def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
Genomic Health, Inc.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Genomic
Health, Inc.
301 Penobscot Drive
Redwood City, California 94063
(650) 556-9300
May 4, 2007
Dear Stockholder:
You are cordially invited to attend the 2007 Annual Meeting of
Stockholders of Genomic Health, Inc. The meeting will be held at
10:00 a.m., Pacific Time, on Tuesday, June 12, 2007,
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 and
submit your proxy by dating, signing and returning the enclosed
proxy card in the enclosed postage-prepaid envelope. Your
shares cannot be voted unless you submit your proxy or attend
the Annual Meeting in person.
We have also enclosed a copy of our 2006 Annual Report.
The board of directors and management look forward to seeing you
at the meeting.
Sincerely,
Randal W. Scott, Ph.D.
Chairman of the Board and Chief Executive Officer
Genomic
Health, Inc.
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To Be Held on Tuesday,
June 12, 2007
To our Stockholders:
Genomic Health, Inc. will hold its Annual Meeting of
Stockholders at 10:00 a.m., Pacific Time, on Tuesday,
June 12, 2007, 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 2008 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; and
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to transact such other business as may properly come before the
Annual Meeting and any adjournments or postponements of the
Annual Meeting.
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Stockholders of record at the close of business on
April 17, 2007, are entitled to notice of and to vote at
this meeting and any adjournments or postponements 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 promptly vote and submit your proxy by dating, signing
and returning the enclosed proxy card. This will not limit your
rights to attend or vote at the meeting.
By Order of the Board of Directors
G. Bradley Cole
Executive Vice President,
Chief Financial Officer and Secretary
Redwood City, California
May 4, 2007
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, 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 Tuesday, June 12, 2007, 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 May 8, 2007.
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 2007.
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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 2007.
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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 17, 2007 (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?
You may vote using any of the following methods:
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By Mail Sign and date each proxy card you
receive and return it in the prepaid envelope. Sign your name
exactly as it appears on the proxy. If you return your signed
proxy but do not indicate your voting preferences, your shares
will be voted on your behalf FOR the election of the
nominated directors and FOR the ratification of the
independent registered public accounting firm for 2007.
Stockholders of record may vote by mail or in person at the
Annual Meeting.
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By Telephone or the Internet If you are a
beneficial owner, you will receive instructions from the holder
of record that you must follow in order for your shares to be
voted. Telephone and Internet voting will be offered to
stockholders owning shares through most banks and brokers.
Follow the instructions located on your voting instruction form.
Please be aware that if you vote over the Internet, you may
incur costs such as telephone and Internet access charges for
which you will be responsible.
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If you vote by telephone or via the Internet you do not need to
return your voting instruction form to your bank or broker.
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In Person at the Annual Meeting Shares held
in your name as the stockholder of record may be voted at the
Annual Meeting. Shares held beneficially in street name may be
voted in person only if you obtain a legal proxy from the
broker, bank or nominee that holds your shares giving you the
right to vote the shares. Even if you plan to attend the
Annual Meeting, we recommend that you also submit your proxy or
voting instructions or vote by telephone or the Internet so that
your vote will be counted if you later decide not to attend the
meeting.
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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 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 the 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 or voting instruction
form with no further instructions, your shares will be voted in
accordance with the recommendations of the board
(FOR all of the nominees to the board,
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
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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 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 24,582,528 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 and submit your proxy by signing, dating
and returning the enclosed proxy card in the postage-prepaid
return envelope so that your shares can be voted. This will not
limit your rights to attend or vote at the Annual Meeting.
3
Proposal 1
Election
of Directors
Directors
and Nominees
We currently have authorized nine directors. 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.
The names of the board of directors nominees, their ages
as of March 15, 2007, 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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Chairman of the Board and Chief
Executive Officer
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2000
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Kimberly J. Popovits
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President, Chief Operating 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., Ph.D.
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50
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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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Michael D. Goldberg
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Director
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2001
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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 Chairman of the
Board and Chief Executive Officer since our inception in August
2000 and served as 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
Operating Officer since February 2002. 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, she served as
Division Manager, Southeast Region, for American Critical
Care, a Division of American Hospital Supply, a supplier of
healthcare products to hospitals. Ms. Popovits is a
director of Nuvelo, Inc. Ms. Popovits holds a B.A. in
Business from Michigan State University.
Julian C. Baker is a Managing Member 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. He
is also a director of Incyte Corporation, Neurogen
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Corporation, Theravance, Inc. and Trimeris, Inc. Mr. Baker
holds an A.B. in Social Studies from Harvard University.
Brook H. Byers is a general partner of Kleiner Perkins
Caufield & Byers, a venture capital firm which he
joined in 1977. He was the founding president and chairman of
four life science companies: Hybritech Inc., IDEC
Pharmaceuticals Corporation, InSite Vision Inc. and Ligand
Pharmaceuticals Inc. Mr. Byers currently serves as a
director of a number of privately held technology, healthcare
and biotechnology companies. 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., Ph.D. joined TPG Ventures, a
venture capital firm, as a Managing Director in 2001.
Dr. Cohen is also a Professor of Medicine and Pharmacology
at the University of California, San Francisco, where he
has taught since July 1988. Dr. Cohen is a director of
Matrix Laboratories Limited, Quintiles Transnational and a
number of privately held companies. Dr. Cohen holds a B.S.
in Molecular Biophysics and Biochemistry from Yale University, a
Ph.D. in Molecular Biophysics from Oxford University, and an
M.D. from Stanford University.
Samuel D. Colella co-founded Versant Ventures, a healthcare and
biotechnology venture capital firm, 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 Symyx Technologies, Inc.,
Alexza Pharmaceuticals, Thermage, Inc., and a number of
privately held technology and biotechnology companies.
Mr. Colella has a B.S. in Business and Engineering from the
University of Pittsburgh and an M.B.A. from the Stanford
Graduate School of Business.
Michael D. Goldberg joined Mohr Davidow Ventures, a venture
capital firm, as a general partner in 2005. From October 2000 to
December 2004, Mr. Goldberg served as the Managing Director
of Jasper Capital, a management and financial consultancy
business. In 1995, Mr. Goldberg founded OnCare, Inc., an
oncology practice management company, and served as Chairman
until August 2001 and as Chief Executive Officer until March
1999. Previously, Mr. Goldberg was the founder, President
and Chief Executive Officer of Axion Inc., a cancer-focused
healthcare service company. Prior to Axion, Mr. Goldberg
was director of Corporate Development and a member of the
Operating Committee at Cetus Corporation. He is also a director
of several privately held companies. Mr. Goldberg holds a
B.A. in Philosophy from Brandeis University and an M.B.A. from
the Stanford Graduate School of Business.
Randall S. Livingston has served as Vice President for Business
Affairs and Chief Financial Officer of Stanford University since
2001. From 1999 to 2001, Mr. Livingston served as Executive
Vice President and Chief Financial Officer of OpenTV Corp., a
provider of interactive television services. From 1996 until
1999, Mr. Livingston served as a consultant and part-time
executive for several Silicon Valley technology companies. Prior
to 1996, Mr. Livingston worked for Heartport, Inc.,
Taligent, Apple Computer, Ingres Corporation and
McKinsey & 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 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
University Graduate School of Business.
Vote
Required
The nine nominees for director receiving the highest number of
affirmative votes will be elected as directors. Unless marked to
the contrary, proxies received will be voted FOR the
nominees.
Your board of directors recommends a vote FOR the
election of the nominees set forth above as directors of Genomic
Health.
5
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 2006 was, an
independent director within the meaning of
Rule 4200 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. Byers,
Colella, Goldberg and Livingston and Drs. Cohen and Myers,
the board of directors considered their relationship and
transactions with the Company as directors and securityholders
of the Company. For Mr. Baker, the board of directors
considered Mr. Bakers status as a director and
securityholder, and ordinary course transactions between the
Company and another company for which Mr. Baker serves as a
director.
Board
Meetings
Our board of directors held eight meetings in 2006. 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 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 board members
attended our 2006 annual meeting.
Committees
of the Board of Directors
Our board of directors has appointed an Audit Committee, a
Compensation Committee and a Nominating and Corporate Governance
Committee. The board of directors has determined that each
director who serves on these committees is
independent, as that term is defined by applicable
listing standards of The NASDAQ Stock Market and rules of the
SEC. The board of directors has adopted written charters for
each of these committees. Copies of 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)
Samuel D. Colella
Michael D. Goldberg
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Number of Meetings in
2006:
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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.
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6
Compensation
Committee
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Number of Members:
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4
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Current Members:
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Samuel D. Colella (Chair)
Brook H. Byers
Fred E. Cohen, M.D., Ph.D.
Woodrow A. Myers, Jr., M.D.
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Number of Meetings in
2006
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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,
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 Chief
Executive Officer and other executive officers, and administer
our stock plans and other equity-based compensation plans.
As allowed under its charter, the Compensation Committee has
delegated to Randal Scott and Kimberly Popovits, the members of
the Non-Management Stock Option Committee, the authority to
grant options to new non-executive employees. This Committee may
not grant options to purchase more than 50,000 shares of
common stock to any employee.
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Nominating
and Corporate Governance Committee
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Number of Members:
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3
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Current Members:
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Fred E.
Cohen, M.D., Ph.D. (Chair)
Samuel D. Colella
Michael D. Goldberg
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Number of Meetings in
2006:
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1
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Functions:
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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.
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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
7
effectively their duties as directors. 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 first by
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 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 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 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 earlier
than 90 days nor more than 120 days in advance of the
date the proxy statement was released to the stockholders in
connection with the previous years annual meeting of
stockholders; however, if we have not held an annual meeting in
the previous year or the date of the annual meeting is changed
by more than 30 days from the prior year, we must have
received the stockholders notice not later than the close
of business on the later of the 90th day prior to the
annual meeting or the 7th day following the first public
announcement of the annual meeting date. 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.
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. We conduct a review of all related
party transactions for potential conflict of interest situations
on an ongoing basis and all such
8
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.
2006 Director
Compensation
The following table sets forth cash amounts and the value of
other compensation paid to our outside directors for their
service in 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
Option
|
|
|
|
|
|
|
Cash
|
|
|
Awards
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
$(2)(3)
|
|
|
($)
|
|
|
Julian C. Baker
|
|
|
20,000
|
|
|
|
35,000
|
|
|
|
55,000
|
|
Brook H. Byers
|
|
|
20,000
|
|
|
|
35,000
|
|
|
|
55,000
|
|
Fred E.
Cohen, M.D., Ph.D.
|
|
|
20,000
|
|
|
|
35,000
|
|
|
|
55,000
|
|
Samuel D. Colella
|
|
|
20,000
|
|
|
|
35,000
|
|
|
|
55,000
|
|
Michael D. Goldberg
|
|
|
20,000
|
|
|
|
35,000
|
|
|
|
55,000
|
|
Randall S. Livingston
|
|
|
30,000
|
|
|
|
58,030
|
|
|
|
88,030
|
|
Woodrow A.
Myers, Jr., M.D.(1)
|
|
|
10,000
|
|
|
|
19,500
|
|
|
|
29,500
|
|
|
|
|
(1) |
|
Dr. Myers joined our board of directors on April 11,
2006. |
|
(2) |
|
Represents the compensation expense related to outstanding
options we recognized for the year ended December 31, 2006
under Statement of Financial Accounting Standards No. 123
(revised 2004), or SFAS 123R, rather than amounts paid to
or realized by the named individual and, except with respect to
Dr. Myers, includes expenses we recognized in 2006 for
option grants in prior periods. Compensation expense is
determined by computing the fair value of each option on the
grant date in accordance with SFAS 123R and recognizing
that amount as expense ratably over the option vesting term. See
Note 9 of Notes to our Consolidated Financial Statements
set forth in our Annual Report on
Form 10-K
for the year ended December 31, 2006, or the
10-K, for
the assumptions made in determining SFAS 123R values. The
SFAS 123R value of an option as of the grant date is spread
over the number of months in which the option is subject to
vesting and includes ratable amounts expensed for option grants
in prior years. 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
compensation expense we recognized. In 2006, Messrs. Baker,
Byers, Colella, Goldberg and Livingston and Dr. Cohen each
received an option to purchase 8,250 shares of our common
stock with a grant date fair value of $59,300, and
Dr. Myers received an option to purchase 16,500 shares
of our common stock with a grant date fair value of $110,000. |
|
(3) |
|
The following table sets forth the aggregate number of shares of
common stock underlying option awards outstanding at
December 31, 2006: |
|
|
|
|
|
|
|
Number of
|
|
Name
|
|
Shares(1)
|
|
|
Julian C. Baker
|
|
|
8,250
|
|
Brook H. Byers
|
|
|
8,250
|
|
Fred E.
Cohen, M.D., Ph.D.
|
|
|
13,541
|
|
Samuel D. Colella
|
|
|
8,250
|
|
Michael D. Goldberg
|
|
|
8,250
|
|
Randall S. Livingston
|
|
|
25,596
|
|
Woodrow A.
Myers, Jr., M.D.
|
|
|
16,500
|
|
|
|
|
(1) |
|
Options with respect to an aggregate of 66,000 shares
automatically accelerate upon a change of control. |
Directors who are our employees do not receive any fees for
their service on our board of directors. During 2006,
Dr. Scott and Ms. Popovits were our only employee
directors.
9
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. Immediately
after each of our regularly scheduled annual meetings 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.
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.
Our philosophy is to align the interests of our stockholders and
management by integrating 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 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 currently focuses more on the use of
equity-based compensation rather than cash-based compensation.
In setting the level of cash and equity compensation for our
executive officers, the Compensation Committee of our board of
directors 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 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. While the Compensation Committee and independent
members of the board did not use market benchmarks to determine
executive compensation for 2006, the Compensation Committee
reviewed survey data with respect to companies in the
San Francisco Bay Area with revenues in a broadly similar
range as the Companys revenues and data with respect to a
peer group of biotechnology, life sciences and diagnostic
companies, which included competitive information relating to
compensation levels for comparable positions in those
industries. The Compensation Committee and the independent
members of the board, who have a broad range of experience
relating to executive compensation matters for similarly
situated companies, consider as well the compensation levels of
other employees of the Company. When establishing each element
of an executive officers compensation, the Compensation
Committee and independent members of the board also take into
consideration the executives historical cash and equity
compensation, level of equity ownership, and total current and
potential compensation.
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 a stock ownership or stock retention policy that
requires executive officers to own stock in Genomic Health or
retain options they exercise. We do not have an employee stock
purchase plan, nor have we made contributions to our executive
officers 401(k) plans. In 2007, we will make up to a
$1,000 matching 401(k) contribution for all eligible employees
and executive officers.
10
We generally intend to qualify executive compensation for
deductibility without limitation under section 162(m) of
the Internal Revenue Code. Section 162(m) provides that,
for purposes of the regular income tax and the alternative
minimum tax, the otherwise allowable deduction for compensation
paid or accrued with respect to a covered employee of a
publicly-held corporation (other than certain exempt
performance-based compensation) is limited to no more than
$1 million per year. None of the non-exempt compensation we
paid to any of our executive officers for 2006 as calculated for
purposes of section 162(m) exceeded the $1 million
limit.
Elements
of Executive Compensation
Our compensation structure for executive officers consists of a
combination of salary and stock options; because of our
egalitarian 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. For 2007, executive officers will be
eligible to receive cash bonuses as well.
Base Salary. Our Compensation Committee
reviews base salaries for executive officers on an annual basis,
considering recommendations by the Chief Executive Officer for
executive officers other than the Chief Executive Officer, and
adjusting salaries based on individual and company performance.
The Compensation Committee also considers market information and
the base salaries and other incentives paid to executive
officers of other similarly sized companies within our industry.
However, the Compensation Committee does not limit its decision
to or target any particular range or level of total compensation
paid to executive officers at these companies. The Chief
Executive Officer is involved in the decisions on base salary
adjustments for executives other than the Chief Executive
Officer.
Annual Bonus. While we have had a bonus pool
that is tied to corporate and operational goals for our
non-executives, we have not in the past paid cash bonuses to our
executive officers. For 2007, our executive officers will be
eligible to participate in our cash bonus program. The eligible
bonus pool for all employees will be 10% of the Companys
total salary base, but there will be no preset limitations on
minimum or maximum bonus amounts. While bonuses for
non-executive employees will be based in part on achievement of
corporate goals established by our executive officers, 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.
Equity-Based Compensation. Our 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. Option grants to Randal W. Scott that were
intended to qualify as incentive stock options while he owned
more than 10% of our common stock were made at an exercise price
of 110% of fair market value on the date of grant and have a
five-year term.
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 also considers stock option grants to
be an important aspect in compensating and providing incentives
to management. 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. The Compensation Committee
also sets annual grants as part of its and the independent
members of the boards annual compensation review process.
The Compensation Committee determines 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, and comparison with comparable
awards to individuals in similar positions in our industry.
Additionally, in the future our 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. We do not coordinate the
11
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.
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
Form 10-K
and in this proxy statement.
Compensation Committee
Samuel D. Colella
Brook H. Byers
Fred E. Cohen, M.D., Ph.D.
Woodrow A. Myers, Jr., M.D.
Named
Executive Officers
The tables that follow provide compensation information for our
named executive officers, including Randal W. Scott, Chief
Executive Officer, G. Bradley Cole, Chief Financial Officer, and
our three most highly compensated executive officers who were
serving as executive officers at the end of 2006, which were
Kimberly J. Popovits, Joffre B. Baker and Steven Shak.
2006
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Awards
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
Randal W. Scott, Ph.D.
|
|
|
2006
|
|
|
|
252,500
|
|
|
|
181,200
|
|
|
|
433,700
|
|
Chief Executive Officer and
Chairman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G. Bradley Cole
|
|
|
2006
|
|
|
|
262,000
|
|
|
|
252,900
|
|
|
|
514,900
|
|
Executive Vice President,
Chief Financial Officer and
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kimberly J. Popovits
|
|
|
2006
|
|
|
|
303,000
|
|
|
|
206,700
|
|
|
|
509,700
|
|
President and Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joffre B. Baker, Ph.D.
|
|
|
2006
|
|
|
|
288,000
|
|
|
|
187,400
|
|
|
|
475,400
|
|
Chief Scientific Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven Shak, M.D.
|
|
|
2006
|
|
|
|
288,000
|
|
|
|
187,400
|
|
|
|
475,400
|
|
Chief Medical Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the compensation expense related to outstanding
options we recognized for the year ended December 31, 2006
under SFAS 123R, rather than amounts paid to or realized by
the named individual, and includes expense we recognized in 2006
for option grants in prior periods. Compensation expense is
determined by computing the fair value of each option on the
grant date in accordance with SFAS 123R and |
12
|
|
|
|
|
recognizing that amount as expense ratably over the option
vesting term. See Note 9 of Notes to our Consolidated
Financial Statements set forth in our
Form 10-K
for the assumptions made in determining SFAS 123R values.
The SFAS 123R value of an option as of the grant date is
spread over the number of months in which the option is subject
to vesting and includes ratable amounts expensed for option
grants in prior years. 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 compensation expense we recognized. |
2006
Grants of Plan-Based Awards
The following table sets forth information on grants of options
to purchase shares of our common stock in 2006 to our named
executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Option
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: Number
|
|
|
|
|
|
Grant Date Fair
|
|
|
|
|
|
|
of Securities
|
|
|
Exercise or Base Price
|
|
|
Value of Option
|
|
|
|
|
|
|
Underlying Options
|
|
|
of Option Awards
|
|
|
Awards
|
|
Name
|
|
Grant Date
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)
|
|
|
Randal W. Scott, Ph.D.
|
|
|
11/30/06
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
460,412
|
|
G. Bradley Cole
|
|
|
11/30/06
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
460,412
|
|
Kimberly J. Popovits
|
|
|
11/30/06
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
460,412
|
|
Joffre B. Baker, Ph.D.
|
|
|
11/30/06
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
460,412
|
|
Steven Shak, M.D.
|
|
|
11/30/06
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
460,412
|
|
Outstanding
Equity Awards at Fiscal Year-End 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable(1)
|
|
|
($)(2)
|
|
|
Date
|
|
|
Randal W. Scott, Ph.D.
|
|
|
34,674
|
|
|
|
34,674
|
|
|
|
3.17
|
|
|
|
12/02/09
|
|
|
|
|
12,500
|
|
|
|
37,500
|
|
|
|
10.33
|
|
|
|
12/01/10
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
G. Bradley Cole
|
|
|
94,270
|
|
|
|
61,763
|
|
|
|
1.33
|
|
|
|
07/06/14
|
|
|
|
|
8,669
|
|
|
|
8,669
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
12,500
|
|
|
|
37,500
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
Kimberly J. Popovits
|
|
|
43,345
|
|
|
|
0
|
|
|
|
0.63
|
|
|
|
01/31/12
|
|
|
|
|
34,674
|
|
|
|
34,674
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
12,500
|
|
|
|
37,500
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
Joffre B. Baker, Ph.D.
|
|
|
34,674
|
|
|
|
34,674
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
12,500
|
|
|
|
37,500
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
Steven Shak, M.D.
|
|
|
34,674
|
|
|
|
34,674
|
|
|
|
2.88
|
|
|
|
12/02/14
|
|
|
|
|
12,500
|
|
|
|
37,500
|
|
|
|
9.39
|
|
|
|
12/01/15
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
18.89
|
|
|
|
11/30/16
|
|
|
|
|
(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. |
|
(2) |
|
Except for the grants to Dr. Scott at $3.17 per share
and $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 grants to Dr. Scott were equal to 110%
of the fair market value of our common stock on the date of
grant. |
13
Other than the grants to Dr. Scott noted in footnote
(2) above that have 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.
Security
Ownership of
Certain Beneficial Owners and Management
The following table sets forth certain information as of
April 17, 2007, 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.
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 17, 2007. 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)
|
|
|
2,941,272
|
|
|
|
12.0
|
%
|
Entities Affiliated with Versant
Ventures(3)
|
|
|
2,366,622
|
|
|
|
9.6
|
%
|
Entities Affiliated with TPG
Ventures(4)
|
|
|
1,910,273
|
|
|
|
7.8
|
%
|
Entities Affiliated with Kleiner
Perkins Caufield & Byers(5)
|
|
|
1,665,160
|
|
|
|
6.8
|
%
|
Entities Affiliated with OrbiMed
Advisors(6)
|
|
|
1,329,400
|
|
|
|
5.4
|
%
|
Directors and Named Executive
Officers:
|
|
|
|
|
|
|
|
|
Julian C. Baker(2)(7)
|
|
|
2,949,522
|
|
|
|
12.0
|
%
|
Brook H. Byers(5)(7)
|
|
|
1,673,410
|
|
|
|
6.8
|
%
|
Fred E.
Cohen, M.D., Ph.D.(4)(8)
|
|
|
1,973,143
|
|
|
|
8.0
|
%
|
Samuel D. Colella(3)(7)
|
|
|
2,374,872
|
|
|
|
9.7
|
%
|
Michael D. Goldberg(9)
|
|
|
56,963
|
|
|
|
*
|
|
Randall S. Livingston(10)
|
|
|
25,957
|
|
|
|
*
|
|
Woodrow A.
Myers, Jr., M.D.(11)
|
|
|
16,812
|
|
|
|
*
|
|
Joffre B. Baker, Ph.D.(12)
|
|
|
476,683
|
|
|
|
1.9
|
%
|
G. Bradley Cole(13)
|
|
|
155,657
|
|
|
|
*
|
|
Kimberly J. Popovits(14)
|
|
|
473,221
|
|
|
|
1.9
|
%
|
Randal W. Scott, Ph.D.(15)
|
|
|
2,274,887
|
|
|
|
9.2
|
%
|
Steven Shak, M.D.(16)
|
|
|
490,570
|
|
|
|
2.0
|
%
|
All directors and executive
officers as a group (12 persons)(17)
|
|
|
12,941,697
|
|
|
|
51.6
|
%
|
|
|
|
* |
|
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. |
14
|
|
|
(2) |
|
According to Amendment No. 1 to Schedule 13D filed
jointly on March 13, 2007 by Julian C. Baker and Felix J.
Baker, Julian C. Baker and Felix J. Baker share voting and
dispositive power with respect to 2,941,272 shares of the
Companys common stock, including 173,897 shares owned
by Baker Bros. Investments, L.P., 193,759 shares owned by
Baker/Tisch Investments, L.P., 16,444 shares owned by Baker
Bros. Investments II, L.P., 606,709 shares owned by
Baker Biotech Fund I, L.P., 1,738,099 shares owned by
Baker Brothers Life Sciences, L.P., 38,467 shares owned by
14159, 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. The principal address for entities affiliated
with Baker Brothers Advisors is 677 Madison Avenue, New York,
New York 10021. 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 February 9, 2007 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, Ross A.
Jaffe, Samuel D. Colella, Donald B. Milder, Barbara N. Lubash,
Rebecca B. Robertson and William J. Link, Versant Venture
Capital I, L.P. has the sole power to vote and dispose of
or direct the disposition of 2,192,150 shares, Versant Side
Fund I. L.P. has the sole power to vote and dispose of or
direct the disposition of 42,994 shares, Versant Affiliates
Fund I-A,
L.P. has the sole power to vote and dispose of or direct the
disposition of 42,412 shares, Versant Affiliates
Fund I-B,
L.P. has the sole power to vote and dispose of or direct the
disposition of 89,066 shares, Versant Ventures I, LLC,
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., has the sole power to vote and dispose of or direct the
disposition of 2,336,622 shares, and Brian G. Atwood, Ross
A. Jaffe, Samuel D. Colella, Donald B. Milder, Barbara N.
Lubash, Rebecca B. Robertson and William J. Link, who are the
Managing Directors of Versant Ventures I, LLC, have shared
power to vote and dispose of or direct the disposition of
2,366,622 shares. Under certain circumstances set forth in
the Limited Partnership Agreements 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 general partner and limited partners of each of such
funds have the right to receive dividends from, or the proceeds
from the sale of the common stock of the Company owned by each
such fund. The principal address for Versant Ventures affiliated
entities is 3000 Sand Hill Road, Building Four, Suite 210,
Menlo Park, California 94025. Mr. Colella, who is also one
of our directors, is a managing director of Versant
Ventures I, LLC, 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., of which Versant Ventures I, LLC is the general
member. In such capacity, Mr. Colella may be deemed to
share voting and investment power with respect to the shares
held by 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. Mr. Colella disclaims beneficial ownership of the
shares owned by these funds, except to the extent of his
pecuniary interest therein. |
|
(4) |
|
According to a Schedule 13G filed jointly on
February 14, 2006 by Tarrant Advisors, Inc., Tarrant
Advisors, Inc. is the beneficial owner of and has the sole power
to vote and dispose of or direct the disposition of the shares
which are beneficially owned by TPG Ventures, L.P. and TPG
Biotechnology Partners, L.P. Tarrant Advisors is the general
partner of TPG Ventures Professional, L.P., which in turn is the
managing member of TPG Venture Holdings, L.L.C., which is the
sole member of each of TPG Venture Advisors, L.L.C. and
TPG Biotech Advisors, L.L.C. TPG Biotech Advisors, L.L.C.
is the general partner of TPG Biotechnology GenPar, L.P., which
is the general partner of TPG Biotechnology Partners, L.P. The
principal address for TPG Ventures affiliated entities is
301 Commerce Street #3300, Fort Worth, Texas 76102.
Dr. Cohen, who is also one of our directors, is a managing
director of Texas Pacific Group Ventures. In such capacity,
Dr. Cohen may be deemed to share voting and investment
power with respect to the shares held by TPG Ventures,
L.P. and TPG Biotechnology Partners, L.P. Dr. Cohen
disclaims beneficial ownership of the shares owned by these
funds, except to the extent of his pecuniary interest therein. |
|
(5) |
|
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 |
15
|
|
|
|
|
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 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. |
|
(6) |
|
According to a Schedule 13G filed jointly on April 3,
2007 by OrbiMed Advisors LLC, OrbiMed Capital LLC and Samuel D.
Isaly, OrbiMed Advisors LLC has shared power to vote and dispose
of or direct the disposition of 1,162,700 of the shares, OrbiMed
Capital LLC has shared power to vote and dispose of or direct
the disposition of 166,700 of the shares and Samuel D. Isaly, as
President of OrbiMed Advisors LLC and a managing member of
OrbiMed Capital LLC, each of which is an investment advisor, has
shared power to vote and dispose of or direct the disposition of
all of the shares. The shares are held on behalf of Caduceus
Capital Master Fund Limited (131,900 shares), Caduceus
Capital II, L.P. (79,300 shares), UBS Eucalyptus Fund,
LLC (93,900 shares), PW Eucalyptus Fund, Ltd.
(9,700 shares), HFR SHC Aggressive Master Trust
(15,600 shares), UBS Juniper Crossover Fund, LLC
(36,500 shares), Eaton Vance Worldwide Health Sciences
(932,100 shares), Eaton Vance Emerald Worldwide Heath
Sciences (19,200 shares) and Eaton Vance Variable Trust
(11,200 shares). The principal address for OrbiMed Advisors
LLC, OrbiMed Capital LLC and Samuel D. Isaly is 767 Third
Avenue,
30th Floor,
New York, New York 10017. |
|
(7) |
|
Includes options to purchase 8,250 shares of common stock
that are exercisable within 60 days of April 17, 2007. |
|
(8) |
|
Includes options to purchase 13,451 shares of common stock
that are exercisable within 60 days of April 17, 2007
and 6,068 shares held in a family trust, of which
Dr. Cohen is a trustee. |
|
(9) |
|
Includes options to purchase options to purchase
8,250 shares of common stock that are exercisable within
60 days of April 17, 2007 and 48,713 shares held
in a family trust, of which Mr. Goldberg is trustee. |
|
(10) |
|
Includes options to purchase 19,808 shares of common stock
that are exercisable within 60 days of April 17, 2007. |
|
(11) |
|
Includes options to purchase 4,812 shares of common stock
that are exercisable within 60 days of April 17, 2007. |
|
(12) |
|
Includes options to purchase 62,092 shares of common stock
that are exercisable within 60 days of April 17, 2007.
Also includes 116,343 shares held in a family trust of
which Dr. Baker is a trustee. |
|
(13) |
|
Includes options to purchase 143,359 shares of common stock
that are exercisable within 60 days of April 17, 2007. |
|
(14) |
|
Includes options to purchase 105,437 shares of common stock
that are exercisable within 60 days of April 17, 2007.
Also includes 8,670 shares held by Ms. Popovits
child. |
|
(15) |
|
Includes options to purchase 62,092 shares of common stock
that are exercisable within 60 days of April 17, 2007.
Also includes 5,199 shares held for the benefit of
Dr. Scotts children, of which Dr. Scotts
sister is trustee. |
|
(16) |
|
Includes options to purchase 62,092 shares of common stock
that are exercisable within 60 days of April 17, 2007. |
|
(17) |
|
Includes options to purchase 506,143 shares of common stock
that are exercisable within 60 days of April 17, 2007. |
16
Report of
the Audit Committee
The Audit Committee operates under a written charter adopted by
the board of directors. A link to a copy of 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 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.
In discharging its oversight role, the Audit Committee reviewed
and discussed the audited financial statements contained in the
2006 Annual Report with Genomic Healths management and the
independent registered public accounting firm.
The Audit Committee met privately with the independent
registered public accounting firm, and discussed issues deemed
significant by the independent registered public accounting
firm, including those required by Statements on Auditing
Standards No. 61 and No. 90 (Audit Committee
Communications). In addition, the Audit Committee discussed with
the independent registered public accounting firm the
firms independence from Genomic Health and its management,
including the matters in the written disclosures required by
Independence Standards board Standard No. 1 (Independence
Discussions with Audit Committees), and considered whether the
provision of nonaudit services was compatible with maintaining
the independent registered public accounting 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, 2006, 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 2007 fiscal year.
Audit Committee
Randall S. Livingston
Samuel D. Colella
Michael D. Goldberg
17
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 fiscal
year ending December 31, 2007. 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, 2006 and 2005, were as follows:
|
|
|
|
|
|
|
|
|
Services Provided
|
|
2006
|
|
|
2005
|
|
|
Audit
|
|
$
|
527,000
|
|
|
$
|
858,000
|
|
Audit-Related
|
|
|
|
|
|
|
28,000
|
|
Tax
|
|
|
19,000
|
|
|
|
15,000
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
546,000
|
|
|
$
|
901,000
|
|
|
|
|
|
|
|
|
|
|
Audit fees. For the years ended
December 31, 2006 and 2005, audit fees were for the audits
of our financial statements. For the year ended
December 31, 2006, audit fees also included the audit of
our internal control over financial reporting. For the year
ended December 31, 2005, audit fees also included services
provided in connection with our initial public offering,
including review of quarterly financial information contained in
our registration statement on
Form S-1,
work related to our
S-8, comfort
letters and consents, and review of our filings with the SEC.
Audit-Related fees. For the year ended
December 31, 2005, audit-related fees were for review of
our documentation of internal control over financial reporting
under Section 404 of the Sarbanes-Oxley Act.
Tax fees. For the years ended
December 31, 2006 and 2005, tax fees were for the
preparation of our tax returns, tax planning and tax consulting
services.
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 2006 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
18
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.
Your board of directors recommends a vote FOR
ratification of Ernst & Young LLP as our independent
registered public accounting firm.
Stockholder
Proposals for the 2008 Annual Meeting
If a stockholder wishes to present a proposal to be included in
our proxy statement for the 2008 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 January 4, 2008. 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 2008 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, the Bylaws provide that we must have
received the stockholders notice not earlier than
90 days nor more than 120 days in advance of the date
the proxy statement was released to the stockholders in
connection with the previous years annual meeting of
stockholders; however, if the date of the annual meeting is
changed by more than 30 days from the prior year, we must
have received the stockholders notice not later than the
close of business on the later of the 90th day prior to the
annual meeting or the 7th day following the first public
announcement of the annual meeting date. The stockholders
notice must set forth, as to each proposed matter: a brief
description of the business desired to be brought before the
meeting; the text of the proposal or business and reasons for
conducting such business at the meeting; the name and address,
as they appear on our books, of the stockholder proposing such
business and the beneficial owner, if any, on whose behalf the
proposal is made; the class and number of shares of our
securities that are owned beneficially and of record by the
stockholder and the beneficial owner; any material interest of
the stockholder in such business; and any other information that
is required to be provided by such stockholder pursuant to proxy
proposal submission rules of the SEC. 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
person 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 2006,
except that Forms 4 related to automatic annual option
grants to each of Messrs. Baker, Byers, Colella, Goldberg
and Livingston and Dr. Cohen on May 24, 2006, the day
after our 2006 Annual Meeting of Stockholders, were
inadvertently not filed until September 2006.
19
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, your proxy
holders will vote on it as they think best 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 submit your signed proxy promptly.
By Order of the Board of Directors.
G. Bradley Cole
Executive Vice President,
Chief Financial Officer and Secretary
Redwood City, California
May 4, 2007
Our 2006 Annual Report on
Form 10-K
as initially filed with the SEC on March 16, 2007 has been
mailed with this Proxy Statement. We amended our
10-K after
its initial filing. We will provide, on request and without
charge, copies of Amendment No. 1 and Amendment No. 2
to our 10-K.
We will also 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 17,
2007, the stockholder was entitled to vote at the Annual
Meeting. Our
10-K, the
amendments and exhibits are also available at
www.genomichealth.com.
20
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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
1:00 a.m., Central Time, on June 12, 2007. |
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Vote by Internet
Log on to the Internet and go to
www.investorvote.com
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Follow the steps outlined on the secured
website. |
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the United
States, Canada & Puerto Rico any time on a touch tone
telephone. There is NO CHARGE to you for the call. |
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Follow the instructions provided by the
recorded message. |
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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 |
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Annual Meeting Proxy Card
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C0123456789
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12345 |
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6 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE,
FOLD ALONG THE PERFORATION,
DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
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A |
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Proposals The
Board of Directors recommends a vote FOR the Election of
Directors 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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+ |
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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 - Michael D. Goldberg*
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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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o |
Mark here to vote FOR all nominees |
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o |
Mark here to vote WITHHOLD
vote from all nominees
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01 |
02 |
03 |
04 |
05 |
06 |
07 |
08 |
09 |
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o |
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 |
Against |
Abstain |
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2.
To ratify the appointment of Ernst & Young LLP as Genomic Health's independent registered public accounting firm for the 2007 fiscal
year. |
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o |
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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 |
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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/
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/
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6 IF YOU HAVE
NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,
DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
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Proxy GENOMIC HEALTH, INC. |
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PROXY SOLICITED BY BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS To
Be Held on June 12, 2007 |
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The undersigned hereby authorizes Randal W. Scott 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 Tuesday, June 12, 2007 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. |
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Unless a contrary direction is indicated, this Proxy will be voted FOR Proposal
1, the election of directors, FOR Proposal 2, the ratification of the
appointment of accountants 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.
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Please mark, sign, date and mail this proxy card promptly, using the enclosed
envelope. |
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