def14a
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed
by the Registrant þ
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ Preliminary Proxy Statement
¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material Pursuant to §240.14a-12
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
¨ Fee paid previously with preliminary materials.
¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:
Geonomic Health, Inc.
301 Penobscot Drive
Redwood City, California 94063
(650) 556-9300
April 28, 2006
Dear Stockholder:
You are cordially invited to attend the 2006 Annual Meeting of
Stockholders of Genomic Health, Inc. The meeting will be held at
10:00 a.m., Pacific Time, on Wednesday, May 24, 2006,
at Hotel Sofitel, 223 Twin Dolphin Drive, Redwood City,
California.
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 2005 Annual Report.
The Board of Directors and management look forward to seeing you
at the meeting.
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Sincerely, |
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/s/ Randal W. Scott |
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Randal W. Scott, Ph.D. |
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Chairman of the Board and Chief Executive Officer |
Genomic Health, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Wednesday, May 24, 2006
To our Stockholders:
Genomic Health, Inc. will hold its Annual Meeting of
Stockholders at 10:00 a.m., Pacific Time, on Wednesday,
May 24, 2006, at Hotel Sofitel, 223 Twin Dolphin Drive,
Redwood City, California.
We are holding this Annual Meeting:
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to elect nine directors to serve until the 2007 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. |
Stockholders of record at the close of business on
April 20, 2006, 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 are 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.
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By Order of the Board of Directors |
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/s/ G. Bradley Cole |
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G. Bradley Cole |
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Executive Vice President, |
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Chief Financial Officer and Secretary |
Redwood City, California
April 28, 2006
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 Hotel Sofitel, 223 Twin Dolphin Drive, Redwood City,
California on Wednesday, May 24, 2006, at 10:00 a.m.,
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, 2006.
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:
* The election of directors; and
* The ratification of the appointment of the independent
registered public accounting firm for 2006.
What are the Boards recommendations?
Our Board recommends that you vote:
* FOR election of each of the nominated
directors; and
* FOR ratification of the appointment of the
independent registered public accounting firm for 2006.
Will there by 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 20, 2006 (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.
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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 Investor Services, 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 account firm for 2006.
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. |
If you vote by telephone or via the Internet you do not need to
return your voting instruction form.
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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. |
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
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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 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 24,486,847 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?
Employees, officers and directors of the Company may solicit
proxies. We 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.
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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 April 1, 2006, and certain biographical information
about the nominees are set forth below.
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Name |
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Position with Company | |
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Director Since | |
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Randal W. Scott
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Chairman of the Board and Chief Executive Officer |
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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
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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
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Director |
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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 until
February 2002, Chief Financial Officer from December 2000 until
April 2004, and Secretary from August 2000 until December 2000
and from May 2003 until February 2005. Dr. Scott was a
founder of Incyte Corporation, 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 health
care products to hospitals. Ms. Popovits is a director of
Nuvelo, Inc., a biotechnology company. 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
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investing partnership with the Tisch Family, which led to the
establishment in 2000 of Baker/ Tisch Advisors, LLC.
Mr. Baker is currently a Managing Member of Baker/ Tisch
Advisors. 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
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 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. From
1984 to 1999, Mr. Colella was a general partner of
Institutional Venture Partners, a venture capital firm.
Mr. Colella currently serves as a director of Symyx
Technologies, 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 health care service company. Prior to Axion,
Mr. Goldberg was a partner at the venture capital firm
Sevin Rosen Funds, and 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, M.D., has been a Visiting
Professor in the General Internal Medicine Division of the
University of California, Los Angeles School of Medicine since
2001. 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
Graduate School of Business.
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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.
Board Meetings
Our Board of Directors held seven meetings in 2005. All
directors attended at least 75% of the aggregate number of
meetings of the Board of Directors held during the period for
which such directors 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 did not hold an annual meeting of
stockholders in 2005. We do not have a policy that requires the
attendance of directors at the 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
Securities and Exchange Commission. 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). A copy of the Audit Committee
Charter is also attached as Appendix A to this Proxy
Statement.
Audit Committee
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Number of Members: |
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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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Members in 2005: |
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Randall S. Livingston (Chair and Audit Committee Financial
Expert)
Julian C. Baker (until October 5, 2005)
Samuel D. Colella (beginning October 5, 2005)
Michael D. Goldberg |
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Number of Meetings in 2005: |
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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 |
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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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3 |
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Current Members: |
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Samuel D. Colella (Chair)
Brook H. Byers
Fred E. Cohen |
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Number of Meetings in 2005 |
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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 the Companys Chief
Executive Officer and other executive officers, and administer
the Companys 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. |
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 (Chair)
Samuel D. Colella
Michael D. Goldberg |
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Number of Meetings in 2005: |
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None |
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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 effectively carry out his
or her duties as a director. 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 Securities and Exchange
Commission, 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 certain 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.
8
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.
Director Compensation
Following our initial public offering in October 2005, our
outside directors receive an annual retainer of $20,000 and the
chairman of our audit committee receives an annual retainer of
$30,000. We reimburse our non-employee directors for reasonable
expenses in connection with attendance at Board of Director and
committee meetings.
Prior to our initial public offering, we paid Mr. Goldberg
and Mr. Livingston an annual retainer of $20,000 each for
their services as members of our Board of Directors.
During the year ended December 31, 2005, we paid
Mr. Goldberg $5,000 for consulting services separate from
his services as a member of our Board of Directors. This
consulting agreement was terminated effective as of
March 31, 2005.
Outside 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 after
October 4, 2005 will automatically be 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 or 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 have a per share exercise price
equal to 100% of the fair market value of the underlying shares
on the date of grant, and become fully vested if we are subject
to a change of control.
Compensation Committee Interlocks and Insider
Participation
None of the members of our compensation committee at any time
has been one of our officers or employees. There are no familial
relationships among any of our directors or officers. No
interlocking relationship exists between our Board of Directors
or compensation committee and the Board of Directors or
compensation committee of any other entity.
9
Executive Compensation
Summary Compensation Table
The following table sets forth compensation for services
rendered in all capacities to us for the two fiscal years ended
December 31, 2005 for our Chief Executive Officer and the
four other most highly compensated executive officers as of
December 31, 2005 whose total annual salary and bonus for
2005 exceeded $100,000, whom we refer to in this Proxy Statement
as the Named Executive Officers.
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Long Term Compensation | |
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Shares Underlying | |
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All Other | |
Name and Position(s) |
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Year | |
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Salary | |
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Options | |
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Compensation | |
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Randal W. Scott, Ph.D.
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2005 |
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$ |
204,000 |
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50,000 |
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Chief Executive Officer
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2004 |
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200,000 |
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69,348 |
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and Chairman
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Kimberly J. Popovits
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2005 |
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277,000 |
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50,000 |
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President and Chief
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2004 |
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275,000 |
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69,347 |
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Operating Officer
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Joffre B. Baker, Ph.D.
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2005 |
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276,000 |
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50,000 |
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Chief Scientific Officer
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2004 |
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275,000 |
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69,348 |
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Steven Shak, M.D.
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2005 |
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276,000 |
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50,000 |
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Chief Medical Officer
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2004 |
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275,000 |
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69,362 |
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G. Bradley Cole(1)
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2005 |
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251,000 |
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50,000 |
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Executive Vice President, Chief
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2004 |
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126,000 |
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173,370 |
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Financial Officer and Secretary
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(1) |
Mr. Cole became our Executive Vice President and Chief
Financial Officer in July 2004. |
Grant of Stock Options
The following table sets forth information on grants of options
to purchase shares of our common stock in 2005 to the Named
Executive Officers.
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Individual Grants | |
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Potential Realizable | |
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Value at Assumed Annual | |
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Number of | |
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Percent of Total | |
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Rates of Stock Price | |
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Shares | |
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Options | |
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Appreciation for Option | |
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Underlying | |
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Granted to | |
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Term(3) | |
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Options | |
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Employees in | |
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Exercise Price | |
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Expiration | |
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Name |
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Granted | |
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Fiscal Year | |
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per Share(1) | |
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Date(2) | |
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5% | |
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10% | |
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Randal W. Scott, Ph.D.
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50,000 |
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5.8% |
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$ |
10.33 |
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12/01/2010 |
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$ |
82,714 |
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$ |
239,634 |
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Kimberly J. Popovits
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50,000 |
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5.8% |
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$ |
9.39 |
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12/01/2015 |
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295,266 |
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748,262 |
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Joffre B. Baker, Ph.D.
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50,000 |
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5.8% |
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$ |
9.39 |
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12/01/2015 |
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295,266 |
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748,262 |
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Steven Shak, M.D.
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50,000 |
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5.8% |
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$ |
9.39 |
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12/01/2015 |
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295,266 |
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748,262 |
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G. Bradley Cole
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50,000 |
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5.8% |
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$ |
9.39 |
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12/01/2015 |
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295,266 |
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748,262 |
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(1) |
Except for the grant to Dr. Scott, the exercise price is
equal to the fair market value of our common stock on the date
of grant. The exercise price for Dr. Scotts grant is
equal to 110% of the fair market value of our common stock on
the date of grant. |
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(2) |
Unless otherwise noted, the options have a term of
10 years, subject to earlier termination in certain events
related to termination of employment. |
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(3) |
The 5% and 10% assumed rates of appreciation are required by the
rules of the Securities and Exchange Commission and do not
represent our estimate or projection of the future common stock
price. |
10
Aggregated Option Exercises in 2005 and Year-End Option
Values
The following table sets forth, with respect to the Named
Executive Officers, the number of shares acquired and the value
realized upon exercise of stock options during 2005 and the
exercisable and unexercisable options held by them as of
December 31, 2005.
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Value of Unexercised In-the- | |
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Number of Unexercised | |
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Money Options at | |
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Shares | |
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Options at Fiscal Year-End | |
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December 31, 2005(2) | |
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Acquired on | |
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Value | |
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Name |
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Exercise | |
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Realized(1) | |
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Exercisable | |
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Unexercisable | |
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Exercisable | |
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Unexercisable | |
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Randal W. Scott, Ph.D.
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17,337 |
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102,011 |
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$ |
157,940 |
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$ |
473,820 |
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Kimberly J. Popovits
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78,016 |
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$ |
175,536 |
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52,014 |
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110,678 |
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$ |
473,848 |
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$ |
522,777 |
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Joffre B. Baker, Ph.D.
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17,337 |
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102,011 |
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$ |
157,940 |
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$ |
473,820 |
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Steven Shak, M.D.
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17,337 |
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102,011 |
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$ |
157,940 |
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$ |
473,820 |
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G. Bradley Cole
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59,597 |
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163,773 |
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$ |
542,929 |
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$ |
1,036,472 |
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(1) |
Calculated on the basis of the fair market value of the
underlying securities at the exercise date less the exercise
price multiplied by the number of shares acquired on exercise. |
|
(2) |
Calculated on the basis of the fair market value of the
underlying securities at December 31, 2005 ($9.11 per
share) less the exercise price multiplied by the number of
options. |
Report of the Compensation Committee
of the Board of Directors on Executive Compensation
The Compensation Committee is comprised of three independent
directors. The purpose of the Compensation Committee is 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 to the Board
of Directors with respect to major compensation plans, policies
and programs of the Company. The Compensation Committee expects,
pursuant to its charter, to periodically review the approach to
executive compensation and make changes as competitive
conditions and other circumstances warrant and will seek to
ensure Genomic Healths compensation philosophy is
consistent with its best interests and is properly implemented.
Compensation Philosophy and Objectives
The Compensation Committee believes that compensation of Genomic
Healths 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. It is the
Compensation Committees philosophy to align the interests
of Genomic Healths stockholders and management by
integrating compensation with Genomic Healths annual and
long-term corporate and financial objectives, including through
equity ownership by management. In order to attract and retain
qualified personnel, Genomic Health strives 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. The components of executive
officer compensation consist of salary and stock options, which
are discussed separately below.
In setting the level of cash and equity compensation for our
executive officers, including the Chief Executive Officer, the
Compensation Committee considers 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, and the
Companys compensation philosophy for all employees. The
Compensation Committee also reviews market and benchmark data,
which include competitive information relating to compensation
levels for comparable positions in the biotechnology and life
sciences industries as well as the compensation levels of other
executive officers of the Company. In
11
conjunction with its review, the Compensation Committee utilizes
benchmark surveys that are widely used in Genomic Healths
industry and peer company proxy data. When establishing each
element of an executive officers compensation, the
Compensation Committee also takes into consideration the
executives historical cash and equity compensation as well
as his or her total current and potential compensation.
Genomic Health generally intends 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 paid by Genomic Health to any of its
executive officers for 2005 as calculated for purposes of
section 162(m) exceeded the $1 million limit.
Key Elements of Executive Compensation
The Companys existing compensation structure for executive
officers consists of a combination of salary and stock options;
because of the Companys egalitarian culture, we do not
have programs providing for personal-benefit perquisites to
officers. Prior to our initial public offering, compensation for
our executive officers was determined by the independent members
of our Board of Directors. After our initial public offering,
the Compensation Committee made recommendations with respect to
executive officer compensation, to be approved by the
independent members of the Board of Directors.
Base Salary
The Compensation Committee intends to review 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 its industry. However,
the Compensation Committee does not limit its decisions to 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.
Equity Compensation
The Compensation Committee administers Genomic Healths
stock option plans for executive officers, employees,
consultants and outside directors, under which it grants options
to purchase Genomic Healths common stock with an exercise
price equal to the fair market value of a share of the common
stock on the date of grant. A committee consisting of Randal
Scott and Kimberly Popovits has been formed for the purpose of
granting options to certain new employees.
The Compensation Committee believes that providing executive
officers who have responsibility for Genomic Healths
management and growth with an opportunity to increase their
stock ownership aligns the interests of the executive officers
with those of the stockholders. Accordingly, the Compensation
Committee also considers stock option grants as appropriate. At
its discretion, from time to time the Compensation Committee may
also grant options based on individual and corporate
achievements. The Compensation Committee determines the number
of shares underlying each stock option grant based upon the
executive officers and Genomic Healths performance,
the executive officers role and responsibilities, the
executive officers base salary, and comparison with
comparable awards to individuals in similar positions in the
industry.
Chief Executive Officer Compensation
The Compensation Committee reviews the compensation of the Chief
Executive Officer using the same criteria as for the other
executive officers, but has also considered the level of
Dr. Scotts stock ownership in the Company together
with the Companys cash position. In light of the
foregoing, prior to our initial public offering,
Dr. Scotts annual base salary for 2004 and 2005 was
set by the independent members of the Board of
12
Directors, with the participation and recommendation of the
members of the Compensation Committee, at $200,000. In December
2005, the Compensation Committee, with the approval of the
independent members of the Board of Directors, adjusted the
annual base salaries of and granted stock options to our
executive officers, including Dr. Scott. The Compensation
Committee and the independent directors noted in their
discussions the performance of Dr. Scott and our other four
executive officers in 2005, our performance in 2005, including
our financing activities and completion of our initial public
offering, our financial performance, our progress toward our
strategic goals, including the achievement of commercial and
research and development objectives, the strength and balance of
our management team, and the Companys compensation
philosophy. On the basis of these factors, the Compensation
Committee recommended, and the independent members of the Board
of Directors approved, an increase in Dr. Scotts base
salary to $250,000 and grants to all five executive officers,
including Dr. Scott, of options to
purchase 50,000 shares of our common stock.
Compensation Committee
|
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Samuel D. Colella |
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Brook H. Byers |
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Fred E. Cohen |
13
Security Ownership of
Certain Beneficial Owners and Management
The following table sets forth certain information as of
March 31, 2006, as to shares of our common stock
beneficially owned by: (i) each person who is known by us
to own beneficially more than 5% of our common stock,
(ii) each of our Named Executive Officers listed in the
Summary Compensation Table, (iii) each of our directors and
(iv) all our directors and executive officers as a group.
We have determined beneficial ownership in accordance with the
rules of the Securities and Exchange Commission. 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 March 31, 2006. We
did not deem these shares outstanding, however, for the purpose
of computing the percentage ownership of any other person.
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Number of | |
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Shares of | |
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Percentage of | |
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Common Stock | |
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Common Stock | |
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Beneficially | |
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Beneficially | |
Name and Address of Beneficial Owner(1) |
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Owned | |
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Owned | |
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5% Stockholders:
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Entities Affiliated with Kleiner Perkins Caufield &
Byers
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2,366,625 |
(2) |
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9.7 |
% |
Entities Affiliated with Versant Ventures
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2,366,622 |
(3) |
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9.7 |
% |
Entities Affiliated with TPG Ventures
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1,910,273 |
(4) |
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7.8 |
% |
Directors and Named Executive Officers:
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Julian C. Baker
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1,171,299 |
(5) |
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4.9 |
% |
Brook H. Byers
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2,366,625 |
(2) |
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9.7 |
% |
Fred E. Cohen, M.D., Ph.D.
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1,964,893 |
(4)(6) |
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8.0 |
% |
Samuel D. Collela
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2,366,622 |
(3) |
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9.7 |
% |
Michael D. Goldberg
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48,713 |
(7) |
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* |
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Randall S. Livingston
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13,012 |
(8) |
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* |
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Woodrow A. Myers, M.D.
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* |
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Joffre B. Baker, Ph.D.
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453,038 |
(9) |
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1.8 |
% |
G. Bradley Cole
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89,953 |
(10) |
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* |
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Kimberly J. Popovits
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435,689 |
(11) |
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1.8 |
% |
Randal W. Scott, Ph.D.
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2,273,355 |
(12) |
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9.2 |
% |
Steven Shak, M.D.
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453,038 |
(13) |
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1.8 |
% |
All directors and executive officers as a group
(12 persons)(14)
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12,286,237 |
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49.7 |
% |
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* |
Represents beneficial ownership of less than 1%. |
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(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 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 |
14
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|
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. However, Mr. Byers disclaims beneficial
ownership of these shares except to the extent of his pecuniary
interest therein. |
|
|
(3) |
According to a Schedule 13G filed jointly on
February 14, 2006 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. Collela disclaims beneficial
ownership of the shares owned by these funds, except to the
extent of his pecuniary interest therein. |
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(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 345
California Street, Suite 2600, San Francisco,
California 94104. 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) |
Consists of 173,897 shares owned by Baker Bros.
Investments, L.P., 173,897 shares owned by Baker/ Tisch
Investments, L.P., 15,314 shares owned by Baker Bros.
Investments II, L.P., 158,486 shares owned by Baker
Biotech Fund I, L.P., 181,478 shares owned by Baker
Biotech Fund II, L.P., 19,583 shares owned by Baker
Biotech Fund II (Z), L.P., 252,529 shares owned by
Baker Biotech Fund III, L.P., 22,218 shares owned by
Baker Biotech Fund III (Z), L.P. and 173,897 shares
owned by FBB Associates, a general partnership. Mr. Baker
disclaims beneficial ownership of the shares held by these
entities except to the extent of his pecuniary interest therein. |
|
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(6) |
Also includes options to purchase 5,201 shares of
common stock that are exercisable within 60 days of
March 31, 2006 and 6,068 shares held in a family
trust, of which Dr. Cohen is a trustee. |
15
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(7) |
Consists of shares held in a family trust, of which
Mr. Goldberg is trustee. |
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(8) |
Includes options to purchase 6,863 shares of common
stock that are exercisable within 60 days of March 31,
2006. |
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(9) |
Includes options to purchase 24,560 shares of common
stock that are exercisable within 60 days of March 31,
2006. Also includes 116,343 shares held in a family trust
of which Dr. Baker is a trustee. |
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(10) |
Includes options to purchase 77,655 shares of common
stock that are exercisable within 60 days of March 31,
2006. |
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(11) |
Includes options to purchase 67,905 shares of common
stock that are exercisable within 60 days of March 31,
2006. Also includes 8,670 shares held by
Ms. Popovits minor child. |
|
(12) |
Includes options to purchase 24,560 shares of common
stock that are exercisable within 60 days of March 31,
2006. Also includes 5,199 shares held for the benefit of
Dr. Scotts children, of which Dr. Scotts
sister is trustee. |
|
(13) |
Includes options to purchase 24,560 shares of common
stock that are exercisable within 60 days of March 31,
2006. |
|
(14) |
Includes options to purchase 231,304 shares of common
stock that are exercisable within 60 days of March 31,
2006. |
Certain Relationships and Related Transactions
During the fiscal year ended December 31, 2005, there was
no transaction or series of transactions to which we were or are
a party in which the amount involved exceeded or exceeds $60,000
and in which any director, executive officer, holder of more
than 5% of our common stock or any member of the immediate
family of any of the foregoing persons had or will have a direct
or indirect material interest.
We entered into indemnification agreements with our directors
and executive officers in which the Company has agreed to
indemnify such parties to the fullest extent allowable under
Delaware law if any is made a party to any action or threatened
with any action as a result of such persons service or
having served as an officer, director, employee or agent of
Genomic Health or having served, at the Companys request,
as an officer, director, employee or agent of another company.
Report of the Audit Committee
The Audit Committee operates under a written charter adopted by
the Board of Directors, a copy of which is attached as
Appendix A to this Proxy Statement. A link to a copy of the
Audit Committee Charter is also 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
2005 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
16
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, 2005, for filing with the
Securities and Exchange Commission. The Audit Committee has
appointed Ernst & Young LLP to serve as Genomic
Healths independent registered public accounting firm for
the 2006 fiscal year.
Audit Committee
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Randall S. Livingston |
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Samuel D. Colella |
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Michael D. Goldberg |
17
Stock Performance Graph
Set forth below is a line graph showing the cumulative total
stockholder return (change in stock price plus reinvested
dividends) assuming the investment of $100 on September 29,
2005 in each of our common stock, the Nasdaq Market Index and
the Nasdaq Biotechnology Index for the monthly period commencing
on September 29, 2005 and ending on December 31, 2005.
The comparisons in the table are required by the Securities and
Exchange Commission and are not intended to forecast or be
indicative of future performance of our common stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG GENOMIC HEALTH INC.,
NASDAQ MARKET INDEX AND NASDAQ BIOTECHNOLOGY INDEX
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September 29, |
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October 31, |
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November 30, |
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December 31, |
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2005 |
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2005 |
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2005 |
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2005 |
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Genomic Health, Inc.
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$ |
100.00 |
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$ |
81.11 |
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$ |
78.47 |
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$ |
77.53 |
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Nasdaq Market Index
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$ |
100.00 |
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$ |
98.71 |
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$ |
104.08 |
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$ |
102.81 |
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Nasdaq Biotechnology Index
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$ |
100.00 |
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$ |
97.71 |
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$ |
102.39 |
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$ |
102.67 |
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18
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, 2006. The Board of Directors has
endorsed this appointment. 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, 2005 and 2004, were as follows:
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Services Provided |
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2005 | |
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2004 | |
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Audit
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$ |
858,000 |
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$ |
47,000 |
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Audit-Related
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28,000 |
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Tax
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15,000 |
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10,000 |
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All Other
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Total
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$ |
901,000 |
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$ |
57,000 |
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Audit fees. For the years ended December 31, 2005
and 2004, audit fees were for the audits of the Companys
financial statements. For the year ended December 31, 2005,
audit fees also included services provided in connection with
the Companys initial public offering, including review of
quarterly financial information contained in the Companys
registration statement on
Form S-1, work
related to the Companys S-8, comfort letters and consents,
and review of the Companys filings with the Securities and
Exchange Commission.
Audit-Related fees. For the years ended December 31,
2005, audit-related fees were for review of the Companys
documentation of internal control over financial reporting under
Section 404 of the
Sarbanes-Oxley Act.
Tax fees. For the years ended December 31, 2005 and
2004, tax fees were for the preparation of the Companys
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.
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 Securities and
Exchange Commission.
Throughout the year, the Audit Committee will review any
revisions to the estimates of audit and non-audit fees initially
approved.
19
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.
Your Board of Directors recommends a vote FOR
ratification of Ernst & Young LLP as our independent
registered public accounting firm.
Stockholder Proposals for the 2007 Annual Meeting
If a stockholder wishes to present a proposal to be included in
our proxy statement for the 2007 Annual Meeting of Stockholders,
the proponent and the proposal must comply with the proxy
proposal submission rules of the Securities and Exchange
Commission. One of the requirements is that the proposal be
received by Genomic Healths Secretary no later than
January 22, 2007. 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 2007 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 Securities and Exchange
Commission. 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 Securities and Exchange Commission. 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 2005.
20
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.
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By Order of the Board of Directors. |
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/s/ G. Bradley Cole |
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G. Bradley Cole |
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Executive Vice President, |
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Chief Financial Officer and Secretary |
Redwood City, California
April 28, 2006
Our 2005 Annual Report on
Form 10-K has been
mailed with this Proxy Statement. We will provide copies of
exhibits to the Annual Report on
Form 10-K, but
will charge a reasonable fee per page to any requesting
stockholder. Stockholders may make such request 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 20,
2006, the stockholder was entitled to vote at the Annual
Meeting.
21
Appendix A
GENOMIC HEALTH, INC.
AUDIT COMMITTEE CHARTER
(As adopted by the Board of Directors effective as of
October 4, 2005)
Purpose
The purpose of the Audit Committee of the Board of Directors is
to assist the Board in fulfilling its oversight responsibilities
relating to the Companys (i) financial statements and
auditing, accounting and related reporting processes and
(ii) systems of internal controls regarding finance,
accounting, financial reporting and business practices and
conduct established by management and the Board.
Membership and Procedures
Membership and Appointment. The Committee shall consist
of at least three members of the Board, with the exact number
being determined by the Board. The members of the Committee
shall be appointed and replaced from time to time by the Board.
Independence and Qualifications. Each member of the
Committee shall meet the independence and experience
requirements of the applicable provisions of federal law and the
rules and regulations promulgated thereunder and the applicable
rules of The Nasdaq Stock Market, provided that the exemptions
from the independence requirements set forth in such rules and
regulations shall also be applicable to members of the Committee.
Resources. The Committee shall have the authority to
retain, at the Companys expense, special legal, accounting
or other consultants to advise the Committee and to authorize or
conduct investigations into any matters within the scope of its
responsibilities. The Committee shall have the sole authority to
approve related fees and retention terms. The Committee may
request any officer or employee of the Company or the
Companys outside counsel or independent auditors to attend
a meeting of the Committee or to meet with any members of, or
consultants to, the Committee, and shall have full access to all
books, records, facilities and personnel of the Company in
connection with the discharge of its responsibilities.
Evaluation. The Committee shall review and reassess the
adequacy of this Charter annually and recommend any proposed
changes to the Board.
Duties and Responsibilities
The following shall be the common recurring activities and
responsibilities of the Committee in carrying out its oversight
functions. These activities and responsibilities are set forth
below as a guide to the Committee with the understanding that
the Committee may alter or supplement them as appropriate under
the circumstances to the extent permitted by applicable law,
regulation or listing standard:
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Documents/ Reports Review |
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Review and discuss the Companys annual audited financial
statements and quarterly financial statements with management
and the independent auditors, including the Companys
disclosures under the section entitled Managements
Discussion and Analysis of Financial Condition and Results of
Operations in the Companys reports filed with the
Securities and Exchange Commission and, with respect to the
annual financial statements, the appropriateness and quality of
accounting and auditing principles and practices as well as the
adequacy of internal controls that could significantly affect
the Companys financial statements. |
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Review and discuss with management and the independent auditors
the Companys earnings press releases before they are
issued, and discuss generally with management the nature of any
additional financial information or earnings guidance to be
provided publicly and/or to ratings agencies. |
A-1
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Review and discuss with management and the independent auditors
the matters required to be discussed by Statement on Auditing
Standards Nos. 61 and 90 (Communications with Audit Committees),
as they may be modified or supplemented, relating to the conduct
of the audit, other significant financial reporting issues and
judgments made in connection with the preparation of the
Companys financial statements, and any other matters
communicated to the Committee by the independent auditors. |
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Review with management and such outside professionals as the
Committee considers appropriate important trends and
developments in financial reporting practices and requirements
and their effect on the Companys financial statements. |
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Based on its review and discussions with management and the
independent auditors, recommend to the Board whether the
Companys audited financial statements should be included
in the Companys Annual Report on
Form 10-K. |
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Prepare the report of the Audit Committee required by the rules
of the Securities and Exchange Commission to be included in the
Companys annual proxy statement. |
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Accounting and Financial Controls Framework |
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Review major changes to the Companys auditing and
accounting principles and practices as suggested by the
independent auditors or management. |
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Review and discuss with management and the independent auditors
the adequacy and effectiveness of the Companys internal
controls (including any significant deficiencies, material
weaknesses and significant changes in internal controls reported
to the Committee by management and any fraud involving
management or other employees who have a significant role in the
Companys internal controls) and the effectiveness of the
Companys disclosure controls and procedures. |
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Review with the independent auditors any management letter
provided by the independent auditors and the Companys
responses to that letter. |
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Review and discuss with management and the independent auditors
(i) any material financial or non-financial arrangements
that do not appear on the Companys financial statements,
(ii) any transactions or courses of dealing with parties
related to the Company that are significant in size or involve
terms or other aspects that differ from those that would likely
be negotiated with independent parties, and that are relevant to
an understanding of the Companys financial statements, and
(iii) material financial risks that are designated as such
by management or the independent auditors. |
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Periodically meet separately with management and with the
independent auditors. |
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Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting,
internal accounting controls or auditing matters; and the
confidential, anonymous submission by the Companys
employees of concerns regarding accounting or auditing matters. |
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Be directly responsible for the appointment, removal,
compensation and oversight of the work of the independent
auditors (including the resolution of disagreements between the
Companys management and the independent auditors regarding
financial reporting) for the purpose of preparing or issuing an
audit report or related work, with the independent auditors
reporting directly to the Committee. |
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Have the sole authority to review in advance, and grant any
appropriate pre-approvals, of all auditing services to be
provided by the independent auditors and all non-audit services
(including the fees and other terms of engagement), and, if
desired, establish policies and procedures for review and
pre-approval by the Committee of such services. |
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Obtain, review and discuss with the independent auditors at
least annually a report by the independent auditors describing
(i) the independent auditors internal quality-control
procedures, and (ii) any |
A-2
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material issues raised by the most recent internal quality
control review or peer review of the independent auditors, or by
any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or
more independent audits carried out by the independent auditors,
and the steps taken to deal with those issues. |
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Review the report by the independent auditors, which is required
by Section 10A of the Securities Exchange Act of 1934,
concerning: (i) all critical accounting policies and
practices to be used; (ii) alternative treatments of
financial information within generally accepted accounting
principles that have been discussed with management officials,
ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent
auditors; and (iii) any other material written
communications between the independent auditors and the
Companys management. |
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Review and discuss with the independent auditors, on an annual
basis, all relationships the independent auditors have with the
Company in order to evaluate the independent auditors
continued independence, and receive from the independent
auditors on an annual basis a written statement (consistent with
Independence Standards Board Standard No. 1) regarding the
auditors independence. |
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Meet with the independent auditors prior to the audit for each
fiscal year to review the planning, staffing and scope of the
audit. |
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Establish guidelines for the hiring of employees and former
employees of the independent auditors. |
Clarification of Audit Committees Role
While the Committee has the responsibilities and powers set
forth in this Charter, the Committees role is one of
oversight. It is not the duty of the Committee to plan or
conduct audits or to determine that the Companys financial
statements and disclosures are complete and accurate and are in
accordance with generally accepted accounting principles and
applicable rules and regulations. These are the responsibilities
of management and the independent auditors.
A-3
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Genomic Health, Inc.
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MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6
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Mark this box with an X if you have made
changes to your name or address details above. |
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Annual Meeting Proxy Card
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C0123456789
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PLEASE
REFER TO THE REVERSE SIDE FOR TELEPHONE AND INTERNET VOTING
INSTRUCTIONS.
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A |
Election
of Directors
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1. To elect nine directors to serve until the next Annual Meeting or until their successors have been duly
elected and qualified.
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For |
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Withhold |
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For |
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Withhold |
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For |
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Withhold |
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01 - Randal W. Scott |
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04 - Brook H. Byers |
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07 - Michael D. Goldberg |
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02 - Kimberly J. Popovits |
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05 - Fred E. Cohen |
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08 - Randall S. Livingston |
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03 - Julian C. Baker |
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06 - Samuel D. Colella |
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09 - Woodrow A. Myers |
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The Board of Directors recommends a vote FOR the following proposal.
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For
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Against
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Abstain
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2. |
To ratify the appointment of Ernst
& Young
LLP as Genomic Healths independent
registered public accountants for the 2006
fiscal year.
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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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C |
Authorized Signatures - Sign Here - This section must be completed for your instructions to be executed. |
Please mark, sign, date and mail this proxy card promptly, using the enclosed envelope.
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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Signature 1 - Please keep signature within the box
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Signature 2 - Please keep signature within the box
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Date (mm/dd/yyyy) |
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/ / |
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0 0 9 0 3 4 1 |
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1 U P X
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C O Y
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001CD40001
00KB2A
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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 May 24, 2006
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 Hotel Sofitel, 223 Twin Dolphin Drive, Redwood City, California on Wednesday, May
24, 2006 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 the election of directors, FOR Proposal 2,
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.
Telephone and Internet Voting Instructions
You can vote by telephone OR Internet! 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.
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Call toll free 1-800-652-VOTE
(8683) in the United States or Canada any time on a touch tone telephone.
There is NO CHARGE to you for the call.
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Go to the following web site: |
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WWW.COMPUTERSHARE.COM/EXPRESSVOTE |
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Follow the simple instructions provided by the recorded message.
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Enter the information requested on your
computer screen and follow the simple instructions. |
VALIDATION DETAILS ARE LOCATED ON THE FRONT OF THIS FORM IN THE COLORED BAR.
If you vote by telephone or the Internet, please DO NOT mail back this proxy card.
Proxies submitted by telephone or the Internet must be received by 1:00 a.m.,
Central Time, on May 24, 2006.
THANK YOU FOR VOTING