def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
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Genomic
Health, Inc.
301 Penobscot Drive
Redwood City, California 94063
(650) 556-9300
April 28,
2010
Dear Stockholder:
You are cordially invited to attend the 2010 Annual Meeting of
Stockholders of Genomic Health, Inc. The meeting will be held at
10:00 a.m., Pacific Time, on Thursday, June 10, 2010,
at Seaport Center, 459 Seaport Court, Redwood City, California
94063.
The formal notice of the Annual Meeting and the Proxy Statement
has been made a part of this invitation.
Whether or not you attend the Annual Meeting, it is important
that your shares be represented and voted at the Annual Meeting.
After reading the Proxy Statement, please promptly vote by
dating, signing and returning the enclosed proxy card in the
enclosed postage-prepaid envelope, or by voting by telephone or
the Internet. Your shares cannot be voted unless you sign,
date and return the enclosed proxy, vote by telephone or the
Internet, or attend the Annual Meeting in person.
We have also enclosed a copy of our 2009 Annual Report to
Stockholders.
We look forward to seeing you at the meeting.
Sincerely,
Kimberly J. Popovits
President and Chief Executive Officer
Genomic
Health, Inc.
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, June 10, 2010
To our Stockholders:
Genomic Health, Inc. will hold its Annual Meeting of
Stockholders at 10:00 a.m., Pacific Time, on Thursday,
June 10, 2010 at Seaport Center, 459 Seaport Court, Redwood
City, California 94063.
We are holding this Annual Meeting:
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to elect nine directors to serve until the 2011 Annual Meeting
or until their successors are duly elected and qualified;
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to ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for 2010; and
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to transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement of the Annual
Meeting.
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Stockholders of record at the close of business on
April 14, 2010, are entitled to notice of and to vote at
this meeting and any adjournment or postponement of the Annual
Meeting. For ten days prior to the meeting, a complete list of
stockholders entitled to vote at the Annual Meeting will be
available at the Secretarys office, 301 Penobscot Drive,
Redwood City, California 94063.
It is important that your shares be represented at this
meeting. Even if you plan to attend the meeting, we hope that
you will vote promptly. Please review the instructions on page 2
of the attached Proxy Statement regarding your voting
options.
By Order of the Board of Directors
G. Bradley Cole
Chief Operating Officer,
Chief Financial Officer and Secretary
Redwood City, California
April 28, 2010
Important
Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be held on June 10,
2010.
The Proxy
Statement and Annual Report are available at
www.proxydocs.com/ghdx
TABLE
OF CONTENTS
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Genomic
Health, Inc.
301 Penobscot Drive
Redwood City, California 94063
PROXY
STATEMENT
Information
Concerning Voting and Solicitation
This Proxy Statement is being furnished to you in connection
with the solicitation by the board of directors of Genomic
Health, Inc., a Delaware corporation (we,
us, our, Genomic Health or
the Company), of proxies in the accompanying form to
be used at the Annual Meeting of Stockholders of the Company to
be held at Seaport Center, 459 Seaport Court, Redwood City,
California 94063 on Thursday, June 10, 2010, at
10:00 a.m., Pacific Time, and any postponement or
adjournment thereof (the Annual Meeting).
This Proxy Statement and the accompanying form of proxy are
being mailed to stockholders on or about April 28, 2010.
Questions
and Answers About
the Proxy Materials and the Annual Meeting
What
proposals will be voted on at the Annual Meeting?
Two proposals will be voted on at the Annual Meeting:
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The election of directors; and
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The ratification of the appointment of the independent
registered public accounting firm for 2010.
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What are
the Boards recommendations?
Our board recommends that you vote:
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FOR election of each of the nominated
directors; and
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FOR ratification of the appointment of the
independent registered public accounting firm for 2010.
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Will
there be any other items of business on the agenda?
We do not expect any other items of business because the
deadline for stockholder proposals and nominations has already
passed. Nonetheless, in case there is an unforeseen need, the
accompanying proxy gives discretionary authority to the persons
named on the proxy with respect to any other matters that might
be brought before the meeting. Those persons intend to vote that
proxy in accordance with their best judgment.
Who is
entitled to vote?
Stockholders of record at the close of business on
April 14, 2010 (the Record Date) may vote at
the Annual Meeting. Each stockholder is entitled to one vote for
each share of the Companys common stock held as of the
Record Date.
What is
the difference between holding shares as a stockholder of record
and as a beneficial owner?
Stockholder of Record. If your shares are
registered directly in your name with Genomic Healths
transfer agent, Computershare Trust Company, Inc., you are
considered, with respect to those shares, the stockholder of
record. The Proxy Statement, Annual Report and proxy card have
been sent directly to you by Genomic Health.
Beneficial Owner. If your shares are held in a
brokerage account or by a bank or other nominee, you are
considered the beneficial owner of shares held in street name.
The Proxy Statement and Annual Report have been forwarded to you
by your broker, bank or nominee who is considered, with respect
to those shares, the stockholder of record. As the beneficial
owner, you have the right to direct your broker, bank or nominee
how to vote your shares by using the voting instruction form
included in the mailing.
How do I
vote?
Stockholder
of Record
If you are a stockholder of record, you may vote in person at
the Annual Meeting, vote by proxy using the enclosed proxy card,
vote by telephone or vote by the Internet. Whether or not you
plan to attend the Annual Meeting, we urge you to vote to ensure
your vote is counted. You may still attend the Annual Meeting
and vote in person even if you have already voted.
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To vote in person, come to the Annual Meeting and we will give
you a ballot when you arrive.
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To vote using the proxy card, complete, sign and date the
enclosed proxy card and return it promptly in the
postage-prepaid envelope provided. If you return your signed
proxy card to us before the Annual Meeting, we will vote your
shares as you direct.
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To vote by telephone, follow the telephone voting instructions
on the enclosed proxy card. You will be asked to provide the
company number and control number from the proxy card. Your vote
must be received by 11:59 p.m., Eastern Time, on
June 9, 2010 to be counted.
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To vote by the Internet, follow the Internet voting instructions
on the enclosed proxy card. You will be asked to provide the
company number and control number from the proxy card. Your vote
must be received by 11:59 p.m., Eastern Time, on
June 9, 2010 to be counted.
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Beneficial
Owner
If you are a beneficial owner of shares registered in the name
of your broker, bank, or other agent, you should have received
voting instructions with these proxy materials from that
organization rather than from the Company. Complete and mail the
voting form to ensure that your vote is counted. Alternatively,
you may vote by telephone or over the Internet as instructed by
your broker or bank. To vote in person at the Annual Meeting,
you must obtain a valid proxy from your broker, bank or other
agent. Follow the instructions from your broker, bank or other
agent included with these proxy materials, or contact your
broker, bank or other agent to request a proxy form.
We provide Internet voting to allow you to vote online.
However, please be aware that you must bear any costs associated
with your Internet access, such as usage charges from Internet
access providers and telephone companies.
Can I
change my vote or revoke my proxy?
You may change your vote or revoke your proxy at any time prior
to the vote at the Annual Meeting. If you submitted your proxy
by mail, you must file with the Secretary of the Company a
written notice of revocation or deliver, prior to the vote at
the Annual Meeting, a valid, later-dated proxy. If you submitted
your proxy by telephone or by the Internet, you may change your
vote or revoke your proxy with a later telephone or Internet
proxy, as the case may be. Attendance at the Annual Meeting will
not have the effect of revoking a proxy unless you give written
notice of revocation to the Secretary before the proxy is
exercised or you vote by written ballot at the Annual Meeting.
How are
votes counted?
In the election of directors, you may vote FOR all
of the nominees or your vote may be WITHHELD with
respect to one or more of the nominees. For any other items of
business, you may vote FOR, vote AGAINST
or ABSTAIN. If you ABSTAIN, the
abstention has the same effect as a vote AGAINST. If
you provide specific instructions, your shares will be voted as
you instruct. If you sign your proxy card with no instructions,
your shares
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will be voted in accordance with the recommendations of the
board (FOR all of the nominees to the board and
FOR ratification of the independent registered
public accounting firm) and in the discretion of the proxy
holders on any other matters that properly come before the
meeting.
What vote
is required to approve each item?
In the election of directors, the nine persons receiving the
highest number of FOR votes at the Annual Meeting
will be elected. All other proposals require the affirmative
FOR vote of a majority of the shares present and
voting at the Annual Meeting in person or by proxy. If you hold
shares beneficially in street name and do not provide your
broker or nominee with voting instructions, your shares may
constitute broker non-votes. Generally, broker
non-votes occur on a matter when a broker is not permitted to
vote on that matter without instructions from the beneficial
owner and instructions are not given. In the event you do not
give your broker voting instructions, your broker will be able
to vote on the proposal to ratify the appointment of our
auditors but will not be able to vote for the election of
directors. In tabulating the voting result for any particular
proposal, shares that constitute broker non-votes are not
considered entitled to vote on that proposal. Thus, broker
non-votes will not affect the outcome of any matter being voted
on at the Annual Meeting, assuming that a quorum is obtained.
Abstentions have the same effect as votes against the matter.
Is
cumulative voting permitted for the election of
directors?
Stockholders may not cumulate votes in the election of
directors, which means that each stockholder may vote no more
than the number of shares he or she owns for a single director
candidate.
What
constitutes a quorum?
The presence at the Annual Meeting, in person or by proxy, of
the holders of a majority of common stock outstanding on the
Record Date will constitute a quorum. As of the close of
business on the Record Date, there were 28,775,558 shares
of our common stock outstanding. Both abstentions and broker
non-votes are counted for the purpose of determining the
presence of a quorum.
How are
proxies solicited?
Our employees, officers and directors may solicit proxies. We
will bear the cost of soliciting proxies and will reimburse
brokerage houses and other custodians, nominees and fiduciaries
for their reasonable out-of-pocket expenses for forwarding proxy
and solicitation material to the owners of common stock.
IMPORTANT
Please promptly vote by signing, dating and returning the
enclosed proxy card in the postage-prepaid return envelope
provided, or by telephone or the Internet, so that your shares
can be voted.
Proposal 1
Election
of Directors
Directors
and Nominees
At the Annual Meeting, nine persons will be elected as members
of your board of directors, each for a one-year term or until
their successors are elected and qualified. The Nominating and
Corporate Governance Committee of the board of directors has
recommended, and the board of directors has designated, the nine
persons listed below for election at the Annual Meeting. The
proxies given to the proxy holders will be voted or not voted as
directed and, if no direction is given, will be voted FOR each
of the nominees. Your board of directors knows of no reason why
any of these nominees should be unable or unwilling to serve.
However, if for any reason any nominee should be unable or
unwilling to serve, the proxies will be voted for any nominee
designated to fill the vacancy by your board of directors,
taking into account the recommendations of the Nominating and
Corporate Governance Committee.
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The names of the board of directors nominees, their ages
as of March 15, 2010 and certain biographical information
about the nominees are set forth below.
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Director
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Name
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Age
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Position with Company
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Since
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Randal W. Scott, Ph.D.
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Executive Chairman of the Board
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2000
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Kimberly J. Popovits
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President, Chief Executive Officer and Director
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2002
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Julian C. Baker
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Director
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2001
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Brook H. Byers
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Director
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2001
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Fred E. Cohen, M.D., D.Phil.
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Director
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2002
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Samuel D. Colella
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Director
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2001
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Ginger L. Graham
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Director
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2008
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Randall S. Livingston
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Director
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2004
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Woodrow A. Myers, Jr., M.D.
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Director
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2006
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Randal W. Scott, Ph.D. has served as our Executive
Chairman of the Board since January 2009, Chairman of the Board
and Chief Executive Officer from our inception in August 2000 to
January 2009, President from August 2000 to February 2002,
Chief Financial Officer from December 2000 to April 2004, and
Secretary from August 2000 to December 2000 and from May
2003 to February 2005. Dr. Scott was a founder of Incyte
Corporation, which at the time was a genomic information
company, and served Incyte in various roles, including Chairman
of the Board from August 2000 to December 2001, President from
January 1997 to August 2000, and Chief Scientific Officer from
March 1995 to August 2000. Dr. Scott holds a B.S. in
Chemistry from Emporia State University and a Ph.D. in
Biochemistry from the University of Kansas.
Kimberly J. Popovits has served as our President and
Chief Executive Officer since January 2009 and as President
and Chief Operating Officer from February 2002 to January
2009. From November 1987 to February 2002,
Ms. Popovits served in various roles at Genentech, Inc., a
biotechnology company, most recently serving as Senior Vice
President, Marketing and Sales from February 2001 to February
2002, and as Vice President, Sales from October 1994 to February
2001. Prior to joining Genentech, Ms. Popovits served as
Division Manager, Southeast Region, for American Critical
Care, a Division of American Hospital Supply, a supplier of
healthcare products to hospitals. In addition, Ms. Popovits
served as a director of Nuvelo, Inc. from July 2005 until its
merger with ARCA biopharma, Inc. in January 2009.
Ms. Popovits holds a B.A. in Business from Michigan State
University.
Julian C. Baker is a Managing Partner of Baker Bros.
Advisors, LLC, which he and his brother,
Felix Baker, Ph.D., founded in 2000.
Mr. Bakers firm manages Baker Brothers Investments, a
family of long-term investment funds for major university
endowments and foundations, which are focused on publicly traded
life sciences companies. Mr. Bakers career as a
fund-manager began in 1994 when he co-founded a biotechnology
investing partnership with the Tisch Family. Previously,
Mr. Baker was employed from 1988 to 1993 by the private
equity investment arm of Credit Suisse First Boston Corporation.
Mr. Baker is also a director of Incyte Corporation and
Trimeris, Inc. In addition, Mr. Baker served as a director
of Neurogen Corporation from May 1999 until its acquisition in
December 2009, and as a director of Theravance, Inc. from
January 1999 to April 2007. Mr. Baker holds an A.B. in
Social Studies from Harvard University.
Brook H. Byers is a partner of Kleiner Perkins
Caufield & Byers, a venture capital firm which he
joined in 1977. Mr. Byers currently serves as a director of
a number of privately held technology, healthcare and
biotechnology companies. In addition, Mr. Byers served as a
director of Argonaut Technologies from January 1995 to
July 2005. Mr. Byers holds a B.S. in Electrical
Engineering from the Georgia Institute of Technology and an
M.B.A. from the Stanford Graduate School of Business.
Fred E. Cohen, M.D., D.Phil. is a partner at TPG, a
private equity firm he joined in 2001, and serves as co-head of
TPGs biotechnology group. Dr. Cohen is also a
Professor of Cellular and Molecular Pharmacology at the
University of California, San Francisco, where he has
taught since 1988. Dr. Cohen serves as a director of Axcan
Pharmaceuticals, Quintiles Transnational and a number of other
privately held companies. Dr. Cohen holds a B.S. in
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Molecular Biophysics and Biochemistry from Yale University, a
D.Phil. in Molecular Biophysics from Oxford University and an
M.D. from Stanford University.
Samuel D. Colella is a Managing Director of Versant
Ventures, a healthcare and biotechnology venture capital firm he
co-founded in 1999. Mr. Colella is also a general partner
of Institutional Venture Partners, a venture capital firm he
joined in 1984. Mr. Colella currently serves as a director
of Alexza Pharmaceuticals, Inc., Jazz Pharmaceuticals, Inc. and
a number of privately held technology and biotechnology
companies. In addition, Mr. Colella served as a director of
Thermage, Inc. from September 1997 to July 2007, and as a
director of Symyx Technologies, Inc. from August 1997 to June
2007. Mr. Colella holds a B.S. in Business and Engineering
from the University of Pittsburgh and an M.B.A. from the
Stanford Graduate School of Business.
Ginger L. Graham has served as Faculty at Harvard
Business School since October 2009 and as President and Chief
Executive Officer of Two Trees Consulting, a healthcare and
executive leadership consulting firm, since November 2007.
Ms. Graham was Chief Executive Officer of Amylin
Pharmaceuticals, Inc., a biopharmaceutical company, from
September 2003 to March 2007, and served as Amylins
President from September 2003 to June 2006. From 1994 to
2003, Ms. Graham held various positions with Guidant
Corporation, including Group Chairman, Office of the President,
President of the Vascular Intervention Group, and Vice
President. From 1979 to 1994, Ms. Graham held various
positions with Eli Lilly and Company, including President and
Chief Executive Officer of Advanced Cardiovascular Systems, Inc.
Ms. Graham was elected as a director of Walgreen Co.
effective May 1, 2010, and she currently serves as a
director of a number of privately held companies. In addition,
Ms. Graham served as a director of Amylin Pharmaceuticals,
Inc. from November 2005 to May 2009, and as a director of
Millenium Pharmaceuticals, Inc. from February 2002 to January
2004. Ms. Graham holds a B.S. in Agricultural Economics
from the University of Arkansas and an M.B.A. from Harvard
University.
Randall S. Livingston has served as Vice President for
Business Affairs and Chief Financial Officer of Stanford
University since 2001. Prior to 2001, Mr. Livingston spent
16 years working in Silicon Valley with several technology
and life science companies as Chief Financial Officer and in
various corporate development and marketing roles.
Mr. Livingston currently serves as a director of eHealth,
Inc. and a privately held biotechnology company.
Mr. Livingston holds a B.S. in Mechanical Engineering from
Stanford University and an M.B.A. from the Stanford Graduate
School of Business.
Woodrow A. Myers, Jr., M.D. has served as
Managing Director of Myers Ventures LLC, which concentrates on
opportunities in healthcare and education, since December 2005.
He was the Executive Vice President and Chief Medical Officer of
WellPoint, Inc., a commercial health benefits company, from
September 2000 to January 2005. Dr. Myers currently serves
as a director of Express Scripts, Inc. and serves as Chairman of
the Board of the Mozambique Healthcare Consortium. In addition,
Dr. Myers served as a director of ThermoGenesis Corp from
June 2006 to December 2009, and as a director of CardioNet,
Inc. from August 2007 to May 2009. Dr. Myers holds a B.S.
in Biological Sciences from Stanford University, an M.D. from
Harvard Medical School and an M.B.A. from the Stanford Graduate
School of Business.
Vote
Required
The nine nominees for director receiving the highest number of
affirmative votes will be elected as directors.
Your board of directors recommends a vote FOR the election of
the nominees set forth above as directors of Genomic Health.
Director
Independence
Our board of directors has determined that, except for
Dr. Scott and Ms. Popovits, each individual who
currently serves as a member of the board is, and each
individual who served as a member of the board in 2009 was, an
independent director within the meaning of
Rule 5605 of The NASDAQ Stock Market. Dr. Scott and
Ms. Popovits are not independent because they are employed
by the Company. All of the nominees are members of the board
standing for reelection as directors. For Messrs. Baker,
Byers, Colella, and Livingston, Drs. Cohen and Myers and
Ms. Graham, the board of directors considered their
relationship and transactions with the Company as directors and
securityholders of the Company.
5
Board
Meetings
Our board of directors held six meetings in 2009. Each director
attended at least 75% of the aggregate number of meetings of the
board of directors held during the period for which such
director served on our board of directors and of the committees
on which such director served. The independent directors meet in
regularly scheduled executive sessions at in-person meetings of
the board of directors without the participation of the
Executive Chairman of the Board, the President and Chief
Executive Officer or the other members of management. We do not
have a policy that requires the attendance of directors at the
Annual Meeting. Two directors attended our 2009 annual meeting.
Committees
of the Board of Directors
Below is a description of each committee of the board of
directors. The board of directors has determined that each
director who serves on the Audit, Compensation, and Nominating
and Corporate Governance Committees is independent,
as that term is defined by applicable listing standards of The
NASDAQ Stock Market and rules of the Securities and Exchange
Commission, or SEC, and has adopted written charters for these
committees. These charters are available on the investor section
of our website (www.genomichealth.com).
Audit
Committee
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Number of Members: |
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3 |
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Current Members: |
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Randall S. Livingston (Chair and Audit Committee Financial
Expert)
Fred E. Cohen, M.D., D.Phil.
Ginger L. Graham |
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Number of Meetings in 2009: |
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5 |
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Functions: |
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The Audit Committee provides assistance to the board of
directors in fulfilling its oversight responsibilities relating
to the Companys financial statements, system of internal
control over financial reporting, and auditing, accounting and
financial reporting processes. Other specific duties and
responsibilities of the Audit Committee are to appoint,
compensate, evaluate and, when appropriate, replace the
Companys independent registered public accounting firm;
review and pre-approve audit and permissible non-audit services;
review the scope of the annual audit; monitor the independent
registered public accounting firms relationship with the
Company; and meet with the independent registered public
accounting firm and management to discuss and review the
Companys financial statements, internal control over
financial reporting, and auditing, accounting and financial
reporting processes. |
Compensation
Committee
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Number of Members: |
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4 |
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Current Members: |
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Brook H. Byers (Chair)
Julian C. Baker
Samuel D. Colella
Woodrow A. Myers, Jr., M.D. |
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Number of Meetings in 2009: |
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3 |
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Functions: |
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The Compensation Committees primary functions are to
assist the board of directors in meeting its responsibilities
with regard to oversight and determination of executive
compensation and to review and make recommendations with respect
to major compensation plans, |
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policies and programs of the Company. Other specific duties and
responsibilities of the Compensation Committee are to review and
make recommendations for approval by the independent members of
the board of directors regarding compensation of our Executive
Chairman of the Board, our President and Chief Executive Officer
and other executive officers, and administer our stock plans and
other equity-based compensation plans. |
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The board of directors has established a Non-Management Stock
Option Committee, the members of which are Randal W.
Scott, Ph.D., Kimberly J. Popovits and G. Bradley Cole. The
Committee has been delegated the authority for any two members
of the committee to grant options to new employees, other than
to any member of our board of directors, individuals designated
by our board of directors as Section 16
officers, and employees who hold the title of Vice
President or above. This Committee may not make any awards or
grants to any new employee that total more than
50,000 shares of common stock. |
Nominating
and Corporate Governance Committee
|
|
|
Number of Members: |
|
4 |
|
Current Members: |
|
Julian C. Baker (Chair)
Brook H. Byers
Samuel D. Colella
Woodrow A. Myers, Jr., M.D. |
|
Number of Meetings in 2009: |
|
1 (held in conjunction with formal board meeting) |
|
Functions: |
|
The Nominating and Corporate Governance Committees primary
functions are to identify qualified individuals to become
members of the board of directors, determine the composition of
the board and its committees and monitor a process to assess
board effectiveness. Other specific duties and responsibilities
of the Nominating and Corporate Governance Committee are to
recommend nominees to fill vacancies on the board of directors,
review and make recommendations to the board of directors with
respect to candidates for director proposed by stockholders, and
review on an annual basis the functioning and effectiveness of
the board and its committees. |
Director
Nominations
The board of directors nominates directors for election at each
annual meeting of stockholders and elects new directors to fill
vacancies when they arise. The Nominating and Corporate
Governance Committee has the responsibility to identify,
evaluate, recruit and recommend qualified candidates to the
board of directors for nomination or election.
The board of directors has as an objective that its membership
be composed of experienced and dedicated individuals with
diversity of backgrounds, perspectives and skills. The
Nominating and Corporate Governance Committee will select
candidates for director based on their character, judgment,
diversity of experience, business acumen and ability to act on
behalf of all stockholders. The Nominating and Corporate
Governance Committee believes that nominees for director should
have experience, such as experience in management or accounting
and finance, or industry and technology knowledge, that may be
useful to Genomic Health and the board of directors, high
personal and professional ethics, and the willingness and
ability to devote sufficient time to carry out effectively their
duties as directors. Although the Company has no formal
diversity policy for board members, the board and the Nominating
and Corporate Governance Committee consider diversity of
backgrounds and
7
experiences and other forms of diversity when selecting
nominees. The Nominating and Corporate Governance Committee also
believes that service as director of other public companies
provides experience and perspective that may be useful to
Genomic Health and the board of directors, and several of our
directors have served as directors of other public companies.
The Nominating and Corporate Governance Committee believes it
appropriate for at least one, and, preferably, multiple, members
of the board of directors to meet the criteria for an
audit committee financial expert as defined by rules
of the SEC, and for a majority of the members of the board of
directors to meet the definition of independent
director under the rules of The NASDAQ Stock Market. The
Nominating and Corporate Governance Committee also believes it
appropriate for key members of our management to participate as
members of the board of directors.
Prior to each annual meeting of stockholders, the Nominating and
Corporate Governance Committee identifies nominees by first
evaluating the current directors whose term will expire at the
annual meeting and who are willing to continue in service. These
candidates are evaluated based on the criteria described above,
including as demonstrated by the candidates prior service
as a director, and the needs of the board of directors with
respect to the particular talents and experience of its
directors. In the event that a director does not wish to
continue in service, the Nominating and Corporate Governance
Committee determines not to re-nominate the director, or a
vacancy is created on the board of directors as a result of a
resignation, an increase in the size of the board or other
event, the Nominating and Corporate Governance Committee will
consider various candidates for board membership, including
those suggested by the committee members, by other board of
directors members, by any executive search firm engaged by the
committee or by stockholders. The Nominating and Corporate
Governance Committee recommended all of the nominees for
election included in this Proxy Statement.
A stockholder who wishes to suggest a prospective nominee for
the board of directors should notify Genomic Healths
Secretary or any member of the Nominating and Corporate
Governance Committee in writing with any supporting material the
stockholder considers appropriate.
In addition, our Bylaws contain provisions that address the
process by which a stockholder may nominate an individual to
stand for election to the board of directors at our annual
meeting of stockholders. In order to nominate a candidate for
director, a stockholder must give timely notice in writing to
Genomic Healths Secretary and otherwise comply with the
provisions of our Bylaws. To be timely, our Bylaws provide that
we must have received the stockholders notice not less
than 90 days nor more than 120 days prior to the first
anniversary date of the preceding years annual meeting;
however, if we have not held an annual meeting in the previous
year or the date of the annual meeting is called for a date that
is more than 30 days before or more than 60 days after
the first anniversary date of the preceding years annual
meeting, we must have received the stockholders notice not
later than the close of business on the later of the
90th day prior to the date of the scheduled annual meeting
or the 7th day following the earlier of the day on which
notice of the annual meeting date was mailed or the day of the
first public announcement of the annual meeting date. An
adjournment or postponement of an annual meeting will not
commence a new time period or extend any time period for the
giving of the stockholders notice described above.
Information required by the Bylaws to be in the notice includes
the name and contact information for the candidate and the
person making the nomination, and other information about the
nominee that must be disclosed in proxy solicitations under
Section 14 of the Securities Exchange Act of 1934 and the
related rules and regulations under that Section.
Stockholder nominations must be made in accordance with the
procedures outlined in, and include the information required by,
our Bylaws and must be addressed to: Secretary, Genomic Health,
Inc., 301 Penobscot Drive, Redwood City, California 94063. You
can obtain a copy of our Bylaws by writing to the Secretary at
this address.
Director
Qualifications
Set forth below is a summary of the specific experience,
qualifications, attributes or skills of the nominees for the
board of directors that, in addition to the experience of those
nominees described in their biographies above, led
8
our Nominating and Corporate Governance Committee and board to
conclude that the nominee should serve as a member of the board:
Dr. Scott has significant leadership and senior management
experience as the Companys former Chief Executive Officer
and from prior senior management and board of director roles at
Incyte Corporation. Dr. Scott also brings strategic
planning insights as a result of his current role as the
Companys Executive Chairman and substantial knowledge of
the Companys current and potential markets.
Ms. Popovits role as President and Chief Executive
Officer of the Company gives her strong knowledge of the
Companys strategy, markets, competitors and operations.
She also brings significant experience in commercial operations,
sales and marketing and experience as a public company director.
Mr. Baker is an experienced investor in many life sciences
companies. Mr. Baker brings to the board significant
strategic and financial expertise and leadership experience in
the life sciences field as a result of his investments in and
service as a director of other publicly and privately held life
sciences companies.
Mr. Byers brings significant leadership in the life
sciences industry, having founded, invested in and served on the
boards of numerous publicly and privately held life sciences and
healthcare companies. Mr. Byers also brings significant
government relations experience as a result of his leadership
role in a number of industry organizations.
Because of his background as an M.D. and a venture capitalist,
Dr. Cohen brings significant leadership experience in the
medical and finance fields. He has extensive technical expertise
relevant to the Companys business and has served as an
investor in and on the boards of numerous life sciences and
healthcare companies.
Mr. Colella brings significant leadership in the life
sciences industry, having founded, invested in and served on the
boards of numerous publicly and privately held life sciences and
healthcare companies. He also brings extensive senior management
experience in a broad array of diverse businesses.
Ms. Graham has extensive experience in senior management
roles in the life sciences and healthcare industries, including
experience leading companies in drug, device and product
development and commercialization. She also brings significant
experience as a director of publicly and privately held life
sciences companies.
Mr. Livingston brings significant experience in financial
matters and extensive experience in working with emerging growth
companies in the life sciences, healthcare and technology
industries. Mr. Livingston also has experience as a
director of publicly and privately held companies, and his
breadth and depth of financial experience position him well to
serve as Chair of the Audit Committee.
Dr. Myers brings extensive experience from senior
management roles with healthcare payors and employers and in
working with healthcare reimbursement issues. He also brings
medical expertise and significant experience as a director of
other publicly held life sciences and healthcare companies.
Board
Leadership Structure and Role in Risk Oversight
The board of directors has chosen to separate the roles of chief
executive officer and chairman of the board of directors and to
have two executive officers serve in those roles. This situation
enables our Chief Executive Officer, Ms. Popovits, to focus
on the day-to-day operation of our business while allowing
Dr. Scott, our founder and Executive Chairman, to focus on
leadership of the board of directors and on strategic matters,
in addition to providing direction on issues such as stockholder
relationships. While the board believes it is important to
retain the organizational flexibility to determine whether the
roles of chairman of the board and chief executive officer
should be separated or combined in one individual, or whether to
elect an independent non-executive chairman, the board currently
believes that the interests of the Company and its stockholders
are better served with an executive officer serving in each role.
The board believes this structure promotes better alignment of
strategic development and execution, more effective
implementation of strategic initiatives, and clearer
accountability for their success or failure. Moreover, the board
believes that having an executive officer serve in each position
does not impede independent oversight. Seven of the nine members
of the board of directors are independent under The NASDAQ Stock
Market rules. The independent directors have chosen not to
appoint a lead independent director, as the independent
directors take
9
active roles with respect to the Company and a number of the
independent directors represent significant stockholders. The
independent directors meet in an executive session after each
regular board meeting, at which the independent directors have
the opportunity to discuss management performance.
Our board of directors is responsible for overseeing the overall
risk management process at the Company. The responsibility for
managing risk rests with executive management while the
committees of the board and the board of directors as a whole
participate in the oversight process. The boards risk
oversight process builds upon managements risk assessment
and mitigation processes, which include reviews of long-term
strategic and operational planning, executive development and
evaluation, regulatory and legal compliance, and financial
reporting and internal controls. The board considers strategic
risks and opportunities and regularly receives reports from
executive management regarding specific aspects of risk
management.
Stockholder
Communications with the Board of Directors
If you wish to communicate with the board of directors, you may
send your communication in writing to: Secretary, Genomic
Health, Inc., 301 Penobscot Drive, Redwood City, California
94063. You must include your name and address in the written
communication and indicate whether you are a stockholder of
Genomic Health. The Secretary will review any communication
received from a stockholder, and all material communications
from stockholders will be forwarded to the appropriate director
or directors or committee of the board of directors based on the
subject matter.
Certain
Relationships and Related Transactions
It is our policy that all employees, officers and directors must
avoid any activity that is or has the appearance of conflicting
with the interests of the Company. This policy is included in
our Code of Business Conduct and Ethics. We conduct a review of
all related party transactions for potential conflict of
interest situations on an ongoing basis and all such
transactions relating to executive officers and directors must
be approved by the independent and disinterested members of our
board of directors or an independent and disinterested committee
of the board.
Director
Compensation
The following table sets forth cash amounts and the value of
other compensation paid to our outside directors for their
service in 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
Option Awards
|
|
|
Name
|
|
in Cash ($)
|
|
($)(1)(2)
|
|
Total ($)
|
|
Julian C. Baker
|
|
|
20,000
|
|
|
|
75,562
|
|
|
|
95,562
|
|
Brook H. Byers
|
|
|
20,000
|
|
|
|
75,562
|
|
|
|
95,562
|
|
Fred E. Cohen, M.D., D.Phil.
|
|
|
20,000
|
|
|
|
75,562
|
|
|
|
95,562
|
|
Samuel D. Colella
|
|
|
20,000
|
|
|
|
75,562
|
|
|
|
95,562
|
|
Ginger L. Graham
|
|
|
20,000
|
|
|
|
75,562
|
|
|
|
95,562
|
|
Randall S. Livingston
|
|
|
30,000
|
|
|
|
75,562
|
|
|
|
105,562
|
|
Woodrow A. Myers, Jr., M.D.
|
|
|
20,000
|
|
|
|
75,562
|
|
|
|
95,562
|
|
|
|
|
(1) |
|
Represents the aggregate fair value of options to purchase our
common stock computed as of the grant date of each option in
accordance with the Financial Accounting Standards Board
Accounting Standard Codification Topic 718, Stock
Compensation, or FASB ASC Topic 718, formerly referred to as
Statement of Financial Accounting Standards No. 123
(revised 2004), rather than amounts paid to or realized by the
named individual. See Note 10 of Notes to our Consolidated
Financial Statements set forth in our Annual Report on
Form 10-K
for the year ended December 31, 2009 for the assumptions
made in determining these values. There can be no assurance that
options will be exercised (in which case no value will be
realized by the individual) or that the value on exercise will
approximate the fair value as computed in accordance with FASB
ASC Topic 718. In 2009, each outside director received an option
to purchase 8,250 shares of our common stock. |
10
|
|
|
(2) |
|
The following table sets forth the aggregate number of shares of
common stock underlying option awards outstanding at
December 31, 2009: |
|
|
|
|
|
|
|
Number of
|
Name
|
|
Shares
|
|
Julian C. Baker
|
|
|
33,000
|
|
Brook H. Byers
|
|
|
33,000
|
|
Fred E. Cohen, M.D., D.Phil.
|
|
|
33,000
|
|
Samuel D. Colella
|
|
|
33,000
|
|
Ginger L. Graham
|
|
|
24,750
|
|
Randall S. Livingston
|
|
|
50,337
|
|
Woodrow A. Myers, Jr., M.D.
|
|
|
41,250
|
|
Directors who are our employees do not receive any fees for
their service on our board of directors. During 2009,
Dr. Scott and Ms. Popovits were our only employee
directors.
Our outside directors receive an annual retainer of $20,000 and
Mr. Livingston, as chairman of our Audit Committee,
receives an annual retainer of $30,000. We also reimburse our
non-employee directors for reasonable expenses in connection
with attendance at board of director and committee meetings.
In addition to cash compensation for services as a member of the
board, non-employee directors also are eligible to receive
nondiscretionary, automatic grants of stock options under our
2005 Stock Incentive Plan. An outside director who joins our
board is automatically granted an initial option to purchase
16,500 shares upon first becoming a member of our board of
directors. The initial option vests and becomes exercisable over
four years, with the first 25% of the shares subject to the
initial option vesting on the first anniversary of the date of
grant and the remainder vesting monthly thereafter. On the first
business day following each regularly scheduled annual meeting
of stockholders, each outside director is automatically granted
a nonstatutory option to purchase 8,250 shares of our
common stock, provided the director has served on our board of
directors for at least six months. These options vest and become
exercisable on the first anniversary of the date of grant or
immediately prior to our next annual meeting of stockholders, if
earlier. The options granted to outside directors under our 2005
Stock Incentive Plan have a per share exercise price equal to
100% of the fair market value of the underlying shares on the
date of grant, a term of 10 years, and become fully vested
in the event of a change in control. At December 31, 2009,
options granted to outside directors with respect to an
aggregate of 231,000 shares automatically accelerate upon a
change of control.
Executive
Compensation
Compensation
Discussion and Analysis
Our
Compensation Philosophy and Objectives
We believe that compensation of our executive officers should:
|
|
|
|
|
encourage creation of stockholder value and achievement of
strategic corporate objectives;
|
|
|
|
attract and retain qualified, skilled and dedicated executives
on a long-term basis;
|
|
|
|
reward past performance and provide incentives for future
performance; and
|
|
|
|
provide fair compensation consistent with our internal
compensation programs.
|
Our philosophy is to align the interests of our stockholders and
management by linking compensation with our annual and long-term
corporate and financial objectives, including through equity
ownership by management. In order to attract and retain
qualified personnel, we strive to offer a total compensation
package competitive with select companies in the life sciences
industry, taking into account relative company size, performance
and geographic location as well as individual responsibilities
and performance. Our compensation philosophy with respect to our
executive officers has and continues to focus more on the use of
equity-based compensation rather than cash-based compensation,
although in order to recruit and retain qualified, skilled and
dedicated executives, we expect to use cash-based compensation
to a greater degree than we have in the past.
11
Implementing
Our Objectives
The Compensation Committee of our board of directors administers
and interprets our executive compensation and benefits policies,
including our stock option plan, and reviews and makes
recommendations to the independent members of the board of
directors with respect to major compensation plans, policies and
programs. For 2009 compensation, the Compensation Committee
evaluated the performance of Randal W. Scott, our current
Executive Chairman of the Board, who was our Chief Executive
Officer, or CEO, until January 2009, and Kimberly J. Popovits,
who was our President and Chief Operating Officer from February
2002 until she was appointed President and CEO in January 2009.
The Compensation Committee made recommendations to the
independent members of the board regarding Dr. Scotts
and Ms. Popovitss compensation in light of the goals
and objectives of our compensation program. Dr. Scott,
Ms. Popovits and the Compensation Committee together
assessed the performance of our other executive officers and
other members of our management committee, based on initial
recommendations from Dr. Scott and Ms. Popovits. This
assessment took into account the economic environment and the
Companys operating results. The Committees
recommendations were then submitted to the independent members
of the board for their consideration and approval.
The Compensation Committee and the independent members of the
board have a broad range of experience relating to executive
compensation matters for similarly situated companies. In
setting the level of cash and equity compensation for our
executive officers, the Compensation Committee and the
independent members of our board consider various factors,
including the performance of the Company and the individual
executive during the year, the uniqueness and relative
importance of the executives skill set to the Company, the
executives historical cash and equity compensation levels,
the executives expected future contributions to the
Company, the percentage of vested versus unvested options held
by the executive, the level of the executives stock
ownership and the Companys compensation philosophy for all
employees.
Market Reference Data. While the Compensation
Committee did not use market benchmarks to determine its
recommendations for executive compensation for 2009, the
Committee reviewed market reference data to evaluate the
competitiveness of our executive officers compensation and
to determine whether the total compensation paid to each of our
named executive officers was reasonable in the aggregate.
However, the Compensation Committee did not limit its decision
to or target any particular range or level of total compensation
paid to executive officers at these companies. In connection
with its analysis, the Committee reviewed information prepared
by Compensia Inc., an independent executive compensation
consultant, comparing our executive compensation with data from
the Radford Biotechnology Executive Compensation Survey with
respect to companies in the San Francisco Bay Area with
revenues between $50 million and $200 million and
between 150 and 499 employees and data from SEC filings for
a peer group comprised of the following 13 biotechnology and
diagnostic companies:
|
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|
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Abaxis
|
|
Human Genome Sciences
|
|
Myriad Genetics
|
Cepheid
|
|
Incyte
|
|
Third Wave Technologies
|
Decode Genetics
|
|
Lexicon Pharmaceuticals
|
|
ZymoGenetics
|
Exelixis
|
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Maxygen
|
|
|
Gen-Probe
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Monogram Biosciences
|
|
|
The peer group includes the same companies as the peer groups
used in prior years, but was smaller than those used in prior
years due to acquisitions of peer group companies.
The analysis indicated that 2008 base salary for our executive
officers other than our CEO approximated the
50th percentile, while base salary for our CEO was well
below the 25th percentile. The analysis also indicated that
target total cash compensation (salary plus potential bonus) for
each of our executive officers other than our CEO approximated
the 25th percentile, with the target total cash
compensation for our CEO well below the 25th percentile.
According to the analysis, target total direct compensation
approximated the 45th percentile for all executive officers
other than our CEO, and target total direct compensation for our
CEO was well below the 25th percentile. For purposes of
this analysis, target total direct compensation for our
executives equaled target total cash compensation plus the
Black-Scholes value of options awarded in December 2007. With
respect to equity awards, the analysis indicated that the annual
equity values of stock options granted to our executive officers
fell between the 25th and 50th percentiles, with
Dr. Scotts grants below the 25th percentile.
12
Equity Grant Practices. The Compensation
Committee administers our stock option plan for executive
officers, employees, consultants and outside directors, under
which it grants options to purchase our common stock with an
exercise price equal to the fair market value of a share of our
common stock on the date of grant, which is the closing price on
the date of grant. We do not coordinate the timing of equity
award grants with the release of financial results or other
material announcements by the Company; our annual equity grants
are made at regularly scheduled board and Compensation Committee
meetings.
Each executive officer is initially granted an option when he or
she begins working for us. The amount of the grant is based on
his or her position with us, relevant prior experience and
market conditions. These initial grants generally vest over four
years and no shares vest before the one-year anniversary of the
option grant. We spread the vesting of our options over four
years to compensate executives for their contribution over a
period of time and to provide an incentive to focus on our
longer term goals.
In the future, the Compensation Committee and independent
members of our board of directors may consider awarding
additional or alternative forms of equity incentives, such as
grants of restricted stock, restricted stock units and other
performance-based awards.
Miscellaneous. We do not enter into employment
or severance contracts with our executive officers as we do not
believe these types of arrangements facilitate our compensation
goals and objectives. We do not have an employee stock purchase
plan. In 2009, we made up to a $1,000 matching 401(k) plan
contribution for all eligible employee and executive officers,
and we expect to make the same matching contribution in 2010.
Tax Deductibility of Compensation. We
generally intend to qualify executive compensation for
deductibility without limitation under section 162(m) of
the Internal Revenue Code of 1986, as amended.
Section 162(m) places a limit of $1,000,000 on the amount
of compensation we may deduct in any one year with respect to
our executive officers other than our Chief Financial Officer.
None of the non-exempt compensation we paid to any of our
executive officers for 2009 as calculated for purposes of
section 162(m) exceeded the $1,000,000 limit.
Stock Ownership Guidelines. We do not have a
stock ownership or stock retention policy that requires
executive officers to own stock in Genomic Health or retain
shares of common stock underlying options they exercise.
Elements
of Executive Compensation
Our compensation structure for executive officers consists of a
combination of base salary, bonus and equity-based compensation.
Because of our current culture, we do not have programs
providing for personal benefit perquisites to officers. The
Compensation Committee makes recommendations with respect to
executive officer compensation, to be approved by the
independent members of the board of directors.
Base Salary. The Compensation Committee
reviews base salaries for executive officers on an annual basis,
adjusting salaries based on individual and Company performance
and other factors discussed below. The Compensation Committee
and independent members of the Board will consider market
adjustments to base salaries for our executives, which may be
implemented over time and will depend on the Companys
operating results. In January 2009, based on the recommendation
of the Committee, the independent members of the board of
directors approved salary increases for our named executive
officers except Dr. Scott ranging from 7.0% to 10.5%.
Dr. Scotts salary was increased by 3.6%. In February
2010, based on the recommendation of the Committee, the
independent members of the board of directors approved a 5.6%
salary increase for Mr. Cole, to reflect his increased
responsibilities. This adjustment brings his base salary closer
to the market 50th percentile and in alignment with our
compensation philosophy. No salary increases were approved for
any of our other named executive officers. For both years,
salary increases were established after considering job
performance and responsibilities, internal pay alignment and
marketplace competitiveness, among other things. In the case of
Ms. Popovits and Mr. Cole, increases in base salary
for 2009 also reflected the additional management
responsibilities resulting from the appointment in January 2009
of Ms. Popovits as our President and CEO and Mr. Cole
as our Chief Operating Officer and Chief Financial Officer.
13
Annual Bonus. We have a bonus pool for our
employees that is tied to corporate and operational goals. Prior
to 2007, we had not paid cash bonuses to our executive officers.
Since 2007, our executive officers have been eligible to
participate in our cash bonus program. The size of the target
bonus pool for executive officers was increased to 15% of base
salary for 2009 and 2010 to better align total target cash
compensation with market and increase the emphasis on pay for
performance.
For 2009, the eligible bonus pool for all employees was 10% of
the Companys total salary base, but there were no preset
limitations on minimum or maximum bonus amounts for any
employee. For 2009, the eligible bonus pool for employees with
titles of director and above, including our executive officers,
was subject to increase by 5% of the total salary base for those
employees if the Company was profitable in the fourth quarter of
2009 and met specified objectives with respect to
commercialization of a colon cancer test. However, the Company
was not profitable in the fourth quarter of 2009 and the 5%
increase for these employees was not paid.
While bonuses for non-executive employees were based in part on
achievement of corporate goals established by our executive
officers and board of directors, bonuses for executive officers
were determined by the Compensation Committee and independent
members of our board of directors at the time of their annual
compensation review based on their assessment of corporate and
individual achievements. For 2009, the Committee determined to
award bonuses to each executive officer that approximated 8.8%
of his or her annual base salary, primarily because the first
half and second half 2009 corporate objectives for purposes of
determining the 2009 bonus pool for non-executive employees were
achieved at an average level of 88%. In addition, the Committee
believed the executive team should be treated equally because
corporate accomplishments were judged largely based on team
performance and performance within their respective domains was
relatively level among executive team members. The corporate
bonus objectives for our non-executive employees were approved
by the Committee and the board of directors for the first half
and second half of the year. The corporate bonus objectives for
the first half of 2009 were achieved at the 87% level. Of these
objectives, objectives related to certain business metrics were
achieved at the target level of 15%, objectives related to
driving top line revenue for the year, with a target of 19%,
were achieved at the 15% level, objectives related to success in
the adoption of our tests, with a target of 25%, were achieved
at the 16% level, objectives related to pipeline development
were achieved at the target level of 31%, objectives related to
operational excellence were achieved at the target level of 6%,
and the organizational excellence objective was achieved at the
target level of 4%. The corporate bonus objectives for the
second half of 2009 were achieved at the 89% level. Of these
objectives, objectives related to success in the adoption of our
tests, with a target of 23%, were achieved at the 23.5% level,
objectives related to driving top line revenue for the year,
with a target of 12%, were achieved at the 10.5% level,
objectives related to progress toward profitability were
achieved at the target level of 7%, objectives related to
pipeline development for our breast cancer test program, with a
target of 15%, were achieved at the 10% level, objectives
related to pipeline development for our colon cancer test
program, with a target of 20%, were achieved at the 14% level,
objectives related to pipeline development for our other
programs were achieved at the target level of 10%, objectives
related to operational excellence, with a target of 5%, were
achieved at the 6% level, the organizational excellence
objective was achieved at the target level of 5%, and objectives
related to our research activities were achieved at the target
level of 3%. Specific corporate bonus objectives are not
disclosed because we consider the information to be confidential
and believe it would be competitively harmful if disclosed. In
addition, bonus amounts paid constituted a small percentage of
each executive officers total cash compensation.
For 2010, the eligible bonus pool for all employees will be 10%
of the Companys total salary base, with no preset
limitations on minimum or maximum bonus amounts for any
employee. As with prior years, bonuses for executive officers
will be determined by the Compensation Committee and independent
members of our board of directors at the time of their annual
compensation review based on their assessment of corporate and
individual achievements. Each member of our management
committee, which includes our executive officers, has a funding
target under the plan of 15% of his or her annual base salary
for 2010, with the potential for actual awards under the plan to
either exceed or be less than the funding target depending upon
corporate and individual performance. Corporate performance
objectives for the management committee will be established and
measured for each half of 2010, with the results averaged to
determine the funding pool. Unlike prior years, the corporate
performance objectives for members of our management committee,
while being the same as many of the objectives applicable to the
remainder of our employees, will have different percentages
attached to the objectives to reflect the different
14
emphasis on incentives to be applied to the management
committee. Management committee corporate objectives for the
first half of 2010 include financial performance objectives,
representing 45% of the overall first half objectives, pipeline
progress objectives, representing 30% of the overall first half
objectives, operational excellence objectives, representing 15%
of the overall first half objectives, research objectives,
representing 5% of the overall first half objectives, and
organizational excellence objectives, representing 5% of the
overall first half objectives. Minimum and target achievement
levels are defined for certain of the financial performance and
pipeline progress objectives, with overachievement enabling the
addition of a fixed number of bonus percentage points for such
objectives. In addition, the funding target of 15% of base
salary can be increased to 20% upon achievement of a separate
financial performance goal. No bonus pool funding will be made
for the first half of 2010 if the Company does not achieve a
specified minimum revenue threshold.
Equity-Based Compensation. We believe that
providing executive officers who have responsibility for our
management and growth with an opportunity to increase their
stock ownership aligns the interests of the executive officers
with those of our stockholders. Accordingly, the Compensation
Committee considers stock option grants to be an important
aspect in compensating and providing incentives to management.
The Compensation Committee sets annual grants as part of its and
the independent members of the boards annual compensation
review process. The Compensation Committee determined the number
of shares underlying each stock option grant based upon the
executive officers and the Companys performance, the
executive officers role and responsibilities, the
executive officers base salary, comparison with comparable
awards to individuals in similar positions in our industry using
the survey data described above and previously determined stock
grant guidelines for all employees.
In December 2008, the Compensation Committee granted our
executive officers options to purchase between 40,000 to
60,000 shares of our common stock, with grants intended to
reflect the factors discussed above and larger awards being made
to Ms. Popovits and Mr. Cole in recognition of their
increased levels of responsibility. In February 2010, the
Compensation Committee approved grants of stock options to our
executive officers in connection with the evaluation of our
executive officers 2009 performance by the Compensation
Committee and the independent members of our board. Grants
ranging from 40,000 to 65,000 shares were made to our
executive officers other than our CEO, and a grant of
125,000 shares was made to our CEO. The grants were
intended to reflect the factors discussed above as well as
increased responsibilities associated with management changes in
2009. In addition, the Compensation Committee desired to
increase the total target direct compensation for our CEO to a
level closer to the 50th percentile of the market reference
data, as Ms. Popovits does not hold as significant an
equity stake in our company as does her predecessor,
Dr. Scott.
Other Compensation. All of our full-time
employees, including our executive officers, may participate in
our health programs, such as medical, dental and vision care
coverage, and our 401(k) and life and disability insurance
programs.
Compensation
Committee Report
The following report of the Compensation Committee shall not
be deemed to be soliciting material or
filed with the SEC or to be incorporated by
reference into any other filing by Genomic Health under the
Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that we specifically incorporate it by
reference into a document filed under those Acts.
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis set forth above with
Genomic Healths management. Based on its review and those
discussions, the Compensation Committee recommended to the board
of directors that the Compensation Discussion and Analysis be
included in our 2009 Annual Report on
Form 10-K
and in this Proxy Statement.
Compensation Committee
Brook H. Byers
Julian C. Baker
Samuel D. Colella
Woodrow A. Myers, Jr., M.D.
15
Named
Executive Officers
The tables that follow provide compensation information for our
named executive officers, including Kimberly J. Popovits,
President and Chief Executive Officer, G. Bradley Cole, Chief
Operating Officer, Chief Financial Officer and Secretary, and
our three most highly compensated executive officers who were
serving as executive officers at the end of 2009, which were
Randal W. Scott, Steven Shak and Joffre B. Baker.
2009
Summary Compensation Table
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|
|
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|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
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|
|
Option
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Incentive Plan
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|
|
|
|
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Salary
|
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Awards
|
|
Compensation
|
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Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)(1)
|
|
($)
|
|
($)
|
|
Kimberly J. Popovits
|
|
|
2009
|
|
|
|
420,000
|
|
|
|
|
|
|
|
37,000
|
|
|
|
457,000
|
|
President and Chief Operating Officer
|
|
|
2008
|
|
|
|
380,000
|
|
|
|
562,170
|
|
|
|
35,350
|
|
|
|
977,520
|
|
|
|
|
2007
|
|
|
|
340,000
|
|
|
|
407,240
|
|
|
|
25,000
|
|
|
|
772,240
|
|
G. Bradley Cole
|
|
|
2009
|
|
|
|
360,000
|
|
|
|
|
|
|
|
31,700
|
|
|
|
391,700
|
|
Chief Operating Officer, Chief Financial Officer
|
|
|
2008
|
|
|
|
330,000
|
|
|
|
468,475
|
|
|
|
30,700
|
|
|
|
829,175
|
|
and Secretary
|
|
|
2007
|
|
|
|
286,000
|
|
|
|
407,240
|
|
|
|
25,000
|
|
|
|
718,240
|
|
Steven Shak, M.D.
|
|
|
2009
|
|
|
|
380,000
|
|
|
|
|
|
|
|
33,400
|
|
|
|
413,400
|
|
Chief Medical Officer
|
|
|
2008
|
|
|
|
350,000
|
|
|
|
374,780
|
|
|
|
32,550
|
|
|
|
757,330
|
|
|
|
|
2007
|
|
|
|
315,000
|
|
|
|
407,240
|
|
|
|
25,000
|
|
|
|
747,240
|
|
Joffre B. Baker, Ph.D.
|
|
|
2009
|
|
|
|
365,000
|
|
|
|
|
|
|
|
32,100
|
|
|
|
397,100
|
|
Chief Scientific Officer
|
|
|
2008
|
|
|
|
341,000
|
|
|
|
374,780
|
|
|
|
31,700
|
|
|
|
747,480
|
|
|
|
|
2007
|
|
|
|
310,000
|
|
|
|
407,240
|
|
|
|
25,000
|
|
|
|
742,240
|
|
Randal W. Scott, Ph.D.
|
|
|
2009
|
|
|
|
290,000
|
|
|
|
|
|
|
|
25,500
|
|
|
|
315,500
|
|
Executive Chairman of the Board
|
|
|
2008
|
|
|
|
280,000
|
|
|
|
374,780
|
|
|
|
26,000
|
|
|
|
680,780
|
|
|
|
|
2007
|
|
|
|
280,000
|
|
|
|
407,240
|
|
|
|
25,000
|
|
|
|
712,240
|
|
|
|
|
(1) |
|
Represents the aggregate fair value of options computed as of
the grant date of each option in accordance with FASB ASC Topic
718 rather than amounts paid to or realized by the named
individual. See Note 10 of Notes to our Consolidated
Financial Statements set forth in our Annual Report on
Form 10-K
for the year ended December 31, 2009 for the assumptions
made in determining FASB ASC Topic 718 values. There can be no
assurance that options will be exercised (in which case no value
will be realized by the individual) or that the value on
exercise will approximate the fair value as computed in
accordance with FASB ASC Topic 718. |
For 2009 and succeeding years, the Compensation Committee and
the independent members of the board of directors changed the
timing of their annual compensation review for executive
officers from December to February of the following year in
order to be able to consider the entire previously completed
fiscal years results in reaching their compensation
determinations and to match the compensation review cycle used
for all employees of the Company.
In February 2010, stock options were granted to our named
executive officers as compensation for 2009 performance as
follows:
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|
|
|
|
|
|
|
|
|
Grant Date
|
|
Option
|
|
|
Number of Options
|
|
Fair Value of
|
|
Exercise
|
Name
|
|
Granted (#)(1)
|
|
Option Awards ($)
|
|
Price ($)
|
|
Kimberly J. Popovits
|
|
|
125,000
|
|
|
|
1,111,530
|
|
|
$
|
17.18
|
|
G. Bradley Cole
|
|
|
65,000
|
|
|
|
578,340
|
|
|
$
|
17.18
|
|
Steven Shak, M.D.
|
|
|
55,000
|
|
|
|
489,360
|
|
|
$
|
17.18
|
|
Joffre B. Baker, Ph.D.
|
|
|
55,000
|
|
|
|
489.360
|
|
|
$
|
17.18
|
|
Randal W. Scott, Ph.D.
|
|
|
45,000
|
|
|
|
355,690
|
|
|
$
|
17.18
|
|
16
|
|
|
(1) |
|
Options vest over a four year period, becoming exercisable as to
25% of the shares on the first anniversary of the grant date
with the remaining shares vesting monthly thereafter over the
following 36 months. |
All of the options have a term of ten years, subject to earlier
termination in specified events related to termination of
employment.
Outstanding
Equity Awards at Fiscal Year-End
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
|
Exercisable
|
|
Unexercisable
|
|
Price
|
|
Expiration
|
Name
|
|
(#)
|
|
(#)(1)
|
|
($)(2)
|
|
Date
|
|
Kimberly J. Popovits
|
|
|
69,348
|
|
|
|
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
30,833
|
|
|
|
9,167
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
23.31
|
|
|
|
12/06/17
|
|
|
|
|
15,000
|
|
|
|
45,000
|
|
|
|
17.33
|
|
|
|
12/04/18
|
|
G. Bradley Cole
|
|
|
125,368
|
|
|
|
|
|
|
|
1.33
|
|
|
|
07/06/14
|
|
|
|
|
17,337
|
|
|
|
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
30,833
|
|
|
|
9,167
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
23.31
|
|
|
|
12/06/17
|
|
|
|
|
12,500
|
|
|
|
37,500
|
|
|
|
17.33
|
|
|
|
12/04/18
|
|
Steven Shak, M.D.
|
|
|
69,348
|
|
|
|
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
30,833
|
|
|
|
9,167
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
23.31
|
|
|
|
12/06/17
|
|
|
|
|
10,000
|
|
|
|
30,000
|
|
|
|
17.33
|
|
|
|
12/04/18
|
|
Joffre B. Baker, Ph.D.
|
|
|
69,348
|
|
|
|
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
30,833
|
|
|
|
9,167
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
23.31
|
|
|
|
12/06/17
|
|
|
|
|
10,000
|
|
|
|
30,000
|
|
|
|
17.33
|
|
|
|
12/04/18
|
|
Randal W. Scott, Ph.D.
|
|
|
50,000
|
|
|
|
|
|
|
|
10.33
|
|
|
|
12/01/10
|
|
|
|
|
30,833
|
|
|
|
9,167
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
23.31
|
|
|
|
12/06/17
|
|
|
|
|
10,000
|
|
|
|
30,000
|
|
|
|
17.33
|
|
|
|
12/04/18
|
|
|
|
|
(1) |
|
Options vest over a four year period, becoming exercisable as to
25% of the shares on the first anniversary of the grant date
with the remaining shares vesting monthly thereafter over the
following 36 months. |
|
(2) |
|
Except for the grant to Dr. Scott at $10.33 per share, the
option exercise price is equal to the fair market value of our
common stock on the date of grant. The specified option grant to
Dr. Scott was equal to 110% of the fair market value of our
common stock on the date of grant because he owned more than 10%
of our outstanding common stock at the time the specified grant
was made. |
17
Other than the grant to Dr. Scott noted in footnote
(2) above that has a term of five years, all of the options
have a term of ten years, subject to earlier termination in
specified events related to termination of employment.
2009
Option Exercises
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of Shares
|
|
|
|
|
Acquired on
|
|
Value Realized on
|
Name
|
|
Exercise (#)
|
|
Exercise ($)(1)
|
|
Kimberly J. Popovits
|
|
|
|
|
|
|
|
|
G. Bradley Cole
|
|
|
10,665
|
|
|
|
206,744
|
|
Steven Shak, M.D.
|
|
|
|
|
|
|
|
|
Joffre B. Baker, Ph.D.
|
|
|
|
|
|
|
|
|
Randal W. Scott, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Value realized is based on the fair market value of our common
stock on the date of exercise minus the exercise price and does
not necessarily reflect proceeds actually received by the
individual. |
Equity
Compensation Plan Information
The following table provides information about our common stock
that may be issued upon the exercise of options and rights under
all of our existing equity compensation plans as of
December 31, 2009, including the 2005 Stock Incentive Plan,
or 2005 Plan, and the 2001 Stock Incentive Plan, or 2001 Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
Number of
|
|
|
|
|
|
Available for Future
|
|
|
|
Securities to be
|
|
|
Weighted-Average
|
|
|
Issuance
|
|
|
|
Issued Upon Exercise
|
|
|
Exercise Price of
|
|
|
Under Equity Compensation
|
|
|
|
of Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
Plans (Excluding Securities
|
|
Plan Category
|
|
Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Reflected in Column(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
4,683,763
|
|
|
$
|
15.36
|
|
|
|
4,796,673
|
(1)
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,683,763
|
|
|
$
|
15.36
|
|
|
|
4,796,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes 4,796,673 shares available for issuance under the
2005 Plan. The 2001 Plan was terminated upon completion of our
initial public offering in October 2005. No shares of common
stock are available under the 2001 Plan other than to satisfy
exercises of stock options granted under the 2001 Plan prior to
its termination. |
18
Security
Ownership of
Certain Beneficial Owners and Management
The following table sets forth certain information as of
April 14, 2010 as to shares of our common stock
beneficially owned by: (1) each person who is known by us
to own beneficially more than 5% of our common stock,
(2) each of our named executive officers listed in the
summary compensation table, (3) each of our directors and
(4) all of our directors and executive officers as a group.
We have determined beneficial ownership in accordance with the
rules of the SEC. Except as indicated by the footnotes below, we
believe, based on the information furnished to us, that the
persons and entities named in the table below have sole voting
and investment power with respect to all shares of common stock
that they beneficially own, subject to applicable community
property laws.
The percentage of common stock beneficially owned is based on
28,775,558 shares outstanding as of April 14, 2010,
the record date for the Annual Meeting. In computing the number
of shares of common stock beneficially owned by a person and the
percentage ownership of that person, we deemed outstanding
shares of common stock subject to options held by that person
that are currently exercisable or exercisable within
60 days after April 14, 2010. We did not deem these
shares outstanding, however, for the purpose of computing the
percentage ownership of any other person.
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
Common
|
|
|
Number of Shares
|
|
Stock
|
|
|
of Common Stock
|
|
Beneficially
|
Name and Address of Beneficial Owner(1)
|
|
Beneficially Owned
|
|
Owned
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
Entities affiliated with Baker Brothers Advisors(2)
|
|
|
6,097,613
|
|
|
|
21.2
|
%
|
Entities affiliated with Versant Ventures(3)
|
|
|
2,292,922
|
|
|
|
8.0
|
%
|
Entities affiliated with AXA Financial, Inc.(4)
|
|
|
1,977,337
|
|
|
|
6.9
|
%
|
Entities affiliated with Tarrant Capital Advisors, Inc.(5)
|
|
|
1,910,273
|
|
|
|
6.6
|
%
|
Entities affiliated with Kleiner Perkins Caufield &
Byers(6)
|
|
|
1,665,160
|
|
|
|
5.8
|
%
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
Julian C. Baker(2)(7)
|
|
|
6,130,613
|
|
|
|
21.3
|
%
|
Brook H. Byers(6)(7)
|
|
|
1,714,742
|
|
|
|
6.0
|
%
|
Fred E. Cohen, M.D., D.Phil.(5)(8)
|
|
|
87,620
|
|
|
|
|
*
|
Samuel D. Colella(3)(7)
|
|
|
2,292,922
|
|
|
|
8.0
|
%
|
Ginger L. Graham(9)
|
|
|
14,437
|
|
|
|
|
*
|
Randall S. Livingston(10)
|
|
|
56,486
|
|
|
|
|
*
|
Woodrow A. Myers, Jr., M.D.(11)
|
|
|
53,250
|
|
|
|
|
*
|
Joffre B. Baker, Ph.D.(12)
|
|
|
436,043
|
|
|
|
1.5
|
%
|
G. Bradley Cole(13)
|
|
|
256,203
|
|
|
|
|
*
|
Kimberly J. Popovits(14)
|
|
|
506,219
|
|
|
|
1.7
|
%
|
Randal W. Scott, Ph.D.(15)
|
|
|
1,915,159
|
|
|
|
6.6
|
%
|
Steven Shak, M.D.(16)
|
|
|
576,374
|
|
|
|
2.0
|
%
|
All directors and executive officers as a group
(12 persons)(17)
|
|
|
14,040,068
|
|
|
|
46.9
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than 1%. |
|
(1) |
|
Unless otherwise stated, the address of each beneficial owner
listed on the table is
c/o Genomic
Health, Inc., 301 Penobscot Drive, Redwood City, California
94063. |
|
(2) |
|
According to Amendment No. 5 to Schedule 13D filed
jointly on February 10, 2010 by Julian C. Baker and Felix
J. Baker, Julian C. Baker and Felix J. Baker share voting and
dispositive power with respect to 6,097,613 shares of the
Companys common stock, including 173,897 shares owned
by Baker Bros. |
19
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|
|
|
|
Investments, L.P., 194,161 shares owned by Baker/Tisch
Investments, L.P., 20,287 shares owned by Baker Bros.
Investments II, L.P., 4,168,674 shares owned by Baker
Brothers Life Sciences, L.P., 113,044 shares owned by
14159, L.P., 1,253,653 shares owned by 667, L.P., each, a
limited partnership, and 173,897 shares owned by FBB
Associates, a general partnership of which Julian C. Baker and
Felix J. Baker are the sole partners. In addition, as of the
date of the filing, Julian C. Baker had sole voting and
dispositive power with respect to an option to purchase
33,000 shares of the Companys common stock. The
principal address for entities affiliated with Baker Brothers
Investments is 677 Madison Avenue, New York, New York 10065.
Mr. Baker disclaims beneficial ownership of the shares held
by these entities except to the extent of his pecuniary interest
therein. |
|
(3) |
|
According to Amendment No. 1 to Schedule 13G filed
jointly on March 2, 2009 by Versant Venture Capital I,
L.P., Versant Side Fund I, L.P., Versant Affiliates
Fund I-A,
L.P., Versant Affiliates
Fund I-B,
L.P., Versant Ventures I, LLC, Brian G. Atwood, Samuel D.
Colella, Ross A. Jaffe, William J. Link, Donald B. Milder,
Barbara N. Lubash and Rebecca B. Robertson (together, the
Versant Entities), and a Form 4 filed by Samuel
D. Colella on March 11, 2010, Versant Venture
Capital I, L.P. has shared power to vote and dispose of or
direct the disposition of 2,093,316 shares, Versant Side
Fund I. L.P. has shared power to vote and dispose of or
direct the disposition of 41,056 shares, Versant Affiliates
Fund I-A,
L.P. has shared power to vote and dispose of or direct the
disposition of 40,500 shares, and Versant Affiliates
Fund I-B,
L.P. has shared power to vote and dispose of or direct the
disposition of 85,050 shares. Also includes an option to
purchase 33,000 shares of common stock exercisable within
60 days of April 14, 2010 held by Mr. Colella for the
benefit of Versant Ventures I, LLC for which he has shared
voting and dispositive power. Versant Ventures I, LLC is
the general partner of Versant Venture Capital I, L.P.,
Versant Side Fund I, L.P., Versant Affiliates
Fund I-A,
L.P. and Versant Affiliates
Fund I-B,
L.P (the Funds). Brian G. Atwood, Samuel D. Colella,
Ross A. Jaffe, William J. Link, Donald B. Milder, Barbara N.
Lubash and Rebecca B. Robertson, as the Managing Directors of
Versant Ventures I, LLC, have shared power to vote and
dispose of or direct the disposition of 2,292,922 shares of
our common stock. The principal address for the Versant Entities
is 3000 Sand Hill Road, #4-210, Menlo Park, California 94025.
Mr. Colella, as a managing director of Versant
Ventures I, LLC, is deemed to have shared voting and
investment power with respect to the shares held by the Funds.
Mr. Colella disclaims beneficial ownership of the shares
held by the Funds, except to the extent of his pecuniary
interest therein. |
|
(4) |
|
According to Amendment No. 1 to Schedule 13G filed
jointly on February 12, 2010 by AXA Financial, Inc., AXA,
AXA Assurances I.A.R.D. Mutuelle and AXA Assurances Vie
Mutuelle, AllianceBernstein L.P., an investment advisor and
subsidiary of AXA Financial Inc., has sole power to vote
1,746,323 shares and sole power to dispose of or direct the
disposition of 1,803,953 shares that are beneficially owned
by unaffiliated third-party client accounts managed by
AllianceBernstein L.P., AXA Equitable Life Insurance Company, a
subsidiary of AXA Financial, Inc., has sole power to vote and to
dispose of or direct the disposition of 89,100 shares, and
AXA Investment Managers UK LTD, a subsidiary of AXA, has sole
power to vote and to dispose of or direct the disposition of
84,284 shares. The principal address for AXA Financial,
Inc. is 1290 Avenue of the Americas, New York, New York 10104.
The principal address for AXA is 25, avenue Matignon, 75008
Paris, France. The principal address for AXA Assurances I.A.R.D.
Mutuelle and AXA Assurances Vie Mutuelle AXA is 26, rue Drouot,
75009 Paris, France. |
|
(5) |
|
According to information provided by Tarrant Capital Advisors,
Inc. (Tarrant), Tarrant is the beneficial owner of
and has the sole power to vote and dispose of or direct the
disposition of the shares reported opposite its name in the
table above; such shares are held directly by TPG Ventures, L.P.
(TPG Ventures) and TPG Biotechnology Partners, L.P.
(TPG Biotech and, together with TPG Ventures, the
TPG Funds). Tarrant is the sole shareholder of
Tarrant Advisors, Inc., which is the general partner of TPG
Ventures Professional, L.P., which is the general partner of TPG
Ventures Partners, L.P., which is the managing member of TPG
Ventures Holdings, L.L.C. (TPG Ventures Holdings),
which is the sole member of each of TPG Ventures Advisors, LLC
(TPG Ventures Advisors) and TPG Biotech Advisors,
L.L.C. (TPG Biotech Advisors). TPG Ventures Advisors
is the general partner of TPG Ventures GenPar, L.P., which is
the general partner of TPG Ventures. TPG Biotech Advisors is the
general partner of TPG Biotechnology GenPar, L.P., which is the
general partner of TPG Biotech. The principal address for the
TPG Funds is 301 Commerce Street, Suite 3300,
Fort Worth, Texas 76102. David Bonderman and James G.
Coulter are officers, directors and sole shareholders |
20
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|
|
|
|
of Tarrant and therefore may be deemed to beneficially own these
shares. Dr. Cohen, who is also one of our directors, is a
partner at TPG. Dr. Cohen disclaims beneficial ownership of
the shares held by the TPG Funds. |
|
(6) |
|
According to a Schedule 13G filed jointly on
February 14, 2006 by Kleiner Perkins Caufield &
Byers X-A, L.P., Kleiner Perkins Caufield & Byers X-B,
L.P. and KPCB X Associates, L.P. 1,619,483 shares are
beneficially owned by Kleiner Perkins Caufield & Byers
X-A, L.P. and 45,677 shares are beneficially owned by
Kleiner Perkins Caufield & Byers X-B, L.P. KPCB X
Associates, L.P. is the general partner of Kleiner Perkins
Caufield & Byers X-A, L.P. and Kleiner Perkins
Caufield & Byers X-B, L.P. and has shared power to
vote and dispose of or direct the disposition of the shares of
stock held by Kleiner Perkins Caufield & Byers X-A,
L.P. and Kleiner Perkins Caufield & Byers X-B, L.P.
The principal address for the Kleiner Perkins
Caufield & Byers affiliated entities is 2750 Sand Hill
Road, Menlo Park, California 94025. Mr. Byers, who is also
one of our directors, is a managing member of the general
partner and, as such, has shared voting and investment authority
over these shares. Mr. Byers disclaims beneficial ownership
of these shares except to the extent of his pecuniary interest
therein. |
|
(7) |
|
Includes options to purchase 33,000 shares of common stock
that are exercisable within 60 days of April 14, 2010. |
|
(8) |
|
Includes options to purchase 33,000 shares of common stock
that are exercisable within 60 days of April 14, 2010
and 6,068 shares held in a family trust, of which
Dr. Cohen is a trustee. |
|
(9) |
|
Includes options to purchase 14,437 shares of common stock
that are exercisable within 60 days of April 14, 2010. |
|
(10) |
|
Includes options to purchase 50,337 shares of common stock
that are exercisable within 60 days of April 14, 2010. |
|
(11) |
|
Includes options to purchase 41,250 shares of common stock
that are exercisable within 60 days of April 14, 2010. |
|
(12) |
|
Includes options to purchase 188,096 shares of common stock
that are exercisable within 60 days of April 14, 2010.
Also includes 36,113 shares held by the Baker Charitable
Remainder Trust and 66,343 shares held by the Joffre and
Diana J. Baker 1998 Trust. Dr. Baker and his wife are
trustees and beneficiaries of both trusts. |
|
(13) |
|
Includes options to purchase 255,203 shares of common stock
that are exercisable within 60 days of April 14, 2010. |
|
(14) |
|
Includes options to purchase 195,595 shares of common stock
that are exercisable within 60 days of April 14, 2010.
Also includes 10,210 shares held by Ms. Popovits
son. |
|
(15) |
|
Includes options to purchase 118,749 shares of common stock
that are exercisable within 60 days of April 14, 2010.
Also includes 3,466 shares held for the benefit of
Dr. Scotts children, of which Dr. Scotts
sister is trustee. |
|
(16) |
|
Includes options to purchase 188,096 shares of common stock
that are exercisable within 60 days of April 14, 2010. |
|
(17) |
|
Includes options to purchase 1,150,763 shares of common
stock that are exercisable within 60 days of April 14,
2010. |
21
Report of
the Audit Committee
The Audit Committee operates under a written charter adopted by
the board of directors. A link to the Audit Committee Charter is
available on our website at www.genomichealth.com. All members
of the Audit Committee meet the independence standards
established by The NASDAQ Stock Market.
The Audit Committee assists the board of directors in fulfilling
its responsibility to oversee managements implementation
of Genomic Healths financial reporting process. It is not
the duty of the Audit Committee to plan or conduct audits or to
determine that the financial statements are complete and
accurate and are in accordance with generally accepted
accounting principles, or to assess or determine the
effectiveness of the Companys internal control over
financial reporting. Management is responsible for the financial
statements and the reporting process, including the system of
internal control over financial reporting and disclosure
controls. The independent registered public accounting firm is
responsible for expressing an opinion on the conformity of those
financial statements with accounting principles generally
accepted in the United States and of the effectiveness of the
Companys internal control over financial reporting.
In discharging its oversight role, the Audit Committee reviewed
and discussed the audited financial statements contained in the
Annual Report on
Form 10-K
for the year ended December 31, 2009 with Genomic
Healths management and the independent registered public
accounting firm.
The Audit Committee has discussed issues deemed significant by
the independent registered public accounting firm, including
those required by AICPA Professional Standards, Vol. 1, AU
section 380, as adopted by the Public Company Accounting
Oversight Board in Rule 3200T. In addition, the Audit
Committee has received the written disclosures and the letter
from the independent registered public accounting firm required
by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent registered public
accounting firms communications with the Audit Committee
concerning independence, and has discussed with the independent
registered public accounting firm such firms independence.
The Audit Committee has discussed with Genomic Healths
independent registered public accounting firm, with and without
management present, their evaluations of Genomic Healths
internal control over financial reporting and the overall
quality of Genomic Healths financial reporting.
In reliance on the reviews and discussion with management and
the independent registered public accounting firm referred to
above, the Audit Committee recommended to the board of
directors, and the board approved, the inclusion of the audited
financial statements in Genomic Healths Annual Report on
Form 10-K
for the year ended December 31, 2009, for filing with the
SEC. The Audit Committee has appointed Ernst & Young
LLP to serve as Genomic Healths independent registered
public accounting firm for the 2010 fiscal year.
Audit Committee
Randall S. Livingston
Fred E. Cohen, M.D., D.Phil.
Ginger L. Graham
22
Proposal 2
Ratification of the Appointment of Independent Registered
Public Accounting Firm
The Audit Committee has appointed Ernst & Young LLP as
our independent registered public accounting firm for the year
ending December 31, 2010. Representatives of
Ernst & Young LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a
statement, if they desire to do so, and will be available to
respond to appropriate questions. Although stockholder
ratification of our independent registered public accounting
firm is not required by our Bylaws or otherwise, we are
submitting the selection of Ernst & Young LLP to our
stockholders for ratification to permit stockholders to
participate in this important corporate decision.
Principal
Accountant Fees and Services
Ernst & Young LLP has audited our financial statements
since our inception in 2000. Aggregate fees for professional
services rendered for us by Ernst & Young LLP for the
years ended December 31, 2009 and 2008 were as follows:
|
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|
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|
|
Services Provided
|
|
2009
|
|
|
2008
|
|
|
Audit
|
|
$
|
639,000
|
|
|
$
|
594,000
|
|
Audit-Related
|
|
|
|
|
|
|
|
|
Tax
|
|
|
143,000
|
|
|
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49,000
|
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All Other
|
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|
|
|
|
|
|
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|
|
|
|
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|
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Total
|
|
$
|
782,000
|
|
|
$
|
643,000
|
|
|
|
|
|
|
|
|
|
|
Audit fees. For the years ended
December 31, 2009 and 2008, audit fees were for the
integrated audits of our annual financial statements and our
internal control over financial reporting and the review of
quarterly financial statements included in our quarterly reports
on
Form 10-Q.
For the year ended December 31, 2009, audit fees also
included work related to our
S-8 filing.
Tax fees. For the years ended
December 31, 2009 and 2008, tax fees were for the
preparation of our tax returns, tax planning and tax consulting
services. For the year December 31, 2009, tax fees also
included fees for consultation and assistance with establishing
a foreign subsidiary, including transfer pricing, foreign tax
guidance, expatriate services and other international tax
matters.
Audit
Committee Pre-Approval Policies and Procedures
The Audit Committee has implemented pre-approval policies and
procedures related to the provision of audit and non-audit
services. Under these procedures, the Audit Committee
pre-approves both the type of services to be provided by
Ernst & Young LLP and the estimated fees related to
these services. All of the services in 2008 and 2009 were
pre-approved.
During the approval process, the Audit Committee considers the
impact of the types of services and the related fees on the
independence of the independent registered public accounting
firm. The services and fees must be deemed compatible with the
maintenance of that firms independence, including
compliance with rules and regulations of the SEC.
Throughout the year, the Audit Committee will review any
revisions to the estimates of audit and non-audit fees initially
approved.
Required
Vote
Ratification of the appointment of Ernst & Young LLP
requires the affirmative vote of a majority of the shares
present and voting at the Annual Meeting in person or by proxy.
Unless marked to the contrary, proxies received will be voted
FOR ratification of the appointment. In the event
ratification is not obtained, the Audit Committee will review
its future selection of our independent registered public
accounting firm but will not be required to select a different
independent registered public accounting firm.
23
Your board of directors recommends a vote FOR ratification of
Ernst & Young LLP as our independent registered public
accounting firm.
Stockholder
Proposals for the 2011 Annual Meeting
If a stockholder wishes to present a proposal to be considered
for inclusion in our proxy statement for the 2011 Annual Meeting
of Stockholders, the proponent and the proposal must comply with
the proxy proposal submission rules of the SEC. One of the
requirements is that the proposal be received by Genomic
Healths Secretary no later than December 31, 2010.
Proposals we receive after that date will not be included in the
proxy statement. We urge stockholders to submit proposals by
Certified Mail Return Receipt Requested.
A stockholder proposal not included in our proxy statement for
the 2011 Annual Meeting will not be eligible for presentation at
the meeting unless the stockholder gives timely notice of the
proposal in writing to our Secretary at our principal executive
offices and otherwise complies with the provisions of our
Bylaws. To be timely, our Bylaws provide that we must have
received the stockholders notice not less than
90 days nor more than 120 days prior to the first
anniversary date of the preceding years annual meeting;
however, if we have not held an annual meeting in the previous
year or the date of the annual meeting is called for a date that
is more than 30 days before or more than 60 days after
the first anniversary date of the preceding years annual
meeting, we must have received the stockholders notice not
later than the close of business on the later of the
90th day prior to the date of the scheduled annual meeting
or the 7th day following the earlier of the day on which
notice of the annual meeting date was mailed or the day of the
first public announcement of the annual meeting date. An
adjournment or postponement of an annual meeting will not
commence a new time period or extend any time period for the
giving of the stockholders notice described above. The
stockholders notice must set forth, as to each proposed
matter, the information required by our Bylaws. The presiding
officer of the meeting may refuse to acknowledge any matter not
made in compliance with the foregoing procedure.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our executive officers and directors, and persons who
own more than 10% of a registered class of our equity
securities, to file reports of ownership on Forms 3, 4 and
5 with the SEC. Officers, directors and greater than 10%
stockholders are required to furnish us with copies of all
Forms 3, 4 and 5 they file.
Based solely on our review of the copies of such forms we have
received and written representations from certain reporting
persons that they filed all required reports, we believe that
all of our officers, directors and greater than 10% stockholders
complied with all Section 16(a) filing requirements
applicable to them with respect to transactions during 2009,
except a Form 4 related to the sale of 4,629 shares of
our common stock pursuant to a
Rule 10b5-1
sales plan by Dr. Joffre Baker on March 3, 2009, due
on March 5, 2009, was inadvertently not filed until
March 6, 2009.
24
Other
Matters
Your board of directors does not know of any other business that
will be presented at the Annual Meeting. If any other business
is properly brought before the Annual Meeting, the proxy holders
will vote in accordance with their judgment unless you direct
them otherwise in your proxy instructions.
Whether or not you intend to be present at the Annual Meeting,
we urge you to vote by signing and mailing the enclosed proxy or
voting by telephone or the Internet promptly.
By Order of the Board of Directors.
G. Bradley Cole
Chief Operating Officer,
Chief Financial Officer and Secretary
Redwood City, California
April 28, 2010
Our 2009 Annual Report on
Form 10-K
has been mailed with this Proxy Statement. We will provide
copies of exhibits to our Annual Report on
Form 10-K,
but will charge a reasonable fee per page to any requesting
stockholder. Stockholders may make such requests in writing to
Secretary, Genomic Health, Inc., 301 Penobscot Drive, Redwood
City, California 94063. The request must include a
representation by the stockholder that, as of April 14,
2010, the stockholder was entitled to vote at the Annual
Meeting. Our
10-K and
exhibits are also available at www.genomichealth.com.
25
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Using a black ink pen, mark your votes with an X as
shown in this example. Please do not write outside the designated areas. |
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x |
Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may
choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by
11:59 p.m., Eastern Time, on June 9, 2010.
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Vote by Internet
Log on to the Internet and go to
www.investorvote.com/GHDX
Follow the steps outlined on the secure website. |
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada
any time on a touch tone telephone. There is NO CHARGE to you for the call.
Follow the instructions provided by the recorded message. |
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Annual Meeting Proxy Card |
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▼
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH
AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
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A
Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. |
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+ |
1. Election of Directors: |
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01 - Randal W. Scott* |
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02 - Kimberly J. Popovits* |
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03 - Julian C. Baker* |
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04 - Brook H. Byers* |
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05 - Fred E. Cohen* |
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06 - Samuel D. Colella* |
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07 - Ginger L. Graham* |
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08 - Randall S. Livingston* |
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09 - Woodrow A. Myers, Jr.* |
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*Each to serve until the next Annual Meeting or until
their successors have been duly elected and qualified.
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Mark here to vote FOR all nominees |
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Mark here to WITHHOLD vote from all nominees |
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For All EXCEPT -
To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. |
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For |
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Abstain |
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2.
To ratify the appointment of Ernst & Young LLP as Genomic Healths independent registered public accounting firm for 2010. |
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3. In his or her discretion, the
proxies are authorized to vote upon such other business as may properly come before the meeting or any postponements or adjournments thereof. |
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B |
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Non-Voting Items |
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Change of Address Please print new address below. |
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and
Sign Below |
Please sign exactly as your name appears hereon. If the stock is registered in the names of two
or more persons, each should sign. Executors, administrators, trustees, guardians and
attorneys-in-fact should add their titles. If a corporation, please give full corporate
name and have a duly authorized officer sign, stating title. If a partnership, please
sign in partnership name by authorized person.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box. |
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Signature 2 Please keep signature within the box. |
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▼
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
Proxy GENOMIC HEALTH, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 10, 2010
The undersigned hereby authorizes Randal W. Scott, Kimberly J. Popovits and G. Bradley
Cole, and each of them, as proxies of the undersigned, with full power of substitution,
to represent and vote the shares of common stock of Genomic Health, Inc. (Genomic Health)
which the undersigned may be entitled to vote at the Annual Meeting of Stockholders of Genomic
Health to be held at Seaport Center, 459 Seaport Court, Redwood City, California
on June 10, 2010 at 10:00 a.m. (Pacific Time), and at any and all postponements or
adjournments thereof, with all powers that the undersigned would possess if personally
present, upon and in respect of the following matters and in accordance with the following instructions.
Unless a contrary direction is indicated, this Proxy will be voted FOR Proposal 1,
the election of directors, and FOR Proposal 2, the ratification of the appointment of Ernst &
Young LLP as independent registered public accounting firm and in accordance with the discretion
of the Proxies on any other matters as may properly come before the Annual Meeting. If specific
instructions are indicated, this Proxy will be voted in accordance therewith.
Please mark, sign, date and mail this proxy card promptly, using the enclosed envelope.