industry.
Mark W. Reynolds, CPA Mr. Reynolds joined the Company on a part-time basis in October 2006 as
Chief Financial Officer and Corporate Secretary, becoming a full-time employee in January 2010.
From 2003 to 2006, before being named Chief Financial Officer of GeoVax Labs, Inc., Mr. Reynolds
provided financial and accounting services to GeoVax, Inc. as an independent contractor. From 2004
to 2008, Mr. Reynolds served as Chief Financial Officer for Health Watch Systems, Inc. a
privately-held company in the consumer healthcare industry. From 2004 to 2006, he served as Chief
Financial Officer for Duska Therapeutics, Inc., a publicly-held biotechnology company. From 1988 to
2002, Mr. Reynolds was first Controller and later Chief Financial Officer and Corporate Secretary
of CytRx Corporation, a publicly-held biopharmaceutical company. Mr. Reynolds began his career as
an auditor with Arthur Andersen & Co. from 1985 to 1988. He is a certified public accountant and
earned a masters of accountancy degree from the University of Georgia.
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Harriet L. Robinson, Ph.D. Dr. Robinson joined the Company as Senior Vice President, Research
and Development on a part-time basis in November 2007 and on a full-time basis in February 2008,
and was elected to the Board of Directors in June 2008. She is a co-founder of GeoVax, Inc. and has
served as chief of its scientific advisory board since formation of the company in 2001. From 1999
to February 2008, Dr. Robinson served as the Asa Griggs Candler Professor of Microbiology and
Immunology at Emory University in Atlanta, Georgia, and from 1998 to February 2008 as Chief,
Division of Microbiology and Immunology, Yerkes National Primate Center and Professor at the Emory
University School of Medicine. She was Professor, Department of Microbiology & Immunology, at the
University of Massachusetts Medical Center from 1988 to 1997 and Staff, then Senior, then Principal
Scientist at the University of Massachusetts Worcester Foundation for Experimental Biology from
1977 to 1987. She was also a National Science Foundation Postdoctoral Fellow at the Virus
Laboratory, University of California, Berkeley, from 1965 to 1967. Dr. Robinson received a bachelor
of arts degree from Swarthmore College and M.S. and Ph.D. degrees from the Massachusetts Institute
of Technology. The Board of Directors has concluded that Dr. Robinson should serve on its Board of
Directors by virtue of her extensive knowledge of the Companys technology as its scientific
founder.
Steven S. Antebi. Mr. Antebi joined the Board of Directors in March 2010. During the last
five years, he has served as President of Maple Capital Management, a fund focusing on debt and
equity investments in North America (May 2007 to present), President and Chief Executive Officer of
Galileo Partners LLC (2006 to present), and President of Blue and Gold Enterprises Inc.
(2002-2009), funds that invest in registered direct investments, PIPE transactions, private
placements, and open market equity transactions. Prior to that, he served for twenty years in
various senior positions at Bear Stearns and Company, including institutional sales, trading the
firms capital in the over the counter market, syndicate distribution, and outside investment
banking. He has served as a member of the Board of Governors of Cedars Sinai Medical Center in Los
Angeles, California, one of the largest hospital/research centers in the world, for over ten years.
He serves as Chairman of the Board of Epinex Diagnostic Inc., a late stage development company,
creating a rapid diagnostic system for testing glycated albumen in diabetics. Mr. Antebi is also
the Chairman of the Board of the Royalty Review Council, a company doing royalty accounting for web
casting and digital media, covering all five major record labels. The Board of Directors concluded
that Mr. Antebi should serve on the Board of Directors because of his substantial experience in
finance and his experience in healthcare and technology.
David A. Dodd. Mr. Dodd joined the Board of Directors in March 2010. He is the Chief
Executive Officer of RiversEdge BioVentures, an investment and advisory firm focused on the life
sciences and pharmaceuticals industries, which he founded in 2009. He has more than 35 years of
executive experience in the healthcare industry. From December 2007 to June 2009, Mr. Dodd was
President, Chief Executive officer and Chairman of BioReliance Corporation, an organization that
provided biological safety testing, viral clearance testing, genetic and mammalian technology
testing and laboratory animal diagnostic services testing. From October 2006 to April 2009, he
served as non-executive chairman of Stem Cell Sciences Plc. Before that, Mr. Dodd served as
President, Chief Executive Officer and Director of Serologicals Corporation (Nasdaq: SERO) before
it was sold to Millipore Corporation in July 2006 for $1.5 billion. For five years prior to this,
Mr. Dodd served as President and Chief Executive Officer of Solvay Pharmaceuticals, Inc. and
Chairman of its subsidiary Unimed Pharmaceuticals, Inc. The Board of Directors concluded Mr. Dodd
should serve on the Board of Directors due to his experience in the pharmaceutical industry, as
well as his background in general management, business transformation, corporate partnering, and
mergers and acquisitions.
Dean G. Kollintzas. Mr. Kollintzas joined the Board of Directors upon consummation of the
merger with GeoVax, Inc. in September 2006. Since 2001 Mr. Kollintzas has been an intellectual
property attorney specializing in biotechnology and pharmaceutical licensing, FDA regulation, and
corporate/international transactions. Mr. Kollintzas received a microbiology degree from the
University of Illinois and a J.D. from Franklin Pierce Law Center. He is a member of the Wisconsin
and American Bar Associations. Since 2004, Mr. Kollintzas has owned and operated a restaurant in
Joliet, Illinois called The Metro Grill. The Board of Directors has concluded that Mr. Kollintzas
should serve on the Board of Directors by virtue of his experience with intellectual property
matters, biotechnology and pharmaceutical licensing, and FDA regulation.
John N. (Jack) Spencer, Jr., CPA Mr. Spencer joined the Board of Directors upon consummation
of the merger with GeoVax, Inc. in September 2006. Mr. Spencer is a certified public accountant and
was a partner of Ernst & Young where he spent more than 38 years until he retired in 2000.
Mr. Spencer also serves as a director SurgiVision, Inc., a medical device company, and one other
privately held medical technology company, where he also chairs the audit committees, and served as
a director of Firstwave Technologies (Nasdaq:FSTW) from November 2003 until April of 2009. He also
serves as a consultant to various companies primarily relating to financial accounting and
reporting matters. Mr. Spencer received a bachelor of science degree from Syracuse University, and
he earned an M.B.A. degree from Babson College. He also attended the Harvard Business School
advanced management program. The Board of Directors has concluded that Mr. Spencer should serve on
the Board of Directors by virtue of his experience at Ernst & Young where he was the partner in
charge of that firms life sciences practice for the southeastern United States, and his
clients included a large number of publicly-owned and privately-held medical technology
companies, together with his continuing expertise as a director of, and a consultant to, other
publicly owned and privately held companies.
6
CORPORATE GOVERNANCE
The Companys Bylaws provide that the number of Members shall be determined from
time to time by resolutions of the Board of Directors, but shall not be less than three or more
than nine. Our Board of Directors has seven members.
Director Nomination Process
Our Board of Directors appointed a standing Nominating and Corporate Governance
Committee in March 2010. Its responsibilities include making recommendations on nominees for
election as directors to the Board of Directors.
We do not have specific minimum qualifications that a person must meet in order to
serve on our Board of Directors, nor do we have a formal policy about the consideration of any
director candidates recommended by stockholders. However, GeoVaxs Nominating and Governance
Committee, and its Board of Directors, believe that directors should possess the highest personal
and professional ethics, integrity and values, and be committed to representing the long-term
interests of the Companys stockholders. Each director must also be able to dedicate the time and
resources sufficient to ensure the diligent performance of his or her duties. Further, our Board
of Directors is intended to encompass a range of talents, experience, skills, and expertise
sufficient to provide sound and prudent guidance with respect to the operations and interests of
GeoVax and its stockholders.
GeoVax considers persons for nomination for election to the Board of Directors from
any source, including stockholder recommendations. The Nominating and Governance Committee does not
evaluate candidates differently based on who has made the recommendation. Consideration of nominee
candidates typically involves a series of internal discussions, a review of information concerning
candidates, and interviews with selected candidates. To date, no third parties have been engaged to
assist us in finding suitable candidates to serve as directors. All of our nominees are directors
standing for re-election. The nomination of each director was recommended by the Nominating and
Governance Committee, and the Board of Directors followed the recommendation.
There have been no material changes to the procedures by which stockholders may
recommend nominees to our Board of Directors. GeoVaxs Nominating and Governance Committee will
consider stockholder recommendations for directors sent to GeoVax Labs, Inc., 1900 Lake Park Drive,
Suite 380, Smyrna, Georgia 30080, Attention: Chairman of the Nominating and Governance Committee.
Any recommendation from a stockholder should include the name, background and qualifications of
such candidate and should be accompanied by evidence of such stockholders ownership of GeoVaxs
common stock.
A stockholder making any proposal shall also comply with all applicable requirements
of the Exchange Act.
Director Independence
Based on the findings and recommendations of the Nominating and Governance Committee, the
Board of Directors has determined that Messrs. Antebi, Dodd, Kollintzas, and Spencer are the
members of our Board of Directors who are independent, as that term is defined by
Section 301(3)(B) of the Sarbanes-Oxley Act of 2002. Based on the same findings and
recommendations, the Board of Directors also determined that these four individuals meet the
definition of independent director set forth in Rule 5605(a)(2) of the Nasdaq Listing Rules and
Rule 803(A)(2) of the NYSE Amex Listing Requirements. As independent directors, Messrs. Antebi,
Kollintzas and Spencer serve as the members of our Audit Committee, Messrs. Antebi, Dodd and
Kollintzas serve as the members of our Compensation Committee, and Messrs. Dodd, Kollintzas and
Spencer serve as the members of the Nominating and Governance Committee. The Board of Directors
also determined that Mr. Peter Tsolinas, who served as a director and committee member in 2009 and
thereafter until June 16, 2010, was independent using the same criteria it applied to the other
independent directors.
Board Meetings and Committees
Board of Directors. The Board of Directors held six meetings during 2009 and took
action by unanimous written consent on three other occasions. Each director attended at least 75%
of the total meetings of the Board and the committees on which they served during 2009. We
strongly encourage, but we do not require, our directors to attend our Annual Stockholders
Meeting. All of our directors attended our Annual Stockholders Meeting in 2009.
Our Board of Directors has a standing Audit Committee, Compensation Committee, and
Nominating and Governance Committee.
7
Audit Committee. The Audit Committee provides assistance to the Board of Directors
in fulfilling its oversight responsibility relating to: (i) the integrity of the Companys
financial statements; (ii) the effectiveness of the Companys internal control over financial
reporting; (3) the Companys compliance with legal and regulatory requirements; and (iv) the
independent registered public accounting firms qualifications, independence and performance. It
also prepares the Audit Committee report that SEC proxy rules require for this proxy statement. Our
Audit Committee was comprised of Mr. Spencer (Chairman), Mr. Kollintzas, and Mr. Peter Tsolinas (a
former director) from January 1, 2009 until June 16, 2010. Effective June 16, 2010, the Committee
consists of Mr. Spencer (Chairman), Mr. Antebi, and Mr. Kollintzas. Our Board of Directors has
determined that each member of the committee is independent in accordance with the criteria of
independence set forth in Section 301(3)(B) of the Sarbanes-Oxley Act of 2002, and that Mr. Spencer
qualifies as an audit committee financial expert as defined by the SECs rules. The Audit
Committee has adopted a charter, a copy of which is available on our website at www.geovax.com. The
Audit Committee held five meetings during 2009 and took action by unanimous written consent on one
other occasion.
Compensation Committee. The Compensation Committee has responsibility for matters
relating to the fair and competitive compensation of the Companys executives, employees and
non-employee directors, as well as our benefit plans. It also prepares the Compensation Discussion
and Analysis and Compensation Committee Report that SEC rules require for this proxy statement.
Our Compensation Committee was comprised of Mr. Spencer (Chairman), Mr. Kolintzas and Mr. Tsolinas
from January 1, 2009 until June 16, 2010. Effective June 16, 2010, the Committee consists of Mr.
Dodd (Chairman), Mr. Antebi and Mr. Kollintzas. The Compensation Committee has adopted a charter, a
copy of which is available on our website at www.geovax.com . The members of the Compensation
Committee are independent, as required by the Compensation Committee Charter, they also qualify as
outside directors within the meaning of Rule 16b-3 under the Security Exchange Act of 1934 and as
outside directors within the meaning of Section 162(m) of the Internal Revenue Code. The
Compensation Committee held two meetings during 2009 and took action by unanimous written consent
on one other occasion.
Nominating and Corporate Governance Committee. The Nominating and Governance
Committee was created by the Board of Directors on March 31, 2010. It assists the Board of
Directors in fulfilling its responsibilities of: (i) identifying individuals qualified to become
directors and committee members; (ii) recommending director nominees to the Board of Directors;
(iii) developing and recommending approval of policies relating to, and generally overseeing
matters of, corporate governance; and (iv) leading the Board of Directors in its annual review of
the Board of Directors and its committees. The Nominating and Governance Committee consists of Mr.
Spencer (Chairman), Mr. Dodd, and Mr. Kollintzas. The Nominating and Governance Committee has
adopted a charter, a copy of which is available on our website at www.geovax.com. Our Board of
Directors has determined that each member of the committee is independent as required by its
charter.
Compensation Committee Interlocks and Insider Participation.
During the fiscal year ended December 31, 2009, Mr. Kollintzas, Mr. Spencer and
Mr. Tsolinas (a former director) served on our Compensation Committee. None of these individuals
were officers or employees of the Company or any of its subsidiaries during the fiscal year ended
December 31, 2009, nor at any time prior thereto. During the fiscal year ended December 31, 2009,
none of the members of the Compensation Committee had any relationship with the Company requiring
disclosure under Item 404 of Regulation S-K, and none of the Companys executive officers served on
the compensation committee (or equivalent), or the Board of Directors, of another entity whose
executive officer(s) served on our Board of Directors or Compensation Committee.
Stockholder Communications with the Board of Directors
Any stockholder who wishes to communicate directly with our Board of Directors
should do so in writing, addressed to GeoVax Labs, Inc., c/o Audit Committee Chair, 1900 Lake Park
Drive, Suite 380, Smyrna, Georgia 30080. Communications sent to individual directors must clearly
indicate the name of the director for whom they are intended. Unless marked Confidential, we
screen mail addressed to the Board, its Committees or any specified individual director for
security purposes and to ensure that the mail relates to discrete business matters that are
relevant to our Company. Mail that satisfies these screening criteria is required to be forwarded
to the appropriate director or directors. If marked Confidential, these communications will not
be screened by management before they are delivered by the Audit Committee Chair. Stockholders who
wish to submit director nominees for consideration by the Nominating and Governance Committee
should follow the directions at Director Nomination Process.
8
Code of Ethics
Our Board of Directors has adopted a written Code of Ethics, a copy of which is
available on our website at www.geovax.com . The Company will provide a copy of the Code of Ethics
upon request to any person without charge. Such requests may be transmitted by regular mail in the
care of the Corporate Secretary. We require all officers, directors and employees to adhere to this
code in addressing the legal and ethical issues encountered in conducting their work. The code
requires that employees avoid conflicts of interest, comply with all laws and other legal
requirements, conduct business in an honest and ethical manner, and otherwise act with integrity
and in our best interest. Employees are required to report any conduct that they believe in good
faith to be an actual or apparent violation of the code. The Sarbanes-Oxley Act of 2002 requires
certain companies to have procedures to receive, retain and treat complaints received regarding
accounting, internal accounting controls or auditing matters and to allow for the confidential and
anonymous submission by employees of concerns regarding questionable accounting or auditing
matters. We have such procedures in place.
The Company will post on its website, www.geovax.com, or will disclose on a Form 8-K
filed with the SEC, any amendments to, or waivers from, a provision of the Code of Ethics that
applies to the Chief Executive Officer or the Chief Financial Officer, or persons performing
similar functions, and that relate to (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 the Company files with, or submits to, the SEC and in other public communications
made by the Company; (iii) compliance with applicable governmental laws, rules and regulations;
(iv) the prompt internal reporting of violations of the Code of Ethics to an appropriate person or
persons identified in the code; or (v) accountability for adherence to the Code of Ethics. Any
waiver granted to an executive officer or a director may only be granted by the Board and will be
disclosed, along with the reasons therefore, on a Form 8-K filed with the SEC. No waivers were
granted in 2009.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act, as amended, requires our executive officers and directors
and persons who own more than 10% of a registered class of our equity securities, as well as
certain affiliates of those persons, to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning their ownership of common
stock and other of our equity securities on Forms 3, 4, and 5, respectively. Executive officers,
directors and greater than 10% stockholders are required by SEC regulations to furnish us with
copies of all Section 16(a) reports they file. Based solely on our review of the copies of such
reports we received and written representations that no other reports were required to be filed for
those persons, we believe that, during the fiscal year ended December 31, 2009, all of our
executive officers, directors and owners of more than 10% of our common stock filed all reports
required by Section 16(a) on a timely basis, except that:
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Emory University did not timely file a Form 4 to report sales of our common stock on the
open market on each of September 25, 2009 (to report the sale of
17,600 shares of our common
stock), September 28, 2009 (to report the sale of 4,400 shares of our common stock),
September 29, 2009 (to report the sale of 7,200 shares of our common stock) and September 30,
2009 (to report the sale of 3,500 shares of our common stock). Emory University filed a Form 4
with the SEC to report these transactions on October 8, 2009. |
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Each of Dr. McNally, Mr. Reynolds, Dr. Robinson, Mr. Kollintzas, Mr. Spencer and
Mr. Tsolinas did not timely file a Form 4 to report the grant of an option to purchase
10,000 shares of our common stock awarded to each on December 2, 2009. Each of these individuals
filed a Form 4 with the SEC to report his or her respective transaction on December 7, 2009. |
9
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS
Based solely upon information made available to us, the following table sets forth information
with respect to the beneficial ownership of our common stock as of July 2, 2010 by (1) each
director; (2) each of our Named Executive Officers; (3) all executive officers and directors as a
group; and (4) each additional person who is known by us to beneficially own more than 5% of our
common stock. Except as otherwise indicated, the holders listed below have sole voting and
investment power with respect to all shares of common stock beneficially owned by them.
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Number of Shares |
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|
|
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Beneficially |
|
Percent |
Name and Address of Beneficial Owner(1) |
|
Owned |
|
of Class(2) |
Directors and Executive Officers: |
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|
|
|
|
|
|
Steven S. Antebi (3) |
|
|
|
|
|
|
|
* |
David A. Dodd (4) |
|
|
15,725 |
|
|
|
|
* |
Donald G. Hildebrand (5) |
|
|
1,427,225 |
|
|
|
8.9 |
% |
Dean G. Kollintzas (6) |
|
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36,400 |
|
|
|
|
* |
Robert T. McNally (7) |
|
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89,055 |
|
|
|
|
* |
Mark W. Reynolds (8) |
|
|
52,000 |
|
|
|
|
* |
Harriet L. Robinson (9) |
|
|
1,283,686 |
|
|
|
8.1 |
% |
John N. Spencer, Jr. (10) |
|
|
50,100 |
|
|
|
|
* |
All executive officers and directors as a group (9 persons) (11) |
|
|
2,954,191 |
|
|
|
18.0 |
% |
Andrew J. Kandalepas (12) |
|
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49,800 |
|
|
|
1.6 |
% |
Other 5% Stockholders: |
|
|
|
|
|
|
|
|
Emory University (13) |
|
|
4,621,405 |
|
|
|
29.5 |
% |
Stavros Papageorgiou (14) |
|
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1,111,857 |
|
|
|
7.1 |
% |
Welch & Forbes LLC (15) |
|
|
1,591,073 |
|
|
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10.2 |
% |
|
|
|
* |
|
Less than 1% |
|
(1) |
|
Except as otherwise indicated, the business address of each director and executive officer listed is c/o GeoVax Labs, Inc., 1900 Lake Park Drive,
Suite 380, Smyrna, Georgia 30080. |
|
(2) |
|
This table is based upon information supplied by our executive officers and directors, and with respect to principal stockholders, Schedule 13G filed
with the SEC. Beneficial ownership is determined in accordance with the rules of the SEC. Applicable percentage ownership is based on 15,654,846 shares
of common stock outstanding as of July 2, 2010. In computing the number of shares beneficially owned by a person and the percentage ownership of that
person, shares of common stock subject to options currently exercisable, or exercisable within 60 days of July 2, 2010, are deemed outstanding. |
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(3) |
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Mr. Antebi has options to acquire 26,400 shares, which will vest in equal amounts over the next three anniversaries of his appointment to the Board of
Directors, beginning in March 2011. |
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(4) |
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Mr. Dodd has options to acquire 26,400 shares, which will vest in equal amounts over the next three anniversaries of his appointment to the Board of
Directors, beginning in March 2011. |
|
(5) |
|
Includes options to purchase 355,825 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(6) |
|
Includes options to purchase 36,400 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(7) |
|
Includes options to purchase 68,400 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(8) |
|
Includes options to purchase 46,000 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(9) |
|
Dr. Robinson shares voting and investment power over 1,102,441 shares with Welch & Forbes LLC, whose ownership is described below. Includes options to
purchase 181,245 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(10) |
|
Includes options to purchase 36,400 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(11) |
|
Includes options to purchase 724,270 shares of common stock exercisable within 60 days of July 2, 2010. |
|
(12) |
|
Mr. Kandalepas resigned as an executive officer of the Company on July 1, 2009. Ownership information has been derived from our stock records, which
show Mr. Kandalepas owns these shares of record as of July 2, 2010. |
|
(13) |
|
The address for this stockholder is Administration Building, 201 Dowman Drive, Atlanta, Georgia 30322. Ownership information has been derived from this
stockholders SEC filing on Form 4 filed on January 29, 2010. |
10
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(14) |
|
The address for this stockholder is c/o Morse, Zelnick, Rose &
Lander LLP, 405 Park Avenue, Suite 1401, New York, New York
10022. Includes 91,854 shares subject to warrants and 503,840
shares as to which Mr. Papageorgiou shares voting and investment
power. Ownership information has been derived from this
stockholders SEC filing on Schedule 13G filed on October 1,
2009. |
|
(15) |
|
The address for this stockholder is 45 School Street, Boston,
Massachusetts 02108. This stockholder shares voting and
investment power with respect to all of these shares. Includes
1,102,441 shares held by Dr. Robinson. Ownership information has
been derived from this stockholders Schedule 13G filed February
12, 2010. |
COMPENSATION DISCUSSION AND ANALYSIS
In the paragraphs that follow, the Compensation Committee provides an overview and analysis of
our compensation program and policies, the material compensation decisions made under those
programs and policies with respect to our executive officers, and the material factors considered
in making those decisions.
The Compensation Committee reviews, analyzes and approves the compensation of our senior
executive officers, including the Named Executive Officers listed in the tables that follow this
Compensation Discussion and Analysis. The Named Executive Officers for 2009 include our chief
executive officer, our chief financial officer, and the two other individuals who served as
executive officers during 2009 and whose total compensation for 2009 exceeded $100,000, calculated
in accordance with the rules and regulations of the SEC. Our Named Executive Officers for 2009
were:
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Robert T. McNally, President and Chief Executive Officer |
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Mark W. Reynolds, Chief Financial Officer |
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Harriet L. Robinson, Chief Scientific Officer |
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Andrew Kandalepas, our former Senior Vice-President |
The tables that follow this Compensation Discussion and Analysis contain specific data about the
compensation earned or paid in 2009 to the Named Executive Officers. The discussion below is
intended to help you understand the detailed information provided in the compensation tables and
put that information into the context of our overall compensation program.
Objectives of Our Compensation Program
In general, we operate in a marketplace where competition for talented executives is
significant. The biopharmaceutical industry is highly competitive and includes companies with far
greater resources than ours. We are engaged in the long-term development of drug candidates without
the benefit of significant current revenues, and therefore our operations involve a high degree of
risk and uncertainty. This level of risk and uncertainty may make it difficult to retain talented
executives. Nevertheless, continuity of personnel across multi-disciplinary functions is critical
to the success of our business. Furthermore, since we have relatively few employees, each must
perform a broad scope of functions, and there is very little redundancy in skills.
The objectives of our compensation program for our executive officers and other employees are
to provide competitive cash compensation, health, and retirement benefits, as well as long-term
equity incentives that offer significant reward potential for the risks assumed and for each
individuals contribution to our long-term performance. Although the Compensation Committee seeks
to pay salaries and bonuses sufficient to hire and retain talented individuals, the Compensation
Committee also believes, based on its subjective perception of their skills, that many of its
employees could earn somewhat higher cash compensation at other companies, and seeks to address
this concern by making stock option grants at a somewhat higher level than it would if the salaries
and bonuses were higher. Individual performance is measured subjectively taking into account
Company and individual progress toward overall corporate goals, as well as each individuals
skills, experience, and responsibilities, together with corporate and individual progress in the
areas of scientific innovation, regulatory compliance, business development, employee development,
and other values designed to build a culture of high performance. No particular weight is assigned
to these measures, and the Compensation Committee is of the view that much of the Companys
progress results from team effort. These policies and practices are based on the principle that
total compensation should serve to attract and retain those executives and employees critical to
our overall success and are designed to reward executives for their contributions toward business
performance that enhances stockholder value.
11
Role of the Compensation Committee
Our Compensation Committee assists our Board of Directors in discharging its responsibilities
relating to the compensation of our executive officers. As such, the Compensation Committee has
responsibility over certain matters relating to the fair and competitive compensation of our
executives, employees and directors (only non-employee directors are compensated as directors) as
well as matters relating to equity-based benefit plans. Each of the members of our Compensation
Committee is independent in accordance with the criteria of independence set forth in Rule
5605(a)(2) of the Nasdaq Listing Rules and Rule 803(A)(2) of the NYSE Amex Listing Requirements. We
believe that their independence from management allows the members of the Compensation Committee to
provide unbiased consideration of various elements that could be included in an executive
compensation program and apply independent judgment about which elements best achieve our
compensation objectives. Pursuant to its charter as in effect prior to March 2010, the Compensation
Committee was charged specifically with reviewing and determining annually the compensation of our
Chief Executive Officer, approving special bonus payments and perquisites paid to and other special
compensation or benefit arrangements with executive officers, and approving (subject to approval of
the Board of Directors) recommendations by the Chief Executive Officer with respect to grants under
our stock option plan and any other equity-based plan we might adopt in the future. Subject to
approval of the Board of Directors, the Compensation Committee also set salaries and determines
bonuses, sometimes referred to as cash incentive awards, for the Companys employees. The
Compensation Committee gave due consideration to the Chief Executive Officers recommendations and
could change them prior to recommending them to the Board of Directors. The Compensation Committee
did not exercise the authority granted to it by its charter to approve a pool of options and other
discretionary awards to be used by the Chief Executive Officer.
In March 2010, the Compensation Committee and the Board of Directors approved a new charter
for the Compensation Committee. Pursuant to the new charter, the Compensation Committee is
responsible for, among other things:
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reviewing the Companys overall compensation philosophy and strategy; |
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evaluating and determining the compensation of the Chief Executive Officer; |
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evaluating and setting, in conjunction with the Chief Executive Officer,
the compensation of other officers; |
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reviewing and approving the annual Compensation Discussion and Analysis; |
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evaluating and approving the components and amounts of compensation of the
Companys employees; |
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evaluating, considering and approving, in its discretion, the Companys
equity-based compensation plans, as well as grants and awards made under
any such plans to persons other than the Chief Executive Officer and
submitting them to the Board of Directors for its consideration and
approval; |
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approving, with sole and exclusive authority, grants and awards made to
the Companys Chief Executive Officer under the Companys equity-based
compensation plans; |
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evaluating, considering and approving, in its discretion, compensation for
non-employee members of the Board of Directors; and |
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managing and controlling the operation and administration of the Companys
stock option plans. |
Elements of Compensation
To achieve the objectives described above, the three primary compensation elements used for
executive officers are base salary, cash bonus, and stock option awards. We believe that these
three elements are the most effective combination in motivating and retaining our executive
officers at this stage in our development. The Compensation Committee has not utilized other
companies for benchmarking purposes because it believes that those businesses which would be most
comparable to GeoVax are either privately held or divisions of very large medical products
companies.
Base Salary
Our philosophy is to maintain executive base salary at a competitive level sufficient to
recruit and retain individuals possessing the skills and capabilities necessary to achieve our
goals over the long term. Base salaries provide our
executive officers with a degree of financial certainty and stability and also reward
individual achievements and contributions.
12
Cash Bonus
Annual cash incentive awards motivate our executive officers to contribute toward the
achievement of corporate goals and objectives. Generally, every employee is eligible to earn an
annual cash incentive award, promoting alignment and pay-for-performance at all levels of the
organization. The Company does not have a formalized cash incentive award plan, and awards are
based on the subjective recommendation of the President and Chief Executive Officer (except as to
the Chief Executive Officers cash bonus) and on the Compensation Committees subjective judgment.
Stock Option Awards
Stock option awards are a fundamental element in our executive compensation program because
they emphasize our long-term performance, as measured by creation of stockholder value, and align
the interests of our stockholders and management. In addition, the Compensation Committee believes
they are crucial to a competitive compensation program for executive officers, and they act as a
powerful retention tool. In our current pre-commercial state, we view the Company as still facing a
significant level of risk, but with the potential for a high reward over a period of time, and
therefore we believe that stock incentive awards are appropriate for executive officers. These
awards are provided through initial grants at or near the date of hire and through subsequent,
periodic grants. The initial grant is typically larger than subsequent, periodic grants and is
intended to motivate the officer to make the kind of decisions and implement strategies and
programs that will contribute to an increase in our stock price over time. Subsequent periodic
stock option awards may be granted to reflect each executive officers ongoing contributions to the
Company, to create an incentive to remain at the Company, and to provide a long-term incentive to
achieve or exceed our corporate goals and objectives. The Company does not have a formula for
determining stock option awards. Awards are generally based on the subjective recommendation of the
President and Chief Executive Officer and on the Compensation Committees subjective judgment. The
Compensation Committee does not typically give much weight to the overall levels of stock and stock
options owned by the Companys executive officers and directors.
Accounting and Tax Considerations
The accounting and tax treatment of compensation generally has not been a factor in
determining the amounts of compensation for the Companys executive officers.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits tax deductions of
public companies on compensation paid to certain executive officers in excess of $1 million. The
Compensation Committee considers the impact of Section 162(m) on its compensation decisions, but
has no formal policy to structure executive compensation so that it complies with the requirements
of Section 162(m) due to the overall level of compensation paid. In general, stock options granted
under the Companys 2006 Equity Incentive Plan, or the Plan, are intended to qualify under and
comply with the performance based compensation exemption provided under Section 162(m), thus
excluding from the Section 162(m) compensation limitation any income recognized by executives at
the time of exercise of such stock options.
Accounting principles generally accepted in the United States require us to recognize an
expense for the fair value of equity-based compensation awards. The Compensation Committee is
informed of the accounting implications of significant compensation decisions, especially in
connection with decisions that relate to our equity incentive award plans, but has no formal policy
to structure executive compensation to align accounting expenses of our equity awards with our
overall executive compensation philosophy and objectives. The Compensation Committee has considered
the impact of cash payments to its employees as compared to the costs it recognizes on an accrual
basis when stock options are granted.
Setting Executive Compensation
Historically, we have not used quantitative methods or mathematical formulae in setting any
element of executive compensation. We use discretion, guided in large part by the concept of
pay-for-performance, and we consider all elements of an executives compensation package when
setting each portion of compensation. There is no pre-established policy or target for the
allocation between cash and equity incentive compensation, although the Compensation Committee
believes its stock option grants are at a level that permits it to retain talented personnel at
somewhat lower levels of cash compensation than these individuals might otherwise receive.
Year-to-year changes in base salary have usually been relatively modest, and executive officer base
salaries are within a relatively narrow range. The Compensation Committee considers relative levels
of compensation among its various executive officers. Our annual cash incentive awards have
generally been modest. When made at all, the individual cash incentive awards have ranged from
$10,000 to $15,000 over the last three years. Bonuses have usually been paid to all Named Executive
Officers when they were paid at all. We may choose other compensation approaches if circumstances
warrant.
13
When determining compensation for a new executive officer, and when annually reviewing the
compensation for our executive officers, factors taken into consideration are the individuals
skills, knowledge and experience, the individuals past and potential future impact on our
short-term and long-term success, the individuals recent compensation levels in other positions,
and any present and expected compensation information obtained from other prospective candidates
interviewed during the recruitment process. In setting our executive compensation for 2009, no
specific benchmarking activities were undertaken. We will generally make a grant of stock options
when an executive officer joins us. Options are granted at no less than 100% of the fair market
value on the date of grant. In determining the size of an initial stock option grant to an
executive officer, we primarily consider company performance and the individuals scope of
responsibility. For periodic grants, we also consider the Companys and the individuals continuing
performance and the recommendations of the Chief Executive Officer, all on a subjective basis.
Since the stock option grant is meant to be a retention tool, we also consider the importance to
stockholders of that persons continued service. Stock option grants to executives generally vest
over a period of three years.
The Compensation Committee annually reviews and determines the compensation for our Chief
Executive Officer. Each year, recommendations for the compensation for other executive officers
(other than himself) are prepared by the Chief Executive Officer and are reviewed with the
Compensation Committee and modified by it where appropriate.
In order to assess the performance of a full calendar year, annual cash incentive and stock
option awards are generally determined in December of each year. We do not currently have any
program, plan or practice in place to time stock option grants to our executives or other employees
in coordination with the release of material non-public information.
As part of our executive compensation review conducted annually in December, we review a tally
sheet prepared by the President and Chief Executive Officer setting forth all components of total
compensation to our Named Executive Officers and all other employees. The tally sheet includes
current and proposed base salary, proposed annual cash incentive awards and historical, as well as
proposed, stock option awards. Post-termination pay under employment agreements to which our
executive officers are parties is not considered to be material at the present time. These tools
are employed by the Compensation Committee both in reviewing individual compensation awards and as
a useful check on total compensation. These tools also show the effect of compensation decisions
made over time on the total annual compensation to a Named Executive Officer and allow the
Compensation Committee to review historical amounts for comparative purposes.
We considered whether our compensation policies and practices create risks that are reasonably
likely to have a material adverse effect on GeoVax, and concluded that they do not.
2009 Executive Compensation
In December 2008, using its subjective judgment as to the overall progress of the Company,
skills, experience, responsibilities, achievements and historical compensation of each of the Named
Executive Officers, the Compensation Committee established their salaries for 2009. At that time,
Dr. McNally recommended that none of the Named Executive Officers receive a cash bonus for 2008 or
salary increases for 2009, except that Mr. Reynolds should receive a salary increase in proportion
to his increased time commitment to the business of the Company. Dr. McNally made this
recommendation, and the Compensation Committee accepted it, partially in the interest of preserving
the Companys overall cash flow to the extent reasonably possible. Stock option grants were made at
that time. The amount of compensation earned by each of the Named Executive Officers during fiscal
2009, 2008 and 2007 is shown in the Summary Compensation Table below.
In December 2009, the Compensation Committee considered 2009 stock option grants and cash
incentive awards as well as base salaries for 2010. The Compensation Committee considered the same
factors it considered in 2008, the overall progress of the Company, the skills, experience,
responsibilities, achievements and historical compensation of each of the Named Executive Officers,
in determining the award of cash bonuses and stock option grants for 2009 and salary levels for
2010. In its deliberations on executive compensation at its meeting in December 2009, the
Compensation Committee considered the fact that, during the preceding year (at its meeting in
December 2008) the Compensation Committee had accepted the recommendation from Dr. McNally that
none of the Named Executive Officers receive a cash bonus for 2008 and that no salary increases
would be effective for 2009, except as related to Mr. Reynolds with respect to a proportionate
increase relative to his time commitment to the business of the Company. The Compensation Committee
felt that, under the circumstances, it should increase the salaries of the Companys executive
officers. The Compensation Committee reviewed the salary increases it had approved for the other
employees of the Company and determined the average of the increases was approximately 6.3%. The
Compensation Committee then increased executive officer salaries by 6.3%, with the exception of Dr.
McNally, who received a 10% increase in salary. The Compensation Committee provided a higher salary to Dr. McNally because it felt that the
Chief Executive Officer should be the most highly compensated executive.
14
Robert T. McNally. Dr. McNally serves as our President and Chief Executive Officer pursuant
to an employment agreement executed in April, 2008. In December 2009, the Compensation Committee
awarded Dr. McNally a cash bonus of $15,000 and a stock option grant for 10,000 shares at an
exercise price of $7.00 per share. The Compensation Committee also increased Dr. McNallys annual
base salary from $250,000 to $275,000 (a 10% increase), effective January 1, 2010.
Mark W. Reynolds. Mr. Reynolds serves as our Chief Financial Officer pursuant to an
employment agreement amended and restated effective January 2010. Pursuant to this agreement, and
its predecessor agreement, during 2009, Mr. Reynolds provided services to the Company on a
part-time basis (approximately 75%) and was paid an annualized salary of $150,000. In December
2009, the Compensation Committee awarded Mr. Reynolds a cash bonus of $10,000 and a stock option
grant for 10,000 shares at an exercise price of $7.00 per share. The Compensation Committee also
increased Mr. Reynolds annual base salary from $150,000 to $212,600 effective January 1, 2010. The
increase in Mr. Reynolds base salary was determined based on (a) a proportional increase of
$50,000 (33.3%) based on Mr. Reynolds increased time commitment from 75% to 100%, and (b) a merit
increase of $12,600 (6.3%).
Harriet L. Robinson. Dr. Robinson serves as our Chief Scientific Officer pursuant to an
employment agreement executed in November 2008. In December 2009, the Compensation Committee
awarded Dr. Robinson a cash bonus of $10,000 and a stock option grant for 10,000 shares at an
exercise price of $7.00 per share. The Compensation Committee also increased Dr. Robinsons annual
base salary from $250,000 to $265,750 (a 6.3% increase), effective January 1, 2010.
Andrew Kandalepas. Mr. Kandalepas served as our Senior Vice President until his resignation
in July 2009. During 2009, he received an annualized base salary of $225,000 pursuant to his
employment agreement. During 2009, the Compensation Committee made no decisions with regard to Mr.
Kandalepas compensation.
Benefits Provided to Executive Officers
We provide our executive officers with certain benefits that the Compensation Committee
believes are reasonable and consistent with our overall compensation program. The Compensation
Committee will periodically review the levels of benefits provided to our executive officers.
Dr. McNally, Mr. Reynolds and Dr. Robinson are eligible for health insurance and 401(k)
benefits at the same level and subject to the same conditions as provided to all other employees.
The amounts shown in the Summary Compensation Table under the heading Other Compensation
represent the value of the Companys matching contributions to the 401(k) accounts of these
executive officers. Executive officers did not receive any other perquisites or other personal
benefits or property from the Company or any other source.
Employment Agreements
Robert T. McNally. On March 20, 2008, GeoVax entered into an employment agreement with Robert
T. McNally, Ph.D. to become our President and Chief Executive Officer effective April 1, 2008. The
employment agreement has no specified term. The employment agreement provided for an initial annual
salary of $200,000 to Dr. McNally, subject to periodic increases as determined by the Compensation
Committee. The Board of Directors may also approve the payment of a discretionary bonus annually.
Dr. McNally is eligible for grants of awards from the Plan and is entitled to participate in any
and all benefits in effect from time-to-time for employees generally. We may terminate the
employment agreement, with or without cause. If we terminate the employment agreement without
cause, we will be required to provide Dr. McNally at least 60 days prior notice of the termination
and one week of severance pay for each full year of service as President and Chief Executive
Officer ($10,577 if terminated in fiscal 2010, paid as salary continuance). Dr. McNally may
terminate the employment agreement at any time by giving us 60 days notice. In that event, he would
not receive severance.
15
Mark W. Reynolds. On February 1, 2008, GeoVax entered into an amended and restated employment
agreement with Mark W. Reynolds, our Chief Financial Officer. The employment agreement has no
specified term. The employment agreement provided for an initial annual salary of $115,000 to Mr.
Reynolds, which was increased to $150,000 by the Compensation Committee and the Board of Directors
effective January 1, 2009, commensurate with an increased time commitment provided by Mr. Reynolds
(50% to 75%). The employment agreement was again amended and restated, effective January 1, 2010,
to reflect a further adjustment for Mr. Reynolds time commitment (from 75% to 100%) together with a
base salary increase to $212,600. The Board of Directors may also approve the payment of a
discretionary bonus annually. Mr. Reynolds is eligible for grants of awards from the Plan and is
entitled to participate in any and all benefits in effect from time-to-time for employees
generally. We may terminate the employment agreement, with or without cause. If we terminate the
employment agreement without cause, we will be required to provide Mr. Reynolds at least 60 days
prior notice of the termination and one week of severance pay for each full year of service as
Chief Financial Officer ($16,354 if terminated in fiscal 2010, paid as salary continuance). Mr.
Reynolds may terminate the employment agreement at any time by giving us 60 days notice. In that
event, he would not receive severance.
Harriet L. Robinson. On November 19, 2007, GeoVax entered into an employment agreement with
Harriet L. Robinson, our Chief Scientific Officer. The employment agreement has no specified term.
The employment agreement provided for an initial base salary of $250,000 to Dr. Robinson, subject
to periodic increases as determined by the Compensation Committee. Dr. Robinson initially worked
part-time for the Company, and became a full-time employee in February 2008. The Board of Directors
may also approve the payment of a discretionary bonus annually. Dr. Robinson is eligible for grants
of awards from the Plan and is entitled to participate in any and all benefits in effect from
time-to-time for employees generally. We may terminate the employment agreement, with or without
cause. If we terminate the employment agreement without cause, we will be required to provide Dr.
Robinson at least 90 days prior notice of the termination and one week of severance pay for each
full year of service ($15,332 if terminated in fiscal 2010, paid as salary continuance). Dr.
Robinson may terminate the employment agreement at any time by giving us 60 days notice. In that
event, she would not receive severance.
Andrew Kandalepas. On February 1, 2007, GeoVax entered into an employment agreement with
Andrew Kandalepas, our Senior Vice President. The employment agreement had no specified term. The
employment agreement provided for an initial annual salary of $210,000 to Mr. Kandalepas, subject
to periodic increases as determined by the Compensation Committee. Mr. Kandalepas was also eligible
for discretionary cash bonuses, grants of awards from the Plan and participation in any and all
benefits in effect from time-to-time for employees generally. We could terminate the employment
agreement, with or without cause. Effective June 30, 2009, Mr. Kandalepas resigned from our Board
of Directors, and effective July 1, 2009, he resigned his position as Senior Vice President. We
paid Mr. Kandalepas severance of $18,750.
Indemnification Agreements
In October 2006 GeoVax Labs, Inc. and our subsidiary, GeoVax, Inc. entered into
indemnification agreements with Messrs. McNally, Reynolds, Hildebrand, Kollintzas and Spencer.
Pursuant to these agreements, we have agreed to indemnify them to the full extent permitted by
Illinois and Georgia law against certain liabilities incurred by these individuals in connection
with specified proceedings if they acted in a manner they believed in good faith to be in or not
opposed to the best interests of the Company and, with respect to any criminal proceeding, had no
reasonable cause to believe that such conduct was unlawful. The agreements also provide for the
advancement of expenses to these individuals subject to specified conditions.
16
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation earned during the
fiscal years ended December 31, 2009, 2008 and 2007 by our Named Executive Officers.
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Option |
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All Other |
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Name and Principal |
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Salary |
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Bonus |
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Awards |
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Compensation |
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Total |
|
Position(1) |
|
Year |
|
|
($) |
|
|
($) |
|
|
($)(2) |
|
|
($)(3) |
|
|
($) |
|
Robert T. McNally |
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|
2009 |
|
|
$ |
250,000 |
|
|
$ |
15,000 |
|
|
$ |
61,500 |
|
|
$ |
3,675 |
|
|
$ |
330,175 |
|
President and |
|
|
2008 |
|
|
|
175,000 |
|
|
|
|
|
|
|
391,100 |
|
|
|
1,250 |
|
|
|
567,350 |
|
Chief Executive Officer |
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2007 |
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Mark W. Reynolds |
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2009 |
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150,000 |
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|
|
10,000 |
|
|
|
61,500 |
|
|
|
94 |
|
|
|
221,594 |
|
Chief Financial Officer |
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2008 |
|
|
|
120,740 |
|
|
|
|
|
|
|
45,500 |
|
|
|
|
|
|
|
166,240 |
|
|
|
|
2007 |
|
|
|
92,102 |
|
|
|
10,000 |
|
|
|
674,800 |
|
|
|
|
|
|
|
776,902 |
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Harriet L. Robinson |
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2009 |
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250,000 |
|
|
|
10,000 |
|
|
|
61,500 |
|
|
|
3,675 |
|
|
|
325,175 |
|
Chief Scientific Officer |
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|
2008 |
|
|
|
234,375 |
|
|
|
|
|
|
|
204,220 |
|
|
|
313 |
|
|
|
438,908 |
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|
|
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2007 |
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|
|
14,904 |
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|
|
10,000 |
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|
|
|
|
|
|
|
|
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24,904 |
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|
|
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Andrew J. Kandalepas |
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2009 |
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|
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119,230 |
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18,750 |
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|
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137,980 |
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Former
Senior Vice President
(through July 1, 2009) |
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2008 |
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225,000 |
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45,500 |
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|
|
|
|
|
|
270,500 |
|
|
|
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2007 |
|
|
|
205,288 |
|
|
|
10,000 |
|
|
|
604,800 |
|
|
|
|
|
|
|
820,088 |
|
|
|
|
(1) |
|
This table excludes Mark Newman, who joined GeoVax as Vice President, Research and Development in January 2010. |
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(2) |
|
Amounts shown in the Option Awards column represent the aggregate grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards
Codification Topic 718, Compensation Stock Compensation or FASB ASC Topic 718. For a discussion of the various assumptions made and methods used for determining such amounts, see
footnotes 2 and 7 to our 2009 consolidated financial statements contained in this prospectus. For 2008, the amount reported for Dr. Robinson includes $158,720, related to the extension of
the exercise period of stock options granted in prior years. These stock options were originally granted with an exercise period of five to seven years and were to expire beginning in 2009.
The extensions were made to adjust the exercise period to ten years from the original grant date, consistent with the current stock option grant policies of the Company. The extensions did
not affect the vesting schedule of the grants because they were all fully vested at the time of the extensions. |
|
(3) |
|
Amounts shown in the All Other Compensation column represent employer contributions to the Companys 401(k) retirement plan for Dr. McNally, Mr. Reynolds and Dr. Robinson, and for Mr.
Kandalepas, the amount in this column represents the severance paid to him during the year ended December 31, 2009. |
17
GRANTS OF PLAN-BASED AWARDS
The following table sets forth option awards. No stock awards or non-equity incentive awards
were granted to the Named Executive Officers for the year ended December 31, 2009.
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All Other Option |
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Awards: Number |
|
Exercise or |
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of Securities |
|
Base Price of |
|
Grant Date Fair |
|
|
Grant |
|
Underlying Options |
|
Option Awards |
|
Value of Stock and |
Name |
|
Date |
|
(#) |
|
($/Sh)(1) |
|
Option Awards(2) |
Robert T. McNally |
|
|
12/2/09 |
|
|
|
10,000 |
|
|
$ |
7.00 |
|
|
$ |
61,500 |
|
Mark W. Reynolds |
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|
12/2/09 |
|
|
|
10,000 |
|
|
|
7.00 |
|
|
|
61,500 |
|
Harriet L. Robinson |
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12/2/09 |
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|
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10,000 |
|
|
|
7.00 |
|
|
|
61,500 |
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(1) |
|
The exercise price for options is the closing trading price of the common stock of the Company on the grant date. The
grant date is determined by the Compensation Committee. All stock option grants during 2009 will vest and become
exercisable in three equal annual installments on the first three anniversary dates of the grant date. |
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(2) |
|
Compensation expense is recognized for all share-based payments based on the grant date fair value estimated for
financial reporting purposes. For a discussion of the various assumptions made and methods used for determining such
amounts, see footnotes 2 and 7 to our 2009 consolidated financial statements contained in this prospectus. |
Additional discussion regarding material factors that may be helpful in understanding the
information included in the Summary Compensation Table and Grants of Plan-Based Awards table is
included above under Compensation Discussion and Analysis.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth certain information with respect to unexercised options
previously awarded to our Named Executive Officers as of December 31, 2009. There were no stock
awards outstanding as of December 31, 2009.
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Option Awards |
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Number of Securities |
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Number of Securities |
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Underlying Unexercised |
|
Underlying Unexercised |
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Options |
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Options |
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Name |
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(#) Exercisable |
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(#) Unexercisable |
|
Option Exercise Price ($) |
|
Option Expiration Date |
Robert T. McNally |
|
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10,000 |
(1) |
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$ |
7.00 |
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12/2/19 |
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3,333 |
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6,667 |
(2) |
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|
5.50 |
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12/11/18 |
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16,000 |
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|
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32,000 |
(3) |
|
|
8.50 |
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6/17/18 |
|
|
|
|
6,667 |
|
|
|
3,333 |
(4) |
|
|
8.05 |
|
|
|
12/5/17 |
|
|
|
|
26,400 |
|
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|
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|
17.75 |
|
|
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3/14/17 |
|
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Mark W. Reynolds |
|
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|
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|
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10,000 |
(1) |
|
|
7.00 |
|
|
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12/2/19 |
|
|
|
|
3,333 |
|
|
|
6,667 |
(2) |
|
|
5.50 |
|
|
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12/11/18 |
|
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|
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6,667 |
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|
3,333 |
(4) |
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8.05 |
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12/5/17 |
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36,000 |
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17.75 |
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3/14/17 |
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Harriet L. Robinson |
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10,000 |
(1) |
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|
7.00 |
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12/2/19 |
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|
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3,333 |
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6,667 |
(2) |
|
|
5.50 |
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12/11/18 |
|
|
|
|
177,913 |
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|
|
|
|
|
|
2.004 |
|
|
|
2/5/14 |
|
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(1) |
|
These stock options vest and become exercisable in three equal installments on December 2, 2010, 2011 and 2012. |
|
(2) |
|
These stock options vest and become exercisable in two equal installments on December 11, 2010 and 2011. |
|
(3) |
|
These stock options vest and become exercisable in two equal installments on June 17, 2010 and 2011. |
|
(4) |
|
These stock options vest and become exercisable on December 5, 2010. |
18
Potential Payments Upon Termination or Change-in-Control
Under SEC rules, we are required to estimate and quantify the payment that would be payable
at, following, or in connection with any termination, including without limitation resignation,
severance, retirement or a constructive termination of each Named Executive Officer, or a
change-in-control of the Company or a change in the Named Executive Officers responsibilities,
with respect to each Named Executive Officer, as if the triggering event had occurred as of the
last business day of the last fiscal year.
The Plan contains provisions that could lead to an accelerated vesting of options or other
awards. In the event of certain change-in-control transactions described in the Plan,
(i) outstanding options or other awards under the Plan may be assumed, converted or replaced;
(ii) the successor corporation may substitute equivalent options or other awards or provide
substantially similar consideration to Plan participants as were provided to stockholders (after
taking into account the existing provisions of the options or other awards); or (iii) the successor
corporation may replace options or awards with substantially similar shares or other property.
In the event the successor corporation (if any) refuses to assume or substitute options or
other awards as described (i) the vesting of any or all options or awards granted pursuant to the
Plan will accelerate upon the change-in-control transaction, and (ii) any or all options granted
pursuant to the Plan will become exercisable in full prior to the consummation of the
change-in-control transaction at such time and on such conditions as the Compensation Committee
determines. If the options are not exercised prior to the consummation of the change-in-control
transaction, they shall terminate at such time as determined by the Compensation Committee. Subject
to any greater rights granted to Plan participants under the Plan, in the event of the occurrence
of a change-in-control transaction any outstanding options or other awards will be treated as
provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or
sale of assets.
If the Company experienced a change-in-control transaction described in the Plan on
December 31, 2009, the value of accelerated options for each Named Executive Officer, based on the
difference between $9.00, the closing price of our common stock on the OTC Bulletin Board on
December 31, 2009, and, if lower, the exercise price per share of each option for which vesting
would be accelerated for each Named Executive Officer, would be as follows: Dr. McNally $62,500;
Mr. Reynolds $46,500 and Dr. Robinson $43,333. Mr. Kandalepas resigned effective July 1, 2009
and held no outstanding options as of December 31, 2009.
Additionally, our employment agreements with each Named Executive Officer provide for payment
to each Named Executive Officer if we terminate such Named Executive Officers employment without
cause. If each Named Executive Officer was terminated without cause on December 31, 2009, the
following amounts, which represent one week of pay for each full year of service to the Company,
would be payable to each Named Executive Officer as salary continuance under the terms of such
Named Executive Officers employment agreement: Dr. McNally $10,577; Mr. Reynolds $16,354 and
Dr. Robinson $15,332. Mr. Kandalepas resigned from our Board of Directors effective June 30, 2009
and resigned his position as Senior Vice President effective July 1, 2009. Mr. Kandalepas was paid
severance of $18,750.
Risk Assessment
We considered whether our compensation policies and practices create risks that are reasonably
likely to have a material adverse effect on GeoVax and concluded that they do not. We do not tie
compensation to specific stock prices or milestones that might encourage risk taking to increase
stock prices or meet specific milestones. When we have granted cash incentive awards, they have
been retrospective or in relatively modest amounts so that they do not encourage inappropriate
short-term risk taking. We give consideration to subjective elements when we determine salaries,
bonuses, and option grants that help us evaluate employee productivity and contribution to the
welfare of GeoVax and place less emphasis on short-term metrics or milestones that might encourage
undue risk taking. When we use stock options, we require them to vest over a period of years so
that their increase in value will be more closely associated with the long-term success of the
Company.
19
DIRECTOR COMPENSATION
The following table sets forth information concerning the compensation earned for service on
our Board of Directors during the fiscal year ended December 31, 2009 by each individual who served
as a director at any time during the fiscal year.
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Change |
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|
|
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|
|
|
|
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in Pension |
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|
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|
|
|
|
|
|
|
|
|
|
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|
|
|
Non- |
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Value and |
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Fees |
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|
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|
Equity |
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Non- |
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Earned or |
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|
|
|
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|
Incentive |
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Qualified |
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All |
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|
|
|
Paid in |
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Stock |
|
Option |
|
Plan |
|
Deferred |
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Other |
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|
|
|
Cash |
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Awards |
|
Awards |
|
Compensation |
|
Compensation |
|
Compensation |
|
Total |
Name |
|
($) |
|
($) |
|
($)(3)(4) |
|
($) |
|
Earnings |
|
($) |
|
($) |
Donald Hildebrand(1) |
|
$ |
30,000 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
57,600 |
|
|
$ |
87,600 |
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|
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|
|
|
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|
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Andrew Kandalepas(2) |
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Dean Kollintzas |
|
|
14,100 |
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|
|
|
|
|
|
61,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert T. McNally(2) |
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|
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Harriet L. Robinson(2) |
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John Spencer |
|
|
28,500 |
|
|
|
|
|
|
|
61,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter Tsolinas (5) |
|
|
12,400 |
|
|
|
|
|
|
|
61,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,900 |
|
|
|
|
(1) |
|
The amount shown in the All Other Compensation column represents the amount paid to Mr. Hildebrand for the year ended December 31, 2009 pursuant to his consulting
agreement with the Company. See Certain Relationships and Related Transactions Consulting Agreement with Donald Hildebrand. |
|
(2) |
|
Dr. McNally, Dr. Robinson, and Mr. Kandalepas, who were employees of the Company during the fiscal year ended December 31, 2009, received no compensation for their
service as directors. All amounts related to their compensation as Named Executive Officers during the fiscal year ended December 31, 2009 and prior years are included
in the Summary Compensation Table. Mr. Kandalepas resigned as a director effective June 30, 2009 and resigned his position as Senior Vice President effective
July 1, 2009. |
|
(3) |
|
Amounts shown in the Option Awards column represent the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. For a discussion of
the various assumptions made and methods used for determining such amounts, see footnotes 2 and 7 to our 2009 consolidated financial statements contained in this
prospectus. On December 2, 2009, Mr. Kollintzas, Mr. Spencer, and Mr. Tsolinas were each granted options to purchase 10,000 shares of our common stock, with an exercise
price of $7.00 per share. |
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(4) |
|
The table below shows the aggregate numbers of option awards outstanding for each non-employee director as of December 31, 2009. There were no stock awards outstanding
for the non-employee directors as of December 31, 2009. |
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|
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Aggregate Option Awards |
|
|
Outstanding |
|
|
as of December 31, 2009 |
Name |
|
(#) |
Donald Hildebrand |
|
|
355,825 |
|
Dean Kollintzas |
|
|
56,400 |
|
John Spencer |
|
|
56,400 |
|
Peter Tsolinas |
|
|
36,400 |
|
|
|
|
(5) |
|
Mr. Tsolinas resigned as a director in June 2010. |
20
Director Compensation Plan
In March 2007, the Board of Directors approved a recommendation from the Compensation
Committee for director compensation, which we refer to as the Director Compensation Plan. It was
subsequently amended in March 2008 and December 2009. The Director Compensation Plan applies only
to non-employee directors. Directors who are employees of the Company receive no compensation for
their service as directors or as members of committees.
Cash Fees
For 2009, each non-employee director received an annual retainer of $2,000 (paid quarterly)
for service as a member of the Audit Committee and $1,250 for service as a member of the
Compensation Committee. The Chairman of the Audit Committee received an annual retainer of $9,000,
and the Chairman of the Compensation Committee received an annual retainer of $6,000, which
retainers were also paid quarterly. Non-employee directors also received fees for each Board of
Directors or Committee meeting attended as follows: $1,500 per Board of Directors meeting, $1,000
per Committee meeting chaired, and $500 per Committee meeting attended as a non-chair member.
Meetings attended telephonically were paid at lower rates ($750, $750 and $400, respectively). The
non-employee Chairman of the Board received an annual retainer of $30,000 (paid quarterly) and was
not entitled to additional fees for meetings attended.
Effective January 1, 2010, the fees paid to non-employee directors for attending meetings of
the Board of Directors were increased to $3,000 for in person meetings and $1,500 for telephonic
meetings. Also, the annual cash retainer for members (non-chairman) of the Audit Committee was
increased to $5,000, and the annual cash retainer for members (non-chairman) of the Compensation
Committee was increased to $3,300. No changes were made to the annual cash retainer for the
chairman of the Audit Committee or the Compensation Committee, nor were any changes made to the
fees paid for attending committee meetings. The members and chairman of the newly formed Nominating
and Governance Committee will receive the same compensation as members of the Compensation
Committee.
Stock Option Grants
Non-employee directors each receive an automatic grant of options to purchase 26,400 shares of
common stock on the date that such non-employee director is first elected or appointed. We
currently do not have a formula for determining annual stock option grants to directors (upon their
re-election to the Board of Directors, or otherwise). Such option grants are currently determined
by the Board of Directors, upon recommendation by the Compensation Committee based on the
Compensation Committees annual deliberations and review of the director compensation structure of
similar companies. At its meeting in December 2009, upon a recommendation of the Compensation
Committee, the Board of Directors determined an annual stock option grant of 10,000 shares to its
non-employee members, with the exception of Mr. Hildebrand, who declined the stock option grant.
In April 2010, at the recommendation of the Compensation Committee, the Board of Directors
approved a 20,000 share increase in the number of shares authorized to be issued pursuant to the
Plan in order to cover an over issuance arising from the automatic grants of options to Mr. Antebi
and Mr. Dodd when they were appointed as directors.
Expense Reimbursement
All directors are reimbursed for expenses incurred in connection with attending meetings of
the Board of Directors and committees.
21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies and Procedures for Approval of Related Party Transactions
Our Audit Committee is responsible for reviewing and approving all transactions or
arrangements between the Company and any of our directors, officers, principal stockholders or any
of their respective affiliates, associates or related parties, other than transactions with
officers which are covered by the duties of the Compensation Committee. In determining whether to
approve or ratify a related party transaction, the Audit Committee will discuss the transaction
with management and will consider all relevant facts and circumstances available to it including:
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whether the terms of the transaction are fair to the Company and at least as favorable to the
Company as would apply if the transaction did not involve a related party; |
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whether there are demonstrable business reasons for the Company to enter into the transaction; |
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|
whether the transaction would impair the independence of a non-employee director; and |
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|
whether the transaction would present an improper conflict of interest for any director or
executive officer, taking into account the size of the transaction, the direct or indirect
nature of the related partys interest in the transaction and the ongoing nature of any
proposed relationship, and any other factors the Audit Committee deems relevant. |
The charter for the Audit Committee requires that it review and approve all related
party transactions required to be disclosed by Item 404 of SEC Regulation S-K, that it discuss with
management the business rationale for the transactions, and whether appropriate disclosure has been
made.
Consulting Agreement with Donald Hildebrand
In March 2008, we entered into a consulting agreement with Donald Hildebrand, the Chairman of
our Board of Directors and our former President and Chief Executive Officer, pursuant to which
Mr. Hildebrand provides business and technical advisory services to the Company. The term of the
consulting agreement began on April 1, 2008 with an original termination date of December 31, 2009.
In December 2009, the Company and Mr. Hildebrand extended the term of the consulting agreement for
an additional year. During 2009 and 2008, Mr. Hildebrand received $57,600 and $64,000,
respectively, for his services pursuant to the consulting agreement. During the remaining term of
the consulting agreement, Mr. Hildebrand will provide us with at least 16 hours of service per
month and will be paid at the rate of $4,800 per month. We also pay Mr. Hildebrands medical and
dental coverage through the term of the consulting agreement. We may terminate the consulting
agreement, with or without cause. If we terminate the consulting agreement without cause, we must
give Mr. Hildebrand at least 30 days notice and we will be required to pay him, as a severance
payment, three months compensation, which is equal to $14,400. Likewise, if the consulting
agreement is terminated due to the death of Mr. Hildebrand, we will be required to pay his estate
three months compensation. If Mr. Hildebrand wishes to terminate the consulting agreement, he must
provide us with at least 30 days notice. No severance payments will be due to Mr. Hildebrand upon
termination with cause or upon his voluntary termination.
Transactions with Emory University
Emory University is a significant stockholder of the Company, and our primary product
candidates are based on technology rights subject to a license agreement with Emory University,
which we refer to as the Emory License. The Emory License, among other contractual obligations,
requires payments based on milestone achievements, royalties on sales by the Company or on payments
to the Company by our sublicensees, and payment of maintenance fees in the event certain milestones
are not met within the time periods specified in the Emory License. We may terminate the Emory
License upon 90 days prior written notice. In any event, the Emory License expires on the date of
the latest expiration date of the underlying patents. We are also obligated to reimburse Emory
University for certain ongoing costs in connection with the filing, prosecution and maintenance of
patent applications subject to the Emory License. Such reimbursements to Emory University amounted
to $85,673, $102,141 and $243,653 for the years ended December 31, 2009, 2008 and 2007,
respectively.
In June 2008, we entered into two subcontracts with Emory University for the purpose of
conducting research and development activities associated with a grant from the NIH. During 2009
and 2008, we recorded $816,651 and $723,887, respectively, of expense associated with these
subcontracts. All amounts paid to Emory University under these subcontracts are reimbursable to us
pursuant to the NIH grant.
Through November 2009, we leased office and laboratory space on a month-to-month basis from
Emtech Biotechnology Development, Inc., a related party associated with Emory University. Rent
expense associated with this lease totaled $43,112, $47,041 and $36,588 for the years ended
December 31, 2009, 2008 and 2007, respectively.
22
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis with Company management and, based on such review and discussions, the Compensation
Committee authorized and directed that the Compensation Discussion and Analysis be included in this
proxy statement and the Annual Report on Form 10-K.
Respectfully Submitted,
COMPENSATION COMMITTEE:
John N. Spencer, Jr., Chairman
Dean G. Kollintzas
Peter M. Tsolinas
Mr. Tsolinas, a former director, was a member of the Compensation Committee in 2009 and until
it had completed the Compensation Discussion and Analysis. Mr. Dodd is now the Chairman, and
Messrs. Antebi and Kollintzas are the other members. The current Compensation Committee has also
approved the Compensation Discussion and Analysis and this report, and directed it be included in
this proxy statement.
This Compensation Committee Report is not incorporated by reference into any of our previous
filings with the SEC and is not to be deemed soliciting material or incorporated by reference
into any of our future filings with the SEC, irrespective of any general statement included in any
such filing that incorporates the Annual Report on Form 10-K referenced above or this proxy
statement by reference, unless such filing explicitly incorporates this report.
PROPOSAL II
RATIFICATION OF APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed the firm of Porter Keadle Moore LLP (PKM) to serve as the
independent registered public accounting firm of GeoVax Labs, Inc. for the fiscal year ending
December 31, 2010. PKM has served as the independent registered public accounting firm of the
Company since 2006, and is considered by the Audit Committee and management to be well qualified.
Principal Accountant Fees and Services
The aggregate fees billed for the services rendered to us by PKM for the years ended
December 31, 2009 and December 31, 2008 were as follows:
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|
|
|
|
|
|
|
|
2009 |
|
|
2008 |
|
Audit Fees(1) |
|
$ |
70,700 |
|
|
$ |
62,950 |
|
Audit-Related Fees(2) |
|
|
5,510 |
|
|
|
11,035 |
|
Tax Fees |
|
|
|
|
|
|
|
|
All Other Fees |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
76,210 |
|
|
$ |
73,985 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit Fees for 2009 and 2008 consisted principally of
fees for professional services in connection with the
audits of our consolidated financial statements,
review of our Annual Report on Form 10-K, review of
our interim financial statements and Quarterly Reports
on Form 10-Q, and the audit of our internal control
over financial reporting. |
|
(2) |
|
Audit-Related Fees consist principally of fees in
connection with the review of registration statements. |
23
Audit Committees Pre-Approval Policies and Procedures
The Audit Committee has adopted policies and procedures for pre-approving all audit and
non-audit services provided by our independent auditors (the Policy) prior to the engagement of
the independent auditors with respect to such services. Under the Policy, proposed services may be
pre-approved on a periodic basis or individual engagements may be separately approved by the Audit
Committee prior to the services being performed. In each case, the Audit Committee considers
whether the provision of such services would impair the independent auditors independence. All
audit services and non-audit services provided by PKM for 2009 and 2008 were pre-approved by the
Audit Committee.
Audit Committees Pre-Approval Policies and Procedures
Stockholder ratification of the Audit Committees selection of PKM as our independent
registered public accounting firm for the year ending December 31, 2010 is not required by our
Bylaws, or otherwise. Nonetheless, the Board of Directors has elected to submit the selection of
PKM to our stockholders for ratification. The selection will be ratified if a majority of the votes
cast at the Annual Meeting vote in favor. Abstentions and broker non-votes are not treated as votes
cast, and therefore will have no effect on the outcome of either proposal. If the selection of PKM
as our independent registered public accounting firm for the year ending December 31, 2010 is not
ratified, the matter will be referred to the Audit Committee for further review.
Representatives of PKM will be present at the annual meeting and will have an opportunity to
make a statement if they desire to do so. They also will be available to respond to appropriate
questions from stockholders.
THE AUDIT COMMITTEE AND BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE
FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF PORTER KEADLE MOORE LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM OF GEOVAX LABS INC. FOR FISCAL 2010.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is providing this report to enable stockholders
to understand how it monitors and oversees the Companys financial reporting process. The Audit
Committee consists of three directors, each of whom are independent in accordance with the criteria
of independence set forth in Section 301(3)(B) of the Sarbanes-Oxley Act of 2002 and operates
pursuant to an Audit Committee charter that is reviewed annually by the Audit Committee and updated
as appropriate. The Audit Committee charter is available on our web site at http://www.geovax.com
.
Management is responsible for the Companys internal controls and the financial reporting
process. The independent registered public accounting firm is responsible for performing an
independent audit of the Companys consolidated financial statements in accordance with generally
accepted auditing standards and issuing a report thereon. The Committees responsibility is to
monitor and oversee these processes.
This report confirms that the Audit Committee has: (i) reviewed and discussed the audited
financial statements for the year ended December 31, 2009 with management and the Companys
independent public accountants; (ii) discussed with the Companys independent public accountants
the matters required to be discussed pursuant to the Statement on Auditing Standards No. 61
(Communications with Audit Committees, as amended); (iii) received and reviewed the written
disclosures and letter from the Companys independent public accountants as required by the Public
Company Accounting Oversight Board regarding the independent accountants independence; and
(iv) discussed with the Companys independent public accountants their independence from the
Company.
The Audit Committee of the Board of Directors has considered whether the provision of
non-audit professional services rendered by Porter Keadle Moore LLP, as discussed above and
disclosed elsewhere in this proxy statement, is compatible with maintaining their independence.
24
Based upon the above review and discussions, the Audit Committee recommended to the Board of
Directors that the audited financial statements for the year ended December 31, 2009 be included in
the Companys Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
Respectfully submitted,
AUDIT COMMITTEE
John N. Spencer, Jr., Chairman
Dean G. Kollintzas
Peter M. Tsolinas
Mr. Tsolinas, a former director, was a member of the Audit Committee in 2009 and at the time
it completed this report. Mr. Antebi was appointed to fill the vacancy created by Mr. Tsolinass
resignation in June 2010.
The Report of the Audit Committee shall not be deemed to be soliciting material and shall
not be incorporated by reference into any of our prior or future filings with the SEC, irrespective
of any general statement included in any such filing that incorporates this proxy statement by
reference, unless such filing explicitly incorporates this Report of the Audit Committee.
25
OTHER MATTERS
Stockholder Proposals
Any proposal which a stockholder intends to present in accordance with Rule 14a-8 of the
Securities Exchange Act of 1934 (the Exchange Act) at our next Annual Meeting of Stockholders to
be held in 2011 must be received by us on or before March 16, 2011. Notice of stockholder proposals
submitted outside of Rule 14a-8 of the Exchange Act will be considered untimely if received by us
after March 16, 2011. Only proper proposals under Rule 14a-8 of the Exchange Act which are timely
received will be included in the proxy statement and proxy in 2011. We reserve the right to vote
against, reject, rule out of order, or take other appropriate action with respect to any proposal
that does not comply with these requirements.
Notice of intention to present a proposal at the 2011 annual meeting should be addressed to
Corporate Secretary, GeoVax Labs, Inc., 1900 Lake Park Drive, Suite 380, Smyrna, Georgia 30080.
Availability of Annual Report
GeoVaxs Annual Report to Stockholders, containing the Companys Annual Report on Form 10-K
including the Companys audited financial statements for the year ended December 31, 2009,
accompanies this proxy statement but is not a part of the Companys soliciting materials.
Stockholders may obtain, without charge, a copy of the Companys Annual Report on Form 10-K
for fiscal 2009, filed with the SEC, including the financial statements and schedules thereto,
without the accompanying exhibits, by writing to: Investor Relations, GeoVax Labs Inc., 1900 Lake
Park Drive, Suite 380, Smyrna, Georgia 30080, or contact Investor Relations by telephone at (404)
384-7220 or email at investor@geovax.com. The Companys Form 10-K is also available online at the
Companys website, www.geovax.com .
Delivery of Documents to Stockholders Sharing an Address
Some banks, brokers or other nominees may participate in the practice of householding proxy
materials. This means that only one copy of our proxy statement may have been sent to multiple
stockholders living in the same household. We will promptly arrange for delivery of a separate copy
of the proxy statement to any stockholder who shares with another stockholder an address to which
only one copy was delivered upon request made (i) in writing to us at GeoVax Labs, Inc., Attention:
Mark W. Reynolds, 1900 Lake Park Drive, Suite, 380, Smyrna, Georgia 30080, (ii) by calling us at
(678) 384-7220, or (iii) via e-mail to mreynolds@geovax.com. Any stockholder who shares with
another stockholder an address that receives only one copy of our proxy statement and wishes to
receive a separate copy of either document in the future, or who is currently receiving multiple
copies and would like to receive only one copy for his or her household, should contact his or her
bank, broker or other nominee, or contact us at the above address and telephone number.
By Order of the Board of Directors
Mark W. Reynolds
Corporate Secretary
26
GEOVAX LABS, INC.
ATTN: DONALD HILDEBRAND
1900 LAKE PARK DRIVE
SUITE 380
SMYRNA, GEORGIA 30080
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up
until 11:59 P.M. Eastern Daylight Time the day before the cut-off date or meeting date. Have your
proxy card in hand when you access the web site and follow the instructions to obtain your records
and to create an electronic voting instruction form.
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern
Daylight Time the day before the cut-off date or meeting date. Have your proxy card in hand when
you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or
return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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M14537-P81128 |
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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GEOVAX
LABS, INC. |
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The Board of Directors recommends that you vote FOR the following: |
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For All |
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Withhold All |
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For All Except |
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To withhold authority to vote for any individual
nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below.
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1. Election of Directors |
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o |
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o |
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o |
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Nominees:
01) Steven S. Antebi
02) David A. Dodd 03) Donald G. Hildebrand |
04) Dean G. Kollintzas
05) Robert T. McNally
06) Harriet L. Robinson 07) John N. Spencer, Jr. |
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The Board of Directors recommends that you vote FOR the following proposal: |
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Abstain |
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2. |
Ratification of the appointment of Porter Keadle Moore LLP as the independent registered public accounting firm of
GeoVax Labs, Inc. for the fiscal year ending December 31, 2010. |
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NOTE:
And such other business as may properly come before the meeting or any adjournment thereof. |
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Signature [PLEASE SIGN WITHIN BOX]
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Signature (Joint Owners) |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report, Notice and Proxy Statement and Form of Proxy are available at www.proxyvote.com.
M14538-P81128
GEOVAX LABS, INC.
This proxy is solicited by the Board of Directors
Annual Meeting of Stockholders
August 24, 2010 01:00 PM
This proxy will be voted as specified by the stockholder. If no specification is made, all
shares will be voted FOR the approval of the proposals set forth in the proxy statement. The
stockholder represented herein appoints Robert McNally and Mark Reynolds, and each of them,
proxies with the power of substitution to vote all shares of Common Stock entitled to be voted
by said stockholder at the Annual Meeting of Stockholders of GeoVax Labs, Inc. to be held at the
offices of Womble Carlyle Sandridge & Rice, PLLC, 271 17th Street, NW, Suite 2400,
Atlanta, Georgia 30363, on August 24, 2010 at 1:00 P.M. (Eastern Daylight Time), and in any
adjournment or postponement thereof as specified in this proxy.
Continued and to be signed on reverse side