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    SEC Form DEF 14A filed by Lineage Cell Therapeutics Inc.

    4/29/25 4:05:15 PM ET
    $LCTX
    Biotechnology: Biological Products (No Diagnostic Substances)
    Health Care
    Get the next $LCTX alert in real time by email
    DEF 14A
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    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

     

    Filed by the Registrant ☒

    Filed by a Party other than the Registrant ☐

     

    Check the appropriate box:

     

    ☐

    Preliminary Proxy Statement

    ☐

    Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

    ☒

    Definitive Proxy Statement

    ☐

    Definitive Additional Materials

    ☐

    Soliciting Material Pursuant to §240.14a-12

     

    Lineage Cell Therapeutics, 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):

     

    ☒

    No fee required.

    ☐

    Fee paid previously with preliminary materials.

    ☐

    Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

     

     

     

     

     


     

     

    img8971038_0.jpg

    2173 Salk Ave., Suite 200

    Carlsbad, CA 92008

    (442) 287-8990

    www.lineagecell.com

    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

    To Be Held June 26, 2025

    To the Shareholders of Lineage Cell Therapeutics, Inc.:

    The 2025 annual meeting of shareholders (the “Meeting”) of Lineage Cell Therapeutics, Inc. (“Lineage,” “we,” “us,” and “our”) will be held at 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008 on June 26, 2025 at 8:00 a.m. Pacific Time for the following purposes:

    1.
    To elect seven directors to hold office until the 2026 annual meeting of shareholders and until their respective successors are duly elected and qualified. The nominees are Michael H. Mulroy, Dipti Amin, Deborah Andrews, Neal C. Bradsher, Brian M. Culley, Anula Jayasuriya, and Angus C. Russell.
    2.
    To ratify the appointment of Moss Adams LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2025.
    3.
    To approve, on an advisory basis, the compensation paid to our named executive officers.
    4.
    To approve an amendment to the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan to increase the number of common shares available thereunder by 19,500,000.
    5.
    To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

    The foregoing items of business are more fully described in the accompanying Proxy Statement, which forms a part of this notice and is incorporated herein by reference.

    All shareholders are cordially invited to attend the Meeting. Our board of directors has fixed the close of business on April 28, 2025 as the record date for determining shareholders entitled to receive notice of, and to vote at, the Meeting or any adjournment or postponement thereof.

    Your vote is important. Whether or not you expect to attend the Meeting, please vote as soon as possible. You may authorize a proxy to vote your shares via the Internet, by telephone, or—if you have received and/or requested paper copies of our proxy materials by mail—by signing, dating and returning the proxy card in the envelope provided. For specific voting instructions, please refer to the information provided in the accompanying Proxy Statement and in the Notice of Internet Availability of Proxy Materials.

    By Order of the Board of Directors,

     /s/ Brian M. Culley

    Brian M. Culley

    Chief Executive Officer and Director

    Carlsbad, California

    April 29, 2025

     


     

     

     

    PROXY STATEMENT

    FOR THE 2025 ANNUAL MEETING OF SHAREHOLDERS

    TO BE HELD ON JUNE 26, 2025

     

     

    The board of directors (“Board”) of Lineage Cell Therapeutics, Inc. (“Lineage,” “we,” “us” and “our”) is soliciting proxies for use at our 2025 annual meeting of shareholders (the “Meeting”) to be held at 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008 on June 26, 2025 at 8:00 a.m. Pacific Time, including any adjournment or postponement thereof.

    Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on June 26, 2025: This Proxy Statement and our 2024 Annual Report are available at www.proxydocs.com/LCTX.

    QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS

    AND THE ANNUAL MEETING

    Why am I receiving these materials?

    We have prepared these proxy materials, including this Proxy Statement and the related proxy card, because our Board is soliciting your proxy to vote at the Meeting. This Proxy Statement summarizes information related to your vote at the Meeting. All shareholders of record at the close of business on April 28, 2025, the record date for the Meeting, and those who hold a valid proxy on their behalf, are cordially invited to attend the Meeting in person. However, you do not need to attend the Meeting to vote your shares. Instead, you may simply submit your proxy in accordance with the instructions provided on the Notice of Internet Availability of Proxy Materials, or if you elected to receive printed copies of the proxy materials, you may submit your proxy by completing, signing and returning the enclosed proxy card. See also, “How do I vote?” below.

    The proxy materials were first sent or made available to our shareholders on or about April 29, 2025.

    Why did I receive a Notice of Internet Availability of Proxy Materials in the mail?

    As permitted by rules adopted by the U.S. Securities and Exchange Commission (“SEC”), we are making our proxy materials available to shareholders electronically via the Internet. Accordingly, we are sending the Notice of Internet Availability of Proxy Materials by mail to our shareholders of record containing instructions on how to access the proxy materials and vote by proxy. All shareholders can access the proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials or request the delivery of a printed set of proxy materials. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, please follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials.

    Who can vote at the Meeting?

    Only shareholders of record at the close of business on April 28, 2025, the record date for the Meeting, are entitled to receive notice of and to vote at the Meeting. On the record date, 228,356,290 of our common shares were issued and outstanding.

    Shareholder of Record: Common Shares Registered in Your Name

    If your common shares are registered directly in your name with our transfer agent, Equiniti Trust Company, LLC, then you are the shareholder of record with respect to those common shares, and we are sending these proxy materials directly to you. As the shareholder of record, you may vote in person at the Meeting or via one of the methods described in the Notice of Internet Availability of Proxy Materials or in the proxy card if you received a printed or

    -1-


     

    electronic copy of the proxy materials. Whether or not you plan to attend the Meeting in person, we urge you to vote before the Meeting to ensure your vote is counted.

    Beneficial Owner: Common Shares Registered in the Name of a Broker, Bank, or Nominee

    If your common shares are held by a broker, bank, or nominee, then you are considered the beneficial owner of common shares held in “street name,” and the Notice of Internet Availability of Proxy Materials or the proxy materials, as appropriate, are being forwarded to you by your broker, bank, or nominee. As the beneficial owner of common shares held in “street name,” you have the right to direct your broker, bank, or nominee how to vote those shares and you are invited to attend the Meeting if you obtain a legal proxy from your broker, bank, or nominee. However, because you are not the shareholder of record, you may not vote in person at the Meeting unless you obtain a legal proxy from your broker, bank, or nominee. See also, “How do I vote?” below.

    How can I attend the Meeting?

    You are entitled to attend the Meeting only if you are (1) a shareholder of record as of the record date or (2) a beneficial owner of shares held in “street name” as of the record date and you obtain a legal proxy from the broker, bank, or nominee who holds your shares.

    For directions to the meeting, please visit www.proxydocs.com/LCTX.

    What am I voting on?

    These are the proposals scheduled for a vote at the Meeting:

    •
    Proposal 1: To elect seven directors to hold office until the 2026 annual meeting of shareholders and until their respective successors are duly elected and qualified.
    •
    Proposal 2: To ratify the appointment of Moss Adams LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2025.
    •
    Proposal 3: To approve, on an advisory basis, the compensation paid to our named executive officers.
    •
    Proposal 4: To approve an amendment to the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan to increase the number of common shares available under the plan by 19,500,000.

    How many votes do my shares represent?

    Each common share is entitled to one vote on all matters that may be acted upon at the Meeting, except that shareholders are entitled to cumulate their votes in the election of directors (i.e., they are entitled to the number of votes determined by multiplying the number of shares held by them times the number of directors to be elected) and may cast all of their votes so determined for one director nominee or spread their votes among two or more director nominees as they see fit. No shareholder is entitled to cumulate votes for a director nominee unless such nominee’s name has been placed in nomination prior to the vote and the shareholder has given notice at the Meeting, prior to the voting, of the shareholder’s intention to cumulate his or her votes. If any shareholder has given such notice, all shareholders may cumulate their votes. Discretionary authority to cumulate votes is hereby solicited by our Board if any shareholder gives notice of such shareholder’s intention to exercise the right to cumulative voting. In that event, our Board will instruct the proxy holders to vote all shares represented by proxies in a manner that will result in the approval of the maximum number of directors from the nominees selected by our Board that may be elected with the votes held by the proxy holders.

    What are the Board’s recommendations?

    Our Board recommends that our shareholders vote “For” each director nominee identified in this Proxy Statement and “For” Proposals 2, 3 and 4.

    -2-


     

    How do I vote?

    In the election of directors, you may vote “For” or you may “Withhold” your vote from each director nominee. For Proposals 2, 3 and 4, you may vote “For” or “Against” or “Abstain” from voting.

    Shareholder of Record: Common Shares Registered in Your Name

    If you are the shareholder of record:

    •
    By Internet: You may vote at www.proxypush.com/LCTX, 24 hours a day, seven days a week. You will need the control number included on your Notice of Internet Availability of Proxy Materials or proxy card. Votes submitted via the Internet must be received by 11:59 p.m., Eastern Time, on June 25, 2025.
    •
    By Telephone: You may vote using a touch-tone telephone by calling (866) 490-6839, 24 hours a day, seven days a week. You will need the control number included on your Notice of Internet Availability of Proxy Materials or proxy card. Votes submitted by telephone must be received by 11:59 p.m., Eastern Time, on June 25, 2025.
    •
    By Mail: If you request printed copies of the proxy materials by mail, you may vote by completing, signing, dating and returning the proxy card in the self-addressed, postage-paid envelope provided. If you properly complete your proxy card and we receive it in time to vote, the individuals named in the proxy card will vote your shares as you have directed.
    •
    In Person: You may attend the Meeting and vote in person even if you have already voted by proxy.

    Beneficial Owner: Common Shares Registered in the Name of a Broker, Bank, or Nominee

    If you are the beneficial owner of common shares held in “street name,” you may instruct your broker, bank, or nominee how to vote those shares using the voting instruction form provided to you by your broker, bank, or nominee. Because you are not the shareholder of record for those shares, you may not vote in person at the Meeting unless you obtain a legal proxy from your broker, bank, or nominee giving you the right to vote at the Meeting. A legal proxy is a written document that authorizes you to vote your shares held in street name at the Meeting. If you desire to vote in person at the Meeting, please contact the broker, bank, or nominee that holds your shares for instructions regarding obtaining a legal proxy.

    What if another matter is properly brought before the Meeting?

    At this time, our Board knows of no matters that will be presented for consideration at the Meeting other than those described in this Proxy Statement. If you vote your shares by proxy over the Internet, by telephone or by signing and returning your proxy card by mail and any other matter is properly brought before the Meeting or any adjournment or postponement thereof, the person(s) named in the proxy card as “proxies” will have authority to vote on those matters as he, she or they deem advisable, in their discretion.

    Who is paying for this proxy solicitation?

    We will pay for the entire cost of soliciting proxies. In addition to the mailed Notices of Internet Availability of Proxy Materials and/or proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks, and nominees for the cost of forwarding proxy materials to beneficial owners.

    What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials or proxy card?

    If you receive more than one Notice of Internet Availability of Proxy Materials or proxy card, your common shares are registered in more than one name or are registered in different accounts. To ensure that all of your shares are voted, please follow the voting instructions in each Notice of Internet Availability of Proxy Materials or complete, sign, date and return each proxy card.

    -3-


     

    Can I revoke or change my vote after submitting my proxy?

    You may revoke your proxy and change your vote at any time before the applicable voting deadlines for the Meeting. If you are the record holder of your common shares, you may revoke your proxy in any one of four ways:

    •
    submit another properly completed proxy card with a later date;
    •
    vote again by Internet or telephone at a later time (only the latest Internet or telephone proxy submitted prior to the Meeting will be counted);
    •
    send a written notice to us at 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008; Attention: Corporate Secretary; or
    •
    attend the Meeting and vote in person (attending the Meeting will not, by itself, revoke your proxy or change your vote).

    If your shares are held by your broker, bank, or nominee, please follow the instructions provided by them.

    How will my shares be voted if I do not specify how they should be voted?

    Shareholder of Record: Common Shares Registered in Your Name

    If you are a shareholder of record and you indicate when voting on the Internet or by telephone that you wish to vote as recommended by our Board, then your common shares will be voted at the Meeting in accordance with our Board’s recommendation on all matters presented for a vote at the Meeting. Similarly, if you sign and return a proxy card but do not indicate how you want to vote your common shares for a particular director nominee or proposal or for all the director nominees and proposals, then as to each nominee and proposal for which you do not so indicate your voting choice, your shares will be voted in accordance with our Board’s recommendation.

    Beneficial Owner: Common Shares Registered in the Name of a Broker, Bank, or Nominee

    If you are a beneficial owner of shares held in street name and do not provide your broker, bank, or nominee that holds your shares with specific voting instructions, then your broker, bank, or nominee may generally vote your shares in their discretion on “routine” matters but not on “non-routine” matters.

    Routine and non-routine proposals

    Proposal 2 is considered to be a routine matter. Therefore, no broker non-votes are expected on this proposal.

    All other proposals described in this Proxy Statement are considered non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on the matter with respect to your shares. This is generally referred to as a “broker non-vote.” Therefore, broker non-votes may exist in connection with all the proposals described in this Proxy Statement other than Proposal 2.

    What constitutes a quorum?

    The presence at the Meeting, in person or by proxy, of holders representing a majority of our outstanding common shares as of the record date for the Meeting, constitutes a quorum at the meeting, permitting us to conduct business at the Meeting.

    Your common shares will be counted as present for the purpose of determining a quorum at the Meeting if you (1) properly vote by proxy (online, by phone, or by mailing a proxy card or a voting instruction form to your broker, fiduciary, or nominee) or (2) are entitled to vote and are present in person at the Meeting. Abstentions and broker non-votes will be treated as present for purposes of determining whether a quorum is present. If a quorum is not present, the chairman of the Meeting or the holders of a majority of common shares present at the Meeting, either in person or by proxy, may adjourn the Meeting to solicit additional proxies and reconvene the Meeting at a later date.

    -4-


     

    If a quorum is present at the Meeting, what vote is required to approve each proposal?

    The election of directors will be determined by a plurality of the votes cast by the shareholders entitled to vote on the election of directors. Accordingly, the nominees receiving the most “FOR” votes from the shares present in person or represented by proxy at the Meeting and entitled to vote on the election of directors will be elected.

    The approval of each of Proposals 2, 3 and 4 requires the affirmative vote of a majority of both: (1) the shares present in person or represented by proxy and voting at the Meeting; and (2) the shares required to constitute a quorum.

    If a quorum is present at the Meeting, what is the effect of withheld votes, abstentions, and broker non-votes on the outcome of a proposal?

    With respect to the election of directors in Proposal 1, neither a “WITHHELD” vote nor a broker non-vote will be counted in determining the outcome of such proposal.

    With respect to each of Proposals 2, 3 and 4, only “FOR” and “AGAINST” votes will be counted for purposes of determining the votes received in connection with each proposal. Broker non-votes and abstentions will have no effect on determining the outcome of a proposal except to the extent that broker non-votes and abstentions results in the number of affirmative votes with respect to such proposal being less than the required quorum.

    Am I entitled to dissenters’ rights or appraisal rights?

    No. Our shareholders are not entitled to dissenters’ rights or appraisal rights on any matter being submitted to shareholders at the Meeting.

    How can I find out the voting results?

    We expect to announce preliminary voting results at the Meeting. Final voting results will be published in a Current Report on Form 8-K to be filed with the SEC within four business days after the Meeting.

    -5-


     

    BOARD OF DIRECTORS

    Set forth below are the names, ages, tenure, and certain biographical information of each of our directors nominated for election at the Meeting. Such information is as of April 18, 2025. For personal reasons, one of our current directors, Mr. Bailey, requested that our Nominating and Corporate Governance Committee consider not nominating him for reelection at the Meeting, and our Nominating and Corporate Governance Committee did not nominate him for reelection. His term on our Board will end at the Meeting.

     

    Name

     

    Age

     

    Director Since

    Michael H. Mulroy

     

    59

     

    October 2014

    Dipti Amin

     

    61

     

    April 2021

    Deborah Andrews

     

    67

     

    April 2014

    Neal C. Bradsher, CFA

     

    59

     

    July 2009

    Brian M. Culley

     

    53

     

    September 2018

    Anula Jayasuriya

     

    68

     

    May 2021

    Angus C. Russell

     

    69

     

    December 2014

     

    Michael H. Mulroy. Mr. Mulroy was appointed Chairman of the Board in April 2024. Mr. Mulroy served as the Chief Executive Officer and a member of the board of directors of Asterias Biotherapeutics, Inc. (AST) from June 2017 until our acquisition of Asterias in March 2019. In April 2020, Mr. Mulroy joined Magtrol Inc., a leading manufacturer of motor test equipment and hysteresis brakes and clutches, on a part-time basis, where he also serves on its board of directors. Prior to joining Asterias, Mr. Mulroy served as a Senior Advisor to CamberView Partners, LLC (now part of PJT Partners Inc.), which assists companies in connection with investor engagement and complex corporate governance issues. Prior to its sale in 2014, Mr. Mulroy served as Executive Vice President, Strategic Affairs and General Counsel and Corporate Secretary of Questcor Pharmaceuticals, Inc. (QCOR). Mr. Mulroy joined Questcor in 2011 as Chief Financial Officer, General Counsel and Corporate Secretary. From January 2017 to July 2019, Mr. Mulroy served as a member of the board of directors of AgeX Therapeutics, Inc. (AGE), a biotechnology company focused on the development and commercialization of novel therapeutics targeting human aging. Mr. Mulroy earned his J.D. degree from the University of California, Los Angeles and his B.A. degree in economics from the University of Chicago. Mr. Mulroy brings to our Board his experience as the Chief Executive Officer of a publicly traded biotechnology company and member of a senior management team of a larger biopharmaceutical company that experienced a period of rapid growth. Mr. Mulroy also brings to our Board his experience in corporate finance and investor relations.

    Dipti Amin, MBBS, FFPM, MRCGP, DCPSA, DCH, DRCOG, DGM. Dr. Amin currently serves as a non-executive director of Ixico plc, a position she has held since October 2023, and as a UK Medical Revalidation Appraiser for Iqvia, a position she has held since 2012. Dr. Amin previously served as a non-executive director of Cambridge Innovation Capital from November 2017 to March 2020, as a director of Maaya Associates Ltd. from August 2017 through the end of 2021, as a non-executive director of Buckinghamshire NHS Trust, from June 2015 to June 2023, and as a non-executive director of the University of Hertfordshire from September 2018 to August 2024. From June 1995 to December 2016, Dr. Amin served at Quintiles Transnational Corporation, a provider of biopharmaceutical development and commercial outsourcing services, in various senior roles within all phases of drug development and most recently as Senior Vice President and Chief Compliance Officer from April 2010 to December 2016. Dr. Amin received her medical degree from Guys and St. Thomas’s Hospitals Medical School of the University of London, her MRCGP from the Royal College of General Practitioners, her FFPM from the Faculty of Pharmaceutical Medicine of the Royal College of Physicians London, her DRCOG form the Royal College of Obstetricians and Gynecologists, her DGM and DCH from the Royal College of Physicians, London and her DCPSA from the Society of Apothecaries of London. Dr. Amin brings to our Board broad experience in clinical pharmacology, ethical issues in clinical research, drug development, ethics and compliance programs as well as leadership and management experience of large, multifunctional, multi-geography, global groups.

    Deborah Andrews. Ms. Andrews currently serves as interim Chief Financial Officer of STAAR Surgical Company (STAA), a leader in the development, manufacture, and marketing of minimally invasive ophthalmic products employing proprietary technologies, a position she has held since March 2025. Ms. Andrews had served as

    -6-


     

    STAAR’s Chief Financial Officer from September 2017 until June 2020, after serving as Vice President, Chief Accounting Officer since 2013. Ms. Andrews also served as STAAR Surgical’s Vice President, Chief Financial Officer from 2005 to 2013, as its Global Controller from 2001 to 2005, and as its Vice President, International Finance from 1999 to 2001. Ms. Andrews previously worked as a senior accountant for a major public accounting firm. Ms. Andrews holds a B.S. degree in accounting from California State University at San Bernardino. Ms. Andrews brings to our Board significant experience in finance, financial reporting, accounting, information systems and security, and auditing, and in management as a senior financial and accounting executive of a public medical device company during a period of significant growth.

    Neal C. Bradsher, CFA. Mr. Bradsher has been President of Broadwood Capital, Inc., a private investment firm, since 2002. Mr. Bradsher holds a B.A. degree in economics from Yale College and is a Chartered Financial Analyst. Mr. Bradsher was a director of Questcor Pharmaceuticals, Inc. (QCOR), from 2004 until Questcor was acquired in 2014. Mr. Bradsher brings to our Board a wealth of experience in finance, management and corporate governance attained through his investments in other companies, including companies in the pharmaceutical, biotechnology, medical device, medical diagnostics, health care services and health care information systems sectors. He has worked with several health care companies to improve their management and governance. Entities that Mr. Bradsher controls have invested in many of Lineage’s financing transactions. Broadwood Capital, Inc. is the general partner of Broadwood Partners, L.P., currently our largest shareholder.

    Brian M. Culley. Mr. Culley joined Lineage as Chief Executive Officer in September 2018 and served as Interim Chief Financial Officer from January 20, 2021 to June 21, 2021 and from July 8, 2022 to November 14, 2022. Prior to joining Lineage, Mr. Culley served from August 2017 to September 2018 as interim Chief Executive Officer at Artemis Therapeutics, Inc. (ATMS). Mr. Culley previously served as Chief Executive Officer of Mast Therapeutics, Inc. (MSTX), from 2010, and was also a member of its board of directors from 2011, until Mast’s merger with Savara, Inc. (SVRA) in April 2017. Mr. Culley served from 2007 to 2010 as Mast’s Chief Business Officer and Senior Vice President, from 2006 to 2007 as Mast’s Senior Vice President, Business Development, and from 2004 to 2006 as Mast’s Vice President, Business Development. From 2002 until 2004, Mr. Culley was Director of Business Development and Marketing for Immusol, Inc. From 1999 until 2000, he worked at the University of California, San Diego (UCSD) Department of Technology Transfer & Intellectual Property Services and from 1996 to 1999 he conducted drug development research for Neurocrine Biosciences, Inc. (NBIX). Mr. Culley served on the Board of Orphagen Pharmaceuticals, Inc. from May 2017 until December 2022. Mr. Culley has more than 30 years of business and scientific experience in the life sciences industry. He received a B.S. in biology from Boston College, a masters in biochemistry and molecular biology from the University of California, Santa Barbara, and an M.B.A. from The Johnson School of Business at Cornell University. Mr. Culley brings to our Board significant knowledge of the biotechnology industry and extensive experience as an executive and board member of publicly traded pharmaceutical companies.

    Anula Jayasuriya, M.D., Ph.D., M.B.A. Dr. Jayasuriya is the Co-Founder and Managing Director of Kidron Capital, a venture fund focused on investments in advancing women’s health, a position she has held since January 2022. She is also the Co-Founder and Managing Director of EXXclaim Capital, a venture fund also focused on innovation in women’s health, a position she has held since July 2017. In 2006, she co-founded the Evolvence India Life Science Fund, managing the fund until July of 2017. From 2001 to 2002, Dr. Jayasuriya was a partner with Skyline Ventures in Palo Alto, and prior to that with the German/US venture capital firm TVM, in San Francisco. Her prior positions include VP, Business Development at Genomics Collaborative, Inc., from 1999 to 2000, and VP, Global Drug Development at Hoffman-La Roche from 1994 to 1998. Dr. Jayasuriya serves as a director of Jaguar Health, Inc. (JAGX). Dr. Jayasuriya received a B.A. from Harvard University summa cum laude, a M. Phil. in pharmacology from the University of Cambridge, an M.D. and Ph.D. (in Microbiology and Molecular Genetics) from Harvard Medical School and an M.B.A. with distinction from Harvard Business School. Dr. Jayasuriya brings to our Board business, scientific, and medical experience earned throughout her career as a pharmaceutical company executive, private equity executive, and venture capitalist, providing her with a broad experience base spanning clinical, executive, entrepreneurial, and financial roles.

    Angus C. Russell. Mr. Russell served as the Chief Executive Officer of Shire plc (SHPG), a biopharmaceutical company, from June 2008 to April 2013. Mr. Russell served as the Chief Financial Officer of Shire from 1999 to 2008 and also served as its Principal Accounting Officer and Executive Vice President of Global Finance. Prior to joining Shire, Mr. Russell served at ICI, Zeneca, and AstraZeneca for 19 years, most recently as Vice President of Corporate

    -7-


     

    Finance at AstraZeneca plc (AZN). Mr. Russell also serves as a member of the Board of Directors of Structure Therapeutics, Inc. a position he has held since August 2024. Mr. Russell served as Chairman of the Board of Directors of Revance Therapeutics, Inc. (RVNC) from March 2014 until it was acquired by Crown Laboratories, Inc. in February 2025. Mr. Russell served as a director of Shire plc from December 1999 to April 2013, as a director of Mallinckrodt plc (MNK) from August 2014 to June 2022, and as a director of Therapeutics MD, Inc. (TXMD) from March 2015 to December 2022. Mr. Russell holds an honorary Doctor of Business Administration from Coventry University; U.K. Mr. Russell brings to our Board numerous years of experience as a Chief Executive Officer of an international publicly traded specialty biopharmaceutical company and his substantial experience in information systems and security and as an officer and director in the specialty pharmaceutical industry.

    Non-Employee Director Compensation

    We compensate our non-employee directors for their service on our Board and on its committees as described below. In addition, all non-employee directors are entitled to reimbursements for their out-of-pocket expenses incurred in attending our Board and committee meetings.

    Annual Cash Fees

    Each of our non-employee directors receives cash fees for service on our Board and on its committee on which the director serves. The fees are paid in four equal quarterly installments, pro-rated based on each director’s service on our Board or applicable committee during the applicable quarter, other than the fees paid to the chair of the Financial Strategy Committee, which is paid monthly in arrears. Our Compensation Committee and our Board assess our non-employee director compensation at least annually and consider market data provided by Anderson Pay Advisors, LLC (“Anderson”), the independent consultant to our Compensation Committee, in making non-employee director compensation decisions. The following table shows the annual cash fees currently payable to our non-employee directors for their service on our Board and on committees of our Board:

     

     

    Annual Fees ($)(1)

     

    Chair of the Board

     

     

    90,000

     

    Director other than Chair

     

     

    50,000

     

    Audit Committee Chair

     

     

    20,000

     

    Audit Committee Member other than Chair

     

     

    10,000

     

    Compensation Committee Chair

     

     

    15,000

     

    Compensation Committee Member other than Chair

     

     

    7,500

     

    Nominating and Corporate Governance Committee Chair

     

     

    15,000

     

    Nominating and Corporate Governance Committee Member other than Chair

     

     

    7,500

     

    Financial Strategy Committee Chair

     

     

    15,000

     

    Financial Strategy Committee Member other than Chair

     

     

    7,500

     

     

    (1)
    Effective July 1, 2024, the cash fees: (a) for the Chair of the Board decreased from $100,000 to $90,000 and (b) for the Chair of the Finance Strategy Committee decreased from $60,000 to $15,000. Mr. Culley currently serves as Chair of the Finance Strategy Committee and is not receiving any fees for such service.

    Equity Awards

    In addition to cash fees, we also grant all non-employee directors an annual stock option to purchase our common shares. During 2024, the annual stock option grant was for 75,000 common shares. All grants are made under the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan. The options vest and become exercisable one year after the grant date subject to the director’s continued service through the vesting date.

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    2024 Non-Employee Director Compensation

    The following table summarizes certain information concerning the compensation during our fiscal year ended December 31, 2024 to each person who served as a non-employee director during the year and who was not our employee on the date the compensation was earned.

     

    2024 Director Compensation Table

     

    Name

     

    Fees Earned
    or Paid in
    Cash

     

     

    Option Award(1)

     

     

    Total

     

    Deborah Andrews

     

    $

    77,500

     

     

    $

    71,558

     

     

    $

    149,058

     

    Dipti Amin

     

    $

    57,500

     

     

    $

    71,558

     

     

    $

    129,058

     

    Don M. Bailey

     

    $

    67,500

     

     

    $

    71,558

     

     

    $

    139,058

     

    Neal C. Bradsher

     

    $

    72,500

     

     

    $

    71,558

     

     

    $

    144,058

     

    Anula Jayasuriya

     

    $

    57,500

     

     

    $

    71,558

     

     

    $

    129,058

     

    Alfred D. Kingsley (2)

     

    $

    53,668

     

     

    $

    —

     

     

    $

    53,668

     

    Michael H. Mulroy

     

    $

    107,679

     

     

    $

    71,558

     

     

    $

    179,237

     

    Angus C. Russell

     

    $

    71,250

     

     

    $

    71,558

     

     

    $

    142,808

     

     

    (1)
    The dollar amounts in this column represent the aggregate fair market value of such awards determined based on the price of our common shares on the grant date in accordance with ASC Topic 718, Compensation-Stock Compensation (ASC Topic 718). See Note 11 Stock-Based Awards to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for details as to the assumptions used to determine the fair value of the awards. As of December 31, 2024, the aggregate number of common shares subject to stock options outstanding for Mses. Andrews, Amin and Jayasuriya and Messrs. Bailey, Bradsher, Mulroy, and Russell was 305,000, 315,000, 315,000, 365,000, 305,000, 305,000 and 305,000, respectively.
    (2)
    Mr. Kingsley passed away in April 2024.

     

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    CORPORATE GOVERNANCE

    General

    We believe that good corporate governance is important to ensure that Lineage is managed for the long-term benefit of its shareholders. We periodically review our corporate governance policies and practices.

    The Board of Directors’ Role in Risk Management

    Our Board has responsibility for the oversight of Lineage’s risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business, and the steps we take to manage them. The risk oversight process includes receiving regular reports from Board committees and members of senior management to enable our Board to understand Lineage’s risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic, cybersecurity and reputational risk.

    Our Audit Committee, which is comprised solely of independent directors, has oversight of risks related to information security (including cybersecurity) and (i) regularly reviews our information security policies, systems, and controls at its regularly scheduled meetings, (ii) regularly assesses the potential impact of exposure to such risk on our business, financial results, operations and reputation, (iii) regularly reviews steps management has taken to monitor and mitigate such exposures. Our Audit Committee also provides oversight of our financial reporting processes and the annual audit of our consolidated financial statements and (iv) regularly briefs our Board on information security matters. In addition, our Audit Committee must review and approve any business transactions between Lineage and its executive officers, directors, and shareholders who beneficially own 5% or more of our common shares (“5% Shareholders”).

    Board Leadership Structure

    The role of the Chair of our Board is separate from our Chief Executive Officer. We believe that separation of the positions of chair and chief executive officer reinforces the independence of our Board in its oversight of our business and affairs and also allows our Chief Executive Officer to provide his undivided attention to our business. In addition, we believe that separation of the positions of chair and chief executive officer creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of our Board to monitor whether management’s actions are in our best interests and in the best interests of our shareholders. As a result, we believe that having the positions of chair and chief executive officer separated can enhance the effectiveness of our Board as a whole.

    Director Independence

    Our Board has determined that Ms. Andrews, Dr. Amin, Mr. Bailey, Mr. Bradsher, Dr. Jayasuriya, Mr. Mulroy, and Mr. Russell qualify as “independent” directors under Section 803(A) of the NYSE American Company Guide, that the members of our Audit Committee meet the additional independence standards under Section 803(B)(2) of the NYSE American Company Guide and Section 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the members of our Compensation Committee meet the additional independence standards under Section 805(c)(1) of the NYSE American Company Guide. In making its independence determinations, our Board considered (i) the transactions, relationships and arrangements described below under “Certain Relationships and Related Transactions,” (ii) the compensation described above under “Board of Directors - Non-Employee Director Compensation,” (iii) with respect to Mr. Bradsher, his relationship with Broadwood Capital, Inc., our largest shareholder, which beneficially owns more than 20% of our common shares; and (iv) with respect to Ms. Andrews, her appointment in March 2025 as Interim Chief Financial Officer of STAAR Surgical Company, of which Broadwood Capital, Inc. currently owns approximately 22% of its outstanding shares and is its largest shareholder.

    Mr. Culley does not qualify as an “independent” director under Section 803(A) of the NYSE American Company Guide because he is our Chief Executive Officer.

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    Board Experience

    Our Board is currently comprised of people with substantial experience in biotechnology, the pharmaceutical industry, corporate management, finance, and law, and other perspectives that we believe expand our Board’s understanding of the needs and viewpoints of our employees, shareholders, and other stakeholders.

    Board Committees

    Our Board has an Audit Committee, a Nominating and Corporate Governance Committee, and a Compensation Committee. The members of each of these committees are independent in accordance with Section 803(A) of the NYSE American Company Guides and Section 10A-3 under the Exchange Act. The members of our Audit Committee and Compensation Committee must also meet the independence tests applicable to members of those committees under the NYSE American Company Guide. Our Board also has a Financial Strategy Committee, the members of which are not required to be independent. From time to time, our Board may establish ad hoc committees to address particular matters.

    The table below sets forth the composition of the committees of our Board as of April 18, 2025:

     

     

     

    Audit

     

    Compensation

     

    Nominating
    & Corporate
    Governance

     

    Financial
    Strategy

    Dipti Amin

     

     

     

    Member

     

     

     

     

    Deborah Andrews

     

    Chair

     

    Member

     

     

     

     

    Don M. Bailey

     

    Member

     

     

     

    Member

     

     

    Neal C. Bradsher, CFA

     

     

     

     

     

    Chair

     

    Member

    Brian M. Culley

     

     

     

     

     

     

     

    Chair

    Anula Jayasuriya

     

     

     

     

     

    Member

     

     

    Michael H. Mulroy

     

    Member

     

    Member

     

     

     

    Member

    Angus C. Russell

     

    Member

     

    Chair

     

     

     

     

     

    Audit Committee

    Our Audit Committee held 8 meetings during 2024. The purpose of our Audit Committee is to recommend the engagement of our independent registered public accounting firm, to review their performance and the plan, scope, and results of the audit, and to review and approve the fees we pay to our independent registered public accounting firm. Our Audit Committee also will review our accounting and financial reporting procedures and controls, and all transactions between us and our executive officers, directors, and 5% Shareholders. Our Audit Committee also has oversight of risks related to information security (including cybersecurity) and regularly (i) reviews our information security policies, systems, and controls at its regularly scheduled meetings and as requested by our Audit Committee from time to time, (ii) assesses the potential impact of exposure to such risk on our business, financial results, operations and reputation, (iii) reviews steps management has taken to monitor and mitigate such exposures, and (iv) briefs our Board on information security matters. See Item 1C., Cybersecurity, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information regarding cybersecurity risk management strategy and governance. Our Audit Committee has a written charter that requires the members of our Audit Committee to be directors who are independent in accordance with Section 803(A) and Section 803(B) of the NYSE American Company Guide and Section 10A-3 under the Exchange Act. A copy of the charter of our Audit Committee is posted on our website at https://investor.lineagecell.com/corporate-governance/highlights.

    Our Board has determined that each of Ms. Andrews and Messrs. Mulroy, Russell and Bailey meet the criteria of an “audit committee financial expert” within the meaning of the SEC’s regulations. Ms. Andrews’ expertise is based on her experience as the current interim Chief Financial Officer, and former Chief Financial Officer, of STAAR Surgical Company, and in other financial roles with that company, including as its Chief Accounting Officer, as well as her experience as a senior accountant for a major accounting firm. Mr. Mulroy’s expertise is based on his experience as the former Chief Executive Officer of Asterias Biotherapeutics, Inc. and as the former Chief Financial Officer of Questcor Pharmaceuticals, Inc. Mr. Russell’s expertise is based on his experience as the former Chief Executive Officer and Chief Financial Officer of Shire plc. Mr. Bailey’s expertise is based on his experience as the former

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    President and Chief Executive Officer of Questcor Pharmaceuticals, Inc. and former Chief Executive Officer of Comarco, Inc.

    Nominating and Corporate Governance Committee

    Our Nominating and Corporate Governance Committee met 6 times during 2024. The purpose of our Nominating and Corporate Governance Committee is to recommend to our Board individuals qualified to serve on our Board and on committees of our Board, and to make recommendations to our Board on corporate governance matters. A copy of our Nominating and Corporate Governance Committee Charter is posted on our website at https://investor.lineagecell.com/corporate-governance/highlights. See the discussion under the heading “Director Nomination Process,” below, for information regarding our director nomination process.

    Compensation Committee

    Our Compensation Committee met 5 times during 2024. All members of our Compensation Committee qualify as “independent” in accordance with Section 803(A) and Section 805(c)(1) of the NYSE American Company Guide. Our Compensation Committee oversees our compensation arrangements and practices, including our non-employee director compensation program and our executive compensation program, and oversees our employee benefit plans and administers our 2021 Equity Incentive Plan. Our Compensation Committee determines or recommends to our Board the terms and amount of executive compensation and grants of equity-based awards to executives, key employees, consultants, and independent contractors. The Chief Executive Officer may make recommendations to our Compensation Committee concerning executive compensation and performance, but our Compensation Committee makes its own determination or recommendation to our Board with respect to the amount and components of compensation, including salary, bonus, and equity awards to executive officers, generally taking into account factors such as company performance, individual performance, and compensation paid by peer group companies. A copy of our Compensation Committee Charter is posted on our website at https://investor.lineagecell.com/corporate-governance/highlights.

    During 2024, our Compensation Committee engaged Anderson to provide compensation consulting services and advice to our Compensation Committee, which included market survey information and competitive market trends in employee, executive, and director compensation programs. Anderson also made recommendations to our Compensation Committee with respect to components of our non-employee director compensation program and our executive compensation program, such as salary, bonus, and equity awards, and the target market pay percentiles in which executive compensation should fall so Lineage can be competitive in executive hiring and retention. In connection with the compensation consultant services provided by Anderson, our Compensation Committee assessed the independence of Anderson and does not believe Anderson’s work has raised any conflict of interest.

    Financial Strategy Committee

    Our Financial Strategy Committee met 8 times during 2024. Our Financial Strategy Committee regularly meets with members of management to discuss our strategy pertaining to investor and shareholder relations and financial strategy, including plans for raising capital.

    Board and Committee Meeting Attendance

    During the fiscal year ended December 31, 2024, our Board met 7 times and none of our directors attended fewer than 75% of the meetings of our Board and its committees on which they served.

    Meetings of Non-Employee Directors

    Our non-employee directors meet no less frequently than quarterly in executive session, without any directors who are our officers or employees present. These meetings allow the non-employee directors to engage in open and frank discussions about corporate governance and about our business, operations, finances, and management performance.

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    Director Nomination Process

    Our Nominating and Corporate Governance Committee has not set any specific minimum qualifications that a prospective nominee would need to be recommended by our Nominating and Corporate Governance Committee to serve on our Board. Rather, in evaluating any new nominee or incumbent director, our Nominating and Corporate Governance Committee will consider whether the particular person has the knowledge, skills, experience, and expertise needed to manage our affairs in light of the knowledge, skills, experience, and expertise of the other members of our Board as a whole. Our Nominating and Corporate Governance Committee will also consider whether a nominee or incumbent director has any conflicts of interest with Lineage that might conflict with our Code of Ethics or that might otherwise interfere with the ability of the nominee to perform their duties in a manner that is in the best interest of Lineage and its shareholders. Our Nominating and Corporate Governance Committee will also consider whether including a prospective director on our Board will result in a Board composition that complies with: (1) applicable state corporate laws; (2) applicable federal and state securities laws; and (3) the rules of the SEC and each stock exchange on which our shares are listed.

    We do not have a formal policy regarding consideration of director candidate recommendations from our shareholders. However, any recommendations received from shareholders have been and will be evaluated in the same manner that potential nominees suggested by members of our Board, management or other parties are evaluated. Accordingly, our Board believes a formal policy regarding consideration of such recommendations is unnecessary at this time.

    Shareholders who wish to recommend a director candidate for our Nominating and Corporate Governance Committee to consider must notify our Nominating and Corporate Governance Committee of the nomination in writing at least 120 days before the date of the next annual meeting. The nominee must also provide our Nominating and Corporate Governance Committee with all information that it may reasonably request regarding the nominee, including but not limited to the candidate’s name and background information, no later than 90 days prior to the annual meeting, in order to allow for sufficient time to consider the recommendation. In addition, nominating shareholders and nominees must satisfy the requirements set forth in our bylaws, which can be found at https://investor.lineagecell.com/corporate-governance/highlights. Furthermore, any notice of director nomination submitted to us must include the supplementary information required by Rule 14a-19(b) under the Exchange Act. See the section titled “Shareholder Proposals and Nominations,” below, for additional information.

    Our Board and our Nominating and Corporate Governance Committee have not adopted specific policies with respect to a particular mix of skills, experience, expertise, perspectives, and background that nominees should have. However, our Board and Nominating and Corporate Governance Committee believe in the benefits of diversity of skills, experience, expertise, perspectives, and background in its members and are cognizant of the value of experience in international markets and operations given the growing globalization of the pharmaceutical and biotechnology industries and world-wide focus on cell therapeutics research. See “Board Experience,” above.

    Shareholder Communications with Directors

    Shareholders wishing to communicate with our Board or with individual directors may do so by following the procedure described under the heading “Procedures for Lineage Security Holder Communications to the Board of Directors” available on our website at https://investor.lineagecell.com/corporate-governance/highlights.

    Code of Ethics

    We adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, other executive officers, and directors. The purpose of the Code of Ethics is to promote: (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with or submit to the SEC and in our other public communications; (3) compliance with applicable governmental rules and regulations; (4) prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and (5) accountability for adherence to the Code of Ethics. A copy of the Code of Ethics is posted on our website at https://investor.lineagecell.com/corporate-governance/highlights. We intend to disclose any future amendments to

    -13-


     

    certain provisions of the Code of Ethics, and any waivers of those provisions granted to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, by posting the information on our website within four business days following the date of the amendment or waiver.

    Insider Trading Policy

    We have adopted an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable NYSE American listing rules. A copy of our insider trading policy is filed as Exhibit 19.1 to our Annual Report on Form 10-K for the year ended December 31, 2024. In addition, it is our policy to comply with applicable laws, rules and regulations, and any applicable NYSE American listing rules when engaging in transactions in our own securities.

    Policies Regarding Short-Sales, Hedging, and Pledging

    We consider it improper and inappropriate for our directors and employees, including our officers, and entities controlled by any of the foregoing (collectively, “insiders”) to engage in short-term or speculative transactions in our securities. Our insider trading policy prohibits our insiders from (1) engaging in “short sales” of our securities, (2) engaging in any kind of hedging transaction that could reduce or limit their holdings, ownership or interest in our securities, including the purchase of financial instruments, including prepaid variable forward contracts, instruments for the short sale or purchase or sale of call or put options, equity swaps, collars, or units of exchangeable funds (except for broadly diversified indexes or index exchange-traded funds), that are designed to or that may reasonably be expected to have the effect of hedging or offsetting a decrease in the market value of any of our securities, (3) holding our securities in a margin account and (4) pledging our securities as collateral for a loan.

    Stock Ownership Guidelines

    Our Board has adopted stock ownership guidelines due to its belief that our directors should own and hold our common shares to further align their interests with the long-term interests of our shareholders. Under these guidelines, our directors are required to hold at least 10,000 common shares three years following the date of their election to our Board. As of April 18, 2025, all our directors met or exceeded the provisions of our stock ownership guidelines. A copy of these guidelines is posted on our website at https://investor.lineagecell.com/corporate-governance/highlights.

    Director Attendance at Annual Meeting

    Directors are encouraged to attend our annual meetings of shareholders, although they are not formally required to do so. At last year’s annual meeting of shareholders, seven of our eight directors attended the meeting.

    Report of the Audit Committee on the Audit of Our Consolidated Financial Statements

    The following is the report of the Audit Committee of the Board with respect to Lineage’s audited consolidated financial statements for the year ended December 31, 2024.

    The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that Lineage specifically incorporates such information by reference in such filing.

    The Audit Committee, among other things, assists with the oversight of our accounting and financial reporting processes.

    The members of the Audit Committee held discussions with our management and representatives of Moss Adams, LLP (“Moss Adams”), our independent registered public accounting firm, concerning the audit of our consolidated financial statements for the year ended December 31, 2024. The independent public accountants are responsible for performing an independent audit of our consolidated financial statements and issuing an opinion on

    -14-


     

    the conformity of those audited consolidated financial statements with generally accepted accounting principles in the United States. Moss Adams discussed with the Audit Committee the adequacy of our internal control over financial reporting. The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of Lineage’s financial statements. The Audit Committee also met on a quarterly basis with our independent registered public accounting firm during 2024 to review and discuss our consolidated financial statements for the quarter and the adequacy of internal control over financial reporting.

    In the performance of its oversight function and in connection with the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the Audit Committee:

    •
    reviewed and discussed the audited financial statements as of and for the fiscal year ended December 31, 2024 with our management and with representatives of Moss Adams;
    •
    discussed with representatives of Moss Adams the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC;
    •
    received and reviewed the written disclosures and the letter from Moss Adams required by applicable requirements of the PCAOB regarding Moss Adams’ communications with the Audit Committee concerning independence, and discussed with representatives of Moss Adams its independence from Lineage; and
    •
    based on the reviews and discussions described in the bullet points above, the Audit Committee unanimously recommended to our Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2024 for filing with the SEC.

    The Audit Committee:

    Deborah Andrews (Chair)

    Michael H. Mulroy

    Angus C. Russell

    Don M. Bailey

    -15-


     

    COMMITMENT TO CORPORATE RESPONSIBILITY AND SUSTAINABILITY

    Lineage is a clinical-stage biotechnology company developing novel allogeneic, or “off-the-shelf,”cell therapies for serious neurological and ophthalmic conditions. Our programs are based on our proprietary, cell-based technology platform and associated development, formulation, delivery and manufacturing capabilities. From this platform, we design, develop, manufacture, and test specialized human cells with anatomical and physiological functions similar or identical to cells found naturally in the human body. The cells we manufacture are produced by applying directed differentiation processes to established, well characterized, and self-renewing pluripotent cell lines. These processes are based on specific developmental lineages and generated cells with desired characteristics. Functional cells developed from such lineages and which are relevant to the underlying condition are transplanted into patients in an effort to (a) replace or support cells that are absent or dysfunctional due to degenerative disease, aging, or traumatic injury, and (b) restore or enhance the patient’s functional activity. Lineage believes it has a responsibility to serve, support, and be transparent with its stakeholders, and is committed to effectively managing corporate responsibility and sustainability issues.

    Our Nominating and Corporate Governance Committee provides oversight of our practices and reporting with respect to sustainability matters. In 2022, we established a task force, made up of key executives and cross-functional subject matter experts across our company to focus on corporate responsibility and sustainability matters. Our Board and its committees, working with the task force, provides strategic direction for our sustainability efforts and approves and oversees the selection and implementation of material sustainability initiatives. In 2025 we updated our Sustainability Accounting Standards Board (SASB) Corporate Sustainability Report, providing an overview of our sustainability programs and reporting on certain key metrics under the SASB framework. The report is available at https://investor.lineagecell.com/static-files/9423ae35-b119-4428-b366-608c4b50a659.

    In 2025, we continued to engage with our internal and external stakeholders to help further inform our future direction and priorities. The three areas of focus for our sustainability program and strategy are (1) environmental stewardship, (2) social responsibility, and (3) corporate governance. Lineage is focused not just on advancing its sustainability efforts, but also on increasing transparency and communications concerning those efforts.

    Environmental Impact

    Lineage is committed to responsible environmental practices that include conservation of natural resources, pollution prevention, and reduction of waste. As environmental concerns become more prevalent, we recognize the need to comply with increased regulations and stricter environmental standards. While our environmental footprint is relatively small, we are striving to employ more sustainable practices. Examples of our commitment to responsible environmental practices include:

    •
    Reusing and recycling our resources;
    •
    Reducing our water usage;
    •
    Supporting ethical treatment of animals in research; and
    •
    Responsibly disposing of our limited waste and prioritizing responsible carbon footprint principles as our facility needs evolve.

    We have implemented ways to boost efficiency, such as utilizing high-efficiency electrical equipment including LED and motion detector lighting and high-efficiency HVAC units. Our headquarters are located in a facility that uses recycled water for irrigation. We also maintain formal hazardous waste and medical waste disposal policies.

    Social Responsibility

    Our employees are our most important asset. We work hard to create a rewarding and supportive environment that empowers our employees to thrive and their skills, experiences and contributions are valued and recognized. Lineage provides comprehensive benefits to meet the needs of employees in each geography. Components of these benefit programs include medical insurance, including PPO and HMO options and mental health services—with contributions to health-related premiums for employees and dependents; Healthcare Flexible Spending Accounts

    -16-


     

    (FSA); short-term and long-term disability; and a 401(k) savings plan with 5% employer match and pension programs specific to non-US employees.

    Our compensation program is designed to attract, retain, and reward performance and align incentives with achievement of our strategic plan. In addition to base salary and benefits, Lineage regular employees participate in incentive plans that support our organizational philosophy of allowing employees to share in our performance and success.

    Responsible Governance

    As a publicly-traded company, it is incumbent upon us to assure that our operations are conducted in a manner that is supportive of the entire community in which we operate. Our Board and senior leadership actively support and promote sound corporate governance and risk management across the company. We believe that good corporate governance is important to ensure that Lineage is managed for the long-term benefit of its shareholders.

    Ethics and Business Conduct

    We are committed to conducting our business in a manner that is fair, ethical, and responsible to earn and maintain the trust of our stakeholders. Our Code of Conduct and Ethics requires all of our directors, officers, and employees to conduct business in an ethical manner and in compliance with all applicable laws, rules, and regulations. Through the oversight of our Audit Committee, our management oversees compliance with applicable laws and regulations and coordinates with subject matter experts throughout the business to identify, monitor, and mitigate compliance risks. Some highlights of our Ethics & Compliance program include:

    •
    We maintain and disclose an insider trading policy.
    •
    We do not make contributions to any political campaigns, organizations, or parties.
    •
    We maintain a “Whistleblower Hotline.”

    Risk Management

    Our Board has responsibility for oversight of our risk management processes and regularly discusses with management our major risk exposures and strategies. We have implemented risk management programs designed to ensure compliance with applicable laws and regulations governing ethical business practices, including our relationships with suppliers and business partners, and our industry.

    Our Audit Committee has oversight of our information security and regularly reviews our policies, systems, and controls. Our IT team works 24/7 and uses a combination of tools and technologies to help protect our stakeholder’s data. Our team members are responsible for complying with our data security standards and complete mandatory annual training to understand the behaviors and technical requirements necessary to keep sensitive information secure. We also offer ongoing education for team members to recognize and report suspicious activity. See Item 1C., Cybersecurity, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information regarding cybersecurity risk management strategy and governance.

    -17-


     

    EXECUTIVE OFFICERS

    Set forth below are the names, ages, offices held, tenure and certain biographical information of each of our executive officers as of April 18, 2025.

     

    Name

     

    Age

     

    Office(s)

     

    Officer Since

    Brian M. Culley

     

    53

     

    Chief Executive Officer and Director

     

    September 2018

    Jill A. Howe

     

    49

     

    Chief Financial Officer

     

    November 2022

    George A. Samuel III

     

    44

     

    General Counsel and Corporate Secretary

     

    September 2021

     

    Mr. Culley’s biographical information is included above with those of the other members of our Board.

    Jill A. Howe. Ms. Howe joined Lineage as Chief Financial Officer on November 14, 2022. Before joining Lineage, Ms. Howe most recently served as the Chief Financial Officer of DTx Pharma, Inc., a biotechnology company, a position she held from June 2021 through July 2022. Prior to joining DTx Pharma, from January 2018 to June 2021, Ms. Howe served as Vice President of Finance and Treasurer for Gossamer Bio, Inc. (Nasdaq: GOSS), a clinical-stage biopharmaceutical company. Prior to Gossamer Bio, she served as Controller & Director of Finance of Amplyx Pharmaceuticals, Inc., a biopharmaceutical company, from March 2016 to December 2017. She previously held positions, including as Controller and Director of Finance, at Receptos, Inc., a biotechnology company, and at Somaxon Pharmaceuticals, Inc., a specialty pharmaceutical company. Since October 2021, Ms. Howe has served on the board of directors of Codagenix Inc., and from November 2021 to March 2025, Ms. Howe served on the board of directors of, and as the chair of the audit committee and as a member of the nominating committee of, Biora Therapeutics, Inc. (Nasdaq: BIOR). Ms. Howe earned a B.S. in Accountancy from San Diego State University.

    George A. Samuel III. Mr. Samuel joined Lineage as General Counsel and Corporate Secretary on September 1, 2021. Prior to joining Lineage, Mr. Samuel most recently served as Director, Senior Counsel for Lytx, Inc., where he managed the commercial legal operations for an international video telematics SaaS company, a position he held from January 2020 to August 2021. Prior to that, Mr. Samuel served as VP, General Counsel and Corporate Secretary for Cardiff Oncology, Inc. (formerly known as Trovagene, Inc.), a clinical-stage biotechnology company focused on developing treatments in oncology. In his career, he advised on strategic, business development and operational decisions; oversaw capital raising efforts, regulatory compliance as well as SEC reporting; and managed intellectual property, including technology transfer and licensing. Mr. Samuel has also practiced corporate law at Cooley LLP, DLA Piper LLP, and Winston & Strawn LLP, where he served as outside counsel to public and private companies in a variety of commercial transactions. Mr. Samuel received a J.D. from Columbia University School of Law, and a B.A. in Philosophy from Tufts University and is a member of the State Bar of California and New York.

    -18-


     

    EXECUTIVE COMPENSATION

    Overview

    We are a “smaller reporting company” under Item 10 of Regulation S-K promulgated under the Exchange Act and the following compensation disclosure is intended to comply with the requirements applicable to smaller reporting companies. Although the rules allow us to provide less detail about our executive compensation program, our Compensation Committee is committed to providing the information necessary to help our shareholders understand its executive compensation-related decisions. Accordingly, this section includes supplemental narratives that describe our executive compensation practices.

    Our Compensation Committee oversees our compensation and employee benefit plans and practices, including executive compensation arrangements and incentive plans and awards of stock options and other equity-based awards under the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). Our Compensation Committee determines, or recommends to our Board for its determination, the terms and amount of executive compensation and grants of equity-based awards to executives, employees, consultants, and independent contractors. The Chief Executive Officer may make recommendations to our Compensation Committee concerning executive compensation and performance, but our Compensation Committee makes its own determination or recommendation to our Board with respect to the amount and components of compensation, including salary, bonus, target bonus percentages, and equity awards to executive officers, generally considering factors such as company performance, individual performance, and compensation paid by peer group companies.

    Our executive compensation programs are designed to:

    •
    attract, motivate, and retain highly qualified executives;
    •
    align management and shareholder interests by tying a substantial percentage of executives’ compensation to financial performance of Lineage and its subsidiaries through the grant of equity awards;
    •
    reward superior performance by basing decisions regarding cash incentive compensation on the overall performance of executives; and
    •
    compensate executives at levels competitive with peer companies.

    With respect to compensation matters for 2024, our Compensation Committee engaged Anderson to provide compensation consulting services and advice to our Compensation Committee, which included reviewing the peer group of companies used in evaluating executive and director compensation; providing information on executive and director compensation market trends; collecting and analyzing market pay data on director and executive compensation; and, providing recommendations on our executive and director compensation programs. Anderson also made recommendations to our Compensation Committee with respect to pay mix components such as salary, bonus, and equity awards, and the target market pay percentiles in which executive compensation should fall so we can be competitive in executive hiring and retention.

    -19-


     

    In reviewing each executive’s overall compensation, our Compensation Committee considers an aggregate view of base salary and bonus opportunities, equity incentive grants, and the dollar value of benefits and perquisites. These factors are balanced against our financial position and capital resources. In making 2024 compensation decisions, our Compensation Committee reviewed market data for each named executive officer’s position, from the following peer group companies:

     

    4D Molecular Therapeutics, Inc.

     

    Cartesian Therapeutics, Inc.

     

    MeiraGTx Holdings plc

    Adverum Biotechnologies, Inc.

     

    Century Therapeutics, Inc.

     

    Nkarta, Inc.

    Agenus Inc.

     

    Fate Therapeutics, Inc.

     

    Poseida Therapeutics, Inc.

    Altimmune, Inc.

     

    Geron Corporation

     

    REGENEXBIO Inc.

    AnaptysBio, Inc.

     

    Gritstone bio, Inc.

     

    Sana Biotechnology, Inc.

    BioAtla, Inc.

    Harpoon Therapeutics, Inc.

    Terns Pharmaceuticals, Inc.

     

     

    Vor Biopharma Inc.

     

    The peer group was recommended by Anderson and consisted of companies operating in the biopharmaceutical/biotechnology industry and generally had fewer than 150 employees, market capitalization between $150 million and $750 million, and a lead development program in Phase 2. The stage of clinical development of ourselves and many of our peers renders us and them pre-commercial, and so revenues were not a meaningful factor considered in selecting our peer group. Some companies in the peer group were outside of one or more of these parameters but were included because their business areas of focus were similar to ours.

    Summary Compensation Table

    The table below sets forth the compensation earned or paid to our executive officers identified below, who under SEC rules are considered our named executive officers, for 2024. Under SEC rules, the following individuals are considered a company’s named executive officers: (1) all individuals serving as the company’s principal executive officer or acting in a similar capacity during the last completed fiscal year, regardless of compensation level, which for us was Mr. Culley; (2) the company’s two most highly compensated executive officers other than its principal executive officer who were serving as executive officers at the end of the last completed fiscal year, which for us were Ms. Howe and Mr. Samuel; and (3) up to two additional individuals for whom disclosure would have been provided pursuant to the preceding clause (2) but for the fact that the individual was not serving as an executive officer of the company at the end of the last completed fiscal year. There was no individual who fit the description in clause (3) of the preceding sentence for 2024.

     

    2024 Summary Compensation Table

     

    Name and Principal Position

     

    Fiscal
    Year

     

    Salary
    ($)

     

     

    Option
    Awards
    ($)
    (1)

     

     

    Non-Equity Incentive Plan Compensation ($)(2)

     

     

    All Other
    Compensation
    ($)
    (3)

     

     

    Total
    ($)

     

    Brian M. Culley

     

    2024

     

    $

    665,100

     

     

    $

    1,502,900

     

     

    $

    349,200

     

     

    $

    17,250

     

     

    $

    2,534,450

     

    Chief Executive Officer

     

    2023

     

    $

    639,500

     

     

    $

    1,918,430

     

     

    $

    330,700

     

     

    $

    16,500

     

     

    $

    2,905,130

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Jill A. Howe

     

    2024

     

    $

    431,600

     

     

    $

    514,150

     

     

    $

    151,100

     

     

    $

    17,250

     

     

    $

    1,114,100

     

    Chief Financial Officer

     

    2023

     

    $

    415,000

     

     

    $

    151,455

     

     

    $

    155,900

     

     

    $

    16,500

     

     

    $

    738,855

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    George A. Samuel III

     

    2024

     

    $

    431,200

     

     

    $

    514,150

     

     

    $

    151,000

     

     

    $

    17,250

     

     

    $

    1,113,600

     

    General Counsel and Corporate Secretary

     

    2023

     

    $

    381,908

     

     

    $

    656,305

     

     

    $

    156,100

     

     

    $

    16,500

     

     

    $

    1,210,813

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1)
    The amounts in this column represent the grant date fair value of stock options granted to the applicable individual during the applicable year. The grant date fair value and incremental fair value of the stock options were determined in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC Topic 718). See Note 11, Stock-Based Awards to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for details as to the assumptions used to determine grant date fair value of the awards.
    (2)
    The amounts in this column for 2024 represent performance bonuses earned for 2024 and paid in 2025 under our annual performance-based incentive plan discussed under the heading “Elements of Compensation—Annual Performance Bonuses.”
    (3)
    The amounts in this column for 2024 represent 401(k) plan company-matching contributions.

    -20-


     

    Narrative to Summary Compensation Table

    Employment Agreements and Termination of Employment & Change in Control Arrangements

    Mr. Culley, Ms. Howe and Mr. Samuel

    In September 2022, we entered into amended and restated employment agreements with each of Messrs. Culley and Samuel, and in October 2022, we entered into an employment agreement with Ms. Howe. Such agreements were approved by our Board, upon the recommendation of its Compensation Committee.

    The terms of the employment agreements for each executive are substantially the same other than with respect to annual salary amount, annual bonus target percentage, and potential benefits in connection with termination of employment.

    The following is a brief description of certain terms of the employment agreements, as amended in March 2024.

    •
    Each executive receives an annual salary (which for 2024 was $665,100 for Mr. Culley, $431,600 for Ms. Howe, and $431,200 for Mr. Samuel). The annual salary may be increased from time to time by our Board or its Compensation Committee in their sole discretion.
    •
    Each executive is eligible for an annual bonus targeted at a percentage of their then annual salary (which for 2024 was 60% for Mr. Culley and 40% for each of Ms. Howe and Mr. Samuel). The annual bonus target percentage may be increased from time to time by our Board or its Compensation Committee in their sole discretion. The amount of an executive’s annual bonus, if any, is subject to the approval of our Board or its Compensation Committee in their sole discretion.
    •
    Each executive may be eligible to participate in certain retirement, pension, life, health, accident and disability insurance, equity incentive plan or other similar employee benefit plans we may adopt for our executive officers or other employees.
    •
    Each executive receives paid time off and will be reimbursed for reasonably incurred travel and business expenses, in each case, in accordance with our company policies.
    •
    Each executive’s employment is “at will” and may be terminated at any time by the executive or us with or without cause.

    -21-


     

    •
    The following summarizes the payments and other benefits to which each executive may be entitled if their employment is terminated for the reason specified.

     

    Reason for Termination

    Accrued Benefits

    Cash Payments(1)

    Other Benefits

     

    ● By us for cause (as defined in the agreement);

    ● Executive’s death or disability (as defined in the agreement); or

    ● By the executive without good reason (as defined in the agreement)

    We must pay the executive:

    ● all accrued but unpaid salary earned prior to or as of the date of termination; and

    ● all accrued and unused paid time off earned prior to or as of the date of termination.

    None.

    None.

     

    ● By us without cause

    ● By the executive with good reason

    Same as above.

     We must pay the executive:

    ● an amount equal to a specified number of months(2) of their then-current base salary, payable in installments;

    ● a certain percentage(3) of their target bonus for the year in which employment was terminated payable in installments; provided that if such target bonus has not been set at the time their employment is terminated, then the amount of their target bonus for the immediately preceding year will be deemed to be the target bonus for the year in which their employment is terminated; and

    ● if they have not been paid their bonus for the immediately preceding year at the time their employment is terminated solely because their employment is terminated before the date on which such bonus otherwise would be paid, they will also receive a payment equal to 100% of the target bonus of such preceding year.

     We must pay 100% of the premium of any health insurance benefits under a company employee health insurance plan subject to COBRA for a specified number of months.(2)

     

    By us without cause or by the executive with good reason within three months before or one-year after a change of control

     Same as above.

    Same as above except both payments are payable in a lump sum and both the number of months of base salary(4) and the percentage(5) of the target bonus increases.

     

    Same as above except the number of months are 18 for Mr. Culley and 12 for each of Ms. Howe and Mr. Samuel.

    Accelerated vesting of all then unexpired, unvested equity awards granted to the executive (with such acceleration occurring on the later of the change of control or the termination of employment) other than any awards that include both a performance-based vesting condition and a time-based vesting condition or that vest solely upon the achievement of a performance-based vesting condition (unless such performance-based vesting condition has been satisfied as of the date of termination).

     

    (1)
    Payment and benefits are conditioned on the executive executing and delivering a release of claims in our favor.
    (2)
    12 months for Mr. Culley and 9 months for each of Ms. Howe and Mr. Samuel.
    (3)
    100% for Mr. Culley and a pro rata portion for each of Ms. Howe and Mr. Samuel.
    (4)
    18 months for Mr. Culley and 12 months for each of Ms. Howe and Mr. Samuel.
    (5)
    150% for Mr. Culley and 100% for each of Ms. Howe and Mr. Samuel.

    -22-


     

    In addition, under Ms. Howe’s employment agreement, she was granted a stock option to purchase 1,000,000 common shares with an exercise price equal to the closing price of our common shares on the grant date and that vests as to 25% of the shares subject to the option on the first anniversary of her start date with us, and the remainder of the shares will vest in a series of 36 successive substantially equal monthly installments thereafter, in each case, subject to her continued service with Lineage.

    All payments made and benefits to each executive under their employment agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, and, to the extent practicable, the employment agreements will be interpreted and administered in a manner so that any amount or benefit payable thereunder will be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder.

    Elements of Compensation

    Base Salary

    Our Compensation Committee or Board reviews the base salaries of our executive officers, including our named executive officers, from time to time and makes adjustments as it determines to be reasonable and necessary to reflect the scope of an executive officer’s performance, contributions, responsibilities, experience, prior salary level, position (in the case of a promotion), and market conditions.

    Annual Performance Bonuses

    In September 2022, our Board, upon the recommendation of its Compensation Committee, adopted an Executive Performance Incentive Bonus Plan (the “Performance-Based Incentive Plan”). The Compensation Committee is the administrator of the Performance-Based Incentive Plan. Under the terms of the Performance-Based Incentive Plan, for each participant, the Compensation Committee will generally establish (1) a target bonus amount (which it may adjust from time to time), (2) company performance goals and/or individual performance goals (together, “Performance Goals”), (3) the time period over which the achievement of Performance Goals will be assessed, which is generally our fiscal year (a “Performance Period”), and (4) the formula(s) for determining the bonuses payable under the Performance-Based Incentive Plan. Performance Goals may be given such weight as determined by the Compensation Committee and may differ among participants. The Compensation Committee, in its discretion, will determine the bonus amounts payable under the Performance-Based Incentive Plan. The actual bonuses, if any, awarded each year may vary from target, depending on individual performance and the achievement of corporate objectives and may also vary based on other factors at the discretion of our Compensation Committee.

    Each of our named executive officers was a participant in, and eligible to receive a bonus under, the Performance-Based Incentive Plan for 2024. For each of our named executive officers who were participants in the Performance-Based Incentive Plan for 2024, their bonus amount was determined by multiplying (1) their target annual bonus amount (which was a percentage of their 2024 annual salary—60% for Mr. Culley, and 40% for each of Ms. Howe and Mr. Samuel) by (2) our overall level of achievement of the Performance Goals for 2024, as determined by our Board and Compensation Committee.

    In March 2025, our Board and Compensation Committee assessed our performance against each of the Performance Goals for 2024, and determined that overall achievement level was 87.5%, as illustrated in the table below. The table below also describes the Performance Goals for 2024, their respective weightings for purposes of

    -23-


     

    determining the level of achievement, and the achievement level of each Performance Goal as determined by our Board and Compensation Committee.

     

    Goal

     

    Weighting

     

     

    Achievement
    Level

     

     

    Weighting x
    Achievement
    Level

     

    (1) OpRegen® Program Progress

     

     

    30

    %

     

     

    100

    %

     

     

    30.0

    %

    (2) OPC1 Program Progress

     

     

    10

    %

     

     

    75

    %

     

     

    7.5

    %

    (3) Preclinical Program Progress

     

     

    10

    %

     

     

    100

    %

     

     

    10.0

    %

    (4) Capital Raising and Budget

     

     

    40

    %

     

     

    88

    %

     

     

    35.0

    %

    (5) Shareholder Value

     

     

    10

    %

     

     

    50

    %

     

     

    5.0

    %

    Total

     

     

    100

    %

     

     

     

     

     

    87.5

    %

     

    In their assessment of our performance against each of the Performance Goals for 2024, and in making their determination as to the achievement level of such Performance Goals, our Board and Compensation Committee considered that we:

    (1)
    continued to support our partners, Roche and Genentech, in connection with our exclusive worldwide collaboration and license agreement for the development and commercialization of OpRegen for the treatment of ocular disorders, including in the ongoing Phase 2a clinical study for OpRegen;
    (2)
    continued to advance activities relating to the DOSED (Delivery of Oligodendrocyte Progenitor Cells for Spinal Cord Injury: Evaluation of a Novel Device) study in support of our OPC1 program in spinal cord injury;
    (3)
    made process development improvements and completed other activities in support of planned preclinical testing;
    (4)
    raised $44 million in gross proceeds from two financings entered into in 2024 and efficiently managed our budget to strengthen our balance sheet; and
    (5)
    supported broad investor and analyst engagement.

    Accordingly, our Board and Compensation Committee approved cash performance bonuses for each of Mr. Culley, Ms. Howe and Mr. Samuel in the amounts reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, above.

    Other Benefits

    We maintain a 401(k) defined contribution employee retirement plan for all of our employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amounts allowable under U.S. federal tax regulations. We provide a safe harbor contribution of up to 5.0% of the employee’s compensation, not to exceed eligible limits, and subject to employee participation.

    We do not have any annuity, pension or deferred compensation plan or other arrangements for our executive officers or any employees.

    -24-


     

    Outstanding Equity Awards at Fiscal Year-End

    The following table sets forth information concerning equity awards held by our named executive officers that were outstanding as of December 31, 2024:

     

     

     

     

    Option Awards

     

     

    Stock Awards

     

    Name

     

    Grant Date

     

    Number of
    securities
    underlying
    unexercised
    options
    exercisable
    (#)

     

     

    Number of
    securities
    underlying
    unexercised
    options
    unexercisable
    (#)
    (1)

     

     

     

    Option
    exercise
    price
    ($)

     

     

    Option
    expiration
    date

     

     

    Number of
    shares or
    units of
    stock that
    have not
    vested
    (#)

     

     

     

    Market
    value of
    shares of
    units of
    stock that
    have not
    vested
    ($)
    (2)

     

    Brian M. Culley

     

    9/17/2018

     

     

    1,854,000

     

     

     

    —

     

     

     

     

    1.87

     

     

    9/17/2028

     

     

     

    —

     

     

     

     

    —

     

     

    3/17/2020

     

     

    933,300

     

     

     

    —

     

    (3)

     

     

    0.69

     

     

    3/17/2030

     

     

     

    —

     

     

     

     

    —

     

     

    3/15/2021

     

     

    1,092,281

     

     

     

    72,819

     

     

     

     

    2.43

     

     

    3/15/2031

     

     

     

    —

     

     

     

     

    —

     

     

    2/11/2022

     

     

    —

     

     

     

    —

     

     

     

     

    —

     

     

     

    —

     

     

     

    187,495

     

    (4)

     

     

    35,890

     

     

    3/10/2022

     

     

    859,375

     

     

     

    390,625

     

     

     

     

    1.40

     

     

    3/10/2032

     

     

     

    100,000

     

    (5)

     

     

    —

     

     

     

    3/09/2023

     

     

    831,250

     

     

     

    1,068,750

     

     

     

     

    1.46

     

     

    3/09/2033

     

     

     

    —

     

     

     

     

    —

     

     

     

    3/07/2024

     

     

    —

     

     

     

    1,900,000

     

     

     

     

    1.13

     

     

    3/7/2034

     

     

     

    —

     

     

     

     

    —

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    George A. Samuel III

     

    9/1/2021

     

     

    564,687

     

     

     

    130,313

     

     

     

     

    2.55

     

     

    9/1/2031

     

     

     

    —

     

     

     

     

    —

     

     

    2/11/2022

     

     

    —

     

     

     

    —

     

     

     

     

    —

     

     

     

    —

     

     

     

    36,457

     

    (4)

     

     

    6,978

     

     

    3/10/2022

     

     

    446,875

     

     

     

    203,125

     

     

     

     

    1.40

     

     

    3/10/2032

     

     

     

    —

     

     

     

     

    —

     

     

     

    3/09/2023

     

     

    284,375

     

     

     

    365,625

     

     

     

     

    1.46

     

     

    3/09/2033

     

     

     

    —

     

     

     

     

    —

     

     

     

    3/07/2024

     

     

    —

     

     

     

    650,000

     

     

     

     

    1.13

     

     

    3/7/2034

     

     

     

    —

     

     

     

     

    —

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Jill A. Howe

     

    11/14/2022

     

     

    520,833

     

     

     

    479,167

     

     

     

     

    1.36

     

     

    11/14/2032

     

     

     

    —

     

     

     

     

    —

     

     

     

    3/09/2023

     

     

    65,625

     

     

     

    84,375

     

     

     

     

    1.46

     

     

    3/09/2023

     

     

     

    —

     

     

     

     

    —

     

     

     

    3/07/2024

     

     

    —

     

     

     

    650,000

     

     

     

     

    1.13

     

     

    3/7/2034

     

     

     

    —

     

     

     

     

    —

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1)
    The shares subject to options vest as to 25% of the shares subject to the option on the first anniversary of the grant date, and the balance vest in equal monthly installments over the three years thereafter, subject to the executive’s continued service with Lineage.
    (2)
    Market value of stock awards calculated as of December 31, 2024, which were calculated in accordance with ASC Topic 718. For stock awards which contained a performance vesting condition there is no market value unless the performance criteria is determined to be probable. For stocks awards which contain a market condition the value of these awards was determined using a Monte Carlo simulation. See footnotes (4) and (5) below for additional information.
    (3)
    This option was granted on March 17, 2020 under the Lineage Cell Therapeutics, Inc. 2012 Equity Incentive Plan (the “2012 Plan”). When the 2012 Plan was approved, it provided that no participant may be granted options and stock appreciation rights with respect to more than 1,000,000 shares in the aggregate per year. However, in accordance with the terms of the 2012 Plan, this per-participant limit was automatically increased to 1,236,000 shares as a result of our sale of shares of AgeX Therapeutics, Inc. to Juvenescence Limited in August 2018. Accordingly, this option did not exceed the per-participant limit in the 2012 Plan.
    (4)
    Represents RSUs granted on February 11, 2022 to certain employees, including our named executive officers, to further align their interests with the achievement of certain development milestones. For each RSU, half of the common shares subject to the RSU will vest in four equal annual installments beginning on the first anniversary of the grant date, subject to the employee’s continued service with Lineage, and the other half will vest in connection with the achievement of certain development milestones.
    (5)
    Represents RSUs granted on March 10, 2022, 100,000 of which would have vested on or prior to March 9, 2023, March 9, 2024 and March 9, 2025, in each case subject to the achievement of certain per share performance targets, calculated based on the trailing 20-day volume weighted average price of our common shares as of the date of determination. If such per share performance targets are not achieved by the applicable vesting date, then such RSUs are forfeited. The 100,000 RSUs that would have vested on or prior to each of March 9, 2023, March 9, 2024, and March 9, 2025 were forfeited.

    -25-


     

    Clawback Policy

    We have adopted a Policy for Recovery of Erroneously Awarded Compensation (also known as a clawback policy) that is compliant with the NYSE American listing rules, as required by the Dodd-Frank Act, a copy of which is an exhibit to our Annual Report on Form 10-K filed with the SEC on March 10, 2025.

    Policies and Procedures Related to the Grant of Certain Equity Awards

    Our Compensation Committee or Board reviews and approves individual equity grants to our employees, including our executive officers, and directors. Historically, annual equity grants to our employees, including our executive officers, typically are reviewed and approved on or around the time of our Board’s first regularly scheduled meeting each year as part of our annual compensation review cycle, which usually occurs in late February or early March of each year. The grant date for the annual equity grants to our employees, including our executive officers, is the date we file our annual report on Form 10-K regardless of any information that may be reported in such annual report that could impact our share price, whether it may be positive or negative. The timing of any equity grants to newly-hired employees, or in connection with promotions or other non-routine grants, is generally tied to the event giving rise to the award and the grant date is generally the date such individual commences employment with us or if later, the date of Compensation Committee or Board approval. We grant our non-employee directors a stock option to purchase our common shares in connection with their initial appointment or election to our Board at the time of such appointment and election. We also grant each of our non-employee directors an annual stock option to purchase our common shares, which historically have been granted on July 1 of each year. Our Board or Compensation Committee may also approve grants to our employees at other times as they deem appropriate. For all stock option awards, the exercise price is no less than the closing price of our common stock on the grant date.

    Our Board does not take material nonpublic information into account when determining the timing and terms of equity awards and we do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

    As required by Item 402(x) of Regulation S-K, the following table presents information regarding stock options granted to our NEOs in 2024 during any period beginning four business days before the filing of Form 10-K or Form 10-Q, or the filing or furnishing of a Form 8-K that discloses material nonpublic information (other than a Form 8-K disclosing a material new option grant under Item 5.02(e)), and ending one business day after the filing or furnishing of such report with the SEC.

     

     

     

    Grant date(1)

     

    Number of securities underlying the award

     

     

    Exercise price per share

     

     

    Grant Date fair value of the award

     

     

    Percentage change in the closing market price of the securities underlying the award between the trading day ending immediately prior to the disclosure of material nonpublic information and the trading day beginning immediately following the disclosure of material nonpublic information

    Brian M. Culley

     

    3/7/2024

     

     

    1,900,000

     

     

    $

    1.13

     

     

    $

    1,502,900

     

     

    15.0%

    Jill A. Howe

     

    3/7/2024

     

     

    650,000

     

     

    $

    1.13

     

     

    $

    514,150

     

     

    15.0%

    George A. Samuel III

     

    3/7/2024

     

     

    650,000

     

     

    $

    1.13

     

     

    $

    514,150

     

     

    15.0%

     

    (1)
    Each stock option vests with respect to 25% of the number of shares subject to such stock option one year following the grant date and the balance vests in 36 monthly installments thereafter, in each case, subject to the recipient’s continuous service.

    -26-


     

    Consideration of Shareholder Advisory Vote on Executive Compensation

    The results of the advisory vote of our shareholders on the compensation of our named executive officers (commonly called the “say-on-pay” vote) at our 2024 annual meeting of shareholders showed that approximately 96% of the votes cast “FOR” or “AGAINST” on the “say-on-pay” vote approved the compensation of our named executive officers during 2023. Our Compensation Committee carefully evaluated and considered the results of this advisory vote and concluded that our shareholders generally supported our executive compensation program and we did not make significant changes to our executive compensation program for 2024. Our Compensation Committee expects to continue to consider the outcome of our “say-on-pay” votes and our shareholders’ views when making future compensation decisions for our named executive officers.

    -27-


     

    PAY VERSUS PERFORMANCE

    The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how Lineage or our Board or the Compensation Committee view the link between Lineage’s performance and named executive officer pay, and neither our Board nor the Compensation Committee uses CAP (as defined below) as the basis for making compensation decisions. For additional information about our pay-for-performance philosophy and how we align executive compensation with performance, please see the section titled “Executive Compensation” above.

    Required Tabular Disclosure of Pay Versus Performance

    The following table reports the compensation of our Chief Executive Officer, who is our principal executive officer (“PEO”), and the average compensation of our other named executive officers (“Non-PEO NEOs”) as reported in the Summary Compensation Table (the “SCT”) in the section titled “Executive Compensation,” above, for the past three fiscal years (“FYs”), as well as the Compensation Actually Paid (“CAP”) as calculated under the SEC pay-versus-performance disclosure requirements.

     

    Year

     

    Summary
    Compensation
    Table Total
    for PEO
    (1)

     

     

    Compensation
    Actually Paid
    to PEO
    (2)

     

     

    Average
    Summary
    Compensation
    Table Total for
    Non-PEO Named
    Executive
    Officers
    (3)

     

     

    Average
    Compensation
    Actually Paid to
    Non-PEO Named
    Executive
    Officers
    (2)

     

     

    Value of Initial
    Fixed $100
    Investment
    Based on Total Shareholder
    Return
    (4)

     

     

    Net Income
    (Loss)
    (5)
    (in thousands)

     

    (a)

     

    (b)

     

     

    (c)

     

     

    (d)

     

     

    (e)

     

     

    (f)

     

     

    (g)

     

    2024

     

    $

    2,534,450

     

     

    $

    706,523

     

     

    $

    1,113,900

     

     

    $

    431,902

     

     

    $

    28.41

     

     

    $

    (18,609

    )

    2023

     

    $

    2,905,130

     

     

    $

    2,187,415

     

     

    $

    936,744

     

     

    $

    (97,716

    )

     

    $

    61.93

     

     

    $

    (21,486

    )

    2022

     

    $

    2,372,528

     

     

    $

    (135,373

    )

     

    $

    1,161,335

     

     

    $

    (536,777

    )

     

    $

    66.48

     

     

    $

    (26,273

    )

     

    (1)
    The amounts reported in column (b) are the amounts of total compensation reported for Brian Culley for each corresponding year in the “Total” column of the SCT.
    (2)
    The amounts reported in column (c) and (e) represent the amount of CAP for Mr. Culley and the average amount of CAP for the Non-PEO NEOs, respectively, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Culley or to the Non-PEO NEOs as a group, respectively, during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the total compensation reported for Mr. Culley in the SCT and to the average total compensation reported for the Non-PEO NEOs in the SCT for each year to determine the CAP:

     

     

    2024

     

     

    2023

     

     

    2022

     

     

    CEO

     

     

    Average
    Non-CEO
    NEOs

     

     

    CEO

     

     

    Average
    Non-CEO
    NEOs

     

     

    CEO

     

     

    Average
    Non-CEO
    NEOs

     

    Total Compensation from SCT

     

    $

    2,534,450

     

     

    $

    1,113,900

     

     

    $

    2,905,130

     

     

    $

    936,744

     

     

    $

    2,372,528

     

     

    $

    1,161,335

     

    Deduct: Value of Option Awards and Stock
       Awards Reported in SCT for the Covered FY

     

     

    (1,502,900

    )

     

     

    (514,150

    )

     

     

    (1,918,430

    )

     

     

    (530,093

    )

     

     

    (1,428,378

    )

     

     

    (734,182

    )

    Add: Year End Fair Value of Equity Awards
       Granted During the Covered FY that Remain
       Outstanding and Unvested as of Last Day of
       the Covered FY

     

     

    502,033

     

     

     

    171,748

     

     

     

    1,294,109

     

     

     

    136,222

     

     

     

    1,107,535

     

     

     

    215,389

     

    Add (Deduct): Year over Year Change in Fair
       Value of Outstanding and Unvested Equity
       Awards

     

     

    (788,545

    )

     

     

    (310,210

    )

     

     

    (210,329

    )

     

     

    (417,377

    )

     

     

    (1,104,920

    )

     

     

    (284,721

    )

    Add: Fair Value as of Vesting Date of Equity
       Awards Granted and Vested in the FY

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Add (Deduct): Year over Year Change in Fair
       Value of Equity Awards Granted in Prior
       FY that Vested in the FY

     

     

    (38,515

    )

     

     

    (29,385

    )

     

     

    116,935

     

     

     

    18,905

     

     

     

    (1,082,138

    )

     

     

    (33,681

    )

    (Deduct): Year End Fair Value at the end of the
       applicable Prior FY of any Awards Granted
       during any Prior FY that were Forfeited during
       the Covered FY

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    (242,116

    )

     

     

    —

     

     

     

    (860,917

    )

    Compensation Actually Paid (as defined by
       SEC rule)

     

    $

    706,523

     

     

    $

    431,902

     

     

    $

    2,187,415

     

     

    $

    (97,716

    )

     

    $

    (135,373

    )

     

    $

    (536,777

    )

     

    -28-


     

     

    (3)
    The amounts reported in column (d) represent the average of the amounts reported for our Non-PEO NEOs as a group in the “Total” column of the SCT in each applicable year. Our Non-PEO NEOs for purposes of calculating the average amounts are (i) Ms. Howe and Mr. Samuel for 2024, (ii) Ms. Howe, Mr. Samuel and Dr. Hogge for 2023, and (iii) Ms. Howe and Messrs. Samuel and Cook for 2022.
    (4)
    The amounts reported in column (f) reflect the cumulative total shareholder return (“TSR”) of our common stock for the measurement periods beginning on December 31, 2021 and ending on December 31 of each of 2024, 2023 and 2022, respectively, calculated in accordance with Item 201(e) of Regulation S-K.
    (5)
    The amounts reported in column (g) represent net income (loss) reflected in our audited financial statements for the applicable FY.

    -29-


     

    Required Disclosure of the Relationship Between CAP and TSR and Net Income

    As required by Item 402(v) of Regulation S-K, we are providing the following graphs to illustrate the relationship between the pay and performance figures that are included in the pay versus performance tabular disclosure above. As noted above, CAP for purposes of the tabular disclosure and the following graphs were calculated in accordance with SEC rules and do not fully represent the actual final amount of compensation earned by or actually paid to our named executive officers during the applicable FYs.

     

    img8971038_1.jpg

     

    img8971038_2.jpg

     

    All information provided above in this “Pay Versus Performance” section will not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent we specifically incorporate such information by reference.

    -30-


     

    PRINCIPAL SHAREHOLDERS

    The table below sets forth certain information, as of April 18, 2025 (the “Measurement Date”), regarding the beneficial ownership of our common shares for: (1) each person known by us to be the beneficial owner of more than 5% of our common shares (“5% Shareholders”); (2) each of our current directors; (3) each of our named executive officers; and (4) all of our current directors and executive officers as a group.

    We have determined beneficial ownership in accordance with applicable SEC rules, and the information reflected in the table below is not necessarily indicative of beneficial ownership for any other purpose. Under applicable SEC rules, beneficial ownership includes any common shares as to which a person has sole or shared voting power or investment power and any common shares that the person has the right to acquire within 60 days after the Measurement Date (for example, through the exercise of any option, warrant or right, upon vesting of any RSUs, or through the conversion of any convertible security). As a result, the beneficial ownership of any person as shown in the table below does not necessarily reflect the person’s actual voting power as of the Measurement Date, or any particular date. Unless otherwise indicated in the footnotes to the table below and subject to community property laws where applicable, we believe, based on the information furnished to us and on SEC filings, that each of the persons named in table below has sole voting and investment power with respect to the shares indicated as beneficially owned.

    The information set forth in the tables below is based on 228,356,290 common shares issued and outstanding on the Measurement Date. In computing the number of common shares beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all common shares subject to options, RSUs, warrants, rights or other convertible securities held by that person that are currently exercisable or vested, or will be exercisable or vested within 60 days after such date. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Except as otherwise noted, the address for each person listed in the table below is c/o Lineage Cell Therapeutics, Inc., 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008.

     

    Name and Address of Beneficial Owner

     

    Number of
    Shares
    Beneficially
    Owned

     

     

    Percentage of
    Shares
    Beneficially
    Owned

     

    5% Shareholders

     

     

     

     

     

     

    Broadwood Partners, L.P.(1)

     

     

    49,878,620

     

     

     

    21.8

    %

    BlackRock, Inc. (2)

     

     

    11,453,305

     

     

     

    5.0

    %

    Named Executive Officers and Directors

     

     

     

     

     

     

    Neal C. Bradsher(1)

     

     

    49,878,620

     

     

     

    21.8

    %

    Brian M. Culley(3)

     

     

    6,844,069

     

     

     

    2.9

    %

    Michael H. Mulroy(4)

     

     

    528,555

     

     

    *

     

    Angus C. Russell(5)

     

     

    317,500

     

     

    *

     

    Don M. Bailey(6)

     

     

    448,801

     

     

    *

     

    Deborah Andrews(7)

     

     

    245,578

     

     

    *

     

    Dipti Amin(8)

     

     

    275,000

     

     

    *

     

    Anula Jayasuriya(9)

     

     

    250,000

     

     

    *

     

    George A. Samuel III(10)

     

     

    1,774,257

     

     

    *

     

    Jill A. Howe(11)

     

     

    958,833

     

     

    *

     

    All executive officers and directors as a group (10 persons)(12)

     

     

    61,521,213

     

     

     

    26.8

    %

     

    * Less than 1%

    (1)
    Includes: (i) 49,648,620 shares owned by Broadwood Partners, L.P.; (ii) 87,628 shares owned by Neal C. Bradsher; and (iii) 230,000 shares that may be acquired by Mr. Bradsher upon the exercise of options that are presently exercisable or may become exercisable within 60 days of the Measurement Date. Broadwood Capital, Inc. is the general partner of Broadwood Partners, L.P., and Mr. Bradsher is the President of Broadwood Capital, Inc. Mr. Bradsher and Broadwood Capital, Inc. may be deemed to beneficially own the shares that Broadwood Partners, L.P. owns. Mr. Bradsher disclaims beneficial ownership of the shares held by Broadwood Partners,

    -31-


     

    L.P. except to the extent of his pecuniary interest therein. The Address of the foregoing entities and Mr. Bradsher is c/o Broadwood Capital, Inc., 142 West 57th Street, 11th Floor, New York, New York 10019.
    (2)
    BlackRock, Inc. has sole voting power with respect to 11,393,041 of such shares and sole dispositive power with respect to all such shares. The address of BlackRock Inc. is 50 Hudson Yards, New York, NY 10001. The foregoing information is as of March 31, 2025 and is based on information set forth in a Schedule 13G filed by BlackRock, Inc. on April 24, 2025.
    (3)
    Includes: (i) 213,544 shares held directly by Mr. Culley; and (ii) 6,630,525 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (4)
    Includes: (i) 298,555 shares held directly by Mr. Mulroy; and (ii) 230,000 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (5)
    Includes: (i) 87,500 shares held directly by Mr. Russell; and (ii) 230,000 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (6)
    Includes: (i) 158,801 shares held directly by Mr. Bailey; (ii) 290,000 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (7)
    Includes: (i) 15,578 shares held directly by Ms. Andrews; and (ii) 230,000 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (8)
    Includes: (i) 35,000 shares held directly by Dr. Amin; and (ii) 240,000 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (9)
    Includes (i) 10,000 held directly by Dr. Jayasuriya; and 240,000 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (10)
    Includes (i) 25,820 shares held directly by Mr. Samuel; and (ii) 1,748,437 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (11)
    Includes (i) 25,500 shares held directly by Ms. Howe; and (ii) 933,333 shares that may be acquired upon the exercise of options that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.
    (12)
    Includes: (i) 50,518,918 shares held by our executive officers and directors; and (ii) 11,002,295 shares that may be acquired upon the exercise of options held by our executive officers and directors that are presently exercisable or that may become exercisable within 60 days of the Measurement Date.

    -32-


     

    PROPOSAL 1 – ELECTION OF DIRECTORS

    Our Board, upon the recommendation of our Nominating and Corporate Governance Committee, has nominated Dipti Amin, Deborah Andrews, Neal C. Bradsher, Brian M. Culley, Anula Jayasuriya, Michael H. Mulroy and Angus C. Russell for election at the Meeting and to serve until the 2026 annual meeting of shareholders and until their respective successors are duly elected and qualified. For more information about each nominee, see the section titled “Board of Directors” in this Proxy Statement. Each of the director nominees has consented to being named in this Proxy Statement as a director nominee and to serving on our Board if elected.

    Unless a proxy solicited by this Proxy Statement is marked “withhold” by a shareholder as to any of the director nominees identified above or otherwise specifies in the proxy that authority to vote for any of the director nominees is withheld, shares represented by proxies will be voted “FOR” all director nominees identified above. In the unlikely event that any of the director nominees identified above is unable to serve as a director or for good cause will not serve as a director at the time of the Meeting, proxies solicited by this Proxy Statement may be voted by the proxy holders in favor of a substitute nominee designated by our Board.

    OUR BOARD RECOMMENDS A VOTE “FOR”

    EACH NOMINEE NAMED ABOVE

    -33-


     

    PROPOSAL 2 - RATIFICATION OF THE SELECTION OF

    OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    Our Audit Committee has selected Moss Adams LLP (“Moss Adams”) as our independent registered public accounting firm. Our Board proposes and recommends that the shareholders ratify the selection of Moss Adams to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2025.

    Moss Adams was appointed to serve as our independent registered public accounting firm for the fiscal year ended December 31, 2024 on June 11, 2024.

    Our Board and its Audit Committee believe that the continued retention of Moss Adams as our independent registered public accounting firm is in the best interests of Lineage and our shareholders. Shareholder ratification of the selection of Moss Adams as our independent registered public accounting firm is not required by California law, our articles of incorporation, or our bylaws. However, we believe that shareholder ratification of the Audit Committee’s selection of Moss Adams is good corporate governance practice. If our shareholders do not ratify the selection, our Audit Committee will reconsider whether to retain the firm for the audit engagement for the 2025 fiscal year. Even if the selection is ratified, our Audit Committee in its discretion may nevertheless direct the appointment of a different independent registered public accounting firm at any time if our Audit Committee determines that such a change would be in the best interests of Lineage and its shareholders.

    We expect that a representative of Moss Adams will be present at the Meeting, in person or by phone, and will have an opportunity to make a statement if he or she so desires and may respond to appropriate questions from shareholders.

    Audit Fees, Audit Related Fees, Tax Fees and Other Fees

    The following table shows the audit fees billed by Moss Adams for the audit of our annual consolidated financial statements for our last fiscal year. Other than audit fees, no other fees were billed or are expected to be billed by Moss Adams for our last fiscal year. As discussed below, there was a change in our independent registered public accounting firm during 2024, and in accordance with SEC staff guidance, the auditor fee disclosure included in this Proxy Statement is only made with respect to Moss Adams, the accountant who rendered an audit opinion on our financial statements for the year ended December 31, 2024.

     

     

    2024

     

    Audit Fees

     

    $

    472,994

     

    Total Fees

     

    $

    472,994

     

     

    Pre-Approval of Audit and Permissible Non-Audit Services

    Our Audit Committee requires pre-approval of all audit and non-audit services. Other than de minimis services incidental to audit services, non-audit services are generally limited to tax services, such as advice and planning, and financial due diligence services. All fees for non-audit services must be approved by the Audit Committee, except to the extent otherwise permitted by applicable SEC regulations. Our Audit Committee may delegate to one or more designated members of our Audit Committee the authority to grant pre-approvals, provided such approvals are presented to our Audit Committee at a subsequent meeting.

    Change in Independent Registered Public Accounting Firm

    As discussed above, on June 11, 2024, our Audit Committee approved the engagement of Moss Adams as our independent registered public accounting firm for the fiscal year ending December 31, 2024. During our two most recent fiscal years and the subsequent interim period through June 11, 2024, neither we, nor any person acting on our behalf, consulted Moss Adams regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, (ii) the type of the audit opinion that might be rendered on our financial statements, and Moss Adams did not provide any written report or oral advice to us that Moss Adams concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue, or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related

    -34-


     

    instructions to Item 304 of Regulation S-K) or a reportable event of the type described in Item 304(a)(1)(v) of Regulation S-K.

    WithumSmith+Brown, PC (“Withum”), ceased serving as our independent registered public accounting firm on June 11, 2024. Withum audited our consolidated financial statements for the years ended December 31, 2023 and 2022. Withum’s report dated March 7, 2024, with respect to our consolidated financial statements as of December 31, 2023 and 2022 and for each of the years ended December 31, 2023 and 2022, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. During the two years ended December 31, 2023, and from December 31, 2023 through June 11, 2024, there were no (i) disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) between us and Withum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Withum, would have caused Withum to make reference to the subject matter of such disagreements in connection with its report, or (ii) “reportable events,” as described in Item 304(a)(1)(v) of Regulation S-K, that would require disclosure under Item 304(a)(1)(v) of Regulation S-K.

    OUR BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL

    -35-


     

    PROPOSAL 3 - ADVISORY VOTE ON EXECUTIVE COMPENSATION

    At our 2023 annual meeting of shareholders, our Board recommended that our shareholders vote to hold the advisory vote on the compensation of our named executive officers (commonly referred to as the “say-on-pay” vote) on an annual basis. Approximately 97% of the votes cast at our 2023 annual meeting of shareholders were for the recommendation of our Board. We have held say-on-pay votes annually since 2017. The say-on-pay vote is not intended to address any specific compensation item, but rather our overall approach to the compensation of our named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules in the “Executive Compensation” section of this Proxy Statement (which includes the related compensation tables included in the “Executive Compensation” section of this Proxy Statement and narrative discussion).

    As described under the heading “Executive Compensation—Overview,” our executive compensation programs are designed to:

    •
    attract, motivate, and retain highly qualified executives;
    •
    align management and shareholder interests by tying a substantial percentage of executives’ compensation to financial performance of Lineage and its subsidiaries through the grant of equity awards;
    •
    reward superior performance by basing decisions regarding cash incentive compensation on the overall performance of executives; and
    •
    compensate executives at levels competitive with peer companies.

    Our Compensation Committee seeks to provide our named executive officers’ total compensation at a level competitive with the compensation paid to officers in similar positions at our peer companies in the biotechnology industry. Our Compensation Committee has approved salary increases and authorized the payment of cash bonuses based on its review of the performance of Lineage and its subsidiaries, the performance of individual executive officers, and the compensation paid by our peer companies. Our executive compensation program also includes performance-based compensation through the grant of equity awards. Equity awards are intended to align the interest of our executives with those of our shareholders because the value realized, if any, by the recipient from an equity award depends upon the increases in the price of our common shares. Please read the “Executive Compensation” section of this Proxy Statement for additional details about our executive compensation programs, including information about the fiscal year 2024 compensation of our named executive officers.

    We are asking our shareholders to indicate their support for our named executive officer compensation as described in the “Executive Compensation” section of this Proxy Statement. This proposal, sometimes called “say-on-pay,” gives our shareholders the opportunity to express their views on our named executive officers’ compensation. Accordingly, our Board is asking our shareholders to cast a non-binding advisory vote “FOR” the following resolution at the Meeting:

    “RESOLVED, that Lineage’s shareholders approve, on an advisory basis, the compensation paid to Lineage’s named executive officers, as disclosed in Lineage’s Proxy Statement for the 2025 annual meeting of shareholders pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion.”

    Our shareholders’ vote on this proposal is only advisory and is not binding on Lineage, our Compensation Committee, or our Board. However, our Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by our shareholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.

    OUR BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL

     

    -36-


     

    PROPOSAL 4 - APPROVAL OF AN AMENDMENT TO THE

    LINEAGE CELL THERAPEUTICS, INC. 2021 EQUITY INCENTIVE PLAN

    We are asking our shareholders to approve an amendment to the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan (the “2021 Plan”) that, if approved, will make an additional 19,500,000 common shares available for issuance under the 2021 Plan (the “Plan Amendment”).

    The 2021 Plan was approved by our shareholders at our 2021 annual meeting. When we solicited shareholder approval of the 2021 Plan, we stated that, absent any unforeseen circumstances, we anticipated seeking shareholder approval of an increase in the number of shares available for issuance thereunder in 2023. In 2023, we solicited, and obtained, shareholder approval of an amendment to the 2021 Plan to make an additional 19,500,000 common shares available for issuance. When we solicited such shareholder approval, we stated that, absent any unforeseen circumstances, we anticipated seeking shareholder approval of another increase in the number of shares available for issuance under the 2021 Plan in 2025. The Board, upon the recommendation of its Compensation Committee, adopted the Plan Amendment, subject to shareholder approval. A text of the Plan Amendment is set out in Appendix A to this Proxy Statement and incorporated herein by reference.

    Why You Should Approve the Plan Amendment

    The 2021 Plan, through the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock awards and other awards based in whole or in part by reference to the Company’s common shares (collectively, “Awards”), is intended to help us secure and retain the services of employees, directors and consultants, provides incentives for such persons to exert maximum efforts for our success, and provides a means by which such persons may benefit from increases in value of our common shares.

    In addition, stock options and other Awards are an important part of our employee and director compensation packages. Our Board believes that our ability to attract and retain the services of employees, consultants, and directors depends in great measure upon our ability to provide the kind of incentives that are derived from the ownership of stock and stock options that are offered by other pharmaceutical development and biotechnology companies. We believe that we will be placed at a serious competitive disadvantage in attracting and retaining capable employees, consultants, and directors at a critical time in our corporate development, unless the number of shares available under the 2021 Plan is increased at this time. The Plan Amendment will also allow us to continue to grant equity incentives to secure and retain the services of our employees, directors and consultants, and to continue to provide long-term incentives that align the interests of our employees, directors and consultants with the interests of our shareholders. Absent any unforeseen circumstances, our Board believes that amending the 2021 Plan to make 19,500,000 additional common shares available for the grant of Awards will fulfill our equity compensation needs through and including our annual grants in 2027.

    The 2021 Plan Combines Compensation and Governance Best Practices

    The 2021 Plan includes provisions that are designed to protect our shareholders’ interests and to reflect corporate governance best practices including:

    •
    Shareholder approval is required for additional shares. The 2021 Plan does not contain an annual “evergreen” provision. The 2021 Plan authorizes a fixed number of shares, so that shareholder approval is required to issue any additional shares under the 2021 Plan in excess thereof.
    •
    Fungible share counting structure. The 2021 Plan contains a “fungible share counting” structure, whereby the number of our common shares available for issuance under the 2021 Plan will be reduced by: (i) one share for each share issued pursuant to a stock option or stock appreciation right granted under the 2021 Plan with an exercise or strike price that is at least 100% of the fair market value of our common shares on the date of grant (an “appreciation award”); and (ii) 1.50 shares for each share issued pursuant to an equity award granted under the 2021 Plan that is not an appreciation award (a “full value award”). This structure helps ensure that we are using the share reserve effectively and with regard to the value of each type of award.

    -37-


     

    •
    No liberal share counting. The following shares will not become available again for issuance under the 2021 Plan: (i) shares that are reacquired or withheld (or not issued) by Lineage to satisfy the exercise, strike or purchase price of an award granted under the 2021 Plan; (ii) shares that are reacquired or withheld (or not issued) by Lineage to satisfy a tax withholding obligation in connection with an award granted under the 2021 Plan; (iii) shares repurchased by Lineage on the open market with the proceeds of the exercise, strike or purchase price of an award granted under the 2021 Plan; and (iv) in the event that a stock appreciation right granted under the 2021 Plan is settled in shares, the gross number of shares subject to such stock appreciation right.
    •
    Minimum vesting requirement. The 2021 Plan provides that no award may vest until at least 12 months following the date of grant of such award (excluding any award granted to a non-employee director that vests on the earlier of the first anniversary of the date of grant or Lineage’s next annual meeting of shareholders), except that shares up to 5% of the share reserve of the 2021 Plan may be issued pursuant to awards that do not meet such vesting requirements.
    •
    Repricing is not allowed. The 2021 Plan prohibits the repricing of stock options and stock appreciation rights granted under the 2021 Plan without prior shareholder approval.
    •
    No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the 2021 Plan must have an exercise price equal to or greater than the fair market value of our common shares on the date the stock option or stock appreciation right is granted.
    •
    Limit on non-employee director compensation. The aggregate value of all cash and equity-based compensation paid or granted by us to any individual for service as a non-employee director with respect to any fiscal year of Lineage will not exceed a total of $1,000,000. For purposes of this limitation, the value of any equity-based awards is calculated based on the grant date fair value of such awards for financial reporting purposes.
    •
    Restrictions on dividends. The 2021 Plan provides that (i) no dividends or dividend equivalents may be paid with respect to any of our common shares subject to an award granted under the 2021 Plan before the date such shares have vested, (ii) any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award agreement (including any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest.
    •
    Specific disclosure of equity award vesting upon a change in control. The 2021 Plan specifically provides that in the event of a change in control of Lineage, if the surviving or acquiring corporation (or its parent company) does not assume or continue outstanding awards granted under the 2021 Plan, or substitute similar awards for such outstanding awards, then with respect to any such awards that have not been assumed, continued or substituted and that are held by participants whose continuous service has not terminated prior to the change in control, the vesting of such awards will be accelerated in full (and with respect to any performance-based awards, vesting will be deemed to be satisfied at the greater of (i) the target level of performance or (ii) the actual level of performance measured in accordance with the applicable performance goals as of the date of the change in control).
    •
    No liberal change in control definition. The change in control definition in the 2021 Plan is not a “liberal” definition. A change in control transaction must actually occur in order for the change in control provisions in the 2021 Plan to be triggered.

     

    -38-


     

    Overhang

    The following table provides certain information regarding our equity incentive program as of April 18, 2025:

     

    Total number of common shares subject to outstanding stock options

     

     

    33,284,775

     

    Weighted-average exercise price of outstanding stock options

     

    $

    1.60

     

    Weighted-average remaining term of outstanding stock options

     

    7.44 years

     

    Total number of common shares subject to outstanding full value awards

     

     

    334,195

     

    Total number of common shares available for grant under the 2021 Plan(1)

     

     

    15,468,280

     

    Total number of common shares outstanding

     

     

    228,356,290

     

    Per-share closing price of common shares as reported on NYSE American

     

    $

    0.41

     

     

    (1)
    There were no shares available for grant under any of our other equity incentive plans.

    We Manage Our Equity Award Use Carefully

    We continue to believe that equity awards such as stock options and restricted stock units are a vital part of our overall compensation program. Our compensation philosophy reflects broad-based eligibility for equity awards, and we grant equity awards to substantially all of our employees. However, we recognize that equity awards dilute existing shareholders, and, therefore, we must responsibly manage the growth of our equity compensation program. We are committed to effectively monitoring our equity compensation share reserve, including our “burn rate,” in a manner intended to maximize shareholders’ value by granting the appropriate number of equity awards necessary to attract, reward, and retain employees.

    The Size of Our Share Reserve Request Is Reasonable

    If this proposal is approved by our shareholders, then subject to adjustment for certain changes in our capitalization, we will have 34,968,280 shares available for grant under the 2021 Plan, plus the Prior Plan Returning Shares (as defined in the 2021 Plan and described below), as such shares become available from time to time. Absent any unforeseen circumstances, we anticipate seeking shareholder approval of an increase in the number of shares available for Awards under the 2021 Plan in 2027.

    Burn Rate

    The following table provides detailed information regarding the activity related to our equity incentive program for the fiscal years indicated.

     

     

    Fiscal Year

     

     

    2024

     

     

    2023

     

     

    2022

     

    Total number of common shares subject to stock
       options granted

     

     

    6,583,654

     

     

     

    5,758,419

     

     

     

    7,297,800

     

    Total number of common shares subject to full value
       awards granted

     

     

    —

     

     

     

    —

     

     

     

    994,424

     

    Weighted-average number of common shares outstanding

     

     

    200,192,847

     

     

     

    172,662,894

     

     

     

    169,791,590

     

    Burn Rate(1)

     

     

    3.29

    %

     

     

    3.34

    %

     

    4.88% (2)

     

     

    (1)
    Burn Rate is calculated as (common shares subject to stock options granted plus common shares subject to full value awards granted) / weighted average common shares outstanding.
    (2)
    In March 2022, we issued a stock option award to purchase 650,000 common shares to Mr. Cook, our former Chief Financial Officer. Mr. Cook resigned in July 2022 and the stock option award issued to him in March 2022 was forfeited in its entirety. In November 2022, we issued a “new hire” award (an option to purchase 1,000,000 common shares) to Ms. Howe in connection with her appointment as our Chief Financial Officer. Excluding the new hire award issued to Ms. Howe, the Burn Rate for fiscal year 2022 would have been 4.29%.

    -39-


     

    Description of the 2021 Plan

    The following is a summary of the principal features of the 2021 Plan, as currently in effect. The summary is qualified in its entirety by the text of the 2021 Plan which is set out in Appendix A to this Proxy Statement. As discussed above, the Plan Amendment makes no changes to the 2021 Plan other than to increase the number of common shares available for grant of Awards thereunder by 19,500,000.

    Purpose

    The 2021 Plan is designed to secure and retain the services of our employees, directors and consultants, incentivize our employees, directors and consultants to exert maximum efforts for the success of Lineage and its affiliates, and provide a means by which our employees, directors and consultants may be given an opportunity to benefit from increases in the value of our common shares.

     

    Types of Awards

    The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, and other stock awards.

    Shares Available for Awards

    Subject to adjustment for certain changes in our capitalization, the aggregate number of our common shares that may be issued under the 2021 Plan will not exceed the sum of (i) 34,500,000 shares and (ii) the Prior Plan Returning Shares (as defined in the 2021 Plan and described below), as such shares become available from time to time.

    The term “Prior Plan Returning Shares” refers to the following common shares: (i) any shares subject to an award granted under the Lineage Cell Therapeutics, Inc. 2012 Equity Incentive Plan (the “2012 Plan”) that was outstanding as of the date of our 2023 annual meeting of shareholders, September 13, 2021 (a “Prior Plan Award”) that on or following September 13, 2021 are not issued because such Prior Plan Award or any portion thereof expires or otherwise terminates without all of the shares covered by such Prior Plan Award having been issued; (ii) any shares subject to a Prior Plan Award that on or following September 13, 2021 are not issued because such Prior Plan Award or any portion thereof is settled in cash; and (iii) any shares issued pursuant to a Prior Plan Award that on or following September 13, 2021 are forfeited back to or repurchased by Lineage because of a failure to vest.

    The share reserve of the 2021 Plan will not be reduced by any of the following common shares and such shares will remain available for issuance under the 2021 Plan: (i) any shares subject to an award granted under the 2021 Plan that are not issued because such award or any portion thereof expires or otherwise terminates without all of the shares covered by such award having been issued; and (ii) any shares subject to an award granted under the 2021 Plan that are not issued because such award or any portion thereof is settled in cash.

    Any common shares issued pursuant to an award granted under the 2021 Plan that are forfeited back to or repurchased by Lineage because of a failure to vest (the “2021 Plan Returning Shares”) will revert to the share reserve of the 2021 Plan and become available again for issuance under the 2021 Plan.

    The following common shares will not revert to the share reserve of the 2021 Plan or become available again for issuance under the 2021 Plan: (i) any shares that are reacquired or withheld (or not issued) by Lineage to satisfy the exercise, strike or purchase price of an award granted under the 2021 Plan or a Prior Plan Award (including any shares subject to such award that are not delivered because such award is exercised through a reduction of shares subject to such award (i.e., “net exercised”)); (ii) any shares that are reacquired or withheld (or not issued) by Lineage to satisfy a tax withholding obligation in connection with an award granted under the 2021 Plan or a Prior Plan Award; (iii) any shares repurchased by Lineage on the open market with the proceeds of the exercise, strike or purchase price of an award granted under the 2021 Plan or a Prior Plan Award; and (iv) in the event that a stock appreciation right granted under the 2021 Plan or the 2012 Plan is settled in common shares, the gross number of common shares subject to such award.

    -40-


     

    The number of common shares available for issuance under the 2021 Plan will be reduced by: (i) one share for each share issued pursuant to an appreciation award granted under the 2021 Plan; and (ii) 1.50 shares for each share issued pursuant to a full value award granted under the 2021 Plan.

    The number of common shares available for issuance under the 2021 Plan will be increased by: (i) one share for each Prior Plan Returning Share or 2021 Plan Returning Share subject to an appreciation award; and (ii) 1.50 shares for each Prior Plan Returning Share or 2021 Plan Returning Share subject to a full value award.

    Eligibility

    All of our employees, non-employee directors and consultants are eligible to participate in the 2021 Plan and may receive all types of awards other than incentive stock options. Incentive stock options may be granted under the 2021 Plan only to our employees, including our affiliates’ employees.

    As of the record date for the Meeting, we, and our affiliates, had approximately 74 employees, eight non-employee directors and approximately 100 consultants.

    Administration

    Our Board previously delegated concurrent authority to our Compensation Committee to administer the 2021 Plan, but may, at any time, re-vest in itself some or all of the power delegated to our Compensation Committee. Our Board and Compensation Committee are each considered to be a “Plan Administrator” for purposes of this proposal.

    Subject to the terms of the 2021 Plan, the Plan Administrator determines the recipients, the types of Awards to be granted, the number of our common shares subject to or the cash value of Awards, and the terms and conditions of Awards granted under the 2021 Plan, including the period of their exercisability and vesting. The Plan Administrator also has the authority to provide for accelerated exercisability and vesting of Awards. Subject to the limitations set forth below, the Plan Administrator also determines the fair market value applicable to an Award and the exercise or strike price of stock options and stock appreciation rights granted under the 2021 Plan.

    Repricing; Cancellation and Re-Grant of Awards

    Under the 2021 Plan, the Plan Administrator does not have the authority to reprice any outstanding stock option or stock appreciation right by reducing the exercise or strike price of the stock option or stock appreciation right or to cancel any outstanding stock option or stock appreciation right that has an exercise or strike price greater than the then-current fair market value of our common shares in exchange for cash or other Awards without obtaining the approval of our shareholders. Such approval must be obtained within 12 months prior to such an event.

    Minimum Vesting Requirements

    Under the 2021 Plan, no Award may vest until at least 12 months following the date such Award was granted (excluding any Award granted to a non-employee director that vests on the earlier of the first anniversary of the grant date or Lineage’s next annual meeting of shareholders), except that shares up to 5% of the share reserve of the 2021 Plan may be issued pursuant to Awards that do not meet such vesting requirements.

    Dividends and Dividend Equivalents

    The 2021 Plan provides that dividends or dividend equivalents may be paid or credited with respect to any of our common shares subject to an Award, as determined by the Plan Administrator and contained in the applicable Award agreement; provided, however, that (i) no dividends or dividend equivalents may be paid with respect to any such shares before the date such shares have vested, (ii) any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable Award agreement (including any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest.

    -41-


     

    Limit on Non-Employee Director Compensation

    The aggregate value of all cash and equity-based compensation paid or granted by us to any individual for service as a non-employee director with respect to any fiscal year of Lineage will not exceed a total of $1,000,000. For purposes of this limitation, the value of any equity-based Award is calculated based on the grant date fair value of such Award for financial reporting purposes.

    Stock Options

    Stock options may be granted under the 2021 Plan pursuant to stock option agreements. The 2021 Plan permits the grant of stock options that are intended to qualify as incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”).

    The exercise price of a stock option granted under the 2021 Plan may not be less than 100% of the fair market value of our common shares on the date of grant and, in some cases (see “Limitations on Incentive Stock Options” below), may not be less than 110% of such fair market value.

    The term of stock options granted under the 2021 Plan may not exceed 10 years from the date of grant and, in some cases (see “Limitations on Incentive Stock Options” below), may not exceed 5 years from the date of grant. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s service relationship with us or any of our affiliates (referred to in this proposal as “continuous service”) terminates (other than for cause and other than upon the participant’s death or disability), the participant may exercise any vested stock options for up to 3 months following the participant’s termination of continuous service. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s continuous service terminates due to the participant’s disability or death (or the participant dies within a specified period, if any, following termination of continuous service), the participant, or his or her beneficiary, as applicable, may exercise any vested stock options for up to 12 months following the participant’s termination due to the participant’s disability or for up to 18 months following the participant’s death. Except as explicitly provided otherwise in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s continuous service is terminated “for cause” (as defined in the 2021 Plan), all stock options held by the participant will terminate upon the participant’s termination of continuous service and the participant will be prohibited from exercising any stock option from and after such termination date. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, the term of a stock option may be extended if the exercise of the stock option following the participant’s termination of continuous service (other than for cause and other than upon the participant’s death or disability) would be prohibited by applicable securities laws or if the sale of any of our common shares received upon exercise of the stock option following the participant’s termination of continuous service (other than for cause) would violate our insider trading policy. In no event, however, may a stock option be exercised after its original expiration date.

    Acceptable forms of consideration for the purchase of our common shares pursuant to the exercise of a stock option under the 2021 Plan will be determined by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to us; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; (iii) by delivery to us of our common shares (either by actual delivery or attestation); (iv) by a net exercise arrangement (for NSOs only); or (v) in other legal consideration approved by the Plan Administrator.

    Stock options granted under the 2021 Plan may vest and become exercisable in cumulative increments, as determined by the Plan Administrator at the rate specified in the stock option agreement (subject to the limitations described in “Minimum Vesting Requirements” above). Shares covered by different stock options granted under the 2021 Plan may be subject to different vesting schedules as the Plan Administrator may determine.

    The Plan Administrator may impose limitations on the transferability of stock options granted under the 2021 Plan in its discretion. Generally, a participant may not transfer a stock option granted under the 2021 Plan other than by will or the laws of descent and distribution or, subject to approval by the Plan Administrator, pursuant to a domestic relations order or an official marital settlement agreement. However, the Plan Administrator may permit transfer of a stock option in a manner that is not prohibited by applicable tax and securities laws. In addition, subject to approval

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    by the Plan Administrator, a participant may designate a beneficiary who may exercise the stock option following the participant’s death. Notwithstanding the foregoing, no option may be transferred to any financial institution without prior shareholder approval.

    Limitations on Incentive Stock Options

    The aggregate fair market value, determined at the time of grant, of our common shares with respect to ISOs that are exercisable for the first time by a participant during any calendar year under all of our stock plans may not exceed $100,000. The stock options or portions of stock options that exceed this limit or otherwise fail to qualify as ISOs are treated as NSOs. No ISO may be granted to any person who, at the time of grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any affiliate unless the following conditions are satisfied:

    •
    the exercise price of the ISO must be at least 110% of the fair market value of our common shares on the date of grant; and
    •
    the term of the ISO must not exceed five years from the date of grant.

    Subject to adjustment for certain changes in our capitalization, the aggregate maximum number of our common shares that may be issued pursuant to the exercise of ISOs under the 2021 Plan is 30,000,000 shares.

    Stock Appreciation Rights

    Stock appreciation rights may be granted under the 2021 Plan pursuant to stock appreciation right agreements. Each stock appreciation right is denominated in common share equivalents. The strike price of each stock appreciation right will be determined by the Plan Administrator, but will in no event be less than 100% of the fair market value of our common shares on the date of grant. The term of stock appreciation rights granted under the 2021 Plan may not exceed 10 years from the date of grant. The Plan Administrator may also impose restrictions or conditions upon the vesting of stock appreciation rights that it deems appropriate (subject to the limitations described in “Minimum Vesting Requirements” above). The appreciation distribution payable upon exercise of a stock appreciation right may be paid in our common shares, in cash, in a combination of cash and shares, or in any other form of consideration determined by the Plan Administrator and set forth in the stock appreciation right agreement. Stock appreciation rights will be subject to the same conditions upon termination of continuous service and restrictions on transfer as stock options under the 2021 Plan.

    Restricted Stock and Restricted Stock Unit Awards

    Restricted stock awards may be granted under the 2021 Plan pursuant to restricted stock award agreements. A restricted stock award may be granted in consideration for cash, check, bank draft or money order payable to us, the participant’s services performed for us or any of our affiliates, or any other form of legal consideration acceptable to the Plan Administrator. Common shares acquired under a restricted stock award may be subject to forfeiture to or repurchase by us in accordance with a vesting schedule determined by the Plan Administrator (subject to the limitations described in “Minimum Vesting Requirements” above). Rights to acquire our common shares under a restricted stock award may be transferred only upon such terms and conditions as are set forth in the restricted stock award agreement; provided, however, that no restricted stock award may be transferred to any financial institution without prior shareholder approval. Upon a participant’s termination of continuous service for any reason, any shares subject to restricted stock awards held by the participant that have not vested as of such termination date may be forfeited to or repurchased by us.

    Restricted stock unit awards may also be granted under the 2021 Plan pursuant to restricted stock unit award agreements. Payment of any purchase price may be made in any form of legal consideration acceptable to the Plan Administrator. A restricted stock unit award may be settled by the delivery of our common shares, in cash, in a combination of cash and shares, or in any other form of consideration determined by the Plan Administrator and set forth in the restricted stock unit award agreement. Restricted stock unit awards may be subject to vesting in accordance with a vesting schedule to be determined by the Plan Administrator (subject to the limitations described in “Minimum Vesting Requirements” above). Except as otherwise provided in a participant’s restricted stock unit award agreement

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    or other written agreement with us or one of our affiliates, restricted stock units that have not vested will be forfeited upon the participant’s termination of continuous service for any reason.

    Performance Stock Awards

    A performance stock award is a stock award that is payable (including that may be granted, may vest, or may be exercised) contingent upon the attainment of pre-determined performance goals during a performance period. A performance stock award may require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained are determined by the Plan Administrator (subject to the limitations described in “Minimum Vesting Requirements” above). In addition, to the extent permitted by applicable law and the performance stock award agreement, the Plan Administrator may determine that cash may be used in payment of performance stock awards.

    Performance goals under the 2021 Plan are based on any one or more of the following performance criteria: (i) earnings (including earnings per share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total shareholder return; (v) return on equity or average shareholder’s equity; (vi) return on assets, investment, or capital employed; (vii) share price; (viii) margin (including gross margin); (ix) income (before or after taxes) or net income; (x) operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses and cost reduction goals; (xvii) improvement in or attainment of working capital levels; (xviii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation or completion of projects or processes, including a clinical trial of a new drug, biological product, or medical device; (xxv) customer satisfaction; (xxvi) shareholders’ equity; (xxvii) capital expenditures; (xxviii) debt levels; (xxix) operating profit or net operating profit; (xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and (xxxiii) any other measures of performance selected by the Plan Administrator.

    Performance goals may be based on a company-wide basis, with respect to one or more business units, divisions, affiliates or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. The Plan Administrator is authorized to make appropriate adjustments in the method of calculating the attainment of performance goals for a performance period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated performance goals; (iii) to exclude the effects of changes to generally accepted accounting principles; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; and (vi) to make other appropriate adjustments selected by the Plan Administrator.

    In addition, the Plan Administrator retains the discretion to reduce or eliminate the compensation or economic benefit due upon the attainment of any performance goals and to define the manner of calculating the performance criteria it selects to use for a performance period.

    Other Stock Awards

    Other forms of Awards valued in whole or in part by reference to, or otherwise based on, our common shares may be granted either alone or in addition to other Awards under the 2021 Plan. Subject to the terms of the 2021 Plan (including the limitations described in “Minimum Vesting Requirements” above), the Plan Administrator has sole and complete authority to determine the persons to whom and the time(s) at which such other stock Awards are granted, the number of our common shares to be granted, and all other terms and conditions of such other stock Awards.

    Clawback/Recoupment

    Awards granted under the 2021 Plan are subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act

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    or other applicable law, and any other clawback policy that we adopt. In addition, the Plan Administrator may impose other clawback, recovery or recoupment provisions in an award agreement, including a reacquisition right in respect of previously acquired shares or other cash or property upon the occurrence of cause.

    Changes to Capital Structure

    In the event of certain capitalization adjustments, the Plan Administrator will appropriately adjust: (i) the class(es) and maximum number of securities subject to the 2021 Plan; (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of ISOs; and (iii) the class(es) and number of securities and price per share of stock subject to outstanding awards.

    Change in Control

    The provisions set forth below apply to outstanding Awards under the 2021 Plan in the event of a change in control (as defined in the 2021 Plan and described below) unless otherwise provided in the instrument evidencing the Award, in any other written agreement between us or one of our affiliates and the participant, or in any director compensation policy we adopt.

    In the event of a change in control, any surviving or acquiring corporation (or its parent company) may assume or continue any or all outstanding Awards under the 2021 Plan, or may substitute similar stock Awards for such outstanding Awards (including, but not limited to, awards to acquire the same consideration paid to the shareholders of Lineage pursuant to the change in control), and any reacquisition or repurchase rights held by Lineage in respect of shares issued pursuant to any outstanding Awards under the 2021 Plan may be assigned by Lineage to the surviving or acquiring corporation (or its parent company). The terms of any such assumption, continuation or substitution will be set by the Plan Administrator.

    In the event of a change in control in which the surviving or acquiring corporation (or its parent company) does not assume or continue outstanding Awards under the 2021 Plan, or substitute similar stock Awards for such outstanding Awards, then with respect to any such Awards that have not been assumed, continued or substituted and that are held by participants whose continuous service has not terminated prior to the effective time of the change in control (the “Current Participants”), the vesting (and exercisability, if applicable) of such Awards will be accelerated in full (and with respect to any such Awards that are subject to performance-based vesting conditions or requirements, vesting will be deemed to be satisfied at the greater of (i) the target level of performance or (ii) the actual level of performance measured in accordance with the applicable performance goals as of the date of the change in control) to a date prior to the effective time of the change in control (contingent upon the closing or completion of the change in control) as the Plan Administrator will determine (or, if the Plan Administrator does not determine such a date, to the date that is 5 days prior to the effective time of the change in control), and such Awards will terminate if not exercised (if applicable) prior to the effective time of the change in control in accordance with the exercise procedures determined by the Plan Administrator, and any reacquisition or repurchase rights held by Lineage with respect to such Awards will lapse (contingent upon the closing or completion of the change in control).

    In the event of a change in control in which the surviving or acquiring corporation (or its parent company) does not assume or continue outstanding Awards under the 2021 Plan, or substitute similar stock Awards for such outstanding Awards, then with respect to any such Awards that have not been assumed, continued or substituted and that are held by participants other than the Current Participants, such Awards will terminate if not exercised (if applicable) prior to the effective time of the change in control in accordance with the exercise procedures determined by the Plan Administrator; provided, however, that any reacquisition or repurchase rights held by Lineage with respect to such Awards will not terminate and may continue to be exercised notwithstanding the change in control.

    Notwithstanding the foregoing, in the event any outstanding Award under the 2021 Plan held by a participant will terminate if not exercised prior to the effective time of a change in control, the Plan Administrator may provide that the participant may not exercise such Award but instead will receive a payment, in such form as may be determined by the Plan Administrator, equal in value to the excess, if any, of (i) the value of the property the participant would have received upon the exercise of such award immediately prior to the effective time of the change in control, over (ii) any exercise price payable by the participant in connection with such exercise.

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    For purposes of the 2021 Plan, a change in control generally will be deemed to occur in the event: (i) a person, entity or group acquires, directly or indirectly, our securities representing more than 50% of the combined voting power of our then outstanding securities, other than by virtue of a merger, consolidation, or similar transaction; (ii) there is consummated a merger, consolidation, or similar transaction and, immediately after the consummation of such transaction, our shareholders immediately prior thereto do not own, directly or indirectly, more than 50% of the combined outstanding voting power of the surviving entity or the parent of the surviving entity in substantially the same proportions as their ownership of our outstanding voting securities immediately prior to such transaction; (iii) there is consummated a sale or other disposition of all or substantially all of our consolidated assets, other than a sale or other disposition to an entity in which more than 50% of the entity’s combined voting power is owned by our shareholders in substantially the same proportions as their ownership of our outstanding voting securities immediately prior to such sale or other disposition; or (iv) individuals who, on the date the 2021 Plan was adopted by our Board, are members of our Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the members of our Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority of the Incumbent Directors then still in office, such new member will be considered as an Incumbent Director; provided, however, that no individual initially elected or nominated as a member of our Board as a result of an actual or threatened election contest with respect to Board membership or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than our Board will be deemed to be an Incumbent Director.

    Plan Amendments and Termination

    The Plan Administrator has the authority to amend or terminate the 2021 Plan at any time. However, except as otherwise provided in the 2021 Plan or an Award agreement, no amendment or termination of the 2021 Plan may materially impair a participant’s rights under his or her outstanding Awards without the participant’s consent.

    No incentive stock options may be granted under the 2021 Plan after July 21, 2031, which is the tenth anniversary of the date the 2021 Plan was adopted by our Board.

    U.S. Federal Income Tax Consequences

    The following discussion summarizes certain federal income tax consequences of participation in the 2021 Plan. The information is based upon existing federal income tax rules and therefore is subject to change when the provisions of those rules and the regulations thereunder change. Participants should consult their tax advisors regarding the federal, state, local and other tax consequences of the grant or exercise of an Award or the disposition of shares acquired the 2021 Plan. The 2021 Plan is not qualified under the provisions of Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974. Our ability to realize the benefit of any tax deductions described below depends on our generation of taxable income as well as the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of our tax reporting obligations.

    Nonstatutory Stock Options

    Generally, there is no taxation upon the grant of an NSO if the stock option is granted with an exercise price equal to the fair market value of the underlying shares on the grant date. Upon exercise, a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the underlying shares on the date of exercise of the stock option over the exercise price. If the participant is employed by us or one of our affiliates, that income will be subject to withholding taxes. The participant’s tax basis in those shares will be equal to their fair market value on the date of exercise of the stock option, and the participant’s capital gain holding period for those shares will begin on that date.

    We will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant.

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    Incentive Stock Options

    The 2021 Plan provides for the grant of stock options that are intended to qualify as “incentive stock options,” as defined in Section 422 of the Code. Under the Code, a participant generally is not subject to ordinary income tax upon the grant or exercise of an ISO. If the participant holds a share received upon exercise of an ISO for more than 2 years from the date the stock option was granted and more than 1 year from the date the stock option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the participant’s tax basis in that share will be long-term capital gain or loss.

    If, however, a participant disposes of a share acquired upon exercise of an ISO before the end of the required holding period, which is referred to as a disqualifying disposition, the participant generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date of exercise of the stock option over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the stock option, the amount of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition exceeds the fair market value of the share on the date of exercise of the stock option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year.

    For purposes of the alternative minimum tax, the amount by which the fair market value of a share acquired upon exercise of an ISO exceeds the exercise price of the stock option generally will be an adjustment included in the participant’s alternative minimum taxable income for the year in which the stock option is exercised. If, however, there is a disqualifying disposition of the share in the year in which the stock option is exercised, there will be no adjustment for alternative minimum tax purposes with respect to that share. In computing alternative minimum taxable income, the tax basis of a share acquired upon exercise of an ISO is increased by the amount of the adjustment taken into account with respect to that share for alternative minimum tax purposes in the year the stock option is exercised.

    We are not allowed a tax deduction with respect to the grant or exercise of an ISO or the disposition of a share acquired upon exercise of an ISO after the required holding period. If there is a disqualifying disposition of a share, however, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant, provided that either the employee includes that amount in income or we timely satisfy our reporting requirements with respect to that amount.

    Restricted Stock Awards

    Generally, the recipient of a restricted stock award will recognize ordinary income at the time the shares are received equal to the excess, if any, of the fair market value of the shares received over any amount paid by the recipient in exchange for the shares. If, however, the shares are not vested when they are received (for example, if the employee is required to work for a period of time in order to have the right to sell the shares), the recipient generally will not recognize income until the shares become vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the shares on the date they become vested over any amount paid by the recipient in exchange for the shares. A recipient may, however, file an election with the Internal Revenue Service, within 30 days following his or her receipt of the award, to recognize ordinary income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the shares on the date the award is granted over any amount paid by the recipient for the shares.

    The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when the shares are received or when the shares become vested.

    We will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock award.

    Restricted Stock Unit Awards

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    Generally, the recipient of a restricted stock unit award structured to comply with the requirements of Section 409A of the Code or an exemption to Section 409A of the Code will recognize ordinary income at the time the shares are delivered equal to the excess, if any, of the fair market value of the shares received over any amount paid by the recipient in exchange for the shares. To comply with the requirements of Section 409A of the Code, the shares subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless the restricted stock unit award otherwise complies with or qualifies for an exemption to the requirements of Section 409A of the Code, in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed.

    The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the shares are delivered.

    We will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock unit award.

    Stock Appreciation Rights

    Generally, if a stock appreciation right is granted with an exercise price equal to the fair market value of the underlying shares on the grant date, the recipient will recognize ordinary income equal to the fair market value of the shares or cash received upon such exercise. We will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the stock appreciation right.

    Section 162(m) Limit

    Under Section 162(m) of the Code (“Section 162(m)”), compensation paid to any publicly held corporation’s “covered employees” that exceeds $1 million per taxable year for any covered employee is generally non-deductible. Awards granted under the 2021 Plan are subject to the deduction limit under Section 162(m) and are not eligible to qualify for the performance-based compensation exception under Section 162(m) pursuant to the transition relief provided by the Tax Cuts and Jobs Act.

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    New Plan Benefits

    No awards have been granted to any officer, director, employee or consultant pursuant to the 2021 Plan that are contingent upon the approval of the Plan Amendment by our shareholders. We anticipate that stock options and restricted stock units may be granted in the discretion of our Board or the Compensation Committee under the 2021 Plan out of the additional common shares that would be available under the 2021 Plan if the Plan Amendment is approved by our shareholders; however, the number and type of equity-based awards that may be so granted has not yet been determined. However, pursuant to our current compensation arrangement for non-employee directors, and based on the current composition of our Board and taking into account the reduction in the size of our Board due to one director not standing for re-election at the Meeting, the aggregate number of our common shares subject to awards that will automatically be granted on an annual basis to all of our current directors who are not executive officers as a group will be 450,000 shares (which consists of a stock option to purchase 75,000 shares for each of our current non-employee directors who will continue in office following the Meeting). For additional information regarding our current compensation arrangement for non-employee directors, please see “Director Compensation” above.

    OUR BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL

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    EQUITY COMPENSATION PLAN INFORMATION

    The following table shows certain information concerning outstanding options and RSUs and the number of common shares remaining available for issuance and RSUs under all of our compensation plans and agreements as of December 31, 2024:

     

    Plan Category

     

    Number of
    Shares to be
    Issued Upon
    Exercise of
    Outstanding
    Options and
    Vesting of
    Restricted
    Stock Units,
    and Rights

     

     

    Weighted
    Average
    Exercise Price
    of the
    Outstanding
    Options,
    and Rights

     

     

    Number of
    Shares
    Remaining
    Available for
    Future Issuance
    under Equity Compensation
    Plans

     

    Equity compensation plans approved by shareholders (2)

     

     

    25,372,326

     

     

    $

    1.62

     

    (1)

     

    21,877,761

     

    Equity compensation plans not approved by shareholders(3)

     

     

    1,854,000

     

     

    $

    1.87

     

     

     

    —

     

    Total

     

     

    27,226,326

     

     

    $

    1.62

     

     

     

    21,877,761

     

     

    (1)
    Reflects the weighted-average exercise price of 24,871,294 shares subject to options outstanding as of December 31, 2024 under our 2021 Equity Incentive Plan and 2012 Equity Incentive Plan. RSUs do not have exercise prices and, therefore, the weighted average exercise price did not take those awards into account.
    (2)
    Consists of our 2021 Equity Incentive Plan and 2012 Equity Incentive Plan.
    (3)
    Consists of an option grant approved by the independent members of our Board and made in reliance upon the exception for inducement grants to new employees under the NYSE American Company Guide.

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    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Related Person Transactions

    Since January 1, 2023, there has not been, nor is there currently proposed, any transaction in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years and in which any of our directors or executive officers, any nominee for director, any beneficial owner of more than 5% of any class of our voting securities or any of their respective affiliates or immediate family members, had, or will have, a direct or indirect material interest, except as described below.

    In November 2018, we, Asterias Biotherapeutics, Inc. (“Asterias”), and Patrick Merger Sub, Inc., a wholly owned subsidiary of ours, entered into an Agreement and Plan of Merger pursuant to which we agreed to acquire all of the outstanding common stock of Asterias in a stock-for-stock transaction (the “Asterias Merger”). The Asterias Merger closed in March 2019.

    In October 2019, a putative class action lawsuit was filed challenging the Asterias Merger. The lawsuit (captioned Ross v. Lineage Cell Therapeutics, Inc., et al., C.A. No. 2019-0822) was filed in Delaware Chancery Court and named, among other defendants, us, Michael H. Mulroy, Alfred D. Kingsley, Richard T. LeBuhn and Aditya Mohanty. Mr. Mulroy is a member of our Board and was a former member of the Asterias board of directors. Mr. Kingsley was a former member of our Board and a former member of the Asterias board of directors. Messrs. LeBuhn and Mohanty were also former members of the Asterias board of directors, and Mr. Mohanty was a former member of our Board and our former chief executive officer. The lawsuit was brought by a purported stockholder of Asterias, on behalf of a putative class of Asterias stockholders, and asserted breach of fiduciary duty and aiding and abetting claims under Delaware law. In April 2022, the parties reached an agreement in principle to settle the lawsuit and, in October 2022, the plaintiff, on behalf of himself and all others similarly situated, us and Messrs. Mulroy, Kingsley, LeBuhn and Mohanty entered into a Stipulation and Agreement of Compromise and Settlement (the “Settlement Agreement”). The effectiveness of the Settlement Agreement was subject to court approval, which was obtained in February 2023. Pursuant to the terms of the Settlement Agreement, we and certain insurers of the defendants paid $10.65 million (the “Settlement Amount”) into a fund created for the benefit of the purported class and in consideration for the full and final release, settlement and discharge of all claims. Approximately $7.12 million of the Settlement Amount was funded by certain insurers and approximately $3.53 million was paid by us in cash. We and all defendants have denied, and continue to deny, the claims alleged in the lawsuit and the settlement does not reflect or constitute any admission, concession, presumption, proof, evidence or finding of any liability, fault, wrongdoing or injury or damages, or of any wrongful conduct, acts or omissions on the part any defendant.

    In connection with the putative shareholder class action lawsuits filed challenging the Asterias Merger, including the lawsuit described in the paragraph above, we agreed to pay for the legal defense of Neal Bradsher, a member of our Board, and Broadwood Partners, L.P. (“Broadwood”), one of our shareholders and an affiliate of Mr. Bradsher, and Broadwood Capital, Inc., which manages Broadwood, all of which were named in the lawsuits. During the years ending December 31, 2023, we incurred a total of approximately $5,000 in legal expenses on behalf of such parties. We have not incurred any additional expenses related to this matter.

    On February 6, 2024, we entered into a stock purchase agreement with certain investors relating to the purchase and sale in a registered direct offering of an aggregate of 13,461,540 common shares. The offering price was $1.04 per common share. The offering closed on February 8, 2024. Broadwood purchased 6,730,770 common shares in the offering, and Don M. Bailey, a member of our board of directors, purchased approximately 100,000 common shares in the offering.

    On November 19, 2024, we entered into securities purchase agreements with certain unaffiliated healthcare focused institutional investors and with Broadwood relating to the purchase and sale in a registered direct offering of an aggregate of up to 39,473,688 of our common shares and accompanying warrants to purchase an aggregate of up to 39,473,688 of our common shares at a combined purchase price of $0.76 per common share and accompanying warrant. In January 2025, following receipt of stockholder approval of the issuance of our common shares and accompanying warrant pursuant to the terms of the securities purchase agreement between us and Broadwood, Broadwood purchased 7,894,737 common shares and an accompanying warrant to purchase an aggregate of up to

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    7,894,737 common shares. Such warrant will be exercisable for one common share at an exercise price of $0.91 per common share commencing on May 21, 2025 and will expire on the earlier of (a) May 21, 2028, and (b) the 90th day following the date of the public disclosure of the intent to advance OpRegen (also known as RG6501) into a multi-center phase 2 or 3 clinical trial which includes a control or comparator arm, or if the date of such public disclosure occurs prior to May 21, 2025, the 90th day following May 21, 2025, with each such 90-day period subject to extension if certain conditions, including equity conditions, some of which are outside of our control, are not satisfied.

    Related Person Transaction Policy

    We have adopted a related person transaction policy that applies to transactions exceeding $120,000 in which any of our officers, directors, 5% Shareholders, or any member of their immediate family, has a direct or indirect material interest, determined in accordance with the policy (a “Related Person Transaction”). A Related Person Transaction must be reported to our Chief Financial Officer and General Counsel or outside legal counsel and will be subject to review and approval by our Audit Committee prior to effectiveness or consummation, to the extent practical. In addition, any Related Person Transaction that is ongoing in nature will be reviewed by our Audit Committee annually to ensure that the transaction has been conducted in accordance with any previous approval and that all required disclosures regarding the transaction are made.

    As appropriate for the circumstances, our Audit Committee will review and consider:

    •
    the interest of the officer, director, beneficial owner of more than 5% of our common shares, or any member of their immediate family (“Related Person”) in the Related Person Transaction;
    •
    the approximate dollar value of the amount involved in the Related Person Transaction;
    •
    the approximate dollar value of the amount of the Related Person’s interest in the transaction without regard to the amount of any profit or loss;
    •
    whether the transaction was undertaken in the ordinary course of our business;
    •
    whether the transaction with the Related Person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party;
    •
    the purpose of, and the potential benefits of the transaction to us; and
    •
    any other information regarding the Related Person Transaction or the Related Person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

    Our Audit Committee will review all relevant information available to it about a Related Person Transaction. Our Audit Committee may approve or ratify the Related Person Transaction only if our Audit Committee determines that, under all of the circumstances, the transaction is in, or is not in conflict with, our best interests. Our Audit Committee may, in its sole discretion, impose such conditions as it deems appropriate on us or the Related Person in connection with approval of the Related Person Transaction. In addition, our Audit Committee has authority to, in its sole discretion, review and approve transactions, arrangements and relationships in which we are a participant, any of our officers, directors, 5% Shareholders, or any member of their immediate family, has a direct or indirect material interest, and the amount involved is $120,000 or less.

    A copy of our Related Person Transaction Policy can be found on our website at https://investor.lineagecell.com/corporate-governance/highlights.

    -52-


     

    IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS

    The SEC has adopted rules that permit companies and brokers, banks or other intermediaries to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other annual meeting materials with respect to two or more shareholders sharing the same address by delivering a single Notice of Internet Availability or only one set of other annual meeting materials addressed to those shareholders (unless otherwise requested by one or more of such shareholders). This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and reduces duplicate mailings and saves significant printing and postage costs as well as natural resources.

    Brokers, banks and other intermediaries with account holders who are our shareholders may be householding our proxy materials. A single Notice of Internet Availability may be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from us (if you are a shareholder of record) or from your broker, bank or other intermediary (if you are a beneficial owner) that we or they will be householding communications to your address, householding will continue until you are notified otherwise or until you notify your broker or us that you no longer wish to participate in householding.

    If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Notice of Internet Availability, or if you currently receive multiple copies and would like to request a single copy, you may notify your broker if you are a beneficial owner, or if you are a shareholder of record, (1) direct your written request to us at Lineage Cell Therapeutics, Inc., 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008, Attention: Corporate Secretary or (2) contact us by telephone at 442-287-8963. Upon written or oral request to us, we will promptly deliver a separate copy of the Notice of Internet Availability, or annual report and proxy statement, to any shareholder at a shared address to which a single copy of such material was delivered.

    SHAREHOLDER PROPOSALS AND NOMINATIONS

    Shareholders who seek to have their proposals of business matters be considered for inclusion in our proxy materials for next year’s annual meeting of shareholders must notify us of such intention by written notice. The proposal of an item of business or action must be received at our principal executive offices no later than the close of business on December 31, 2025, which is 120 days prior to the one-year anniversary of the date this Proxy Statement was released to shareholders, unless the date of next year’s annual meeting is changed by more than 30 days from the anniversary of the date of the Meeting, in which case the deadline for such proposals will be a reasonable time before we begin to print and send our proxy materials. All such proposals must comply with the requirements of Rule 14a-8 under the Exchange Act to be considered for inclusion in our Proxy Statement and form of proxy relating to the annual meeting.

    In addition, our amended and restated bylaws set forth an advance notice procedure applicable to shareholders who intend (1) to present an item of business before or conduct business at an annual meeting of shareholders, but not for inclusion in our proxy materials pursuant to Rule 14a-8, or (2) to directly nominate individuals for election at an annual meeting other than the director candidates that will be included in our proxy statement for such meeting. For such shareholder proposals of business and director nominations to be brought before an annual meeting, the proposing shareholders are required to give timely written notice regarding the proposal or nomination, to provide the information specified in our amended and restated bylaws, such as information about the shareholder and Lineage securities held by such shareholder, a brief description of the proposed business, reasons for proposing the business, and in the case of nominations, certain information about the person whom the proposing shareholder wishes to nominate for election or re-election as a director, and otherwise satisfy all other requirements set forth in our amended and restated bylaws. In order to meet the deadline for timely notice for next year’s annual meeting, such notice of the proposal or nomination must be received at our principal executive offices no later than the close of business on March 28, 2026, which is 90 days prior to the one-year anniversary of the Meeting. However, if the date of next year’s annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be received no later than the later of the close of business on the 90th calendar day prior to such annual meeting and the close of business on the 10th day following the day on which public disclosure of the date of such annual meeting was first made. Shareholders are advised to review our amended and restated bylaws to ensure compliance with the specified requirements as to the form and content of a shareholder’s notice.

    -53-


     

    Any notice of director nomination submitted to us must also include the additional information required by Rule 14a-19(b) under the Exchange Act. Therefore, in addition to satisfying the deadlines for timely notice of a proposed director nominee, shareholders who intend to solicit proxies in support of nominees submitted in accordance with the foregoing advance notice provisions must further provide notice of proxy solicitation in support of director candidates other than Lineage’s nominees, as required under Rule 14a-19, no later than March 28, 2026, which is 90 days prior to the one-year anniversary of the Meeting.

    ANNUAL REPORT

    Our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, without exhibits, may be obtained by a shareholder without charge, upon written request to the Corporate Secretary of Lineage. At a shareholder’s request, we will also furnish any exhibit to such Annual Report upon the payment of a fee to cover our reasonable expenses in furnishing such exhibit.

    -54-


     

    APPENDIX A

    (The following is the text of the proposed Plan Amendment. This text is followed by the current text of the 2021 Plan (without giving effect to the proposed Plan Amendment.)

    Amendment No. 2 to
    Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan

    Section 3(a)(i) of the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan is deleted in its entirety and replaced with the following:

    Subject to Section 3(a)(iii) and Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards from and after the Effective Date (the “Share Reserve”) will not exceed the sum of (A) 54,000,000 shares and (B) the Prior Plan Returning Shares, if any, as such shares become available for issuance under this Plan from time to time.

    *****

    Lineage Cell Therapeutics, Inc.

    2021 Equity Incentive Plan, As Amended(1)

    Originally adopted by the Board of Directors: July 21, 2021

    Originally approved by the Shareholders: September 13, 2021

    1. General.

    (a) Prior Plan.As of the Effective Date: (i) no additional awards may be granted under the Prior Plan; and (ii) all Prior Plan Awards will remain subject to the terms of the Prior Plan, except that any Prior Plan Returning Shares will become available for issuance pursuant to Awards granted under this Plan. All Awards granted under this Plan will be subject to the terms of this Plan.

    (b) Eligible Award Recipients. Subject to Section 4, Employees, Directors and Consultants are eligible to receive Awards.

    (c) Available Awards. The Plan provides for the grant of the following types of Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; and (vii) Other Stock Awards.

    (d) Purpose.The Plan, through the granting of Awards, is intended to help the Company and any Affiliate secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate, and provide a means by which such persons may benefit from increases in value of the Common Stock.

    2. Administration.

    (a) Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).

    (b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

     

    (1)
    An amendment to Section 3(a)(i) was adopted by the Board of Directors on July 11, 2023, which was approved by the shareholders on September 6, 2023.

     

     


     

    (i) To determine (A) who will be granted Awards, (B) when and how each Award will be granted, (C) what type of Award will be granted, (D) the provisions of each Award (which need not be identical), including when a Participant will be permitted to exercise or otherwise receive cash or Common Stock under the Award, (E) the number of shares of Common Stock subject to, or the cash value of, an Award, and (F) the Fair Market Value applicable to an Award.

     

    (ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective.

    (iii) To settle all controversies regarding the Plan and Awards granted under it.

    (iv) To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or shares of Common Stock may be issued in settlement thereof).

    (v) To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan (including Section 2(b)(viii)) or an Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights under an outstanding Award without his or her written consent.

    (vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to make the Plan or Awards granted under the Plan compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. However, if required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek shareholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, or (E) materially expands the types of Awards available for issuance under the Plan. Except as otherwise provided in the Plan (including Section 2(b)(viii)) or an Award Agreement, no amendment of the Plan will materially impair a Participant’s rights under an outstanding Award without his or her written consent.

    (vii) To submit any amendment to the Plan for shareholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 422 of the Code regarding incentive stock options or (B) Rule 16b-3.

    (viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more outstanding Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided, however, that except as otherwise provided in the Plan (including this Section 2(b)(viii)) or an Award Agreement, no amendment of an outstanding Award will materially impair a Participant’s rights under such Award without his or her written consent.

    Notwithstanding the foregoing or anything in the Plan to the contrary, unless prohibited by applicable law, the Board may amend the terms of any outstanding Award or the Plan, or may suspend or terminate the Plan, without the affected Participant’s consent, (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (C) to clarify the manner of exemption from, or to bring the Award or the Plan into compliance with, Section 409A of the Code, or (D) to comply with other applicable laws or listing requirements.

     


     

    (ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.

    (x) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction).

    (c) Delegation to Committee.

    (i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as applicable). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

    (ii) Rule 16b-3 Compliance. The Committee may consist solely of two or more Non-Employee Directors in accordance with Rule 16b-3.

    (d) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

    (e) Cancellation and Re-Grant of Awards. Neither the Board nor any Committee will have the authority to (i) reduce the exercise or strike price of any outstanding Option or SAR or (ii) cancel any outstanding Option or SAR that has an exercise or strike price (per share) greater than the then-current Fair Market Value of the Common Stock in exchange for cash or other Awards under the Plan, unless the shareholders of the Company have approved such an action within 12 months prior to such an event.

    (f) Minimum Vesting Requirements. No Award may vest (or, if applicable, be exercisable) until at least 12 months following the date of grant of the Award (excluding, for this purpose, any Award granted to a Non-Employee Director that vests (or, if applicable, becomes exercisable) on the earlier of the first anniversary of the date of grant or the Company’s next annual meeting of shareholders); provided, however, that shares of Common Stock up to 5% of the Share Reserve (as defined in Section 3(a)(i)) may be issued pursuant to Awards that do not meet such vesting (and, if applicable, exercisability) requirements.

    (g) Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to an Award, as determined by the Board and contained in the applicable Award Agreement; provided, however, that (i) no dividends or dividend equivalents may be paid with respect to any such shares before the date such shares have vested under the terms of such Award Agreement, (ii) any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of such Award Agreement (including, but not limited to, any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to the Company on the date, if any, such shares are forfeited to or repurchased by the Company due to a failure to meet any vesting conditions under the terms of such Award Agreement.

     


     

    3. Shares Subject to the Plan.

    (a) Share Reserve.

    (i) Subject to Section 3(a)(iii) and Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards from and after the Effective Date (the “Share Reserve”) will not exceed the sum of (A) 34,500,000 shares and (B) the Prior Plan Returning Shares, if any, as such shares become available for issuance under this Plan from time to time.

    (ii) Subject to Section 3(b), the number of shares of Common Stock available for issuance under the Plan will be reduced by: (A) one share for each share of Common Stock issued pursuant to an Appreciation Award granted under the Plan; and (B) 1.50 shares for each share of Common Stock issued pursuant to a Full Value Award granted under the Plan.

    (iii) Subject to Section 3(b), the number of shares of Common Stock available for issuance under the Plan will be increased by: (A) one share for each Prior Plan Returning Share or 2021 Plan Returning Share (as defined in Section 3(b)(ii)) subject to an Appreciation Award; and (B) 1.50 shares for each Prior Plan Returning Share or 2021 Plan Returning Share subject to a Full Value Award.

    (iv) For clarity, the Share Reserve is a limit on the number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by NYSE American Company Guide Section 711 or, if applicable, NYSE Listed Company Manual Section 303A.08, Nasdaq Listing Rule 5635(c) or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.

    (b) Operation of Share Reserve.

    (i) No Reduction to Share Reserve. The Share Reserve will not be reduced by any of the following shares of Common Stock and such shares will remain available for issuance under the Plan: (A) any shares subject to an Award that are not issued because such Award or any portion thereof expires or otherwise terminates without all of the shares covered by such Award having been issued; and (B) any shares subject to an Award that are not issued because such Award or any portion thereof is settled in cash.

    (ii) Shares Available for Subsequent Issuance. Any shares of Common Stock issued pursuant to an Award that are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares (the “2021 Plan Returning Shares”) will revert to the Share Reserve and become available again for issuance under the Plan.

    (iii) Shares Not Available for Subsequent Issuance. The following shares of Common Stock will not revert to the Share Reserve or become available again for issuance under the Plan: (A) any shares that are reacquired or withheld (or not issued) by the Company to satisfy the exercise, strike or purchase price of an Award or a Prior Plan Award (including any shares subject to such award that are not delivered because such award is exercised through a reduction of shares subject to such award (i.e., “net exercised”)); (B) any shares that are reacquired or withheld (or not issued) by the Company to satisfy a tax withholding obligation in connection with an Award or a Prior Plan Award; (C) any shares repurchased by the Company on the open market with the proceeds of the exercise, strike or purchase price of an Award or a Prior Plan Award; and (D) in the event that a Stock Appreciation Right granted under the Plan or a stock appreciation right granted under the Prior Plan is settled in shares of Common Stock, the gross number of shares of Common Stock subject to such award.

    (c) Incentive Stock Option Limit. Subject to the Share Reserve and Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be 30,000,000 shares.

    (d) Non-Employee Director Compensation Limit. The aggregate value of all cash and equity-based compensation paid or granted, as applicable, by the Company to any individual for service as a Non-Employee

     


     

    Director with respect to any fiscal year of the Company will not exceed a total of $1,000,000, calculating the value of any equity-based awards based on the grant date fair value of such awards for financial reporting purposes.

    (e) Source of Shares. The shares issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

    4. Eligibility.

    (a) Eligibility for Specific Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405, unless (i) the stock underlying such Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Awards are granted pursuant to a corporate transaction such as a spin off transaction) or (ii) the Company, in consultation with its legal counsel, has determined that such Awards are otherwise exempt from or alternatively comply with Section 409A of the Code.

    (b) Ten Percent Shareholders. A Ten Percent Shareholder will not be granted an Incentive Stock Option unless the exercise price (per share) of such Option is at least 110% of the Fair Market Value of the Common Stock on the date of grant of such Option and the Option is not exercisable after the expiration of five years from the date of grant.

    5. Provisions Relating to Options and Stock Appreciation Rights.

    Each Option or SAR Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The terms and conditions of separate Option or SAR Agreements need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of the provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:

    (a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Shareholders, no Option or SAR will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the Award Agreement.

    (b) Exercise or Strike Price. Subject to the provisions of Section 4(b) regarding Ten Percent Shareholders, the exercise or strike price (per share) of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price (per share) less than 100% of the Fair Market Value of the Common Stock on the date the Award is granted if such Award is granted pursuant to an assumption of, or substitution for, another option or stock appreciation right pursuant to a Change in Control and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.

    (c) Payment of Exercise Price for Options. The exercise price of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by one or more of the methods of payment set forth below that are specified in the Option Agreement. The Board has the authority to grant Options that do not permit all of the following methods of payment (or that otherwise restrict the ability to utilize certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment.

     


     

    (i) By cash (including electronic funds transfers), check, bank draft or money order payable to the Company;

    (ii) Pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

    (iii) By delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

    (iv) If an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

    (v) In any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.

    (d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Award Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR.

    (e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the restrictions set forth in this Section 5(e) on the transferability of Options and SARs will apply. Notwithstanding the foregoing or anything in the Plan or an Award Agreement to the contrary, no Option or SAR may be transferred to any financial institution without prior shareholder approval.

    (i) Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution (and pursuant to Sections 5(e)(ii) and 5(e)(iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. Subject to the foregoing paragraph, the Board may, in its sole discretion, permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan, neither an Option nor a SAR may be transferred for consideration.

    (ii) Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

    (iii) Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator of the Participant’s estate will be entitled

     


     

    to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

    (f) Vesting. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to Section 2(f) and any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

    (g) Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date that is three months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after such termination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time period, the Option or SAR (as applicable) will terminate.

    (h) Extension of Termination Date. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if the exercise of an Option or SAR following the termination of a Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of a Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.

    (i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date that is 12 months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after such termination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time period, the Option or SAR (as applicable) will terminate.

    (j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) a Participant dies within the period (if any) specified in the Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Participant’s Option or SAR may be exercised (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise

     


     

    the Option or SAR by bequest or inheritance, or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within such period of time ending on the earlier of (i) the date that is 18 months following the date of death (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR (as applicable) is not exercised within the applicable time period, the Option or SAR (as applicable) will terminate.

    (k) Termination for Cause. Except as explicitly provided otherwise in the applicable Award Agreement or other individual written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Option or SAR will terminate immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR from and after the time of such termination of Continuous Service.

    (l) Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt employee dies or suffers a Disability, (ii) upon a Change in Control, or (iii) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement, in another written agreement between the Participant and the Company or an Affiliate, or, if no such definition, in accordance with the Company’s or Affiliate’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Awards and are hereby incorporated by reference into such Award Agreements.

    6. Provisions of Awards Other than Options and SARs.

    (a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock underlying a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of separate Restricted Stock Award Agreements need not be identical; provided, however, that each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:

    (i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash (including electronic funds transfers), check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate or (C) any other form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

    (ii) Vesting. Subject to Section 2(f), shares of Common Stock awarded under a Restricted Stock Award Agreement may be subject to forfeiture to or repurchase by the Company in accordance with a vesting schedule to be determined by the Board.

    (iii) Termination of Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant that have not vested as of the date of such termination under the terms of the Participant’s Restricted Stock Award Agreement.

    (iv) Transferability. Rights to acquire shares of Common Stock under a Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under

     


     

    the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement. Notwithstanding the foregoing or anything in the Plan or a Restricted Stock Award Agreement to the contrary, no Restricted Stock Award may be transferred to any financial institution without prior shareholder approval.

    (b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical; provided, however, that each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:

    (i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

    (ii) Vesting. Subject to Section 2(f), at the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

    (iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

    (iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to the Restricted Stock Unit Award to a time after the vesting of the Restricted Stock Unit Award.

    (v) Termination of Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates, any portion of the Participant’s Restricted Stock Unit Award that has not vested as of the date of such termination will be forfeited upon such termination.

    (c) Performance Stock Awards.

    (i) General. A Performance Stock Award is an Award that is payable (including that may be granted, vest or be exercised) contingent upon the attainment during a Performance Period of specified Performance Goals. A Performance Stock Award may, but need not, require the Participant’s completion of a specified period of Continuous Service. Subject to Section 2(f), the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Board, in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.

    (ii) Board Discretion. With respect to any Performance Stock Award, the Board retains the discretion to (A) reduce or eliminate the compensation or economic benefit due upon the attainment of any Performance Goals on the basis of any considerations as the Board, in its sole discretion, may determine and (B) define the manner of calculating the Performance Criteria it selects to use for a Performance Period.

    (d) Other Stock Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof may be granted either alone or in addition to Awards granted under Section 5 and this Section 6. Subject to the provisions of the Plan (including, but not limited to, Sections 2(f) and 2(g)), the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash

     


     

    equivalent thereof) to be granted pursuant to such Other Stock Awards, and all other terms and conditions of such Other Stock Awards.

    7. Covenants of the Company.

    (a) Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Awards.

    (b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan the authority required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.

    (c) No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising an Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.

    8. Miscellaneous.

    (a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock issued pursuant to Awards will constitute general funds of the Company.

    (b) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.

    (c) Shareholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Award has been entered into the books and records of the Company.

    (d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, or (iii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

     


     

    (e) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company or any Affiliate is reduced (for example, and without limitation, if the Participant is an Employee and has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.

    (f) Incentive Stock Option Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

    (g) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Award and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Award has been registered under a then currently effective registration statement under the Securities Act or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

    (h) Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any federal, state, local or foreign tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.

    (i) Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

    (j) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company or an Affiliate. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

     


     

    (k) Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance with Section 409A of the Code, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount under such Award that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment may be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six-month period elapses, with the balance paid thereafter on the original schedule.

    (l) Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, and any other clawback policy that the Company adopts. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including, but not limited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or an Affiliate.

    9. Adjustments upon Changes in Common Stock; Other Corporate Events.

    (a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a); (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c); and (iii) the class(es) and number of securities and price per share of stock subject to outstanding Awards. The Board will make such adjustments and its determination will be final, binding and conclusive.

    (b) Dissolution or Liquidation. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, in the event of a dissolution or liquidation of the Company (except for a liquidation into a parent corporation), all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to a forfeiture condition or the Company’s right of repurchase may be reacquired or repurchased by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service.

    (c) Change in Control. In the event of a Change in Control, the provisions of this Section 9(c) will apply to each outstanding Award unless otherwise provided in the instrument evidencing the Award, in any other written agreement between a Participant and the Company or an Affiliate, or in any director compensation policy of the Company.

    (i) Awards May Be Assumed. In the event of a Change in Control, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all outstanding Awards or may substitute similar stock awards for any or all outstanding Awards (including, but not limited to, awards to acquire the same consideration paid to the shareholders of the Company pursuant to the Change in Control), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued

     


     

    pursuant to any outstanding Awards may be assigned by the Company to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company). For clarity, in the event of a Change in Control, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may choose to assume or continue only a portion of an outstanding Award, to substitute a similar stock award for only a portion of an outstanding Award, or to assume or continue, or substitute similar stock awards for, the outstanding Awards held by some, but not all, Participants. The terms of any such assumption, continuation or substitution will be set by the Board.

    (ii) Awards Held by Current Participants. In the event of a Change in Control in which the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) does not assume or continue outstanding Awards, or substitute similar stock awards for outstanding Awards, then with respect to any such Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Change in Control (referred to as the “Current Participants”), the vesting (and exercisability, if applicable) of such Awards will be accelerated in full (and with respect to any such Awards that are subject to performance-based vesting conditions or requirements, vesting will be deemed to be satisfied at the greater of (x) the target level of performance or (y) the actual level of performance measured in accordance with the applicable performance goals as of the date of the Change in Control) to a date prior to the effective time of the Change in Control (contingent upon the closing or completion of the Change in Control) as the Board will determine (or, if the Board does not determine such a date, to the date that is five days prior to the effective time of the Change in Control), and such Awards will terminate if not exercised (if applicable) prior to the effective time of the Change in Control in accordance with the exercise procedures determined by the Board, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the closing or completion of the Change in Control).

    (iii) Awards Held by Participants other than Current Participants. In the event of a Change in Control in which the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) does not assume or continue outstanding Awards, or substitute similar stock awards for outstanding Awards, then with respect to any such Awards that have not been assumed, continued or substituted and that are held by Participants other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the effective time of the Change in Control in accordance with the exercise procedures determined by the Board; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Change in Control.

    (iv) Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event any outstanding Award held by a Participant will terminate if not exercised prior to the effective time of a Change in Control, the Board may provide that the Participant may not exercise such Award but instead will receive a payment, in such form as may be determined by the Board, equal in value to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of such Award immediately prior to the effective time of the Change in Control, over (B) any exercise price payable by the Participant in connection with such exercise. For clarity, such payment may be zero if the value of such property is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Common Stock in connection with the Change in Control is delayed as a result of escrows, earn outs, holdbacks or any other contingencies.

    (d) Parachute Payments. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if any payment or benefit the Participant would receive pursuant to a Change in Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Participant’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, the reduction will be accomplished in accordance with Section 409A

     


     

    of the Code and the following: first by reducing, on a pro rata basis, cash Payments that are exempt from Section 409A of the Code; second by reducing, on a pro rata basis, other cash Payments; and third by forfeiting any equity-based awards that vest and become payable, starting with the most recent equity-based awards that vest, to the extent necessary to accomplish such reduction. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control will perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Participant and the Company within 15 calendar days after the date on which the Participant’s right to a Payment is triggered (if requested at that time by the Participant or the Company) or such other time as reasonably requested by the Participant or the Company. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Participant and the Company.

    10. Termination or Suspension of the Plan.

    (a) Termination or Suspension. The Board may suspend or terminate the Plan at any time. No Incentive Stock Option may be granted after the tenth anniversary of the earlier of (i) the Adoption Date or (ii) the date the Plan is approved by the shareholders of the Company. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

    (b) No Impairment of Rights. Suspension or termination of the Plan will not materially impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan (including Section 2(b)(viii)) or an Award Agreement.

    11. Effective Date of Plan.

    This Plan will become effective on the Effective Date.

    12. Choice of Law.

    The laws of the State of California will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

    13. Definitions. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

    (a) “Adoption Date” means July 21, 2021, which is the date the Plan was adopted by the Board.

    (b) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

    (c) “Appreciation Award” means (i) a stock option or stock appreciation right granted under the Prior Plan or (ii) an Option or Stock Appreciation Right, in each case with respect to which the exercise or strike price (per share) is at least 100% of the Fair Market Value of the Common Stock subject to the stock option or stock appreciation right, or Option or Stock Appreciation Right, as applicable, on the date of grant.

    (d) “Award” means an Incentive Stock Option, a Nonstatutory Stock Option, a Stock Appreciation Right, a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Stock Award or any Other Stock Award.

    (e) “Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.

    (f) “Board” means the Board of Directors of the Company.

     


     

    (g) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards No. 123 (revised). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

    (h) “Cause” will have the meaning ascribed to such term in any written agreement between a Participant and the Company or an Affiliate defining such term and, in the absence of such agreement, such term means:

    (i) With respect to any Employee or Consultant: (A) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (B) conduct that results in or is reasonably likely to result in harm to the reputation or business of the Company or any of its Affiliates; (iii) willful conversion or misappropriation of corporate funds; (iv) gross negligence or willful misconduct with respect to the Company or an Affiliate; or (v) material violation of any state or federal securities law.

    (ii) With respect to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of the following: (A) malfeasance in office; (B) gross misconduct or neglect; (C) false or fraudulent misrepresentation inducing the Director’s appointment; (D) willful conversion or misappropriation of corporate funds; or (E) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.

    The determination that a termination of a Participant’s Continuous Service is either for Cause or without Cause will be made by the Board, in its sole discretion. Any determination by the Board that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by the Participant will have no effect upon any determination of the rights or obligations of the Company or the Participant for any other purpose.

    (i) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

    (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

    (ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the shareholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in

     


     

    substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

    (iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by shareholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

    (iv) individuals who, on the Adoption Date, are members of the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the Incumbent Directors then still in office, such new member will, for purposes of this Plan, be considered as an Incumbent Director; provided, however, that, for this purpose, no individual initially elected or nominated as a member of the Board as a result of an actual or threatened election contest with respect to Board membership or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director.

    Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between a Participant and the Company or an Affiliate will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that (1) if no definition of Change in Control (or any analogous term) is set forth in such an individual written agreement, the foregoing definition will apply; and (2) no Change in Control (or any analogous term) will be deemed to occur with respect to Awards subject to such an individual written agreement without a requirement that the Change in Control (or any analogous term) actually occur.

    If required for compliance with Section 409A of the Code, in no event will an event be deemed a Change in Control if such event is not also a “change in the ownership of” the Company, a “change in the effective control of” the Company or a “change in the ownership of a substantial portion of the assets of” the Company, each as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of a “change in control event” under Section 409A of the Code and the regulations thereunder.

    (j) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

    (k) “Committee” means a committee of two or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

    (l) “Common Stock” means the common shares of the Company.

    (m) “Company” means Lineage Cell Therapeutics, Inc., a California corporation.

    (n) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.

    (o) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant

     


     

    renders service to the Company or an Affiliate as an Employee, Director or Consultant, or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the Chief Executive Officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or Chief Executive Officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s or Affiliate’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

    (p) “Director” means a member of the Board.

    (q) “Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

    (r) “Effective Date” means the effective date of this Plan, which is the date of the Annual Meeting of Shareholders of the Company held in 2021, provided that this Plan is approved by the Company’s shareholders at such meeting.

    (s) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

    (t) “Entity” means a corporation, partnership, limited liability company or other entity.

    (u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

    (v) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.

    (w) “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

    (i) Unless otherwise provided by the Board, if the Common Stock is listed on any established stock exchange or traded on any established market, then the Fair Market Value of a share of Common Stock will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.

     


     

    (ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value of a share of Common Stock will be the closing sales price for such stock on the last preceding date for which such quotation exists.

    (iii) In the absence of such markets for the Common Stock, the Fair Market Value of a share of Common Stock will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.

    (x) “Full Value Award” means (i) a stock award granted under the Prior Plan or (ii) an Award, in each case that is not an Appreciation Award.

    (y) “Incentive Stock Option” means an option granted pursuant to Section 5 that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

    (z) “Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K, or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

    (aa) “Nonstatutory Stock Option” means an option granted pursuant to Section 5 that does not qualify as an Incentive Stock Option.

    (bb) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

    (cc) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

    (dd) “Option Agreement” means a written agreement between the Company and a holder of an Option evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

    (ee) “Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d).

    (ff) “Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.

    (gg) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

    (hh) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

    (ii) “Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following, as determined by the Board: (i) earnings (including earnings per share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total shareholder return; (v) return on equity or

     


     

    average shareholder’s equity; (vi) return on assets, investment, or capital employed; (vii) share price; (viii) margin (including gross margin); (ix) income (before or after taxes) or net income; (x) operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses and cost reduction goals; (xvii) improvement in or attainment of working capital levels; (xviii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation or completion of projects or processes, including a clinical trial of a new drug, biological product, or medical device; (xxv) customer satisfaction; (xxvi) shareholders’ equity; (xxvii) capital expenditures; (xxviii) debt levels; (xxix) operating profit or net operating profit; (xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and (xxxiii) any other measures of performance selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the applicable Award Agreement.

    (jj) “Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. The Board is authorized to make appropriate adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated Performance Goals; (iii) to exclude the effects of changes to generally accepted accounting principles; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; and (vi) to make other appropriate adjustments selected by the Board.

    (kk) “Performance Period” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Stock Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.

    (ll) “Performance Stock Award” means an Award granted under the terms and conditions of Section 6(c).

    (mm) “Plan” means this Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan.

    (nn) “Prior Plan” means the Lineage Cell Therapeutics, Inc. 2012 Equity Incentive Plan.

    (oo) “Prior Plan Award” means an award granted under the Prior Plan that is outstanding as of the Effective Date.

    (pp) “Prior Plan Returning Shares” means: (i) any shares of Common Stock subject to a Prior Plan Award that on or following the Effective Date are not issued because such Prior Plan Award or any portion thereof expires or otherwise terminates without all of the shares covered by such Prior Plan Award having been issued; (ii) any shares of Common Stock subject to a Prior Plan Award that on or following the Effective Date are not issued because such Prior Plan Award or any portion thereof is settled in cash; and (iii) any shares of Common Stock issued pursuant to a Prior Plan Award that on or following the Effective Date are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares.

    (qq) “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

    (rr) “Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

    (ss) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

     


     

    (tt) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

    (uu) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

    (vv) “Rule 405” means Rule 405 promulgated under the Securities Act.

    (ww) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

    (xx) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

    (yy) “Stock Appreciation Right Agreement” or “SAR Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

    (zz) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.

    (aaa) “Ten Percent Shareholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.

     

    for our fiscal year ending December 31, 2024. 3. To approve, on an advisory basis, the compensation paid to our named executive officers. #P11# 4. To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. BOARD OF DIRECTORS YOUR VOTE

     


     

    img8971038_3.jpg

     

    P.O. BOX 8016, CARY, NC 27512-9903 Have your ballot ready and please use one of the methods below for easy voting: Your vote matters! Your control number Have the 12 digit control number located in the box above available when you access the website and follow the instructions. P.O. BOX 8016, CARY, NC 27512-9903 Have your ballot ready and please use one of the methods below for easy voting: Your vote matters! Your control number Have the 12 digit control number located in the box above available when you access the website and follow the instructions. Lineage Cell Therapeutics, Inc. Annual Meeting of Shareholders For Shareholders of Record as of April 28, 2025 Thursday, June 26, 2025 8:00 AM, Pacific Time 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008 Internet: www.proxypush.com/LCTX • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote Phone: 1-866-490-6839 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions Mail: • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid YOUR VOTE IS IMPORTANT! envelope provided PLEASE VOTE BY: 11:59 PM, Eastern Time, June 25, 2025. This proxy is being solicited on behalf of the board of directors for the 2025 annual meeting of shareholders The undersigned hereby appoints Brian M. Culley and Jill A. Howe (the "Named Proxies"), as proxies and true and lawful attorneys-in-fact of the undersigned, with full power of substitution, and hereby authorizes them, and each or either of them, to represent and vote all the common shares which the undersigned is entitled to vote at the Annual Meeting of Shareholders of Lineage Cell Therapeutics, Inc. (the "Company") to be held on June 26, 2025 at 8:00 a.m. Pacific Time, or any adjournment or postponement thereof, as designated on the reverse side of this proxy card, revoking any other proxy heretofore given. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is given, this proxy will be voted in accordance with the recommendations of the board of directors. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the board of directors’ recommendations. The Named Proxies cannot vote your shares unless you sign the reverse side and return this card. PLEASE BE SURE TO MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE Copyright © 2025 BetaNXT, Inc. or its affiliates. All Rights Reserved

     

     


     

     

    img8971038_4.jpg

     

    Lineage Cell Therapeutics, Inc. Annual Meeting of Shareholders Please make your marks like this: THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR EACH DIRECTOR NOMINEE LISTED AND FOR ON PROPOSALS 2, 3 AND 4. BOARD OF DIRECTORS PROPOSAL YOUR VOTE RECOMMENDS 1. To elect seven directors to hold office until the 2026 annual meeting of shareholders and until their respective successors are duly elected and qualified. FOR WITHHOLD 1.01 Dipti Amin FOR #P2# #P2# 1.02 Deborah Andrews FOR #P3# #P3# 1.03 Neal C. Bradsher FOR #P4# #P4# 1.04 Brian M. Culley FOR #P5# #P5# 1.05 Anula Jayasuriya FOR #P6# #P6# 1.06 Michael H. Mulroy FOR #P7# #P7# 1.07 Angus C. Russell FOR #P8# #P8# FOR AGAINST ABSTAIN 2. To ratify the appointment of Moss Adams LLP as our independent registered public accounting FOR #P9# #P9# #P9# firm for our fiscal year ending December 31, 2025. 3. To approve, on an advisory basis, the compensation paid to our named executive officers. FOR #P10# #P10# #P10# 4. To approve an amendment to the Lineage Cell Therapeutics, Inc. 2021 Equity Incentive Plan to FOR #P11# #P11# #P11# increase the number of common shares available thereunder by 19,500,000. Note: By signing this Proxy Card, you acknowledge that if other matters are properly brought before the meeting or any adjournment or postponement thereof, the Named Proxies are authorized to vote on those matters as the Named Proxies, or either of them, deem advisable, in their discretion. Check here if you would like to attend the meeting in person. Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing this Proxy Card. Signature (and Title if applicable) Signature (if held jointly)

     


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    • Director Broadwood Partners, L.P. bought $6,000,000 worth of shares (7,894,737 units at $0.76) (SEC Form 4)

      4 - Lineage Cell Therapeutics, Inc. (0000876343) (Issuer)

      1/28/25 7:49:41 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • Chief Financial Officer Howe Jill Ann bought $8,850 worth of shares (15,000 units at $0.59), increasing direct ownership by 143% to 25,500 units (SEC Form 4)

      4 - Lineage Cell Therapeutics, Inc. (0000876343) (Issuer)

      11/26/24 4:58:31 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • General Counsel Samuel George A. Iii bought $9,000 worth of shares (15,000 units at $0.60), increasing direct ownership by 209% to 22,184 units (SEC Form 4)

      4 - Lineage Cell Therapeutics, Inc. (0000876343) (Issuer)

      11/26/24 4:55:46 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care

    $LCTX
    Analyst Ratings

    Analyst ratings in real time. Analyst ratings have a very high impact on the underlying stock. See them live in this feed.

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    • Craig Hallum initiated coverage on Lineage Cell Therapeutics with a new price target

      Craig Hallum initiated coverage of Lineage Cell Therapeutics with a rating of Buy and set a new price target of $4.00

      8/20/24 8:32:59 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • Robert W. Baird initiated coverage on Lineage Cell Therapeutics with a new price target

      Robert W. Baird initiated coverage of Lineage Cell Therapeutics with a rating of Outperform and set a new price target of $5.00

      11/2/22 6:28:33 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • B. Riley Securities initiated coverage on Lineage Cell Therapeutics with a new price target

      B. Riley Securities initiated coverage of Lineage Cell Therapeutics with a rating of Buy and set a new price target of $4.00

      6/14/22 7:59:45 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care

    $LCTX
    Leadership Updates

    Live Leadership Updates

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    • Lineage Announces Updates to 2nd Annual Spinal Cord Injury Investor Symposium

      Persons with Lived Experience Session Expanded to Include Michaela & Kyle Devins Clinical Session Expanded to Include Neuralink Preclinical Session Expanded to Include Axonis, Novoron, Sania & Rewire Medical   Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today announced updates to its 2nd Annual Spinal Cord Injury Investor Symposium ("2nd SCIIS"). The 2nd SCIIS aims to accelerate development in SCI research and treatments by bringing together companies working in the development of treatments for SCI, with regulators, key opinion leaders, persons with lived exp

      5/21/24 8:00:00 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • Lineage Announces Appointment of Charlotte Hubbert, Ph.D., as Vice President of Corporate Development

      Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today announced the appointment of veteran industry executive Charlotte Hubbert, Ph.D., as Vice President of Corporate Development. Dr. Hubbert has an extensive background in cell therapy research and venture investment across a broad range of therapeutic modalities and development stages, and has a proven ability to combine deep scientific expertise and business development acumen to identify innovative opportunities to drive both returns and impact. Dr. Hubbert previously served as Partner and Head of Gates Foundation Venture

      4/1/24 8:00:00 AM ET
      $LCTX
      $SYBX
      $VIR
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
      Biotechnology: Pharmaceutical Preparations
    • Lineage Announces Appointment of General Counsel

      Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today announced that it has appointed George A. Samuel III as Lineage's General Counsel and Corporate Secretary. Mr. Samuel will lead the Company's legal operations, bringing extensive corporate, transactional, intellectual property and commercial expertise which spans nearly 15 years across the life sciences and technology sectors as well as in private practice. "We are pleased to welcome George to our leadership team and look forward to his contributions as we build Lineage into a leading cell therapy and cell transplant comp

      9/1/21 8:00:00 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care

    $LCTX
    Financials

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    • Lineage Cell Therapeutics to Report First Quarter 2025 Financial Results and Provide Business Update on May 13, 2025

      Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for serious neurological conditions, today announced that it will report its first quarter 2025 financial and operating results on Tuesday, May 13, 2025, following the close of the U.S. financial markets. Lineage management will also host a conference call and webcast on Tuesday, May 13, 2025, at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its first quarter 2025 financial and operating results and to provide a business update. Conference Call and Webcast Interested parties may access the conference call on May 13, 2025, by dialing (800) 7

      5/1/25 8:00:00 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • Lineage Cell Therapeutics to Report Fourth Quarter and Full Year 2024 Financial Results and Provide Business Update on March 10, 2025

      Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for serious neurological conditions, today announced that it will report its fourth quarter and full year 2024 financial and operating results on Monday, March 10, 2025, following the close of the U.S. financial markets. Lineage management will also host a conference call and webcast on Monday, March 10, 2025, at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its fourth quarter and full year 2024 financial and operating results and to provide a business update. Interested parties may access the conference call on Monday, March 10, 2025, by di

      3/5/25 8:00:00 AM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • Lineage Cell Therapeutics Reports Third Quarter 2024 Financial Results and Provides Business Update

      OpRegen® Granted Regenerative Medicine Advanced Therapy (RMAT) Designation From FDA ReSonance™ (ANP1) Preclinical Results Presented at 59th Annual Inner Ear Biology Workshop Added to 2024 Russell 3000® Index Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today reported its third quarter 2024 financial and operating results. The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss these results and to provide a business update. "We were delighted to see our partners' continued commitment to the OpRegen program, in this instance by seeking

      11/14/24 4:01:00 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care

    $LCTX
    Large Ownership Changes

    This live feed shows all institutional transactions in real time.

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    • Amendment: SEC Form SC 13D/A filed by Lineage Cell Therapeutics Inc.

      SC 13D/A - Lineage Cell Therapeutics, Inc. (0000876343) (Subject)

      11/21/24 8:05:56 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • SEC Form SC 13D/A filed by Lineage Cell Therapeutics Inc. (Amendment)

      SC 13D/A - Lineage Cell Therapeutics, Inc. (0000876343) (Subject)

      2/8/24 6:57:07 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care
    • SEC Form SC 13D/A filed by Lineage Cell Therapeutics Inc. (Amendment)

      SC 13D/A - Lineage Cell Therapeutics, Inc. (0000876343) (Subject)

      3/25/22 5:23:02 PM ET
      $LCTX
      Biotechnology: Biological Products (No Diagnostic Substances)
      Health Care