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| ☐ | Preliminary Proxy Statement | |||||||
| ☐ | Confidential, For Use of the Commission Only (As Permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under Rule 14a-12 |
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| ☐ | Fee paid previously with preliminary materials. | |||||||||||||
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||||||||||
Stockholders and Proxy Statement
8, 2024
NEO2024.
NeoGenomics, Inc.
Lynn Tetrault
| Lynn Tetrault | ||
| Non-Executive Chair of the Board of Directors | ||
Notice of 2023 Annual Meeting of Stockholders
1. To elect eightnine directors from the nominees named in the attached Proxy Statement.
Fourth Amendment of the Employee Stock Purchase Plan (as amended and restated).
2024.
25, 2024.
 |  |  | ||||||
| By Mail | By Phone | By Internet | ||||||
& Business Development
Index of Frequently Requested Information
2023
This Proxy Statement, including the notice of the 2024 Annual Meeting (the "Meeting Notice") and the proxy card, were first distributed to our stockholders on or about April 8, 2024.
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| Proposal 1 - Election of Directors | ||||||||||||||
•As of March •Our Director nominees are diverse. •All |  | The Board recommends a vote FOR each Director nominee.
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| Proposal 2 - Advisory Vote on Executive Compensation | ||||||||||||||
•We strive for pay-for-performance and believe that performance objectives should align with our strategy over the long term. •Our compensation philosophy is focused on providing compensation and benefits that are competitive and meet our goals of attracting, retaining, and motivating highly skilled teammates and management. | ü |
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Proposal 3 - To Approve the
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•To approve the | ü |
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| Proposal 4 - Ratification of Independent Registered Accounting Firm | ||||||||||||||
•The Audit and Finance Committee of the Board has appointed Deloitte & Touche LLP to act as our independent registered public accounting firm for the fiscal year ending December 31, | | The Board recommends a vote FOR this proposal.
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| NeoGenomics, Inc. | 1 | 2024 Proxy Statement | ||||||
Corporate Governance
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We recognize that the Board’s role and oversight extends to sustainability, human capital management, and environmental impact. We continue to have meaningful internal and external conversations about environmental, social, and governance (“ESG”) policies and initiatives and are increasing our focus on related efforts. We believe that progress on these objectives aligns with our vision and further supports our progress towards our near and long-term strategic objectives.
| Diversity, Equity, Inclusion & Belonging Vision | ||||||||||||||||||||
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We also encourage and support community involvement and corporate philanthropy. As part of our social wellness program, we partner with VolunteerMatch Virtual Volunteer Opportunities and with Project Helping, a mental wellness organization that creates meaningful social and accessible volunteer experience to help people improve their mental wellness through service. Each year we also provide corporate giving to organizations that are aligned with our purposes and values. During 2022 we made a variety of charitable donations, education grants, sponsorship programs, and research grants. In September 2022, Hurricane Ian devastated the town of Fort Myers, Florida, where our Company’s headquarters is located. In response, the Company assisted with cleanup efforts and created a fund to provide financial assistance to employees affected by the storm with remaining funds being donated to the American Red Cross. The totals donated to NeoGenomics’ employees and The American Red Cross were approximately $55,000 and $200,000, respectively.
| NeoGenomics, Inc. | 2 | 2024 Proxy Statement | ||||||
| Corporate Governance | ||||||||
| NeoGREEN Vision | ||||||||||||||||||||
| NeoGenomics is committed to seeking and upholding environmentally sustainable solutions that build trust with our employees, clients, and stakeholders. | ||||||||||||||||||||
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| Corporate Governance Highlights | |||||
| Independent Board Chair | •As of March | ||||
| Independent and diverse director nominees | •As of March •All Board committees are entirely comprised of independent directors •Five of our •Directors have a broad range of experience, skills, and qualifications (see | ||||
Executive sessions of
| •Independent directors meet regularly without management | ||||
| Active board refreshment | •Balanced mix of short and long-tenured directors • twenty-four months •Annual election of all directors | ||||
| Continual assessments | •Board and Committees complete annual self-evaluation surveys •Annual Chief Executive Officer and executive management performance and potential evaluation in alignment with corporate goals and objectives, including achievement of business and strategic objectives •Continuously evaluate director capacity | ||||
| Stock ownership guidelines | •No hedging or pledging of NeoGenomics stock •Minimum stock holding requirements for directors and executive officers | ||||
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| Corporate Governance | ||||||||
| Role | Share Ownership Guideline | Current Share Ownership | ||||||||||||
| Chair of the Board | 3.0 | 13.5 | ||||||||||||
Board Members(1) | 3.0 | 15.6 | ||||||||||||
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Generally, when evaluating and recommending candidates for election to the Board, the Nominating and Governance Committee will conduct candidate interviews, evaluate biographical information and background material, and assess the skills and experience of candidates against selection criteria set forth in the Strategic Competencies Matrix in the context of the then-current needs of the Company. In identifying potential director candidates, the Board may also seek input from the executive officers and may also consider recommendations by employees, community leaders, business contacts, third-party search firms, and any other sources deemed appropriate by the Nominating and Governance Committee. The Nominating and Governance Committee will also consider director candidates recommended by stockholders to stand for election at the annual meeting of stockholders so long as such recommendations are submitted in accordance with the procedures described below under “Stockholder “Stockholder Recommendations for Board Candidates.””
On July 15, 2020, Ms. Lynn Tetrault was appointed Lead Independent Director. On October 7, 2021, Ms. Tetrault was appointed as non-executive Chair Under our current leadership structure, the roles of the Board. Effective March 28, 2022, in connection with Mr. Mallon’s termination as Chief Executive Officer and resignation from the Board, Ms. Tetrault was appointed Executive Chair of the Board and as such functioned as the Company’s principal executive officer. Effective May 12, 2022, Ms. Tetrault was appointed Interim Chief Executive Officer and continued in her role as Chair of the Board. Effective August 15, 2022, upon the appointment of Mr. Smith as Chief Executive Officer, Ms. Tetrault resumed the position of non-executive Chair of the Board. Mr. Michael Kelly, an independent director on the Board for the duration of 2022, served as the Board’s Lead Independent Director for the duration of Ms. Tetrault’s service as Executiveare held by two different individuals. The board's independence from management is increased by having separate Chair of the Board and Interim Chief Executive Officer in 2022.
roles, which helps lead to better monitoring and oversight.
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| Corporate Governance | ||||||||
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| Corporate Governance | ||||||||
| Board of Directors | ||||||||||||||||||||
•Stay informed of our risk profile and oversee our Enterprise Risk Management program •Consider risk in connection with strategic planning and other matters | ||||||||||||||||||||
Audit & Finance | Nominating & Corporate Governance | Culture & Compensation | Compliance | |||||||||||||||||||||||||||||
•Enterprise risks, including but not limited to risks relating to IT use and protection, data governance, privacy, and cybersecurity •Independent auditor’s qualifications and independence •Financial reporting and processes, including | • •Investor engagement and communications •Review Board size, composition, function, duties, diversity, and Strategic Competencies •Develop and recommend to the Board the Corporate Governance Guidelines and oversee compliance with | •Review the risks associated with the •Oversee an annual review of the •Diversity, equity, inclusion •Succession planning | •Assess management’s implementation of the Corporate Compliance Program elements •Assess adequacy and effectiveness of policies and programs to monitor compliance with laws and regulations •Monitor significant external and internal investigations •Implementation of Code of Business Conduct and Ethics •Confirmation of zero conflict of interests related to members of the Board of | •
•Support recruitment and interactions with
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| NeoGenomics Management | ||
| NeoGenomics | ||
these risks. | ||
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| Corporate Governance | ||||||||
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In 2022,2023, we received approximately 31%52% support for our annual say-on-pay proposal. Following our say-on-pay vote in 2022,2023, we widened our governance outreach and engagement even further to ensure we understood stockholders’ concerns and to inform and guide our actions in response. WeAs evidenced by the actions taken already throughout 2023, we take the outcome of this vote seriously and have been highly focused on understanding and responding to our stockholders’ feedback reflected in this vote.feedback. Through the company’sCompany’s engagement efforts, the committeeCulture and Compensation Committee sought to elicit and consider a full range of stockholders’ perspectives related to NeoGenomics’ executive compensation program programand design elements and ESG initiatives to inform specific actions to informand appropriate responses to the say-on-pay vote.
throughout 2024.
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| Lynn Tetrault | Age: 61 | Non-Executive Chair of the Board | ||||||||||||||||||||
Lynn Tetrault has served as the non-executive Chair of the Board since August 2022. Prior to her holding this position, from May 2022, Ms. Tetrault served as our Interim Chief Executive Officer and Chair of the Board. From March 2022 to May 2022, Ms. Tetrault served as our Executive Chair of the Board and functioned as the Company's principal executive officer. From October 2021 to March 2022, she served as our non-executive Chair and from July 2020 to October 2021 she served as our Lead Independent Director. Ms. Tetrault has been a director since June 2015. She has also served as a director of Rhythm Pharmaceuticals, Inc. since 2020 and as a director of Acelyrin, Inc. since December 2023. Ms. Tetrault has more than 30 years of experience in the healthcare sector. She worked from 1993 to 2014 with AstraZeneca PLC, most recently as Executive Vice President of Human Resources and Corporate Affairs from 2007 to 2014. Ms. Tetrault was responsible for human resources strategy, talent management, executive compensation and related activities, internal and external communications, government affairs, corporate reputation, and corporate social responsibility for AstraZeneca. Prior to AstraZeneca Ms. Tetrault practiced healthcare and corporate law at Choate, Hall and Stewart in Boston. Ms. Tetrault has a BA from Princeton University and a JD from the University of Virginia Law School. Skills and Qualifications Lynn Tetrault is a dynamic, seasoned executive in the pharmaceutical industry. Having progressed through numerous senior management roles at AstraZeneca, she acquired extensive human resource and corporate governance experience at the highest level of that company. As the Company continues to grow, Ms. Tetrault’s experience is helping to shape human resource policies and operations as well as the make-up of the Board and its governance policies, and therefore we believe that Ms. Tetrault is well qualified to serve on our Board. | ||||||||||||||||||||
| Christopher Smith | Age: 61 | Board Member and Chief Executive Officer | ||||||||||||||||||||
Chris Smith was appointed Chief Executive Officer and a director in August 2022. Prior to joining NeoGenomics, from 2019 to 2022, Mr. Smith served as Chief Executive Officer of Ortho Clinical Diagnostics (“Ortho Clinical”). Under his leadership, Ortho Clinical raised $1.45 billion in funding for a 2021 initial public offering and achieved accelerated revenue growth while simultaneously improving profitability. Mr. Smith successfully guided the company through a combination with Quidel that closed in May 2022. Prior to Ortho Clinical, from 2004 to 2018, Mr. Smith served in key executive leadership positions, including CEO of Cochlear Limited (“Cochlear”), a global market leader in implantable hearing solutions. Having initially joined Cochlear as President of Cochlear Americas in 2004, Mr. Smith helped grow division revenue from $80 million to over $400 million before being named CEO in 2015. Before joining Cochlear, Mr. Smith served as a Chief Executive Officer in residence at global private equity firm Warburg Pincus and Global Group President at Gyrus Group Plc., a surgical products company. Prior to that he served in a variety of leadership roles at Abbott, KCI, Prism and Cardinal Health. Prior to 2023, Mr. Smith has served as a member of the board of directors at QuidelOrtho, a global provider of innovative in vitro diagnostic technologies, Akouos, Inc., Osler Diagnostics Limited and Results Physiotherapy. In addition, since mid-2023, Mr. Smith has served as a member of the board of directors of Laborie Medical Technologies Corp. Mr. Smith has a BS from Texas A&M University. Skills and Qualifications Mr. Smith is a dynamic leader with strong cultural values, vast diagnostic industry experience, and an extensive history of proven operating success. Because of Mr. Smith’s extensive industry knowledge and his experience serving on the boards of directors of other public companies, we believe Mr. Smith is well qualified to serve on our Board. | ||||||||||||||||||||
Skills and Qualifications: Ms. Tetrault is a dynamic, seasoned executive in the pharmaceutical industry. Having progressed through numerous senior management roles at AstraZeneca, she acquired extensive human resource and corporate governance experience at the highest level of that company. As the Company continues to grow, Ms. Tetrault’s experience is helping to shape human resource policies and operations as well as the make-up of the Board and its governance policies, and therefore we believe that Ms. Tetrault is well qualified to serve on our Board.
Christopher Smith, age 60, Board Member and Chief Executive Officer. Mr. Smith was appointed Chief Executive Officer and a director in August 2022. Prior to joining NeoGenomics, from 2019 to 2022, Mr. Smith served as Chief Executive Officer of Ortho Clinical Diagnostics (“Ortho Clinical”). Under his leadership, Ortho Clinical raised $1.45 billion in funding for a 2021 initial public offering and achieved accelerated revenue growth while simultaneously improving profitability. Mr. Smith successfully guided the company through a combination with Quidel that closed in May 2022. Prior to Ortho Clinical, from 2004 to 2018, Mr. Smith served in key executive leadership positions, including CEO of Cochlear Limited (“Cochlear”), a global market leader in implantable hearing
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| NeoGenomics, Inc. | 8 | 2024 Proxy Statement | ||||||
solutions. Having initially joined Cochlear as President of Cochlear Americas in 2004, Mr. Smith helped grow division revenue from $80 million to over $400 million before being named CEO in 2015. Before joining Cochlear, Mr. Smith served as a Chief Executive Officer in residence at global private equity firm Warburg Pincus and Global Group President at Gyrus Group Plc., a surgical products company. Prior to that he served in a variety of leadership roles at Abbott, KCI, Prism and Cardinal Health. Since May 2022, Mr. Smith has served as a member of the board of directors at QuidelOrtho, a global provider of innovative in vitro diagnostic technologies. In addition, since March 2022, Mr. Smith has served as Chair of the board of directors of Osler Diagnostics, a UK-based diagnostics company. Mr. Smith has a BS from Texas A&M University.
Skills and Qualifications: Mr. Smith is a dynamic leader with strong cultural values, vast diagnostic industry experience, and an extensive history of proven operating success. Because of Mr. Smith’s extensive industry knowledge and his experience serving on the boards of directors of other public companies, we believe Mr. Smith is well qualified to serve on our Board.
Bruce Crowther, age 71, Board Member and Chair of the Culture and Compensation Committee. Mr. Crowther has served as a director since October 2014. Mr. Crowther served as President and Chief Executive Officer of Northwest Community Healthcare for 23 years, before retiring in 2013. Northwest Community Healthcare is an award-winning hospital offering a complete system of care. Since 2019, Mr. Crowther has been a director of Methode Electronics, Inc., a leading global supplier of custom-engineered solutions. Mr. Crowther has also served on the board of directors of Gray Matter Analytics, Inc., a privately-owned company that provides analytical tools to health systems, since 2018. Mr. Crowther previously served on the board of directors of Wintrust Financial Corporation, a public financial holding company and was previously the chair and a director of the Max McGraw Wildlife Foundation, a not for profit organization committed to conservation education and research. Mr. Crowther has a BS in Biology and an MBA from Virginia Commonwealth University.
Skills and Qualifications: Mr. Crowther has experience in the healthcare industry and a strong knowledge of the hospital market, having served as Chief Executive Officer of a healthcare system for 23 years. We believe Mr. Crowther’s experience in this role allows him to provide insight into how the Company should manage the hospital market. Because of Mr. Crowther’s extensive industry knowledge and his experience serving on the boards of directors of other public companies, we believe Mr. Crowther is well qualified to serve on our Board.
Dr. Alison Hannah, age 62, Board Member and Chair of the Compliance Committee. Dr. Hannah has served as a director since June 2015. Dr. Hannah has over 30 years’ experience in the development of investigational cancer chemotherapies. She currently serves as a consultant to the pharmaceutical industry, working with over 30 companies over 20 years with a focus on molecularly targeted anti-cancer therapy. Dr. Hannah previously served as Senior Vice President and Chief Medical Officer at CytomX Therapeutics, an oncology-focused biopharmaceutical company. Previously, Dr. Hannah worked as Senior Medical Director at SUGEN (working on Sutent and other tyrokine kinase inhibitors) and Quintiles, a global contract research organization. Dr. Hannah has also served on the board of directors of Rigel Pharmaceuticals since 2021. Dr. Hannah specializes in clinical development strategy and has filed over 30 Investigational New Drug applications for new molecular entities and seven successful New Drug Applications (including talazoparib, enzalutamide, defibrotide, carfilzomib, and others). Dr. Hannah received her BA in biochemistry and immunology from Harvard University and her MD from the University of Saint Andrews. She is a member of ASCO, AACR, ASH, ESMO, SITC, and a Fellow with the Royal Society of Medicine.
Skills and Qualifications: Dr. Hannah has significant healthcare knowledge having spent over 20 years as a consultant in the field of oncology drug development and has over 30 years of experience working with biopharmaceutical companies. Dr. Hannah has extensive knowledge of the clinical trials
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| Dr. Alison Hannah | Age: 63 | Board Member and Chair of the Compliance Committee | ||||||||||||||||||||
Dr. Hannah has served as a director since June 2015. Dr. Hannah has over 30 years’ experience in the development of investigational cancer chemotherapies. She currently serves as a consultant to the pharmaceutical industry, working with over 30 companies over 20 years with a focus on molecularly targeted anti-cancer therapy. From 2020 to 2022, Dr. Hannah served as Senior Vice President and Chief Medical Officer at CytomX Therapeutics, an oncology-focused biopharmaceutical company. Previously, Dr. Hannah worked as Senior Medical Director at SUGEN (working on Sutent and other tyrokine kinase inhibitors) and Quintiles, a global contract research organization. Dr. Hannah has also served on the board of directors of Rigel Pharmaceuticals since 2021. Dr. Hannah specializes in clinical development strategy and has filed over 30 Investigational New Drug applications for new molecular entities and seven successful New Drug Applications (including talazoparib, enzalutamide, defibrotide, carfilzomib, and others). Dr. Hannah received her BA in biochemistry and immunology from Harvard University and her MD from the University of Saint Andrews. She is a member of ASCO, AACR, ASH, ESMO, SITC, and a Fellow with the Royal Society of Medicine. Skills and Qualifications Dr. Hannah has significant healthcare knowledge having spent over 20 years as a consultant in the field of oncology drug development and has over 30 years of experience working with biopharmaceutical companies. Dr. Hannah has extensive knowledge of the clinical trials marketplace, and we believe she will continue to offer valuable guidance on how the Company should position itself to obtain clinical trials diagnostic testing volumes as the Company continues to grow its revenue in that area. Because of this experience and knowledge, we believe Dr. Hannah is well qualified to serve on our Board. | ||||||||||||||||||||
| Stephen Kanovsky | Age: 61 | Board Member and Chair of the Nominating and Corporate Governance Committee | ||||||||||||||||||||
Mr. Kanovsky has served as a director since July 2017. Mr. Kanovsky is Deputy General Counsel and Chief Commercial Counsel of GE HealthCare, where he has served since 2012, which provides medical technologies and solutions to the global healthcare industry and supports customers throughout the world with a broad range of services and systems, from diagnostic imaging and healthcare IT to molecular diagnostics and life sciences. Prior to his service at GE HealthCare, Mr. Kanovsky held numerous legal, compliance, and research roles in several global pharmaceutical companies. Mr. Kanovsky earned his bachelor’s degree from the University of Pennsylvania. He subsequently graduated from Temple University’s School of Pharmacy with a master’s degree in Pharmacology and Temple University’s School of Law with a juris doctorate degree. Mr. Kanovsky also holds an MBA from Saint Joseph’s University’s Haub School of Business. Skills and Qualifications Mr. Kanovsky has over 25 years of legal and compliance experience in the global life sciences and pharmaceutical industry. Through his work as Deputy General Counsel and Chief Commercial Counsel of GE HealthCare, Mr. Kanovsky is able to provide continued knowledge of the life sciences space. He also brings valuable experience to our Board through his prior involvement with Clarient, Inc. (“Clarient”), prior to its acquisition by NeoGenomics in December 2015. Because of Mr. Kanovsky’s extensive legal and compliance background and long-term service to the Board, we believe Mr. Kanovsky is well qualified to serve on our Board. | ||||||||||||||||||||
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marketplace and we believe she will continue to offer valuable guidance on how the Company should position itself to obtain clinical trials diagnostic testing volumes as the Company continues to grow its revenue in that area. Because of this experience and knowledge, we believe Dr. Hannah is well qualified to serve on our Board.
Stephen Kanovsky, age 60, Board Member and Chair of the Nominating and Corporate Governance Committee. Mr. Kanovsky has served as a director since July 2017. Mr. Kanovsky is Deputy General Counsel and Chief Commercial Counsel of GE HealthCare, which provides medical technologies and solutions to the global healthcare industry and supports customers throughout the world with a broad range of services and systems, from diagnostic imaging and healthcare IT to molecular diagnostics and life sciences. Prior to his service at GE HealthCare, Mr. Kanovsky held numerous legal, compliance, and research roles in several global pharmaceutical companies. Mr. Kanovsky earned his bachelor’s degree from the University of Pennsylvania. He subsequently graduated from Temple University’s School of Pharmacy with a master’s degree in Pharmacology and Temple University’s School of Law with a juris doctorate degree. Mr. Kanovsky also holds an MBA from Saint Joseph’s University’s Haub School of Business.
Skills and Qualifications: Mr. Kanovsky has over 25 years of legal experience in the global life sciences and pharmaceutical industry. Through his work as Deputy General Counsel and Chief Commercial Counsel of GE HealthCare, Mr. Kanovsky is able to provide continued knowledge of the life sciences space. He also brings valuable experience to our Board through his prior involvement with Clarient, Inc. (“Clarient”), prior to its acquisition by NeoGenomics in December 2015. Because of Mr. Kanovsky’s extensive legal and compliance background and long-term service to the Board, we believe Mr. Kanovsky is well qualified to serve on our Board.
Michael Kelly, age 66, Board Member and Chair of the Audit and Finance Committee. Mr. Kelly has served as a director since July 2020 and served as the Board’s Lead Independent Director for the duration of Ms. Tetrault’s service as Chair of the Board and Interim Chief Executive Officer in 2022. Mr. Kelly is a former senior executive of Amgen, Inc. and is currently acting as Founder & President of Sentry Hill Partners, LLC, a global life sciences transformation and management consulting business he founded in 2018. Mr. Kelly has more than two decades of executive experience as a senior leader in the life sciences industry serving in various strategic finance and operations positions at Amgen Inc. from 2003 to 2017, most recently as Senior Vice President, Global Business Services and Vice President & CFO, International Commercial Operations. Mr. Kelly has also held positions at Biogen, Tanox and Monsanto Life Sciences. Mr. Kelly currently serves as a director for Amicus Therapeutics, DMC Global, Inc., and Prime Medicine, Inc. Mr. Kelly serves on the Council of Advisors and was the former audit committee chair for Direct Relief, a humanitarian aid organization focused on health outcomes and disaster relief. Mr. Kelly holds a BS in business administration from Florida A&M University, concentrating in Finance and Industrial Relations.
Skills and Qualifications: Mr. Kelly has more than two decades of executive experience as a senior leader in the life sciences industry serving in various strategic finance and operations positions. We believe Mr. Kelly’s extensive experience managing and growing domestic and international organizations, as well as his track record in finance, operations and building differentiated product companies is highly valuable as we continue our long-term growth strategy, and therefore Mr. Kelly is well qualified to serve on our Board. In addition, we believe Mr. Kelly’s extensive knowledge and background in finance qualifies him to serve as a financial expert on the Audit and Finance Committee.
David Perez, age 63, Board Member. Mr. Perez has 40 years of global executive leadership experience, leading the growth and operations of several businesses, growing and scaling organically through research & development and innovation as well as through mergers and acquisitions. In March 2019, he retired from his position as president and CEO of Terumo BCT, a company dedicated to
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| Michael Kelly | Age: 67 | Board Member and Chair of the Audit and Finance Committee | ||||||||||||||||||||
Mr. Kelly has served as a director since July 2020 and served as the Board’s Lead Independent Director for the duration of Ms. Tetrault’s service as Executive Chair of the Board and Interim Chief Executive Officer in 2022. Mr. Kelly is a former senior executive of Amgen, Inc. ("Amgen") and is currently acting as Founder & President of Sentry Hill Partners, LLC, a global life sciences transformation and management consulting business he founded in 2018. Mr. Kelly has more than two decades of executive experience as a senior leader in the life sciences industry serving in various strategic finance and operations positions at Amgen from 2003 to 2017, most recently as Senior Vice President, Global Business Services and Vice President & CFO, International Commercial Operations. Mr. Kelly has also held positions at Biogen, Tanox, and Monsanto Life Sciences. Mr. Kelly currently serves as a director for Amicus Therapeutics, DMC Global, Inc., and Prime Medicine, Inc. Mr. Kelly serves on the Council of Advisors and was the former audit committee chair for Direct Relief, a humanitarian aid organization focused on health outcomes and disaster relief. Mr. Kelly holds a BS in business administration from Florida A&M University, concentrating in Finance and Industrial Relations. Skills and Qualifications Mr. Kelly has more than two decades of executive experience as a senior leader in the life sciences industry serving in various strategic finance and operations positions. We believe Mr. Kelly’s extensive experience managing and growing domestic and international organizations, as well as his track record in finance, operations and building differentiated product companies is highly valuable as we continue our long-term growth strategy, and therefore Mr. Kelly is well qualified to serve on our Board. In addition, we believe Mr. Kelly’s extensive knowledge and background in finance qualifies him to serve as a financial expert on the Audit and Finance Committee. | ||||||||||||||||||||
| David Perez | Age: 64 | Board Member | ||||||||||||||||||||
Mr. Perez has served as a director since November 2022. Mr. Perez has over 40 years of global executive leadership experience, leading the growth and operations of several businesses, growing and scaling organically through research and development and innovation, as well as through mergers and acquisitions. In March 2019, he retired from his position as president and CEO of Terumo BCT, a company dedicated to blood banking, transfusion medicine and cell-based therapies, following a comprehensive two-year succession and transition plan. Mr. Perez currently serves as a director on the following private company boards Laborie Medical Technologies Corp., Advanced Instruments, LLC and MoInlycke Health Care AB. During his nearly 20-year tenure, Mr. Perez guided Terumo BCT through several foreign ownership structures, leveraging his extensive experience leading complex, multinational businesses, and diverse, cross-cultural organizations. Under his leadership as CEO for 18.5 years, the company transformed from a single manufacturing and R&D site to a multi-national biomedical organization with five R&D centers and six manufacturing plants, as he helped drive global revenue growth from $160 million to $1 billion. Mr. Perez holds a BA in Political Science from Texas Tech University. Skills and Qualifications Mr. Perez has 40 years of executive leadership in medical device and health care services, He serves as an independent board member and advisor to several corporations and non-profit organizations. His expertise encompasses growing and scaling highly regulated global businesses organically through R&D and innovation and inorganically through M&A, leading within a variety of foreign, public, and private equity ownership structures, strategic planning, culture and talent development, succession planning, enterprise risk management, operations, compliance, and corporate governance. We believe Mr. Perez’s extensive knowledge and background as a chief executive and director qualifies him to service on our board. | ||||||||||||||||||||
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blood banking, transfusion medicine and cell-based therapies, following a comprehensive two-year succession and transition plan and now serves as an independent board member for public, private equity and non-profit organizations. During his nearly 20-year tenure, Mr. Perez guided Terumo BCT through several foreign ownership structures, leveraging his extensive experience leading complex, multinational businesses and diverse, cross-cultural organizations. Under his leadership, the company transformed from a single manufacturing and R&D site to a multi-national biomedical organization with five R&D centers and six manufacturing plants, as he helped drive global revenue growth from $160 million to $1 billion. Mr. Perez holds a BA in Political Science from Texas Tech University.
Skills and Qualifications: Mr. Perez has 40 years of executive leadership in medical device and health care services, He serves as an independent board member and advisor to several corporations and non-profit organizations. His expertise encompasses growing and scaling highly regulated global businesses organically through R&D and innovation and inorganically through M&A, leading within a variety of foreign, public and private equity ownership structures, strategic planning, culture and talent development, succession planning, enterprise risk management, operations, compliance, and corporate governance. We believe Mr. Perez’s extensive knowledge and background as a chief executive and director qualifies him to service on our board.
Rachel Stahler, age 47, Board Member. Ms. Stahler has served as a director since May 2020. Ms. Stahler is the Chief Information Officer at Organon, a pharmaceutical company created in 2021 through the spin-off of Merck’s women’s health, legacy brands, and biosimilars businesses. Ms. Stahler has nearly two decades of global technology experience in the pharmaceutical industry. From 2019 to 2020 Ms. Stahler was the Chief Information Officer for Allergan, a global pharmaceutical leader focused on developing, manufacturing and commercializing branded pharmaceutical, device, biologic, surgical, and regenerative medicine products for patients around the world. Prior to Allergan, from 2017 to 2019, Ms. Stahler served as Chief Information and Digital Officer at Syneos Health, a leading CRO / CCO, where she was responsible for designing clinical and commercial systems for customers as an outsourcing leader. Ms. Stahler was also the Chief Information Officer at Optimer Pharmaceuticals and held various senior technology roles at Pfizer. Ms. Stahler holds a BA from the University of Pennsylvania and an MBA from Columbia Business School.
Skills and Qualifications: Ms. Stahler is an experienced Chief Information Officer, having held several executive positions in the pharmaceutical industry, including at Allergan, a global pharmaceutical leader focused on developing, manufacturing and commercializing branded pharmaceutical, device, biologic, surgical, and regenerative medicine products for patients around the world. We believe Ms. Stahler’s experience in designing clinical and commercial systems and prior senior technology roles will continue to enhance the Company’s information technology policies and operations, as well as the composition and governance of the Board, and therefore we believe Ms. Stahler is well qualified to serve on our Board.
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| Proposal 1 | ||||||||
| Anthony Zook | Age: 63 | Board Member and Chair of the Culture and Compensation Committee | ||||||||||||||||||||
Mr. Zook has served as a director since June 2023. Mr. Zook served as Chief Executive Officer of Innocoll Pharmaceuticals, and prior to that Mr. Zook was Executive Vice President, Commercial Operations of AstraZeneca (AZ) where he held global P&L responsibility for all of AZ's brands and markets. Under Mr. Zook's leadership, AZ commercialized ten brands, each in excess of $1 billion in sales. Mr. Zook was also responsible for MedImmune, AZ's global biologics business. He also chaired the Commercial Investment Board, which identified and approved critical investments company-wide, including investments in plants, markets, and technology. Earlier in his career at AZ, Mr. Zook held various positions including CEO of North America and VP of Sales, where he helped lead the integrations of Astra US, Astra Merck, and Zeneca. Prior to joining AZ, Mr. Zook spent 14 years with Berlex Laboratories in a variety of positions. Skills and Qualifications Mr. Zook has significant experience as a brand and marketing executive with a focus on managing the interface between commercial and research and development aspects of an organization. Mr. Zook has served as a Chief Executive Officer of a large pharmaceutical company with global responsibilities, has significant sales and marketing experience, as well as operational and oncology experience. Because of Mr. Zook's industry knowledge, we believe Mr. Zook is well qualified to serve on our Board. | ||||||||||||||||||||
| Elizabeth Floegel | Age: 48 | Board Member | ||||||||||||||||||||
Ms. Floegel has served as a director since June 2023. Ms. Floegel is Chief Information & Digital Officer of Numotion and manages a significant digital and cybersecurity transformation with the strategic use of data and technology to drive value creation by creating efficient and compliant operations. Before joining Numotion, Ms. Floegel was the Global Vice President of Business Technology at Allergan (now part of Abbvie) where she led the technology portfolio across global commercial, retail, digital products, and marketing. Prior to Allergan, Ms. Floegel was Head of Commercial and Digital Technology for Regeneron Pharmaceuticals and Global Vice President of Commercial Technology for Baxter Healthcare. Ms. Floegel holds an MBA from Benedictine University. Skills and Qualifications Ms. Floegel has a track record for successfully leading technology and organizational transformation in highly matrixed environments. She has extensive experience in cybersecurity, data privacy, automation, compliance technology and digital technology transformation. Because of her experience and knowledge, we believe Ms. Floegel is well qualified to serve on our Board. | ||||||||||||||||||||
| Dr. Neil Gunn | Age: 63 | Board Member and Chair of the Innovation, Pipeline & Technology Committee | ||||||||||||||||||||
Dr. Neil Gunn has served as a director since June 2023. Most recently, Dr. Gunn was the Chief Executive Officer of IDbyDNA, which was acquired by Illumina in 2022. Prior to that, Dr. Gunn was President of Roche Sequencing Solutions ("RSS"), where he grew the organization from early initial concepts to over 900 employees across three continents while integrating nine acquisitions into one with a common vision and strategy. Before RSS, Dr. Gunn was Head of Global Business for Roche Molecular Diagnostics and was responsible of the development and execution of strategic plan that launched over 140 major assay, instrument, and software launches over six years. Dr. Gunn’s earlier roles include Vice President Commercial Operations for CaridianBCT and Vice President of Commercial Operations - Americas for Novartis Diagnostics. Skills and Qualifications Dr. Gunn is a veteran diagnostics senior executive with expertise in company organization to maximize efficiencies with a focus on value generators to drive growth. Dr. Gunn has multi-year executive experience in multinational diagnostic companies and startups. He also has technical expertise in oncology diagnostics, next generation sequencing and other relevant technologies. Because of this experience and knowledge, we believe Dr. Gunn is well qualified to serve on our Board. | ||||||||||||||||||||
| NeoGenomics, Inc. | 11 | 2024 Proxy Statement | ||||||
| Proposal 1 | ||||||||
Average Tenure Directors
| Average Age Directors
| % of Diverse Directors
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| 3.5 years | 62 years | 56% | ||||||||||||
Board Diversity Matrix (as of April 8, 2024) | ||||||||||||||
| Total Number of Directors | 9 | |||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
| Part I: Gender Identity | ||||||||||||||
| Directors | 3 | 6 | 0 | 0 | ||||||||||
| Part II: Demographic Background | ||||||||||||||
| African American or Black | 0 | 1 | 0 | 0 | ||||||||||
| Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||
| Asian | 0 | 0 | 0 | 0 | ||||||||||
| Hispanic or Latinx | 0 | 1 | 0 | 0 | ||||||||||
| Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||
| White | 3 | 4 | 0 | 0 | ||||||||||
| Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||||||||
| LGBTQ+ | 0 | 0 | 0 | 0 | ||||||||||
| Did not Disclose Demographic Background | 0 | 0 | 0 | 0 | ||||||||||
| 12 | ||||||||
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Female |
Male |
Non-Binary | Did Not Disclose Gender | ||||
| Part I: Gender Identity | ||||||||
| Directors | 3 | 5 | 0 | 0 | ||||
| Part II: Demographic Background | ||||||||
| African American or Black | 0 | 1 | 0 | 0 | ||||
| Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||
| Asian | 0 | 0 | 0 | 0 | ||||
| Hispanic or Latinx | 0 | 1 | 0 | 0 | ||||
| Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||
| White | 3 | 3 | 0 | 0 | ||||
| Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||
| LGBTQ+ | 0 | 0 | 0 | 0 | ||||
| Did not Disclose Demographic Background | 0 | 0 | 0 | 0 | ||||
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| Proposal 1 | ||||||||||||||||||||||||||||||||
| Board Strategic Competencies Matrix | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Competencies / Attributes | Lynn Tetrault | Dr. Alison Hannah | Stephen Kanovsky | Michael Kelly | David Perez | Dr. Neil Gunn |
| Chris Smith | Tony Zook | Elizabeth Floegel | ||||||||||||||||||||||||||||||||||||||||||||||
| Financial (Reporting, Auditing, Internal Controls) | X | X | X | X | X |
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| Strategy/Business Development / M&A | X | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||||||||||||||||||||||||
| Human Resources / Organizational Development | X | X | X | X |
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| Legal / Governance / Business Conduct | X | X | X | X | X | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales / Marketing | X | X | X | X | X | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk Management | X | X | X | X | X | X | X | |||||||||||||||||||||||||||||||||||||||||||||||||
| X | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research & Development | X | X | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sustainability | X | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Public Policy / Regulatory Affairs | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Director Name |
| Audit and Committee |
| Compliance Committee |
| Culture and Compensation Committee |
| Nominating and Corporate Governance Committee | ||||||||
Lynn Tetrault (non-executive Chair of the Board) |
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| X |
| X | ||||||||
| Bruce Crowther |
| X |
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| Chair |
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| David Daly (1) |
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| X |
| X |
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| Dr. Alison Hannah |
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| Chair |
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| X | ||||||||
| Stephen Kanovsky |
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| X |
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| Chair | ||||||||
| Michael Kelly |
| Chair |
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| X |
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| David Perez |
| X |
| X |
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| Rachel Stahler |
| X |
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| X | ||||||||
| Number of Meetings Held in 2022 |
| 8 |
| 4 |
| 8 |
| 6 | ||||||||
| Director Name | Audit and Finance Committee | Compliance Committee | Culture and Compensation Committee | Nominating and Corporate Governance Committee | Innovation, Pipeline & Technology Committee | ||||||||||||
| Lynn Tetrault (non-executive Chair of the Board) | X | X | |||||||||||||||
Bruce Crowther(1) | X | X | |||||||||||||||
| Dr. Alison Hannah | Chair | X | X | ||||||||||||||
| Stephen Kanovsky | X | Chair | |||||||||||||||
| Michael Kelly | Chair | X | |||||||||||||||
| David Perez | X | X | X | ||||||||||||||
Tony Zook(2) | X | Chair | X | ||||||||||||||
| Elizabeth Floegel | X | X | |||||||||||||||
| Dr. Neil Gunn | X | X | Chair | ||||||||||||||
| Number of Meetings Held in 2023 | 8 | 4 | 8 | 6 | 0(3) | ||||||||||||
| NeoGenomics, Inc. |
| 2024 Proxy Statement | ||||||
14
| Proposal 1 | ||||||||
15
2023 to advise the Culture and Compensation Committee on peer development, market practices, industry trends, investor views, and benchmark compensation data.data related to executive officer and director compensation. In addition, WTW reviewed and provided the Culture and Compensation Committee with an independent perspective of management recommendations. These duties were consistent with those performed in prior years. For the year ending December 31, 2022,2023, aggregate fees for WTW’s consulting services provided to the Culture and Compensation Committee were approximately $440,000. Approximately $270,000$547,000, of this aggregate amount which approximately $384,000 was related to review of executive compensation.
| NeoGenomics, Inc. | 14 | 2024 Proxy Statement | ||||||
| Proposal 1 | ||||||||
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Stockholder Recommendations for Board Candidates
The Board will consider qualified candidates for director that are recommended and properly submitted by stockholders in accordance with our Amended and Restated Bylaws (“Bylaws”). Any stockholder may submit in writing a candidate for consideration for each stockholder meeting at which directors are to be elected by no later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the anniversary date of the prior year’s annual meeting, except that if the annual meeting is set for a date that is not within 30 days of such anniversary date, we must receive the notice no later than the close of business on the tenth day following the day on which the date of the annual meeting is first disclosed in a public announcement. Any stockholder recommendations for consideration by
The Committee will evaluate any such candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by Board members, assuming that appropriate biographical and background material is provided forconsideration of director candidates recommended by stockholders from other sources. Such recommendations should be
| NeoGenomics, Inc. | 15 | 2024 Proxy Statement | ||||||
| Proposal 1 | ||||||||
candidate, as well as any other information required by our Amended and Restated Bylaws. (the "Bylaws").
The Corporate Secretary's Office generally does not forward communications from stockholders that are not related to the duties and responsibilities of the Board, including junk mail, service complaints, employment issues, business suggestions, job inquiries, opinion surveys, and business solicitations.
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| NeoGenomics, Inc. | 16 | 2024 Proxy Statement | ||||||
TO OUR NAMED EXECUTIVE OFFICERS
this Proposal 2.
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| NeoGenomics, Inc. | 17 | 2024 Proxy Statement | ||||||
The Board recommends that stockholders approve the 2023 Equity Incentive Plan. The purposes of the 2023 Equity Incentive Plan are to enhance our ability to attract and retain highly qualified officers, non-employee directors, key employees and consultants, and to motivate eligible service providers to serve the Company and to expend maximum effort to improve our business results and earnings, by providing to eligible service providers anits subsidiaries the opportunity to acquire or increase a direct proprietaryan ownership interest in our operations and future success of the company.
The Board seeks approval for an aggregate share reserve of (a) 3,975,000 shares under the 2023 Equity Incentive Plan and (b) any shares which remain available for issuance under the Prior Plan as of the Effective Date, initially equating to approximately 6.93% and 5.83% percent of our weighted-average common shares outstanding on a basic and diluted basis, respectively, as of March 27, 2023 (the “Record Date”). When including the options and stock awards outstanding, the aggregate share reserve equates to 10.48% and 8.81% of our weighted-average common shares outstanding on a basic and diluted basis, respectively, as of the Record Date. 3,975,000 shares will be available for issuance under the 2023 Equity Incentive Plan as Incentive Stock Options.
The Board considered various factors when determining the number of shares to ask stockholders to approve under the 2023 Equity Incentive Plan, including the replacement of the Prior Plan, “overhang”, “burn rate”, dilution, historical grant practices and our forecasted equity award grants.
At December 31, 2022, the Equity Incentive Plan had 4,868,198 shares remaining available for future issuance. In addition, a total of 4,529,837 options and stock awards in aggregate were outstanding, comprised of the following:
3,271,004 stock options (weighted average exercise price of $17.67, and weighted average remaining term of 2.0 years)
1,258,833 stock awards
Over the past three years, the Company has used options andthrough the purchase of Company common stock awards judiciously, withat a value-adjusted burn rate average of approximately 2.09% (of weighted average basic common shares outstanding) as compared to the Health Care Equipment & Services industry benchmark of 3.76%.
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The Company has granted awards as follows:
| Fiscal Year |
| Stock Options Granted |
| Stock Awards Granted | ||||
2022 |
| 4,494,333 |
| 2,865,727 | ||||
2021 |
| 1,232,056 |
| 936,648 | ||||
2020 |
| 845,120 |
| 149,012 | ||||
Based on its review, the Culture and Compensation Committee recommended the reserve of (a) 3,975,000 shares under the 2023 Equity Incentive Plan and (b) any shares which remain available for issuance under the Prior Plan as of the Effective Date, to ensure the 2023 Equity Incentive Plan has an adequate number of shares available. Accordingly, the Board approved and is recommending that the Company’s stockholders approve a share reservethe Fourth Amendment of (a) 3,975,000the ESPP (the “ESPP Amendment”) to increase the number of shares under the 2023 Equity Incentive Plan and (b) any shares which remain availableof common stock reserved for issuance under the Prior Plan asESPP by 1,000,000 shares to 3,500,000 shares. As of March 31, 2024, there were 2,500,000 shares of the Effective DateCompany’s common stock reserved under the 2023 Equity Incentive Plan, with 3,975,000ESPP, of which approximately 315,000 shares were available for issuancefuture purchases. Accordingly, if the ESPP Amendment is approved, approximately 1,315,000 shares would be available for future purchases.
amended by the ESPP Amendment continues to provide essentially the same substantive terms and provisions as the existing ESPP.
The material featuresESPP, to make all determinations regarding the ESPP, including eligibility, and otherwise administer the ESPP. Our Board has delegated administration of the 2023 Equity Incentive Plan are summarized below. The summary is qualified in its entirety by referenceESPP to the specific provisions of the 2023 Equity Incentive Plan, the full text of which is set forth as Annex A to this Proxy Statement.
Description of the Plan
Corporate Governance Aspects of the Plan
The 2023 Equity Incentive Plan has been designed to include a number of provisions that promote best practices by reinforcing the alignment between equity compensation arrangements for eligible service providers and stockholders’ interests. These provisions include, but are not limited to, the following:
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Administration
The 2023 Equity Incentive Plan is administered by the Culture and Compensation Committee. SubjectIn this summary, we use the term “our Board” to refer to the express provisionsadministrator of the 2023 Equity Incentive Plan,ESPP.
Summary3,500,000 shares of Award Terms and Conditions
Awards under the 2023 Equity Incentive Plan may include nonqualified and incentive stock options, stock appreciation rights, restricted shares, restricted stock units and other stock-based awards. Any of these awards may (but need not) be made as performance incentives to reward attainment of performance goals.
Stock Options. The Culture and Compensation Committee may grant to a 2023 Equity Incentive Plan participant options to purchase our common stock that qualifywill be reserved under the amended ESPP, of which approximately 1,315,000 shares would be available for future purchases under the ESPP, subject to adjustment in the event of any significant change in our capitalization, such as incentivea stock options for purposessplit, a combination or exchange of Code Section 422, options that do not qualify as incentive stock options,shares, or a combination thereof. The terms and conditions of stock dividend or other distribution. If any option grants, includingunder the quantity, exercise price, vesting periods and other conditions on exercise will be determined byESPP is terminated without having been exercised, the Committee and will be reflected in a written award agreement.
The exercise price of each option (except those that constitute substitute awards) will be determined by the Culture and Compensation Committee, but will be at least the fair market value of a shareshares of common stock onsubject to such option will again become available under the date the stock option is granted; provided, however,ESPP.
| NeoGenomics, Inc. | 18 | 2024 Proxy Statement | ||||||
| Proposal 3 | ||||||||
Stock options must be exercised within a period fixed by the Culture and Compensation Committee thatas of March 28, 2024, was $15.72 per share. Participants may not exceed 10 yearswithdraw from the date of grant, except thatparticipation in the case of incentive stock options grantedESPP at any time during an offering period and will be paid their accrued payroll deductions that have not yet been used to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise period may not exceed five years. The 2023 Equity Incentive Plan
21
provides for earlier termination of stock options upon the participant’s termination of service, unless extended by the Culture and Compensation Committee, but in no event may the options be exercised after the scheduled expiration date of the options.
At the Culture and Compensation Committee’s discretion, payment forpurchase shares of common stock onstock. Participation ends automatically upon termination of employment with us.
Stock Appreciation Rights. The Culture and Compensation Committee may grant to a 2023 Equity Incentive Plan participant an award of stock appreciation rights, which entitlesloss realized by the participant to receive,on the sale of the shares. Any such additional gain or loss will be taxed as capital gain or loss, long or short, depending on how long the participant held the shares.
The exercise price for a stock appreciation right will be determined by the Culture and Compensation Committee in its discretion, but may not be less than 100%first day of the fair market value of one share of our common stock on the date when the stock appreciation right is granted. Stock appreciation rights must be exercised within a period fixed by the Culture and Compensation Committee that may not exceed 10 years from the date of grant. Upon exercise of a stock appreciation right, payment may be made in cash, shares of our stockoffering period), or a combination of cash and stock.
Restricted Stock. The Culture and Compensation Committee may grant to a 2023 Equity Incentive Plan participant shares of common stock subject to specified restrictions, which we refer to as restricted shares. Restricted shares are subject to forfeiture if the participant does not meet certain conditions such as continued employment over a specified forfeiture period or the attainment of specified performance targets over the forfeiture period. The terms and conditions of restricted share awards are determined by the Culture and Compensation Committee and will be reflected in a written award agreement.
Restricted Stock Units. The Culture and Compensation Committee may grant to a 2023 Equity Incentive Plan participant restricted stock units, which represent the right to earn one share of common stock (or its cash equivalent) upon a participant’s satisfaction of specified terms and conditions. The terms and conditions of restricted stock units are determined by the Culture and Compensation Committee and will be reflected in a written award agreement.
Other Stock-Based Awards. The Culture and Compensation Committee may grant to a 2023 Equity Incentive Plan participant equity-based or equity-related awards, referred to as other stock-based awards, other than options, stock appreciation rights, restricted shares, or restricted stock units. Such other stock-based awards will be subject to terms and conditions as the Culture and Compensation Committee may determine.
Effect of a Change in Control or Similar Corporate Transactions
The Culture and Compensation Committee may provide in any award agreement, or in the event of a change in control may take such actions as it deems appropriate to provide, for any of the following:
acceleration of the vesting or settlement of any such award;
the cancellation of any award in exchange for the value of any vested portion thereof;
22
the issuance of substitute awards or the assumption or replacement of awards;
the termination of all awards not exercised after providing written notice to participants that for a period of at least ten days such awards are exercisable;
the treatment of awards in the manner set forth in the agreement pursuant to which the change in control is consummated.
Eligibility and Limitation on Awards
The Culture and Compensation Committee may grant awards under the 2023 Equity Incentive Plan to any employee, independent director or consultant of ours or any of our participating subsidiaries. While the selection of participants is within the discretion of the Culture and Compensation Committee, it is currently expected that participants will be primarily officers and key senior level employees, as well as our independent directors. As of the date of the filing of this Proxy Statement, all of our approximately 2,100 employees, and each of our seven independent directors, are eligible to participate in the 2023 Equity Incentive Plan.
An option will constitute an incentive stock option only (i) if the participant is an employee; (ii) to the extent specifically provided in the award agreement; and (iii) to the extent that the aggregate fair market value (determined at the time the option is granted) of the shares of all incentive stock options held by the participant that become exercisable during any calendar year does not exceed $100,000.
Shares Subject to the 2023 Equity Incentive Plan
The number of shares of our common stock reserved for issuance for awards under the 2023 Equity Incentive Plan, subject to stockholder approval, is 3,975,000. 3,975,000 of such shares of common stock available for issuance under the 2023 Equity Incentive Plan shall be available for issuance as incentive stock options. These shares would be additive to any shares which remain available for issuance under the Prior Plan as of the Effective Date.
Shares of common stock underlying awards granted under the 2023 Equity Incentive Plan that expire or are forfeited or terminated for any reason (as a result, for example, of the lapse of stock options or forfeiture of restricted shares), as well as any shares underlying an award that is settled in cash rather than stock, will be available for future grants under the 2023 Equity Incentive Plan. In addition, shares of stock that are surrendered to or withheld by us in payment or satisfaction of the exercise price of an award or any tax withholding obligation with respect to an award will be available for future grants. Shares to be issued under the 2023 Equity Incentive Plan will be authorized but unissued shares of common stock or shares of stock reacquired by us.
Anti-Dilution Protections
In the event of a change in the outstanding shares of our common stock, without the receipt by us of consideration, by reason of a stock dividend, stock split, reverse stock split or distribution, recapitalization, merger, reorganization, reclassification, consolidation, split-up, spin-off, combination of shares, exchange of shares or other similar event, the Culture and Compensation Committee will make appropriate and equitable adjustments to (a) the number and kind of shares of stock available under the 2023 Equity Incentive Plan, (b) the number and kind of shares of stock subject to outstanding 2023 Equity Incentive Plan awards, (c) the per-share exercise or other purchase price under any outstanding 2023 Equity Incentive Plan award and (d) the annual award or other maximum award limits applicable under the 2023 Equity Incentive Plan.
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Clawback Provisions
The 2023 Equity Incentive Plan provides that in the event of a restatement of our financials due to material noncompliance with any financial reporting requirements under the law, a participant will be required to reimburse us for any amounts earned or payable in connection with an award under the 2023 Equity Incentive Plan to the extent required by law and any applicable Company policies.
No Repricings of Options or SARs
The 2023 Equity Incentive Plan prohibits the repricing of stock options and stock appreciation rights without the approval of our stockholders. This provision applies to both direct repricings (lowering the exercise price or strike price of a stock option or stock appreciation right) as well as indirect repricings (canceling an outstanding stock option or stock appreciation right and granting a replacement stock option or stock appreciation right with a lower exercise price or strike price or exchange for cash or other forms of awards).
Amendment and Termination
The Board may suspend, terminate, or amend the 2023 Equity Incentive Plan, provided that any amendment to the 2023 Equity Incentive Plan will be subject to the approval of our stockholders to the extent required by applicable law.
In addition, no suspension, termination or amendment of the 2023 Equity Incentive Plan may terminate a participant’s existing award or materially and adversely affect a participant’s rights under such award without the participant’s consent. However, these provisions do not limit the board’s authority to amend or revise the 2023 Equity Incentive Plan to comply with applicable laws or governmental regulations.
Federal Income Tax Consequences
THE FEDERAL INCOME TAX CONSEQUENCES OF THE ISSUANCE AND EXERCISE OF AWARDS UNDER THE PLAN GENERALLY ARE AS DESCRIBED BELOW. THE FOLLOWING INFORMATION IS ONLY A SUMMARY OF THE TAX CONSEQUENCES OF THE AWARDS AND IS NOT INTENDED TO COVER ALL TAX CONSEQUENCES NOR IS IT INTENDED TO BE USED BY ANY TAXPAYER TO AVOID PENALTIES WHICH MAY BE IMPOSED.WE ENCOURAGE PARTICIPANTS TO CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES INHERENT IN THE OWNERSHIP OR EXERCISE OF THEIR AWARDS, AND THE OWNERSHIP AND DISPOSITION OF ANY UNDERLYING SECURITIES. TAX CONSEQUENCES FOR ANY PARTICULAR INDIVIDUAL OR UNDER STATE OR NON-U.S. TAX LAWS MAY BE DIFFERENT.
Incentive Stock Options. A participant who is granted an incentive stock option generally will not recognize any taxable income for federal income tax purposes on either the grant or exercise of the incentive stock option (except for alternative minimum tax purposes, as described below). If the participant disposes of the shares purchased pursuant to the incentive stock option more than two years after the date of grant and more than one year after the exercise of the option by the participant, (a) the participant will recognize long-term capital gain or loss, as the case may be, equal to the difference between the selling price and the exercise price; and (b) we will not be entitled to a deduction with respect to the shares of stock so issued. If the two-year holding period requirements are not met, any gain realized upon disposition will be taxed as ordinary income to the extent of the lesser of (1) the excess of the fair market value of the shares at the time of exercisesale of the shares or on the date of death over the exercise price and (2)paid for the gain onshares by the sale. Also in that case, we will be entitled to a deductionparticipant. Except in the yearcase of disposition in ana transfer as a result of death, the amount equal to theof ordinary income recognized by the participant.participant will be added to the participant’s basis in such shares. Any additional gain realized upon the sale in excess of such basis will be taxed as short-term ora long-term capital gain depending upon the actual holding period for
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| NeoGenomics, Inc. | 19 | 2024 Proxy Statement | ||||||
the stock. A sale for less than the exercise price results in a capital loss.
| Proposal 3 | ||||||||
Nonqualified Stock Options. A participant who is granted a nonqualified stock option under the 2023 Equity Incentive Plan generallyCompany will not recognizereceive any income for federal income tax purposes on the grantdeduction as a result of the option. Generally, on the exercise of the option, the participant will recognize taxable ordinary income equal to the excess of the fair market value of theissuing shares on the exercise date over the option price for the shares. We generally will be entitled to a deduction on the date of exercise in an amount equal to the ordinary income recognized by the participant. Upon disposition of the shares purchased pursuant to the stock option, the participant will recognize long-term or short-term capital gain or loss, as the case may be, equal to the difference between the amount realized on such disposition and the basis for such shares, which basis includes the amount previously recognized by the participant as ordinary income.
Stock Appreciation Rights. A participant who is granted stock appreciation rights generally will not recognize any taxable income on the receipt of the award. Upon the exercise of a stock appreciation right, (a) the participant will recognize ordinary income equal to the amount received (the increase in the fair market value of one share of our stock from the date of grant of the award to the date of exercise multiplied by the number of sharesESPP except, subject to the award), and (b) we will be entitled to a deduction on the date of exercise in an amount equal to the ordinary income recognized by the participant.
Restricted Stock. A participant generally will not recognize any taxable income on the grant date of an award of restricted shares, but will be taxed at ordinary income rates on the fair market value of any restricted shares as of the date that the restrictions lapse, unless the participant, within 30 days after transfer of such restricted shares to the participant, elects under Code Section 83(b) to include in income the fair market value of the restricted shares as of the date of such transfer. We generally will be entitled to a corresponding deduction. Any disposition of shares after the restrictions lapse will be subject to the regular rules governing long-term and short-term capital gains and losses, with the basis for this purpose equal to the fair market value of the shares at the end of the restricted period (or on the date of the transfer of the restricted shares, if the employee elects to be taxed on the fair market value upon such transfer). To the extent dividends are payable during the restricted periodlimitations under the applicable award agreement, any such dividends will be taxable to the participant at ordinary income tax rates and will be deductible by us unless the participant has elected to be taxed on the fair market value of the restricted shares upon transfer, in which case they will thereafter be taxable to the participant as dividends and will not be deductible by us.
Restricted Stock Units. A participant generally will not recognize any taxable income on the grant date of an award of restricted stock units, but will be taxed at ordinary income rates on the fair market value of the restricted stock units as of the vesting or settlement date.
Internal Revenue Code, Section 162(m). Because we are a public company, special rules limit the deductibility of compensation paid to any “covered employee”. A covered employee is generally defined as the principal executive officer or principal financial officer at any time during the year, or any individual acting in such a capacity, and the three other most highly compensated executive officers. An employee that was considered a covered employee after 2016 will always be considered a covered employee even if the employee is no longer the principal executive officer, principal financial officer, or one of the three other most highly compensated executive officers during the applicable year. Under Code Section 162(m), the annual compensation paid to each of these executives may not be deductible to the extent that it exceeds $1 million.
25
New Plan Benefits
Because awards undera participant is required to include as ordinary income amounts arising upon the 2023 Equity Incentive Plan are discretionary, awards are generally not determinable at this time.
sale or disposition of such shares as discussed above.
stockholders.
26
| NeoGenomics, Inc. | 20 | 2024 Proxy Statement | ||||||
2024.
| 2022 |
| 2021 | ||||||||
Audit fees | $ | 1,949,493 |
| $ | 3,162,128 | |||||
Audit related fees | 233,102 |
| 275,168 | |||||||
Tax fees | — |
| — | |||||||
All other fees | 4,140 |
| 3,790 | |||||||
|
|
|
| |||||||
Total | $ | 2,186,735 |
| $ | 3,441,086 | |||||
|
|
|
| |||||||
2022.
| 2023 ($) | 2022 ($) | ||||||||||||||||
| Audit fees | 1,772,689 | 1,949,493 | |||||||||||||||
| Audit related fees | 276,737 | 233,102 | |||||||||||||||
| Tax fees | 58,261 | — | |||||||||||||||
| All other fees | 4,140 | 4,140 | |||||||||||||||
| Total | 2,111,827 | 2,186,735 | |||||||||||||||
SEC registration statement services.
27
The Audit and Finance Committee’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accounting firm, including the estimated fees and other terms of any such engagement. During 2022,2023, the Audit and Finance Committee pre-approved all audit and permitted non-audit services provided by Deloitte & Touche LLP.
| NeoGenomics, Inc. | 21 | 2024 Proxy Statement | ||||||
| Proposal 4 | ||||||||
MEMBERS OF THE AUDIT AND FINANCE COMMITTEE
Michael Kelly (Chair)
Bruce Crowther
David Perez
Rachel Stahler
28
| MEMBERS OF THE AUDIT AND FINANCE COMMITTEE | ||
| Michael Kelly (Chair) | ||
| Bruce Crowther | ||
| Elizabeth Floegel | ||
| David Perez | ||
| Tony Zook | ||
Vote Required for Approval
this Proposal 4.
29
EXECUTIVE OFFICERS
| NeoGenomics, Inc. | 22 | 2024 Proxy Statement | ||||||
| Executive Officer | Age | Current Position | |||||||||
Christopher Smith | 61 | Director and Chief Executive Officer | |||||||||
Jeffrey Sherman | 58 | Chief Financial Officer | |||||||||
| Gregory Aunan | 54 | ||||||||||
| Chief Accounting Officer | ||||||||||
Alicia Olivo(1) | 40 | EVP, General Counsel & Business Development | |||||||||
| |||||||||||
Melody Harris | 58 | President, Enterprise Operations | |||||||||
Warren Stone | 51 | President, Clinical Services | |||||||||
Vishal Sikri | 48 | President, Advanced Diagnostics | |||||||||
| |||||||||||
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|
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|
30
Cynthia Dieter
Chief Accounting Officer
Ms. Dieter
of Iowa.
& Business Development
| NeoGenomics, Inc. | 23 | 2024 Proxy Statement | ||||||
| Executive Officers | ||||||||
31
Ortho Clinical Diagnostics, a leading global provider of in-vitro diagnostics solutions to the clinical laboratory and transfusion medicine communities. Prior to Ortho Clinical, from 1992 to 2020, Mr. Stone served in various roles, at MillisporeSigma (formerly EMDMillipore), the Life Science business of Merck KGaA Darmstadt, Germany, and a leading provider of laboratory materials, technologies and services to scientists and engineers in the U.S., Canada and Latin America. His roles included Senior Vice President, Research Commercial Americas (Life Science Division) from 2016 to 2020, and Vice President of Sales North America (Life Science division) from 2014 to 2015. Prior to that role, Mr. Stone served as General Manager and Vice President of Lab Essentials based in Germany, where he led the global transformation to Advanced Analytics from 2012 to 2014.
Mr. Stone holds an MBA from Suffolk University.
Dr. Shashikant Kulkarni
Chief Scientific Officer and Executive Vice President of Research & Development
Dr. Kulkarni joined NeoGenomics in March 2022 as Executive Vice President for Research & Development and Chief Scientific Officer. In June 2022, Dr. Kulkarni was appointed as Chief Scientific Officer and President, Laboratory Operations. Subsequently, in January 2023, he was appointed as Chief Scientific Officer and Executive Vice President of Research & Development. Dr. Kulkarni served as Chief Scientific Officer and Senior Vice President of Innovation and Emerging Business at Baylor Genetics from 2016 to 2022. He also served as a tenured professor and Vice Chairman for Research, Department of Molecular and Human Genetics at Baylor College of Medicine, Houston, Texas. At Baylor, he led an extensive clinical and translational research team, delivering top-quality clinical genomics and multi-omics tools. Working in collaboration with many professional societies, he has been a pioneer in creating best practices guidelines in Clinical Next-Generation Sequencing for somatic cancer, constitutional genomics, bioinformatics, and whole-genome sequencing. Dr. Kulkarni is considered an expert and key opinion leader in cancer genomics with a focus on the application of genomic and multi-omic technologies. Dr. Kulkarni has served as an expert panelist on several preeminent regulatory agencies such as FDA, CDC, CMS, and NIH. He is the Editor-in-Chief of Cancer Genetics Journal and co-edited a book titled Clinical Genomics - A Guide to Clinical Next-Generation Sequencing. Additionally, he has published extensively in peer-reviewed articles and numerous well-known journals.
Dr. Kulkarni completed his Clinical Fellowship at Harvard Medical School and his translational genomics training at Imperial College in London, UK, and at All India Institute of Medical Sciences. He is an American Board of Medical Genetics and Genomics board-certified medical geneticist with dual certifications in Clinical Molecular Genetics and Genomics and Clinical Cytogenetics and Genomics. He is also a fellow of the American College of Medical Genetics and genomics and holds an executive MBA.
32
| NeoGenomics, Inc. | 24 | 2024 Proxy Statement | ||||||
Compensation of Independent Directors
•Directors serving as Audit and Finance Committee members received annual compensation of $10,000. The Director serving as chair of the Audit and Finance Committee received annual compensation of $20,000.
•Directors serving as Culture and Compensation Committee members received annual compensation of $7,500. The Director serving as chair of the Culture and Compensation Committee received annual compensation of $15,000.
•Directors serving as Compliance Committee members received annual compensation of $5,000. The Director serving as chair of the Compliance Committee received annual compensation of $10,000.
•Directors serving as Nominating and Corporate Governance Committee members received annual compensation of $5,000. The Director serving as chair of the Nominating and Corporate Governance Committee received annual compensation of $10,000.
The Board has the discretion to grant equity awards to
2024.
Share Ownership Guidelines and Share Retention Requirements
NeoGenomics has adopted share ownership guidelines for its independent directors and executive officers to further align the interests of our senior leaders with those of our stockholders. The guidelines require directors to hold NeoGenomics stock worth a value expressed as a multiple of their annual compensation within five years of the guideline applying to them.
33
For the purposes of assessing compliance with share ownership guidelines, the following forms of equity interests are considered:
shares owned directly (including vested restricted awards); and
unvested restricted stock awards.
The table below summarizes the current share ownership guidelines as well as the current share ownership of our independent Board members as a multiple of base compensation for Board services as of December 31, 2022:
| Role |
| Share Ownership Guideline |
| Current Share Ownership | ||||
Chair of the Board |
| 3.0 |
| 6.2 | ||||
Board Members(1) |
| 3.0 |
| 9.4 | ||||
|
Directors who are yet to achieve their share ownership amount are required to retain an amount equal to 25% of the net shares received as the result of the exercise, vesting, or payment of any equity awards. If a director’s required ownership level amount is not attained by the end of the initial five-year period (or at any time thereafter), they will be required to retain an amount equal to 100% of the net shares received as the result of the exercise, vesting, or payment of any equity awards granted, until the applicable guideline level is achieved. As of December 31, 2022, all Board members were either in compliance with the share ownership guidelines or not yet required to be in compliance due to their appointment date.
Independent Director Compensation Tables
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||
| Lynn Tetrault | 125,000 | 168,000 | 72,000 | 365,000 | ||||||||||||||||||||||||||||||||||||||||
| Bruce Crowther | 73,451 | 168,000 | 72,000 | 313,451 | ||||||||||||||||||||||||||||||||||||||||
David Daly(2) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Dr. Alison Hannah | 65,000 | 168,000 | 72,000 | 305,000 | ||||||||||||||||||||||||||||||||||||||||
Stephen Kanovsky(3) | 69,200 | 168,000 | 72,000 | 309,200 | ||||||||||||||||||||||||||||||||||||||||
| Michael Kelly | 77,500 | 168,000 | 72,000 | 317,500 | ||||||||||||||||||||||||||||||||||||||||
David Perez(3) | 69,800 | 168,000 | 72,000 | 309,800 | ||||||||||||||||||||||||||||||||||||||||
Dr. Neil Gunn(3)(4) | 36,309 | 168,000 | 72,000 | 276,309 | ||||||||||||||||||||||||||||||||||||||||
Tony Zook(4) | 36,226 | 168,000 | 72,000 | 276,226 | ||||||||||||||||||||||||||||||||||||||||
Elizabeth Floegel(4) | 33,393 | 168,000 | 72,000 | 273,393 | ||||||||||||||||||||||||||||||||||||||||
Rachel Stahler(5) | 16,250 | — | — | 16,250 | ||||||||||||||||||||||||||||||||||||||||
| NeoGenomics, Inc. | 25 | 2024 Proxy Statement | ||||||
| Independent Compensation Tables | ||||||||
| Name |
| Fees Earned or ($) |
| Stock Awards(1) ($) |
| Option Awards(1) ($) |
| Total ($) | ||||||||||||||||
Bruce Crowther |
| 73,271 |
| 126,000 |
| 54,000 |
| 253,271 | ||||||||||||||||
David Daly(2) |
| 68,931 |
| 126,000 |
| 54,000 |
| 248,931 | ||||||||||||||||
Dr. Alison Hannah |
| 65,000 |
| 126,000 |
| 54,000 |
| 245,000 | ||||||||||||||||
Stephen Kanovsky |
| 65,000 |
| 126,000 |
| 54,000 |
| 245,000 | ||||||||||||||||
Michael Kelly(3) |
| 89,002 |
| 126,000 |
| 54,000 |
| 269,002 | ||||||||||||||||
David Perez(4) |
| 10,421 |
| 75,600 |
| 32,400 |
| 118,421 | ||||||||||||||||
Rachel Stahler |
| 65,000 |
| 126,000 |
| 54,000 |
| 245,000 | ||||||||||||||||
|
34
|
|
|
|
The aggregate number of unvested shares of restricted stock and stock option awards granted and outstanding for the year ended December 31, 2022,2023, were as follows:
| Name | Shares of Restricted Stock | Number of Shares Underlying Options | ||
Bruce Crowther | 15,556 | 13,882 | ||
David Daly(1) | 15,556 | 13,882 | ||
Dr. Alison Hannah | 15,556 | 13,882 | ||
Stephen Kanovsky | 15,556 | 13,882 | ||
Michael Kelly | 15,556 | 13,882 | ||
David Perez | 10,300 | 9,730 | ||
Rachel Stahler | 15,556 | 13,882 | ||
| Name | Shares of Restricted Stock | Number of Shares Underlying Options | ||||||||||||
| Lynn Tetrault | 11,336 | 8,353 | ||||||||||||
| Bruce Crowther | 11,336 | 8,353 | ||||||||||||
David Daly(1) | — | — | ||||||||||||
| Dr. Alison Hannah | 11,336 | 8,353 | ||||||||||||
| Stephen Kanovsky | 11,336 | 8,353 | ||||||||||||
| Michael Kelly | 11,336 | 8,353 | ||||||||||||
| David Perez | 11,336 | 8,353 | ||||||||||||
Dr. Neil Gunn(2) | 11,336 | 8,353 | ||||||||||||
Tony Zook(2) | 11,336 | 8,353 | ||||||||||||
Elizabeth Floegel(2) | 11,336 | 8,353 | ||||||||||||
Rachel Stahler(3) | — | — | ||||||||||||
| NeoGenomics, Inc. |
| |||||||
35
2022
| Named Executive Officer | Title | Dates of Service as NEO | |||||||||||||||
| Christopher Smith | Director and Chief Executive Officer | August 2022 - Present | |||||||||||||||
| Jeffrey Sherman | |||||||||||||||||
| Chief Financial Officer | December 2022 - Present | ||||||||||||||||
| Melody Harris | December 2022 - | ||||||||||||||||
| Warren Stone | President, Clinical Services | November 2022 - Present | |||||||||||||||
| Vishal Sikri | President, Advanced Diagnostics | May 2022 - Present | |||||||||||||||
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36
|
•Align Interests: We believe that our long-term success is dependent on our employees feeling a sense of company ownership and alignment with our stockholder interests, and we will strive to develop an inextricable link.
|
|
|
2022
| NeoGenomics, Inc. | 27 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
Strengthened our executive leadership team by welcoming Chris Smith, Chief Executive Officer; Jeff Sherman, Chief Financial Officer; Warren Stone, President, Clinical Services; Vishal Sikri, President, Advanced Diagnostics; Dr. Shashikant Kulkarni, Chief Scientific Officer•Strong business results led to a total year-on-year revenue increase of ~16% and Executive Vice Presidentpositive adjusted EBITDA, both ahead of Research & Development, Melody Harris, President, Enterprise Operations, and Gary Passman, Chief Culture Officer (2023);
Initiated Project Catalyst, which supports the identification and execution of operational and financial improvement initiatives to improve customer experience, accelerate•Outpaced competitor set from a market cap growth and drive profit. These initiatives focus on lab optimization, peoplestock price performance perspective;
|
37
Developed our vision of “OneNeo” to better integrate the Company, align our core capabilities and enhance communication; and
Initiated•Executed a reorganization in the fourthfirst quarter in an effort to help prioritize outour investments, optimize our general and administrative spend and enable execution of our strategic priorities.
portfolio.
at risk.
| NeoGenomics, Inc. |
| ||||||||
| |||||||||
|
38
investment and growth priorities over the next five years. Additional information, as well as details on the compensation practices and policies more generally, are detailed in the balance of the Compensation Discussion & Analysis.
companies globally.
39
Our vision is to become the world’s leading cancer testing, information, and decision support company by providing uncompromising quality, exceptional service, and innovative solutions. This vision is reflected in how we have designed our compensation programs with specific emphasis on performance metrics that are included inaligned with our annual incentive plan that focus on our achievements.
Metric | How we Use it | Why it Matters | |||||||||||||
| Revenue | Financial metric | ||||||||||||||
metric | Our vision is to be the world’s leading cancer testing, information, and decision support company by providing uncompromising quality, exceptional service, and innovative solutions. Increases in revenue through the execution of strategic opportunities aligns management performance with the achievement of that vision and stockholder value realization. | ||||||||||||||
| Adjusted EBITDA | Financial metric | metric | We continue to seek profitable growth | ||||||||||||
| Strategic Critical Success Factors | Company metric | metric | We believe that a culture of motivated and engaged employees will deliver superior service to our clients, leading to customer satisfaction and retention, which will continue to increase stockholder value. Annual focus areas are established each year to align with our strategic critical success factors. In | ||||||||||||
| Individual Performance | Individual metric | ||||||||||||||
| metric | Each executive that participates in the Management Incentive Plan (“MIP”) plays a unique role in the Company’s strategic objectives. Including individual performance goals for each executive that are in line with the executive’s major responsibilities ensures that incentive payments relate to both Company performance as well as individual performance. | |||||||||||||
| NeoGenomics, Inc. | 29 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
40
The following table summarizes the purpose and key features of each element of compensation.
Element | Purpose | Key Features | |||||||||||||||
| Base Salary | Provide competitive baseline | •Fixed cash compensation •Amounts informed by levels in the market, taking account of the role, scope of the position, experience, performance and strategic criticality • | |||||||||||||||
| Annual Incentive | Reward for the achievement | •Variable cash compensation •Target opportunity informed by levels in the market •Actual value based on financial performance, company-defined critical strategic success factors and the | |||||||||||||||
| Long-Term Incentives | Align with the long-term | •Grants of stock option awards, •Variable equity-based compensation •Target opportunity informed by levels in the market •Options require stock price appreciation to yield value •Restricted stock and options have | |||||||||||||||
41
| NeoGenomics, Inc. | 30 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Compensation Best Practices | |||||||||||||||||||||
| What We Do: | What We Avoid: | ||||||||||||||||||||
| ü | |||||||||||||||||||||
| No tax gross-ups on any change-in-control benefits | ||||||||||||||||||||
| ü | Deliver majority of executive compensation in the form of variable or performance-based pay | No hedging or pledging of NeoGenomics stock | |||||||||||||||||||
| ü | Align annual performance objectives with our strategy | No excessive perquisites, benefits, or pension payments | |||||||||||||||||||
| ü | Conduct annual assessment of Chief Executive Officer pay versus performance | No reloading or repricing of stock option awards | |||||||||||||||||||
| ü | Take into consideration the compensation levels of a relevant peer group of companies when setting compensation
| û |
| ||||||||||||||||||
| ü | Cap payout opportunities under our incentive plans | ||||||||||||||||||||
| ü | Impose share ownership and retention requirements | ||||||||||||||||||||
| ü | Impose clawback policy | ||||||||||||||||||||
| ü | Limit change-in-control benefits to double trigger | ||||||||||||||||||||
| ü | Solicit an annual ‘say on pay’ vote | ||||||||||||||||||||
| ü | Engage an independent compensation consultant | ||||||||||||||||||||
42
| NeoGenomics, Inc. | 31 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Quarter | Typical Meeting Topics | ||||||||||
| Q1 | •Setting compensation for Company executive officers, including the review and approval of executive benchmarking and pay recommendations, salary adjustments, annual bonus payouts, and long-term incentive award values; •Approve annual company and individual performance goals for the year ahead; •Assess compliance versus stock ownership guidelines; •Review historical equity awards and resulting burn •Engage in various stockholder outreach and engagement activities. | ||||||||||
| Q2 | •Review and finalize compensation discussion and analysis section of the proxy statement; and •Monitor the Company’s incentive and equity-based compensation plan, including the review and approval of annual equity grants. •Review and finalize Board of Director compensation with guidance from WTW, our independent outside compensation consultant. | ||||||||||
| Q3 | •Review and discuss proxy advisor reports and any other investor feedback; •Receive update on legislative, regulatory and governance environments; •Review current compensation philosophy and benchmark against our peers various elements of compensation, including organizational culture programs and practices pertaining to diversity, equity and inclusion; and •Review Culture and Compensation Committee charter. | ||||||||||
| Q4 | •Conduct annual peer group review; •Undertake Culture and Compensation Committee self-evaluation; • | ||||||||||
•Succession planning. | |||||||||||
43
Managing Compensation-Related Risks
| NeoGenomics, Inc. | 32 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
•shares owned directly (including vested restricted awards); and
•unvested restricted stock awards.
| Role | Share Ownership Guideline | Share Ownership(1) | ||||||
Chief Executive Officer |
| 3.0 |
| 6.4 | ||||
Other Named Executive Officers | 1.0 | 2.4 | ||||||
|
2023:
| Role | Share Ownership Guideline | Share Ownership(1) | ||||||||||||
| Chief Executive Officer | 3.0 | 14.7 | ||||||||||||
| Other Named Executive Officers | 1.0 | 6.1 | ||||||||||||
44
100% of the net shares received as the result of the exercise, vesting, or payment of any equity awards granted to them, until the applicable guideline level is achieved. As of December 31, 2022,2023, all Named Executive Officers were either in compliance with the share ownership guidelines or not yet required to be in compliance due to their hire date.
| NeoGenomics, Inc. | 33 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
Category | 34 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Feedback Category | Specific Stockholder Commentary | Company Response | |||||||||||
| General
| •Discuss stockholder outreach initiatives throughout proxy disclosures | •Included herein, and embedded throughout our broad proxy and CD&A •Many new leaders joined NeoGenomics in late 2022 and throughout 2023, which created a discernible upgrade in talent to sustainably run a complex organization. •Stockholders we engaged with were pleased to learn about leadership effectiveness directly from a Board member's perspective. | |||||||||||
•Enhance understanding regarding Board member qualifications and refreshment | • •Stockholders were supportive of our Board refreshment approach, 10-year term limit guideline, and 2023 Board appointments. | ||||||||||||
•Share actions around executive leadership transition planning | •Stockholders were supportive of succession planning and employee development, given that it is prevalent deeper than executive leadership. |
| |||||||||||
45
| Compensation | •Changes to executive compensation mid performance period | •There were no mid-year changes to compensation packages in 2023. | |||||||||||
• |
| ||||||||||||
|
| ||||||||||||
| • . The shareholders we engaged were supportive of our short-term incentive plan changes. • •The PSU component for 2024 equity
| ||||||||||||
•Ensure market-competitive and business success-driven CEO compensation | •Several stockholders expressed interest in executive compensation being benchmarked against performance relevant to peers. •Company turnaround/transformation outcomes will continue to drive variable cash
| ||||||||||||
Environmental, Social, Governance | •Governance | • |
| ||||||||||
•Sustainability | • |
as a baseline and will continue to add additional disclosures going forward. We plan to report our information to EcoVadis and have our reduction targets validated by SBTI. •For further information on our future focus areas | |||||||||||
•Social Focus | •Strengthened and introduced culture integration and engagement initiatives around diversity, belonging with the launch of our DEI&B Council. • •Our 2023
| ||||||||||||
| NeoGenomics, Inc. | 35 | 2024 Proxy Statement | ||||||
46
| Executive Compensation | ||||||||
•Company performance;
•Individual performance;
•Company performance relative to our established peer group;
•Compensation practices observed in our established peer group; and
•Stockholder views.
•10x Genomics, Inc. | •Fulgent Genetics, Inc. | •Natera, Inc. | |||||||
•Adaptive Biotechnologies Corporation | •Invitae Corporation | •OPKO Health, Inc. | |||||||
•AtriCure, Inc. | •Maravai Life Sciences Holdings, Inc.(1) | •QuidelOrtho Corporation(2) | |||||||
•CareDx, Inc. | •Medpace Holdings, Inc. | •Veracyte, Inc. | |||||||
•Emergent BioSolutions, Inc. | •Myriad Genetics, Inc | ||||||||
•Exact Sciences Corporation | •NanoString Technologies, Inc. | ||||||||
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Quidel Corporation and Ortho Clinical Diagnostics Holdings in 2022.
| NeoGenomics, Inc. | 36 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
47
The following graph shows the relationship of Mr. Mallon,Smith, our former Chief Executive Officer’s, total compensation as set forth in the 20222023 Summary Compensation Table and the change in stock price for the three years ended December 31, 2019, 2020, 2021, and 20212022 (annualized) as compared to the companies included in our peer group, as defined above. Data for the most recent year ended December 31, 2022,2023, was not used in this graph as the Chief Executive Officer compensation was not available for this period for all companies presented.
As previously highlighted throughout this report, Mr. Smith was brought in as Chief Executive Officer in 2022 as part of a significant leadership and business transition. The turnaround impact needed to structure the organization optimally and drive business outcomes dictated the need for the referenced Chief Executive Officer compensation.
48
| NeoGenomics, Inc. | 37 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Named Executive Officer | 2022 Base Salary ($) | 2023 Base Salary ($) | Increase (%) | Effective Date | |||||||||||||||||||
| Christopher Smith | 1,000,000 | 1,000,000 | — | % | August 15, 2022 | ||||||||||||||||||
| Jeffrey Sherman | 525,000 | 525,000 | — | % | December 7, 2022 | ||||||||||||||||||
| Melody Harris | 525,000 | 525,000 | — | % | December 5, 2022 | ||||||||||||||||||
| Warren Stone | 525,000 | 525,000 | — | % | November 21, 2022 | ||||||||||||||||||
| Vishal Sikri | 510,000 | 536,000 | 5.1 | % | January 13, 2023 | ||||||||||||||||||
Effective August 15, 2022, Company announced Mr. Smith as its new Chief Executive Officer, replacing Ms. Tetrault as Interim Chief Executive Officer. In connection with his appointment, the Culture and Compensation Committee reviewed competitive market data to inform decisions on Mr. Smith’s target compensation, also taking into account his prior experience, including most recently as the Chief Executive Officer at another publicly-traded life sciences company, and the target compensation associated with that role.
The Culture and Compensation Committee approved the following target compensation package:
A base salary of $1.0 million; and
To secure the appointment of Mr. Smith the Culture and Compensation Committee approved an inducement grant made in the form of stock options and restricted stock with a total value of $11.85 million which will vest ratably over the next four years. The $11.85 million consisted of an annual equity award of $8.5 million, and a sign-on equity award of $3.35 million. In addition, Mr. Smith was also entitled to a relocation benefit of up to $1.2 million, which was grossed up for tax purposes so that the economic benefit was the same as if such payment or benefits were provided on a non-taxable basis.
Former Interim Chief Executive Officer (Ms. Tetrault)
On April 19, 2022, the Board approved a compensation arrangement with Ms. Tetrault, pursuant to which Ms. Tetrault received base compensation equal to $800,000 per year, retroactive to March 28, 2022, and pro-rated for calendar year 2022. In addition, Ms. Tetrault was eligible for additional compensation in the form of a bonus in an amount between $500,000 and $2.0 million, to be awarded at the end of her tenure at the discretion of the Culture and Compensation Committee of the Board. In February 2023, based on market data, the members of the Culture and Compensation Committee, excluding Ms. Tetrault, awarded Ms. Tetrault a bonus in the amount of $1.5 million based on key progress associated with operational effectiveness, business growth, and new executive leadership.
49
Former Chief Executive Officer (Mr. Mallon)
In connection with Mr. Mallon stepping down as Chief Executive Officer, Mr. Mallon and the Company entered into a Separation Agreement dated as of March 28, 2022 (the “Mallon Separation Agreement”). Pursuant to the Mallon Separation Agreement, the Company paid or will pay Mr. Mallon (i) $775,000, which is equal to twelve (12) months of base salary; (ii) $775,000, which is equal to his target annual bonus; (iii) payment of premiums for healthcare coverage through the federal law commonly known as “COBRA” until the earliest of (a) twelve (12) months post-termination, (b) the date Mr. Mallon and his eligible dependents cease to be eligible for such coverage under applicable law or plan terms or (c) the date at which Mr. Mallon obtains health coverage from another employer; and (iv) reimbursement for certain relocation and housing costs.
The base salary payments were made in accordance with the Company’s regular payroll practices, with the first payment (i) made on the Company’s next regular payday following the expiration of sixty (60) calendar days from March 28, 2022 (the “Mallon Separation Date”), and (ii) to be retroactive to the day following the Mallon Separation Date. The target annual bonus was paid in a lump sum payment on the Company’s next regular payday following the expiration of sixty (60) calendar days from the Mallon Separation Date.
In addition, in accordance with the Mallon Separation Agreement, (i) the unvested portion of the buyout equity awards fully vested as of the separation date, and (ii) the portion of any other outstanding time-based equity awards held by Mr. Mallon that would have vested by their terms in the twelve (12)-month period following the separation date had Mr. Mallon remained continuously employed vested as of the separation date, with the remaining portion of each such award terminating on the separation date. This resulted in accelerated vesting of 142,302 previously granted time-vesting restricted stock awards and 237,960 previously granted time-based vesting stock option awards. The total dollar value of these awards was approximately $3.7 million and $2.3 million, respectively. These amounts are included in the Summary Compensation Table above. For a period of thirty-six (36) months following the separation date, Mr. Mallon may exercise any options to purchase common stock of the Company that were vested as of the separation date, after which period any then-outstanding and unexercised stock options will automatically terminate.
2022 Base Salary
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50
the calendar year or as of the date of hire, as applicable. Bonus amounts paid to Ms. Tetrault for her service as Interim Chief Executive Officer are described in the “Narrative Disclosure to the Summary Compensation Table and the Grants of Plan Awards Table” section of this Proxy Statement. Bonus amounts paid to Mr. Mallon and Mr. Bonello were provided for in each of their respective separation agreements and details regarding these amounts are described in the “Employment Agreements and Potential Payments Upon Termination or Change in Control” section of this Proxy Statement. In 2022,2023, bonus opportunities and outcomes for the Named Executive Officers currently employed by the Company were as follows:
| Named Executive Officer |
| Target Bonus (% of annual |
| Maximum Bonus (% of annual |
| Actual Bonus (% of annual |
| Actual Bonus (% of target) | ||||||||
Christopher Smith (1) | 100% | 200% | 46% | 46% | ||||||||||||
Jeffrey Sherman (2) | —% | —% | —% | —% | ||||||||||||
Warren Stone (3) | —% | —% | —% | —% | ||||||||||||
Vishal Sikri (4) | 50% | 50% | 50% | 100% | ||||||||||||
Dr. Shashikant Kulkarni (5) | 50% | 100% | 42% | 83% | ||||||||||||
(1) Mr. Smith’s bonus was pro-rated to reflect his start date of August 2022.
(2) Mr. Sherman was not eligible for a bonus based on his December 2022 start date.
(3) Mr. Stone was not eligible for a bonus based on his November 2022 start date.
(4) Mr. Sikri’s bonus reflects the terms of his employment contract which provided for a 100% payout for 2022.
(5) Dr. Kulkarni’s bonus was pro-rated to reflect his March 2022 start date.
| Named Executive Officer | Target Bonus (% of annual salary) | Maximum Bonus (% of annual salary) | Actual Bonus (% of annual salary) | Actual Bonus (% of target) | ||||||||||||||||||||||
| Christopher Smith | 100 | 200 | 185 | 185 | ||||||||||||||||||||||
| Jeffrey Sherman | 70 | 140 | 119 | 171 | ||||||||||||||||||||||
| Melody Harris | 60 | 120 | 101 | 169 | ||||||||||||||||||||||
| Warren Stone | 60 | 120 | 104 | 174 | ||||||||||||||||||||||
| Vishal Sikri | 60 | 120 | 100 | 167 | ||||||||||||||||||||||
|
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| Corporate Performance |
| Individual Performance | ||||||||||||||
| Named Executive Officer |
| Revenue |
| Adjusted EBITDA |
| Strategic Critical Success |
| Individual Goals | ||||||||||
Christopher Smith |
|
|
| 18% |
| 45% |
| 27% |
| 10% | ||||||||
Jeffrey Sherman |
|
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| —% |
| —% |
| —% |
| —% | ||||||||
Warren Stone |
|
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| —% |
| —% |
| —% |
| —% | ||||||||
Vishal Sikri |
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| 10% |
| 25% |
| 15% |
| 50% | ||||||||
Dr. Shashikant Kulkarni |
|
|
| 10% |
| 25% |
| 15% |
| 50% | ||||||||
51
| Corporate Performance | Individual Performance | |||||||||||||||||||||||||
| Named Executive Officer | Revenue (%) | Adjusted EBITDA (%) | Strategic Critical Success Factors (%) | Individual Goals (%) | ||||||||||||||||||||||
| Christopher Smith | 40 | 40 | 10 | 10 | ||||||||||||||||||||||
| Jeffrey Sherman | 40 | 40 | 10 | 10 | ||||||||||||||||||||||
| Melody Harris | 40 | 40 | 10 | 10 | ||||||||||||||||||||||
| Warren Stone | 40 | 40 | 10 | 10 | ||||||||||||||||||||||
| Vishal Sikri | 40 | 40 | 10 | 10 | ||||||||||||||||||||||
| NeoGenomics, Inc. | 39 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Named Executive Officer | Key Achievements | Individual
| |||||||||||||||||
| Christopher Smith | Developed a short and long-term sustainable strategy and approach to strong fiscal performance with favorable outcomes in 2023, drove cost opportunities to enable targeted re-investment and emphasized our customer and patient-first mindset. Oversaw introduction of a robust succession planning approach across various leadership levels. | 10 | |||||||||||||||||
| Jeffrey Sherman | 10 | ||||||||||||||||||
| Melody Harris | Drove critical targeted outcomes across lab operations, especially in the area of | 10 | |||||||||||||||||
| Warren Stone | Delivered exceptional financial results and strong customer retention across the clinical division, established robust sustainable clinical strategy and comprehensive go-to-market design. | 10 | |||||||||||||||||
| Vishal Sikri | Pharma business | 10 | |||||||||||||||||
| Named Executive Officer |
| Actual Bonus ($) |
| Target Bonus($)(1) |
| Actual Bonus (% of annualized |
| Actual Bonus (% of target) | ||||||||||||||||||
Christopher Smith(2) |
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| 455,438 |
|
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| 379,121 |
|
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| 46% |
|
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| 120% | ||||||||||
Jeffrey Sherman(3) |
|
|
| — |
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| — |
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| —% |
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| —% | ||||||||||
Warren Stone(4) |
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| — |
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| — |
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| —% |
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| —% | ||||||||||
Vishal Sikri(5) |
|
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| 255,000 |
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| 255,000 |
|
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| 50% |
|
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| 100% | ||||||||||
Dr. Shashikant Kulkarni(6) |
|
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| 187,437 |
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| 184,822 |
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| 42% |
|
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| 101% | ||||||||||
| Named Executive Officer | 2023 Target Cash Incentive Opportunity | Revenue (40% Weight) @ 172% Performance | EBITDA (40% Weight) @ 200% Performance | Strategic Critical Success Factors (10% Weight) @ 98% Performance | 2023 Individual Performance Modifier | Individual Performance Modifier (10% Weight) | = | 2023 Actual Cash Incentive Award | |||||||||||||||||||||
Christopher Smith(1) | 1,000,000 | 688,000 | 800,000 | 98,000 | 200 | % | 200,000 | = | 1,850,000 | ||||||||||||||||||||
| Jeffrey Sherman | 367,500 | 252,840 | 294,000 | 36,015 | 120 | % | 44,145 | = | 627,000 | ||||||||||||||||||||
| Melody Harris | 315,000 | 216,720 | 252,000 | 30,870 | 105 | % | 33,110 | = | 532,700 | ||||||||||||||||||||
| Warren Stone | 315,000 | 216,720 | 252,000 | 30,870 | 150 | % | 47,210 | = | 546,800 | ||||||||||||||||||||
| Vishal Sikri | 321,600 | 221,261 | 257,280 | 31,517 | 80 | % | 25,242 | = | 535,300 | ||||||||||||||||||||
(2) Mr. Smith’s bonusThe Culture and Compensation Committee approved an additional discretionary adjustment to the CEO's annual incentive award of $64k. This was pro-ratedawarded to reflect his start datethe CEO's criticality in effective senior leadership recruitment and transitions, internal operational improvements, and significant strategic changes during a time of August 2022.
(3) Mr. Sherman was not eligibletransition for a bonus based on his December 2022 start date.
(4) Mr. Stone was not eligible for a bonus based on his November 2022 start date.
(5) Mr. Sikri’s bonus reflects the terms of his employment contract which provided for a 100% payout for 2022.
(6) Dr. Kulkarni’s bonus was pro-ratedCompany. to reflect his March 2022 start date.
2022
| NeoGenomics, Inc. | 40 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
52
restricted stock units subject to a market condition (the “Performance Stock”). This directly reflects our strategy and, in turn, our compensation philosophy by delivering an appropriate balance of retention and motivation to deliver strong strategic performance, with a view to long-term value creation for our stockholders. TheIn addition to the performance share units which were introduced in 2023 and represent a performance-based incentive, the Culture and Compensation Committee views stock option awards as a performance-based incentive given the inherent requirement for stock price appreciation for awards to yield value. The Culture and Compensation Committee also considers it appropriate to grant restricted stock awards and performance share units to our Named Executive Officers because it provides a degree of retention in our LTI program.to drive performance outcomes and align with market practice. This aligns with one of the goals of our compensation philosophy, which is to attract and retain our highly skilled management team.
The Company may also contract for the use of private aircraft to allow Named Executive Officers to travel for business purposes, particularly for reasons of safety and security and efficient use of travel time, subject to the approval by the Chief Executive Officer.
53
| NeoGenomics, Inc. | 41 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
MEMBERS OF THE CULTURE AND COMPENSATION COMMITTEE
Bruce Crowther, Chair
Michael Kelly
Lynn Tetrault
54
| MEMBERS OF THE CULTURE AND COMPENSATION COMMITTEE | ||
| Tony Zook, Chair | ||
| Bruce Crowther, former Chair | ||
| Neil Gunn | ||
| Michael Kelly | ||
| Lynn Tetrault | ||
| NeoGenomics, Inc. | 42 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
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| Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Award(2) ($) | Option Award(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4) ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
Christopher Smith Director and Chief Executive Officer | 2023 | 1,000,000 | — | 5,986,768 | 2,816,870 | 1,850,000 | 12,308 | 11,665,946 | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 346,154 | — | 7,600,000 | 4,250,000 | 455,438 | 2,146,930 | 14,798,522 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Jeffrey Sherman Chief Financial Officer | 2023 | 525,000 | — | 1,619,944 | 762,214 | 627,000 | 13,200 | 3,547,358 | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 16,154 | 250,000 | 1,500,000 | 1,500,000 | — | — | 3,266,154 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Melody Harris President, Enterprise Operations | 2023 | 525,000 | — | 1,880,389 | 1,413,551 | 532,700 | 342,585 | 4,694,225 | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Warren Stone President, Clinical Services | 2023 | 525,000 | — | 1,030,398 | 563,383 | 546,800 | 343,669 | 3,009,250 | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 40,385 | 350,000 | 1,000,000 | 1,000,000 | — | — | 2,390,385 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Vishal Sikri President, Advanced Diagnostics | 2023 | 528,635 | — | 880,390 | 414,251 | 535,300 | 13,200 | 2,371,776 | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 294,231 | 500,000 | 1,250,000 | 1,250,000 | 255,000 | 12,750 | 3,561,981 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Named Executive Officer | Relocation Allowance(a) ($) | Severance ($) | Retirement Plan Company Contribution(b) ($) | Total All Other Compensation ($) | ||||||||||||||||||||||
| Christopher Smith | — | — | 12,308 | 12,308 | ||||||||||||||||||||||
| Jeffrey Sherman | — | — | 13,200 | 13,200 | ||||||||||||||||||||||
| Melody Harris | 330,469 | — | 12,116 | 342,585 | ||||||||||||||||||||||
| Warren Stone | 330,469 | — | 13,200 | 343,669 | ||||||||||||||||||||||
| Vishal Sikri | — | — | 13,200 | 13,200 | ||||||||||||||||||||||
| NeoGenomics, Inc. | 43 |
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| Named Executive Officer | Relocation $ | Severance(b) $ | Retirement Plan Company $ | Total All Other $ | ||||||||||||
Christopher Smith | 2,146,930 | — | — | 2,146,930 | ||||||||||||
Lynn Tetrault | — | — | — | — | ||||||||||||
Mark Mallon | — | 1,550,000 | 27,000 | 1,577,000 | ||||||||||||
Jeffrey Sherman | — | — | — | — | ||||||||||||
William Bonello | — | 682,500 | — | 682,500 | ||||||||||||
Warren Stone | — | — | — | — | ||||||||||||
Vishal Sikri | — | — | 12,750 | 12,750 | ||||||||||||
Dr. Shashikant Kulkarni | — | — | 27,000 | 27,000 | ||||||||||||
|
|
|
|
|
| Name | Fees Earned or Paid ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Total ($) | ||||||||||||
Lynn Tetrault | 91,380 | 126,000 | 54,000 | 271,380 | ||||||||||||
56
| Executive Compensation |
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57
Grants of Plan-Based Awards
Named Executive Officer | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan (1) ($) | Estimated Future Payouts Under Equity Incentive Plan (2) (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards (3) ($) | |||||||||||||||||||||||||||||||||||||
| Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||
Christopher Smith (4) Director and Chief Executive Officer | 8/15/22 | — | 379,121 | 758,242 | — | — | — | 265,452 | — | — | 3,350,000 | |||||||||||||||||||||||||||||||||
| 8/15/22 | — | — | — | — | �� | — | — | 336,767 | — | — | 4,250,000 | |||||||||||||||||||||||||||||||||
| 8/15/22 | — | — | — | — | — | — | — | 694,444 | 12.62 | 4,250,000 | ||||||||||||||||||||||||||||||||||
Lynn Tetrault (5) Former Interim Chief Executive Officer and Current Chair of the Board of Directors | 6/10/22 | — | — | — | — | — | — | 15,556 | — | — | 126,000 | |||||||||||||||||||||||||||||||||
| 6/10/22 | — | — | — | — | — | — | — | 13,882 | 8.10 | 54,000 | ||||||||||||||||||||||||||||||||||
Mark Mallon (6) Former Director and Former Chief Executive Officer | 3/01/22 | — | — | — | — | — | — | 142,457 | — | — | 3,050,000 | |||||||||||||||||||||||||||||||||
| 3/01/22 | — | — | — | — | — | — | — | 347,777 | 21.41 | 3,050,000 | ||||||||||||||||||||||||||||||||||
| 3/28/22 | — | — | — | — | — | — | 142,302 | — | — | 3,661,641 | ||||||||||||||||||||||||||||||||||
| 3/28/22 | — | — | — | — | — | — |
|
|
| 237,960 | (6 | ) | 2,285,869 | |||||||||||||||||||||||||||||||
Jeffrey Sherman (7) Chief Financial Officer | 12/05/22 | — | — | — | — | — | — | 44,603 | — | — | 500,000 | |||||||||||||||||||||||||||||||||
| 12/05/22 | — | — | — | — | 89,206 | — | — | — | — | 1,000,000 | ||||||||||||||||||||||||||||||||||
| 12/05/22 | — | — | — | — | — | — | — | 249,169 | 11.62 | 1,500,000 | ||||||||||||||||||||||||||||||||||
William Bonello (8) Former Chief Financial Officer | 3/01/22 | — | — | — | — | — | — | 40,869 | — | — | 875,000 | |||||||||||||||||||||||||||||||||
| 3/01/22 | — | — | — | — | — | — | — | 99,772 | 21.41 | 875,000 | ||||||||||||||||||||||||||||||||||
| 4/01/22 | — | — | — | — | — | — | 82,305 | — | — | 1,000,000 | ||||||||||||||||||||||||||||||||||
| 12/31/22 | — | — | — | — | — | — | 55,870 | — | — | 330,802 | ||||||||||||||||||||||||||||||||||
| 12/31/22 | — | — | — | — | — | — | — | 50,679 | (8 | ) | 76,964 | |||||||||||||||||||||||||||||||||
Warren Stone (9) President, Clinical Services | 12/01/22 | — | — | — | — | — | — | 89,206 | — | — | 1,000,000 | |||||||||||||||||||||||||||||||||
| 12/01/22 | — | — | — | — | — | — | — | 166,113 | 11.21 | 1,000,000 | ||||||||||||||||||||||||||||||||||
Vishal Sikri (10) President, Advanced Diagnostics | 6/01/22 | — | 255,000 | 255,000 | — | — | — | 148,455 | — | — | 1,250,000 | |||||||||||||||||||||||||||||||||
| 6/01/22 | — | — | — | — | — | — | — | 319,112 | 8.42 | 1,250,000 | ||||||||||||||||||||||||||||||||||
Dr. Shashikant Kulkarni (11) Chief Scientific Officer and Executive Vice President of Research & Development | 4/01/22 | — | 184,822 | 369,643 | — | — | — | 61,728 | — | — | 750,000 | |||||||||||||||||||||||||||||||||
| 4/01/22 | — | — | — | — | — | — | — | 132,744 | 12.15 | 750,000 | ||||||||||||||||||||||||||||||||||
| 8/01/22 | — | — | — | — | — | — | 24,704 | — | — | 250,000 | ||||||||||||||||||||||||||||||||||
| 8/01/22 | — | — | — | — | — | — | — | 51,653 | 10.12 | 250,000 | ||||||||||||||||||||||||||||||||||
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58
| Named Executive Officer | Equity Incentive Plan Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan(1) ($) | Estimated Future Payouts Under Equity Incentive Plan(2) (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price per Share of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards(3) ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher Smith Director and Chief Executive Officer | 5/11/23 | — | 1,000,000 | 2,000,000 | — | — | — | 144,190 | — | — | 2,833,334 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | — | — | 269,841 | 19.65 | 2,816,870 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | 72,095 | 144,190 | 216,285 | — | — | — | 3,153,435 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey Sherman Chief Financial Officer | 5/11/23 | — | 367,500 | 735,000 | — | — | — | 39,016 | — | — | 766,664 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | — | — | 73,016 | 19.65 | 762,214 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | 19,508 | 39,016 | 58,524 | — | — | — | 853,280 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Melody Harris President, Enterprise Operations | 1/01/23 | — | 315,000 | 630,000 | — | — | — | 108,225 | — | — | 999,999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/01/23 | — | — | — | — | — | — | — | 201,613 | 9.24 | 999,300 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | — | 21,204 | — | — | 416,659 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | — | — | — | 39,683 | 19.65 | 414,251 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | 10,602 | 21,204 | 31,806 | — | — | — | 463,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warren Stone President, Clinical Services | 5/11/23 | — | 315,000 | 630,000 | — | — | — | 28,838 | — | — | 566,667 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | — | — | 53,969 | 19.65 | 563,383 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | 10,602 | 21,204 | 31,806 | — | — | — | 463,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vishal Sikri President, Advanced Diagnostics | 5/11/23 | — | 321,600 | 642,600 | — | — | — | 21,204 | — | — | 416,659 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | — | — | 39,683 | 19.65 | 414,251 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | 10,602 | 21,204 | 31,806 | — | — | — | 463,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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59
restricted shares and $4.25 million of stock options. $4.25 million of the restricted shares and the stock options each vest ratably over a period of four years from the date of grant, subject to Mr. Smith’s continued employment through each applicable vesting date. The remaining $3.35 million of restricted shares vest on the fourth anniversary of the grant date subject to Mr. Smith’s continued employment through the vesting date.
Ms. Tetrault entered into an agreement with the Company in connection with her role as Executive Chair and Principal Executive Officer effective April 19, 2022 and, pursuant to such agreement, as of March 28, 2022, Ms. Tetrault was entitled to an initial base salary of $800,000 and additional compensation to be determined by the Culture and Compensation Committee of the Board. The amount of such additional compensation, if awarded, was to be between $500,000 and $2.0 million. In February 2023, the Culture and Compensation Committee, excluding Ms. Tetrault, agreed to award $1.5 million to Ms. Tetrault for her service as Executive Chair and Principal Executive Officer. Ms. Tetrault was not eligible to participate in our employee benefit plans. During 2022, when not acting as Executive Chair and Principal Executive Officer, Ms. Tetrault was also entitled to compensation for her service on the Board. In connection with her service on the Board, Ms. Tetrault earned compensation of $91,380 and an annual equity grant of $180,000 which consisted of $126,000 of restricted shares and $54,000 of stock options. These awards vest on June 10, 2023.
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of grant, subject to Mr. Sikri’s continued employment through each applicable vesting dates. In addition, the employment agreement provided that he receive an additional equity grant in the amount of $1.0 million, split equally between restricted shares and stock options, vesting ratably over a period of four years from the date of grant, subject to Mr. Sikri’s continued employment through each applicable vesting date.
Dr. Kulkarni’s employment agreement was entered into as of January 31, 2022 and, pursuant to such agreement, he was entitled to an initial base salary of $450,000 and a target annual incentive bonus equal to 50% of his base salary. Dr. Kulkarni was also entitled to receive a cash
| NeoGenomics, Inc. | 45 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
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| Stock Option Awards | Restricted Stock Awards | ||||||||||||||||
| Name Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Acquired on Vesting (#) |
| Value Vesting ($) | |||||||||||||
Christopher Smith | — | — | — |
| — | |||||||||||||
Lynn Tetrault | 3,334 | 5,401 | 3,919 |
| 31,204 | |||||||||||||
Mark Mallon | — | — | 142,302 | (1) | 2,503,092 | |||||||||||||
Jeffrey Sherman | — | — | — |
| — | |||||||||||||
William Bonello | 56,097 | 102,247 | 67,229 | (1) | 671,711 | |||||||||||||
Warren Stone | — | — | — |
| — | |||||||||||||
Vishal Sikri | — | — | — |
| — | |||||||||||||
Dr. Shashikant Kulkarni | — | — | — |
| — | |||||||||||||
| Stock Option Awards | Restricted Stock Awards | ||||||||||||||||||||||||||||
| Name Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||||||||||||
| Christopher Smith | — | — | 84,191 | (1) | 1,173,623 | ||||||||||||||||||||||||
| Jeffrey Sherman | — | — | 33,451 | (1) | 608,474 | ||||||||||||||||||||||||
| Melody Harris | — | — | — | — | |||||||||||||||||||||||||
| Warren Stone | — | — | 22,301 | (1) | 405,209 | ||||||||||||||||||||||||
| Vishal Sikri | — | — | 59,381 | (1) | (1) | 1,020,166 | |||||||||||||||||||||||
| NeoGenomics, Inc. |
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| Executive Compensation | ||||||||
2023
| Stock Option Awards | Restricted Stock Awards | |||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | Grant Date | Number of (#) | Number of (#) |
Equity (#) | Option ($) | Option Expiration Date | Number (#) | Market ($) | ||||||||||||||||||||||||||||||||||||
Christopher Smith Director and Chief Executive Officer
| 8/15/22 | — | 694,444 | (2 | ) | — | 12.62 | 8/15/29 | 336,767 | 3,111,727 | (3 | ) | ||||||||||||||||||||||||||||||||
| 8/15/22 | — | — | — | — | — | 265,452 | 2,452,776 | (6 | ) | |||||||||||||||||||||||||||||||||||
Lynn Tetrault Former Interim Chief Executive Officer and Current Chair of the Board of Directors | 6/01/18 | 1,507 | — | — | 11.60 | 6/01/23 | — | — | ||||||||||||||||||||||||||||||||||||
| 6/06/19 | 2,136 | — | — | 22.52 | 6/06/26 | — | — | |||||||||||||||||||||||||||||||||||||
| 5/28/20 | 3,448 | — | — | 28.54 | 5/28/27 | — | — | |||||||||||||||||||||||||||||||||||||
| 6/02/21 | 3,714 | — | — | 40.90 | 6/02/28 | — | — | |||||||||||||||||||||||||||||||||||||
| 10/11/21 | 972 | — | — | 41.76 | 10/11/28 | — | — | |||||||||||||||||||||||||||||||||||||
| 6/10/22 | — | 13,882 | (5 | ) | — | 8.10 | 6/10/29 | 15,556 | 143,737 | (4 | ) | |||||||||||||||||||||||||||||||||
Mark Mallon Director and Chief Executive Officer
| 3/28/22 | 86,944 | — | (7 | ) | — | 21.41 | 3/28/25 | — | — | ||||||||||||||||||||||||||||||||||
| 3/28/22 | 151,016 | — | (7 | ) | — | 49.34 | 3/28/25 | — | — | |||||||||||||||||||||||||||||||||||
Jeffrey Sherman Chief Financial Officer | 12/05/22 | — | 249,169 | (2 | ) | — | 11.62 | 12/05/29 | 44,603 | 412,132 | (3 | ) | ||||||||||||||||||||||||||||||||
| 12/05/22 | — | — | — | — | — | 89,206 | 824,263 | (8 | ) | |||||||||||||||||||||||||||||||||||
William Bonello Former Chief Financial Officer | 12/31/22 | 10,292 | — | (9 | ) | — | 19.60 | 3/31/23 | — | — | ||||||||||||||||||||||||||||||||||
| 12/31/22 | 6,155 | — | (9 | ) | — | 53.17 | 3/31/23 | — | — | |||||||||||||||||||||||||||||||||||
| 12/31/22 | 9,379 | — | (9 | ) | — | 28.33 | 3/31/23 | — | — | |||||||||||||||||||||||||||||||||||
| 12/31/22 | 24,943 | — | (9 | ) | — | 21.41 | 3/31/23 | — | — | |||||||||||||||||||||||||||||||||||
Warren Stone President, Clinical Services
| 12/01/22 | — | 166,113 | (2 | ) | — | 11.21 | 12/01/29 | 89,206 | 824,263 | (3 | ) | ||||||||||||||||||||||||||||||||
Vishal Sikri President, Advanced Diagnostics
| 6/01/22 | — | 125,313 | (2 | ) | — | 8.42 | 6/01/29 | 59,382 | 548,690 | (3 | ) | ||||||||||||||||||||||||||||||||
| 6/01/22 | — | 193,799 | (10 | ) | — | 8.42 | 6/01/29 | 89,073 | 823,035 | (11 | ) | |||||||||||||||||||||||||||||||||
Dr. Shashikant Kulkarni Chief Scientific Officer and Executive Vice President of Research & Development
| 4/01/22 | — | 132,744 | (2 | ) | — | 12.15 | 4/01/29 | 61,728 | 570,367 | (3 | ) | ||||||||||||||||||||||||||||||||
| 8/01/22 | — | 51,653 | (2 | ) | — | 10.12 | 8/01/29 | 24,704 | 228,265 | (3 | ) | |||||||||||||||||||||||||||||||||
| Stock Option Awards | Restricted Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
| Name and Principal Position | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested(1) ($) | ||||||||||||||||||||||||||||||||||||||||||
Christopher Smith Director and Chief Executive Officer | 8/15/22 | 173,611 | 520,833 | (2) | — | 12.62 | 8/15/29 | 252,576 | 4,086,680 | (3) | ||||||||||||||||||||||||||||||||||||||||
| 8/15/22 | — | — | — | — | — | 265,452 | 4,295,013 | (6) | ||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | 269,841 | (7) | — | 19.65 | 5/11/30 | 144,190 | 2,332,994 | (8) | |||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | 144,190 | 2,332,994 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Jeffrey Sherman Chief Financial Officer | 12/05/22 | 62,292 | 186,877 | (2) | — | 11.62 | 12/05/29 | 33,453 | 541,270 | (3) | ||||||||||||||||||||||||||||||||||||||||
| 12/05/22 | — | — | — | — | — | 66,905 | 1,082,523 | (9) | ||||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | 73,016 | (7) | — | 19.65 | 5/11/30 | 39,016 | 631,279 | (8) | |||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | 39,016 | 631,279 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Melody Harris President, Enterprise Operations | 1/01/23 | — | 201,613 | (2) | — | 9.24 | 1/01/30 | 108,225 | 1,751,081 | (3) | ||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | 39,683 | (7) | — | 19.65 | 5/11/30 | 21,204 | 343,081 | (8) | |||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | 21,204 | 343,081 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Warren Stone President, Clinical Services | 12/01/22 | 41,528 | 124,585 | (2) | — | 11.21 | 12/01/29 | 66,905 | 1,082,523 | (3) | ||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | 53,969 | (7) | — | 19.65 | 5/11/30 | 28,838 | 466,599 | (8) | |||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | 21,204 | 343,081 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Vishal Sikri President, Advanced Diagnostics | 6/01/22 | 31,328 | 93,985 | (2) | — | 8.42 | 6/01/29 | 44,537 | 720,609 | (3) | ||||||||||||||||||||||||||||||||||||||||
| 6/01/22 | 96,899 | 96,900 | (4) | — | 8.42 | 6/01/29 | 44,537 | 720,609 | (5) | |||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | 39,683 | (7) | — | 19.65 | 5/11/30 | 21,204 | 343,081 | (8) | |||||||||||||||||||||||||||||||||||||||||
| 5/11/23 | — | — | — | — | — | 21,204 | 343,081 | (10) | ||||||||||||||||||||||||||||||||||||||||||
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Employment Agreements and Potential Payments Upon Termination or Change in Control
Mr. Mallon’s Separation Payments
In connection with Mr. Mallon termination as Chief Executive Officer, Mr. Mallon and the Company entered into a Separation Agreement dated as of March 28, 2022 (the “Mallon Separation Agreement”). Pursuant to the Mallon Separation Agreement, the Company paid or will pay Mr. Mallon (i) $775,000, which is equal to twelve (12) months of base salary; (ii) $775,000, which is equal to his target annual bonus; (iii) payment of premiums for healthcare coverage through the federal law commonly known as “COBRA” until the earliest of (a) twelve (12) months post-termination, (b) the date Mr. Mallon and his eligible dependents cease to be eligible for such coverage under applicable law or plan terms or (c) the date at which Mr. Mallon obtains health coverage from another employer; and (iv) reimbursement for certain relocation and housing costs.
The base salary payments were made in accordance with the Company’s regular payroll practices, with the first payment (i) made on the Company’s next regular payday following the expiration of sixty (60) calendar days from March 28, 2022 (the “Mallon Separation Date”), and (ii) to be retroactive to the day following the Mallon Separation Date. The target annual bonus was paid in a lump sum payment on the Company’s next regular payday following the expiration of sixty (60) calendar days from the Mallon Separation Date.
In addition, in accordance with the Mallon Separation Agreement, (i) the unvested portion of the buyout equity awards fully vested as of the separation date, and (ii) the portion of any other outstanding time-based equity awards held by Mr. Mallon that would have vested by their terms in the twelve (12)-month period following the separation date had Mr. Mallon remained continuously employed vested as of the separation date, with the remaining portion of each such award terminating on the separation date. This resulted in accelerated vesting of 142,302 previously granted time-vesting restricted stock awards and 237,960 previously granted time-based vesting stock option awards. The total dollar value of these awards was approximately $3.7 million and $2.3 million, respectively. These amounts are included in the Summary Compensation Table above. For a period of thirty-six (36) months following the separation date, Mr. Mallon may exercise any options to purchase common stock of the Company that were vested as of the separation date, after which period any then-outstanding and unexercised stock options will automatically terminate.
Mr. Bonello’s Separation Payments
In connection with Mr. Bonello termination as Chief Financial Officer, Mr. Bonello and the Company entered into a Separation Agreement dated as of December 20, 2022 (the “Bonello Separation Agreement”). Pursuant to the Bonello Separation Agreement, the Company will pay Mr. Bonello (i) $455,000, which is equal to twelve (12) months of base salary; (ii) $227,500, which is equal to his target annual bonus; and (iii) payment of premiums for healthcare coverage through the federal law commonly known as “COBRA” until the earliest of (a) the end of the severance period, (b) the date Mr. Bonello and his eligible dependents cease to be eligible for such coverage under applicable law or plan terms, and (c) the date that you obtain health coverage from another employer.
The base salary payments will be made in accordance with the Company’s regular payroll practices, with the first payment (i) made on the Company’s next regular payday following the expiration of sixty
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(60) calendar days from December 31, 2022 (the “Bonello Separation Date”), and (ii) to be retroactive to the day following the Bonello Separation Date. The target annual bonus will be payable in a lump sum payment on the Company’s next regular payday following the expiration of sixty (60) calendar days from the Bonello Separation Date.
In addition, the remaining portion of Mr. Bonello’s 2021 retention bonus, in the amount of $100,000, immediately vested as of December 31, 2022 and was payable in accordance with the terms and conditions set forth in the retention bonus letter. Also pursuant to the Bonello Separation Agreement, (i) the unvested portion of portion of any time-based equity awards that would have vested by their terms in the twelve (12)-month period following the separation date had Mr. Bonello remained continuously employed became vested as of the separation date, with the remaining portion of each such award terminating on the separation date, and (ii) with respect to the shares of restricted stock granted as the Office of the CEO award, a portion of restricted stock granted to Mr. Bonello became vested as of the separation date, with the remaining portion of the shares of restricted stock granted as the Office of the CEO terminating on the separation date. These vesting terms resulted in accelerated vesting of 55,870 previously granted time-vesting restricted stock awards and 50,769 previously granted time-based vesting stock option awards. The total dollar value of these awards was approximately $0.3 million and $77 thousand, respectively. These amounts are included in the Summary Compensation Table above. For a period of three (3) months following the separation date, Mr. Bonello may exercise any options to purchase common stock of the Company that were vested as of the separation date, after which period any then-outstanding and unexercised stock options will automatically terminate.
Potential Payments Upon Termination
•an amount equal to one times the executive’s annual base salary,
•an amount equal to the executive’s target bonus,
•reimbursement of COBRA premiums for up to 12 months following the executive’s termination, and
•accelerated vesting of time-based equity awards outstanding at the time of the executive’s termination that would have continued to vest for the following 12 months.
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| Benefits and Payments Upon Termination | |||||||||||
| Named Executive Officer | Base Salary ($) | Target Bonus ($) | Benefits(1) ($) | |||||||||
Christopher Smith | 1,000,000 | 1,000,000 | 35,000 | |||||||||
Jeffrey Sherman | 525,000 | 367,500 | 35,000 | |||||||||
Warren Stone | 525,000 | 262,500 | 3,000 | |||||||||
Vishal Sikri | 510,000 | 255,000 | 11,000 | |||||||||
Dr. Shashikant Kulkarni | 450,000 | 225,000 | 6,000 | |||||||||
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| Benefits and Payments Upon Termination | ||||||||||||||||||||
| Named Executive Officer | Base Salary ($) | Target Bonus ($) | Benefits(1) ($) | |||||||||||||||||
| Christopher Smith | 1,000,000 | 1,000,000 | 26,438 | |||||||||||||||||
| Jeffrey Sherman | 525,000 | 367,500 | 26,641 | |||||||||||||||||
| Melody Harris | 525,000 | 315,000 | 8,211 | |||||||||||||||||
| Warren Stone | 525,000 | 315,000 | — | |||||||||||||||||
| Vishal Sikri | 536,000 | 321,600 | 31,264 | |||||||||||||||||
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The following table presents accelerated vesting for certain equity awards outstanding at the time of the executive’s termination for each Named Executive Officer, if employment were terminated by either the Company without cause or the executive for good reason at December 31, 2022:
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| Vesting Upon Termination | |||||||||||||||
| Named Executive Officer | Unvested (#) | Stock Estimated ($) | Unvested (#) | Restricted Estimated ($) | ||||||||||||
Christopher Smith | 173,611 | — | 84,191 | 777,925 | ||||||||||||
Jeffrey Sherman | 62,292 | — | 33,451 | 309,087 | ||||||||||||
Warren Stone | 41,528 | — | 22,301 | 206,061 | ||||||||||||
Vishal Sikri | 128,227 | 105,146 | 59,381 | 548,680 | ||||||||||||
Dr. Shashikant Kulkarni | 46,099 | — | 21,608 | 199,658 | ||||||||||||
2023:
| Vesting Upon Termination | ||||||||||||||||||||||||||
| Named Executive Officer | Unvested Stock Option (#) | Stock Option Awards Estimated Benefit(1) ($) | Unvested Restricted Stock (#) | Restricted Stock Estimated Benefit(1) ($) | ||||||||||||||||||||||
| Christopher Smith | 263,558 | 618,055 | 132,255 | 2,139,886 | ||||||||||||||||||||||
| Jeffrey Sherman | 86,630 | 284,052 | 46,457 | 751,674 | ||||||||||||||||||||||
| Melody Harris | 63,630 | 349,797 | 34,124 | 552,126 | ||||||||||||||||||||||
| Warren Stone | 59,517 | 206,394 | 31,913 | 516,352 | ||||||||||||||||||||||
| Vishal Sikri | 141,455 | 995,049 | 66,450 | 1,075,161 | ||||||||||||||||||||||
2023.
| NeoGenomics, Inc. | 48 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
•in the case of the Chief Executive Officer, an amount equal to the Chief Executive’s base salary times three and in the case of an executive other than the Chief Executive Officer, an amount equal to the executive’s base salary times two;
•an amount equal to the executive’s target bonus;
•reimbursement of COBRA premiums for up to 12 months following the executive’s termination;
•accelerated vesting of all unvested equity awards outstanding at the time of the executive’s termination;
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| Benefits and Payments Due to Change in Control | |||||||||||
| Named Executive Officer | Base Salary ($) | Target Bonus ($) | Benefits ($) (1) | |||||||||
Christopher Smith | 3,000,000 | 1,000,000 | 35,000 | |||||||||
Jeffrey Sherman | 1,050,000 | 367,500 | 35,000 | |||||||||
Warren Stone | 1,050,000 | 262,500 | 3,000 | |||||||||
Vishal Sikri | 510,000 | 255,000 | 11,000 | |||||||||
Dr. Shashikant Kulkarni | 450,000 | 225,000 | 6,000 | |||||||||
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| Benefits and Payments Due to Change in Control | ||||||||||||||||||||
| Named Executive Officer | Base Salary ($) | Target Bonus ($) | Benefits ($)(1) | |||||||||||||||||
| Christopher Smith | 3,000,000 | 1,000,000 | 26,438 | |||||||||||||||||
| Jeffrey Sherman | 1,050,000 | 367,500 | 26,641 | |||||||||||||||||
| Melody Harris | 1,050,000 | 315,000 | 8,211 | |||||||||||||||||
| Warren Stone | 1,050,000 | 315,000 | — | |||||||||||||||||
| Vishal Sikri | 1,072,000 | 321,600 | 31,264 | |||||||||||||||||
(1) Represents the estimated incremental cost to the Company for continuation of health care benefits for 12 months. Amounts vary based on elected benefits for each executive.
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| Vesting Due to Change in Control | |||||||||||||||
| Named Executive Officer | Unvested (#) | Stock Estimated ($) | Unvested (#) | Restricted Estimated ($) | ||||||||||||
Christopher Smith | 694,444 | — | 602,219 | 5,564,504 | ||||||||||||
Jeffrey Sherman | 249,169 | — | 133,809 | 1,236,395 | ||||||||||||
Warren Stone | 166,113 | — | 89,206 | 824,263 | ||||||||||||
Vishal Sikri | 319,112 | 261,672 | 148,455 | 1,371,724 | ||||||||||||
Dr. Shashikant Kulkarni | 184,397 | — | 86,432 | 798,632 | ||||||||||||
2023:
| Vesting Due to Change in Control | ||||||||||||||||||||||||||
| Named Executive Officer | Unvested Stock Option (#) | Stock Option Awards Estimated Benefit(1) ($) | Unvested Restricted Stock (#) | Restricted Stock Estimated Benefit(1) ($) | ||||||||||||||||||||||
| Christopher Smith | 790,674 | 1,854,165 | 662,218 | 10,714,687 | ||||||||||||||||||||||
| Jeffrey Sherman | 259,893 | 852,159 | 139,374 | 2,255,071 | ||||||||||||||||||||||
| Melody Harris | 241,296 | 1,399,194 | 129,429 | 2,094,161 | ||||||||||||||||||||||
| Warren Stone | 178,554 | 619,187 | 95,743 | 1,549,122 | ||||||||||||||||||||||
| Vishal Sikri | 230,568 | 1,481,268 | 110,278 | 1,784,298 | ||||||||||||||||||||||
2023.
| NeoGenomics, Inc. | 49 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
2023.
Chief Executive Officer total compensation in 2022(1) | $ | 14,798,522 | ||
Median employee approximate total compensation in 2022 | $ | 82,000 | ||
Ratio of Chief Executive Officer compensation to median employee total compensation | 181:1 | |||
| Chief Executive | $ | 11,665,946 | ||||||
| Median employee approximate total compensation in 2023 | $ | 89,324 | ||||||
| Ratio of | 131:1 | |||||||
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The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
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Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1) | Summary Compensation Table Total for PEO (2) | Compensation Actually Paid to PEO (2) | Summary Compensation Table Total for PEO (3) | Compensation Actually Paid to PEO (3) | Summary Compensation Table Total for PEO (4) | Compensation Actually Paid to PEO (4) | ||||||||||||||||||||||||
| 2022 | $14,798,522 | $11,330,664 | $2,071,184 | $1,951,681 | $7,695,856 | $(3,624,626) | Not a PEO | Not a PEO | ||||||||||||||||||||||||
| 2021 | Not a PEO | Not a PEO | Not a PEO | Not a PEO | $11,479,855 | $9,094,405 | $7,227,002 | $(3,903,431) | ||||||||||||||||||||||||
| 2020 | Not a PEO | Not a PEO | Not a PEO | Not a PEO | Not a PEO | Not a PEO | $4,122,039 | $14,718,158 | ||||||||||||||||||||||||
Year | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (5) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (5) | Value of Initial Fixed $100 Investment Based On: | Net Income ($ millions) | Company-selected measure (Adjusted EBITDA) ($ millions) (7) | |||||||||||||||||||
Total Stockholder Return | Peer Group Total Stockholder Return (6) | |||||||||||||||||||||||
| 2022 | $2,688,029 | $1,906,745 | $32 | $114 | $(144) | $(48) | ||||||||||||||||||
| 2021 | $4,041,472 | $2,553,526 | $117 | $126 | $(8) | $(4) | ||||||||||||||||||
| 2020 | $972,616 | $2,315,879 | $184 | $126 | $4 | $35 | ||||||||||||||||||
| NeoGenomics, Inc. | 2024 Proxy Statement | |||||||
| Executive Compensation | ||||||||
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(1) | Summary Compensation Table Total for PEO ($)(2) | Compensation Actually Paid to PEO ($)(2) | Summary Compensation Table Total for PEO ($)(3) | Compensation Actually Paid to PEO ($)(3) | Summary Compensation Table Total for PEO ($)(4) | Compensation Actually Paid to PEO ($)(4) | ||||||||||||||||||||||||||||||||||||||||||
| 2023 | 11,665,946 | 16,407,815 | Not a PEO | Not a PEO | Not a PEO | Not a PEO | Not a PEO | Not a PEO | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 14,798,522 | 11,330,664 | 2,071,184 | 1,951,681 | 7,695,856 | (3,624,626) | Not a PEO | Not a PEO | ||||||||||||||||||||||||||||||||||||||||||
| 2021 | Not a PEO | Not a PEO | Not a PEO | Not a PEO | 11,479,855 | 9,094,405 | 7,227,002 | (3,903,431) | ||||||||||||||||||||||||||||||||||||||||||
| 2020 | Not a PEO | Not a PEO | Not a PEO | Not a PEO | Not a PEO | Not a PEO | 4,122,039 | 14,718,158 | ||||||||||||||||||||||||||||||||||||||||||
| Year | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($)(5) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(5) | Value of Initial Fixed $100 Investment Based On: | Net Income ($ millions) | Company-selected measure (Adjusted EBITDA) ($ millions)(7) | |||||||||||||||||||||||||||||||||
| Total Stockholder Return ($) | Peer Group Total Stockholder Return ($)(6) | |||||||||||||||||||||||||||||||||||||
| 2023 | 2,999,799 | 4,429,543 | 55 | 119 | (88) | 3 | ||||||||||||||||||||||||||||||||
| 2022 | 2,688,029 | 1,906,745 | 32 | 114 | (144) | (48) | ||||||||||||||||||||||||||||||||
| 2021 | 4,041,472 | 2,553,526 | 117 | 126 | (8) | (4) | ||||||||||||||||||||||||||||||||
| 2020 | 972,616 | 2,315,879 | 184 | 126 | 4 | 35 | ||||||||||||||||||||||||||||||||
| NeoGenomics, Inc. | 51 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Year | Summary Compensation Table Total ($) | Deductions from Summary Compensation Table Total Pay ($) | Additions to Summary Compensation Table Total Pay ($) | Compensation Actually Paid ($) | ||||||||||||||||||||||
| Chief Executive Officer serving as PEO - Christopher Smith | ||||||||||||||||||||||||||
| 2023 | 11,665,946 | 8,803,638 | 13,545,507 | 16,407,815 | ||||||||||||||||||||||
| 2022 | 14,798,522 | 11,850,000 | 8,382,142 | 11,330,664 | ||||||||||||||||||||||
| Interim Chief Executive Officer serving as PEO - Lynn Tetrault | ||||||||||||||||||||||||||
| 2022 | 2,071,184 | 180,000 | 60,497 | 1,951,681 | ||||||||||||||||||||||
| Former Chief Executive Officer serving as PEO - Mark Mallon | ||||||||||||||||||||||||||
| 2022 | 7,695,856 | 5,947,510 | (5,372,972) | (3,624,626) | ||||||||||||||||||||||
| 2021 | 11,479,855 | 10,500,000 | 8,114,550 | 9,094,405 | ||||||||||||||||||||||
| Former Chief Executive Officer serving as PEO - Douglas VanOort | ||||||||||||||||||||||||||
| 2021 | 7,227,002 | 6,577,675 | (4,552,758) | (3,903,431) | ||||||||||||||||||||||
| 2020 | 4,122,039 | 3,000,000 | 13,596,119 | 14,718,158 | ||||||||||||||||||||||
| Average for other Named Executive Officers indicated above | ||||||||||||||||||||||||||
| 2023 | 2,999,799 | 1,772,770 | 3,202,514 | 4,429,543 | ||||||||||||||||||||||
| 2022 | 2,688,029 | 1,981,553 | 1,200,269 | 1,906,745 | ||||||||||||||||||||||
| 2021 | 4,041,472 | 3,350,000 | 1,862,054 | 2,553,526 | ||||||||||||||||||||||
| 2020 | 972,616 | 469,900 | 1,813,164 | 2,315,879 | ||||||||||||||||||||||
| NeoGenomics, Inc. | 52 | 2024 Proxy Statement | ||||||
Year | Summary Compensation Table total | Deductions from Summary Compensation Table Total Pay | Additions to Summary Compensation Table Total Pay | Compensation Actually Paid | ||||||||||||
Chief Executive Officer serving as PEO - Christopher Smith | ||||||||||||||||
| 2022 | $ | 14,798,522 | $ | 11,850,000 | $ | 8,382,142 | $ | 11,330,664 | ||||||||
Interim Chief Executive Officer serving as PEO - Lynn Tetrault | ||||||||||||||||
| 2022 | $ | 2,071,184 | $ | 180,000 | $ | 60,497 | $ | 1,951,681 | ||||||||
Former Chief Executive Officer serving as PEO - Mark Mallon | ||||||||||||||||
| 2022 | $ | 7,695,856 | $ | 5,947,510 | $ | (5,372,972 | ) | $ | (3,624,626 | ) | ||||||
| 2021 | $ | 11,479,855 | $ | 10,500,000 | $ | 8,114,550 | $ | 9,094,405 | ||||||||
Chief Executive Officer serving as PEO - Douglas VanOort | ||||||||||||||||
| 2021 | $ | 7,227,002 | $ | 6,577,675 | $ | (4,552,758 | ) | $ | (3,903,431 | ) | ||||||
| 2020 | $ | 4,122,039 | $ | 3,000,000 | $ | 13,596,119 | $ | 14,718,158 | ||||||||
Average for other Named Executive Officers indicated above | ||||||||||||||||
| 2022 | $ | 2,688,029 | $ | 1,981,553 | $ | 1,200,269 | $ | 1,906,745 | ||||||||
| 2021 | $ | 4,041,472 | $ | 3,350,000 | $ | 1,862,054 | $ | 2,553,526 | ||||||||
| 2020 | $ | 972,616 | $ | 469,900 | $ | 1,813,164 | $ | 2,315,879 | ||||||||
| Executive Compensation | ||||||||
| Year | Addition of fair value at fiscal year (FY) end, of equity awards granted during the FY that remained outstanding ($) | Addition of fair value at vesting date, of equity awards granted during the FY that vested during the FY ($) | Addition of change in fair value at FY end versus prior FY end for awards granted in prior FY that remained outstanding ($) | Addition of change in fair value at vesting date versus prior FY end for awards granted in prior FY that vested during the FY ($) | Deduction of the fair value at the prior FY end for awards granted in prior FY that failed to meet their vesting conditions ($) | Addition in respect of any dividends or other earnings paid during applicable FY prior to vesting date of underlying award ($) | Total Equity Adjustments Reflect in Compensation Actually Paid ($) | |||||||||||||||||||||||||||||||||||||
| Chief Executive Officer serving as PEO - Christopher Smith | ||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 6,614,037 | — | 5,989,957 | 941,513 | — | — | 13,545,507 | |||||||||||||||||||||||||||||||||||||
| 2022 | 8,382,142 | — | — | — | — | — | 8,382,142 | |||||||||||||||||||||||||||||||||||||
| Interim Chief Executive Officer serving as PEO - Lynn Tetrault | ||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 210,599 | — | (150,102) | — | — | — | 60,497 | |||||||||||||||||||||||||||||||||||||
| Former Chief Executive Officer serving as PEO - Mark Mallon | ||||||||||||||||||||||||||||||||||||||||||||
| 2022 | — | — | — | 2,741,578 | (8,114,550) | — | (5,372,972) | |||||||||||||||||||||||||||||||||||||
| 2021 | 8,114,550 | — | — | — | — | — | 8,114,550 | |||||||||||||||||||||||||||||||||||||
| Former Chief Executive Officer serving as PEO - Douglas VanOort | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | (4,381,981) | 11,265,258 | (11,436,035) | — | (4,552,758) | |||||||||||||||||||||||||||||||||||||
| 2020 | 8,485,218 | 9,145,571 | (4,034,670) | — | — | — | 13,596,119 | |||||||||||||||||||||||||||||||||||||
| Average for other Named Executive Officers indicated above | ||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 1,744,759 | 127,903 | 820,474 | 552,690 | (43,312) | — | 3,202,514 | |||||||||||||||||||||||||||||||||||||
| 2022 | 1,458,012 | — | (100,428) | 103,249 | (260,563) | — | 1,200,269 | |||||||||||||||||||||||||||||||||||||
| 2021 | 2,720,213 | (488,131) | (370,028) | — | — | — | 1,862,054 | |||||||||||||||||||||||||||||||||||||
| 2020 | 1,329,346 | 970,205 | (486,387) | — | — | — | 1,813,164 | |||||||||||||||||||||||||||||||||||||
Year | Addition of fair value at fiscal year (FY) end, of equity awards granted during the FY that remained outstanding | Addition of fair value at vesting date, of equity awards granted during the FY that vested during the FY | Addition of change in fair value at FY end versus prior FY end for awards granted in prior FY that remained outstanding | Addition of change in fair value at vesting date versus prior FY end for awards granted in prior FY that vested during the FY | Deduction of the fair value at the prior FY end for awards granted in prior FY that failed to meet their vesting conditions | Addition in respect of any dividends or other earnings paid during applicable FY prior to vesting date of underlying award | Total Equity Adjustments Reflect in Compensation Actually Paid | |||||||||||||||||||||
Chief Executive Officer serving as PEO - Christopher Smith | ||||||||||||||||||||||||||||
| 2022 | $ | 8,382,142 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 8,382,142 | ||||||||||||||
Interim Chief Executive Officer serving as PEO - Lynn Tetrault | ||||||||||||||||||||||||||||
| 2022 | $ | 210,599 | $ | — | $ | (150,102) | $ | — | $ | — | $ | — | $ | 60,497 | ||||||||||||||
Former Chief Executive Officer serving as PEO - Mark Mallon | ||||||||||||||||||||||||||||
| 2022 | $ | — | $ | — | $ | — | $ | 2,741,578 | $ | (8,114,550) | $ | — | $ | (5,372,972) | ||||||||||||||
| 2021 | $ | 8,114,550 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 8,114,550 | ||||||||||||||
Chief Executive Officer serving as PEO - Douglas VanOort | ||||||||||||||||||||||||||||
| 2021 | $ | — | $ | — | $ | (4,381,981) | $ | 11,265,258 | $ | (11,436,035) | $ | — | $ | (4,552,758) | ||||||||||||||
| 2020 | $ | 8,485,218 | $ | 9,145,571 | $ | (4,034,670) | $ | — | $ | — | $ | — | $ | 13,596,119 | ||||||||||||||
Average for other Named Executive Officers indicated above | ||||||||||||||||||||||||||||
| 2022 | $ | 1,458,012 | $ | — | $ | (100,428) | $ | 103,249 | $ | (260,563) | $ | — | $ | 1,200,269 | ||||||||||||||
| 2021 | $ | 2,720,213 | $ | (488,131) | $ | (370,028) | $ | — | $ | — | $ | — | $ | 1,862,054 | ||||||||||||||
| 2020 | $ | 1,329,346 | $ | 970,205 | $ | (486,387) | $ | — | $ | — | $ | — | $ | 1,813,164 | ||||||||||||||
| NeoGenomics, Inc. | 53 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| NeoGenomics, Inc. | 54 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Adjusted EBITDA | ||
| Revenue | ||
| NeoGenomics, Inc. | 55 | 2024 Proxy Statement | ||||||
| Executive Compensation | ||||||||
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights (#) | Weighted average exercise price of outstanding options, warrants and rights ($) | Number of securities remaining available for future issuance under equity compensation plans (#) | ||||||||||||||||||||
| Equity compensation plans approved by security holders: | |||||||||||||||||||||||
Amended and Restated Equity Incentive Plan (“Equity Incentive Plan”)(1) | 3,437,486 | 16.84 | 7,588,221 | ||||||||||||||||||||
Employee Stock Purchase Plan (“ESPP”)(2) | — | N/A | 382,410 | ||||||||||||||||||||
| Equity compensation plans not approved by security holders: | |||||||||||||||||||||||
Inducement Awards(3) | 943,613 | 12.36 | — | ||||||||||||||||||||
| Total | 4,381,099 | 7,970,631 | |||||||||||||||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | |||||||||||||||
| Equity compensation plans approved by security holders: | ||||||||||||||||||
| �� | ||||||||||||||||||
Amended and Restated Equity Incentive Plan (“Equity Incentive Plan”) (1) | 3,271,004 | $ | 17.67 | 4,868,198 | ||||||||||||||
Employee Stock Purchase Plan (“ESPP”) (2) | — | N/A | 709,107 | |||||||||||||||
| Equity compensation plans not approved by security holders: | ||||||||||||||||||
Inducement Awards (3) | 943,613 | $ | 12.36 | — | ||||||||||||||
| Total | 4,214,617 | 5,577,305 | ||||||||||||||||
| NeoGenomics, Inc. | 56 | 2024 Proxy Statement | ||||||
•each person or group known by the Company to own beneficially more than five percent of the Company’s outstanding common stock;
•each director and Named Executive Officer of the Company; and
•the directors and executive officers of the Company as a group.
| Title of Class | Name And Address Of Beneficial Owner (1) | Amount and Nature Of Beneficial Ownership (1) | Percent Of Class (1) | |||||||
5% Stockholders |
| |||||||||
Common | BlackRock, Inc. (2) | 21,932,623 | 17.2% | |||||||
Common | The Vanguard Group (3) | 13,674,745 | 10.7% | |||||||
Common | Brown Advisory Incorporated (4) | 6,337,008 | 5.0% | |||||||
Directors and Named Executive Officers |
| |||||||||
Common | Lynn Tetrault (5) | 70,087 | * | |||||||
Common | Christopher Smith | 602,219 | * | |||||||
Common | Bruce Crowther (6) | 68,834 | * | |||||||
Common | Dr. Alison Hannah (7) | 121,881 | * | |||||||
Common | Stephen Kanovsky (8) | 36,185 | * | |||||||
Common | Michael Kelly (9) | 26,356 | * | |||||||
Common | David Perez | 10,300 | * | |||||||
Common | Rachel Stahler (10) | 28,497 | * | |||||||
Common | Jeffrey Sherman | 133,809 | * | |||||||
Common | Warren Stone | 89,206 | * | |||||||
Common | Vishal Sikri | 148,843 | * | |||||||
Common | Dr. Shashikant Kulkarni (11) | 119,618 | * | |||||||
Common | Directors and executive officers as a group (15 persons) (12) | 1,655,690 | 1.3% | |||||||
Name And Address Of Beneficial Owner(1) | Amount and Nature Of Beneficial Ownership(1) | Percent Of Class(1) (%) | ||||||||||||
BlackRock, Inc.(2) | 19,980,993 | 15.7 | % | |||||||||||
The Vanguard Group(3) | 14,169,665 | 11.1 | % | |||||||||||
Brown Advisory Incorporated(4) | 9,536,307 | 7.5 | % | |||||||||||
T. Rowe Price Investment Management Inc.(5) | 6,382,515 | 5.0 | % | |||||||||||
| Lynn Tetrault | 56,174 | * | ||||||||||||
Christopher Smith(6) | 740,229 | * | ||||||||||||
| Bruce Crowther | 65,120 | * | ||||||||||||
| Dr. Alison Hannah | 107,433 | * | ||||||||||||
| Stephen Kanovsky | 24,754 | * | ||||||||||||
| Michael Kelly | 20,419 | * | ||||||||||||
| David Perez | 10,300 | * | ||||||||||||
Jeffrey Sherman(7) | 163,005 | * | ||||||||||||
Warren Stone(8) | 111,376 | * | ||||||||||||
Vishal Sikri(9) | 149,380 | * | ||||||||||||
Melody Harris(10) | 173,975 | * | ||||||||||||
Directors and executive officers as a group (16 persons)(11) | 1,708,161 | 1.3 | % | |||||||||||
(1)The number and percentage of shares beneficially owned are determined in accordance with Rule 13d-3 |
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Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act requires ourof 1934, as amended (the “Exchange Act”), and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares over which the individual or entity has voting power or investment power and any shares of common stock that the individual has the right to acquire within 60 days of March 25, 2024, through the exercise of any stock option or other right. As of March 25, 2024, 127,665,638 shares of the Company’s common stock were outstanding. The information in the table is based upon information supplied by executive officers and directors and persons who beneficially own more than ten percent (10%) of our outstanding common stock, to file initial reports of ownershipSchedules 13G. and reports of changes in ownershipamendments thereto, filed with the SEC. Such persons are required by SEC regulations to furnish us withThe address of all copies of Section 16(a) forms they file.
Based solely on our review of the forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our directors, executive officers and persons who own more than 10%directors is in care of NeoGenomics, Inc. at 9490 NeoGenomics Way, Fort Myers, Florida 33912.
Dr. Shashikant Kulkarni filed an amended Form 3(3)Represents shares of NeoGenomics common stock beneficially owned as of December 31, 2023, based on September 7, 2022. This Amended Form 3 reflects an additional 20,576 restricted stock awards and an additional 44,248 stock options granted on April 1, 2022 that were omitted due to administrative error on the original Form 3a Schedule 13G/A filed on July 15,February 13, 2024, by The Vanguard Group. In such filing The Vanguard Group lists its address as 100 Vanguard Blvd., Malvern, PA 19355, and indicates that it has, shared voting power with respect to 99,140 shares of our common stock, sole dispositive power with respect to 13,932,641 shares of our common stock, and shared dispositive power with respect to 237,024 shares of our common stock.
| NeoGenomics, Inc. | 57 | 2024 Proxy Statement | ||||||
| Security Ownership of Certain Beneficial Owners and Management | ||||||||
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| NeoGenomics, Inc. | 58 | 2024 Proxy Statement | ||||||
Future Stockholder Proposals
In addition, to comply with the SEC's universal proxy rules, stockholders who intend to solicit proxies for the 2025 Annual Meeting in support of director nominees other than the Company's nominees must provide notice to the Company that sets forth the information required by Exchange Act Rule 14a-19 no later than March 24, 2025.
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| NeoGenomics, Inc. | 59 | 2024 Proxy Statement | ||||||
Transactions with Related Persons
The Company has Pharma ServicesAdvanced Diagnostics contracts with HOOKIPA Pharma, Inc., an entity with whomfor which a director of the Company, Michael A. Kelly, was a director of in 2022. In connection with these contracts, theuntil April 2023. The Company recognized $0.4 million and $0.5 million of revenue in the Consolidated Statements of Operations for the years ended December 31, 2022 and 2021, respectively. In connection withpursuant to these contracts revenue in the Consolidated Statements of Operationswith HOOKIPA Pharma, Inc. for the year ended December 31, 2020 was immaterial.
2023.
| NeoGenomics, Inc. | 60 | 2024 Proxy Statement | ||||||
Incorporation of Certain Information by Reference
The rules of the SEC allow the Company to “incorporate by reference” into this Proxy Statement certain information that we have filed with the SEC. This means that we can disclose important information to our stockholders by referring the stockholders to another document. The information incorporated by reference into this Proxy Statement is an important part of this Proxy Statement and is considered to be part of this Proxy Statement from the date we file that information with the SEC. Any reports filed by us with the SEC after the date of this Proxy Statement will automatically update and, where applicable, supersede any information contained in this Proxy Statement or incorporated by reference into this Proxy Statement.
A copy of any of the documents referred to above will be furnished, without charge, by writing to NeoGenomics, Inc., Attention: Investor Relations, 9490 NeoGenomics Way, Fort Myers, Florida 33912. The documents referred to above are also available from the EDGAR database that can be obtained through the SEC’s website at http:// www.sec.gov or our website at www.neogenomics.com.
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| NeoGenomics, Inc. | 61 | 2024 Proxy Statement | ||||||
23, 2024
•writing to:
•telephoning us at: (866) 776-5907 |
You can obtain a copy of our 20222023 Annual Report and other periodic filings that we make with the SEC at www.neogenomics.comor from the SEC’s EDGAR database athttp://www.sec.gov.
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| NeoGenomics, Inc. | 62 | 2024 Proxy Statement | ||||||
Questions and Answers about the 2023 Annual Meeting
8, 2024.
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| NeoGenomics, Inc. | 63 | 2024 Proxy Statement | ||||||
| Questions and Answers | ||||||||
qualified;
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| NeoGenomics, Inc. | 64 | 2024 Proxy Statement | ||||||
| Questions and Answers | ||||||||
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| NeoGenomics, Inc. | 65 | 2024 Proxy Statement | ||||||
| Questions and Answers | ||||||||
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| NeoGenomics, Inc. | 66 | 2024 Proxy Statement | ||||||
2023 EQUITY INCENTIVE
(AMENDED AND RESTATED EFFECTIVE AS OF APRIL 16, 2013, AND FURTHER AMENDED ON APRIL 20, 2017, APRIL 20, 2018, AND APRIL 14, 2022)
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The Plan is intended to enhance the Company’s and its Affiliates’ ability to attract, retain and motivate employees, Consultants and Non-Employee Directors, to serve the Company and its Affiliates and to expend maximum effort to improve the business results and earnings of the Company, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future successstockholders of the Company. To this end,
|
For purposes of interpreting the Planmost recently amended on April 22, 2022, and related documents (including Award Agreements), the following definitions shall apply:
“Affiliate” means any company or other trade or business that “controls,” is “controlled by” or is “under common control with” the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including any Subsidiary.
“Award” means a grant, under the Plan, of (i) an Option, (ii) SARs, (iii) Restricted Shares, (iv) RSUs, (v) any Other Stock-Based Award, or (vi) a Substitute Award.
“Award Agreement” means a written agreement between the Company and a Grantee, or notice from the Company or an Affiliate to a Grantee that evidences and sets out the terms and conditions of an Award.
“Beneficial Owner” shall have the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular Person, that Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns,” “Beneficially Owned” and “Beneficial Ownership” have corresponding meanings.
“Board” meanseffective on June 2, 2022) (the “Plan”).
“Cause” shall be defined asCompany (the “Board”) may amend the Plan at any time, pursuant to and subject to Section 14 of the Plan, contingent on approval by stockholders of the Company, if stockholder approval is required by applicable securities exchange rules or applicable law.
A-1
discretion of the Committee, is injurious to the Company; (iv) a felony conviction involving personal dishonesty or moral turpitude, or a determination by the Board, that the Grantee has willfully and knowingly violated Company policies or procedures; (v) the Grantee’s engagement in illegal drug use or alcohol abuse that prevents the Grantee from performing the Grantee’s duties in any manner; (vi) the Grantee’s misappropriation, embezzlement, or conversion of the Company’s opportunities or property; or (vii) the Grantee’s willful misconduct, recklessness or gross negligence in respect of the Grantee’s duties or obligations. The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to the existence of Cause.
“Change in Control” means, except as otherwise provided in a Grantee’s Award Agreement, the occurrence of any of the following events:
(i) any “person” or “group” (as defined in Section 13(d) and 14(d) of the Exchange Act) together with their affiliates become the ultimate Beneficial Owners of voting stock of the Company representing more than 50% of the voting power of the total voting stock of the Company;
(ii) the consummation of a merger or consolidation of the Company with any other corporation or entity regardless of which entity is the survivor, other than a merger or a consolidation that would result in the voting stock of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or the parent thereof) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity or the parent thereof, outstanding immediately after such merger or consolidation;
(iii) the Stockholders approve a plan of complete liquidation or winding up of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or
(iv) during any period of two-consecutive years, individuals who at the beginning of such period constitute the Board, and any new member of the Board (other than a member of the Board designated by a person who has entered into an agreement with the Company to effect a transaction described in subsections (i), (ii), or (iii) of this definition of “Change in Control”) whose election by the Company’s stockholders was approved by a vote of at least two-thirds of the members of the Board at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof.
Solely to the extent required by Section 409A of the Code, an event described above shall not constitute a Change in Control for purposes of the payment (but not vesting) terms and conditions of any Award subject to Section 409A of the Code unless such event also constitutes a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the Company’s assets within the meaning of Section 409A of the Code.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
“Committee” means any committee or other persons designated by the Board to administer the Plan. The Board shall cause the Committee (to the extent one is established) to satisfy the applicable requirements of any securities exchange on which the Common Stock may then be listed. For purposes of Awards to Grantees who are subject to Section 16 of the Exchange Act, Committee means all of the members of the Committee who are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act. All references inamend the Plan to increase the Board shall mean such Committee or the Board.
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“Company” means NeoGenomics, Inc., a Nevada corporation.
“Common Stock” means thenumber of shares of common stock reserved for issuance under the Plan by 1,000,000 shares, increasing the Plan share reserve from 2,500,000 shares to 3,500,000 shares.
“Company:
“Disability” shall be defined as that term is defined in the Grantee’s offer letter or other applicable employment agreement or, if there is no such definition, “Disability” means, as determined by the Company and unless otherwise provided in the applicable Award Agreement, “permanent and total disability” as set forth in Section 22(e)(3) of the Code.
“Effective Date” means [Date of shareholder approval].
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” of a Share as of a particular date means (i) if the Shares are listed on a national securities exchange, the closing price of a Share as quoted on such exchange or other comparable reporting system for the first regular trading day immediately preceding the applicable date, (ii) if the Shares are not then listed on a national securities exchange, the closing price of a Share quoted by an established quotation service for over-the-counter securities for the first trading day immediately preceding the applicable date, or (iii) if the Shares are not then listed on a national securities exchange or quoted by an established quotation service for over-the-counter securities, or the value of the Shares is not otherwise determinable, such value as determined by the Board, in good faith (but in any event not less than fair market value within the meaning of Section 409A of the Code, and any regulations and other guidance thereunder). Notwithstanding the foregoing, if the Board determines that an alternative definition of Fair Market Value should be used in connection with the grant, exercise, vesting, settlement or payout of any Award, it may specify such alternative definition in the applicable Award Agreement.
“Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law,father-in-law,son-in-law,daughter-in-law, brother, sister, brother-in-law or sister-in-law, including adoptive relationships, of the applicable individual, any person sharing the applicable individual’s household (other than a tenant or employee), a trust in which any one or more of these persons have more than 50% of the beneficial interest, a foundation in which any one or more of these persons (or the applicable individual) control the management of assets and any other entity in which one or more of these persons (or the applicable individual) own more than 50% of the voting interests.
“GAAP” means U.S. Generally Accepted Accounting Principles.
“Grant Date” means the latest to occur of (i) the date as of which the Board approves an Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award under Section 6, or (iii) such other date as may be specified by the Board in the Award Agreement.
“Grantee” means a person who receives or holds an Award.
“Incentive Stock Option” means an Option that is an “incentive stock option” within the meaning of Section 422 of the Code.
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“Issued Share” means an outstanding Share issued under an Award (including a Restricted Share).
“Non-Employee Director” means a member of the Board who is not an employee of the Company or any Affiliate and who is a non-employee director within the meaning of Rule 16b-3.
“Nonstatutory Stock Option” means an Option that is not an Incentive Stock Option.
“Option” means an option to purchase one or more Shares under the Plan.
“Option Price” means the exercise price for each Share subject to an Option.
“Other Stock-Based Award” means Awards consisting of Share units, or other Awards, valued in whole or in part by reference to, or otherwise based on, Common Stock, other than Options, SARs, Restricted Shares and RSUs.
“Performance Award” means an Award made subject to the attainment of performance goals over a performance period established by the Board.
“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.
“Plan” means this NeoGenomics, Inc. 2023 Equity Incentive Plan.
“Prior Plan” means the NeoGenomics, Inc. Amended and Restated Equity Incentive Plan, ashereby amended and restated in its entirety as follows, effective October 15, 2015, as last amended on May 27, 2021.
23, 2024:
“Restricted Period” shall have the meaning set forth in Section 11.1.
“Restricted Shares” means restricted Shares awarded to a Grantee under Section 11.
“RSU” means a bookkeeping entry representing the equivalent of Shares, awarded to a Grantee under Section 11.
“SAR” means a right granted to a Grantee under Section 10.
“SAR Exercise Price” means the per Share exercise price of a SAR granted under Section 10.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Separation from Service” means the termination of the applicable Grantee’s employment with, and/or performance of services for, the Company and each Affiliate. Unless otherwise determined by the Company, if a Grantee’s employment or service with the Company or an Affiliate terminates but the Grantee continues to provide services(a) Subject to the Company or an Affiliate in a non-employee director capacity or as an employee, officer or consultant, as applicable, such change in status shall not be deemed a Separation from Service. Approved temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and its Affiliates shall not be considered Separations from Service. Notwithstanding the foregoing, with respect to any Award that constitutes nonqualified deferred compensation under Section 409A of the Code, “Separation from Service” shall mean a “separation from service” as defined under Section 409A of the Code.
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“Service Provider” means an employee, officer, Non-Employee Director or Consultant of the Company or an Affiliate.
“Share” means one share of Common Stock.
“Stockholder” means a stockholder of the Company.
“Subsidiary” means any corporation, partnership, joint venture, affiliate or other entity in which the Company owns more than 50% of the voting stock or voting ownership interest, as applicable, or any other business entity designated by the Board as a Subsidiary for purposes of the Plan, that is a subsidiary corporation within the meaningprovisions of Section 424 of the Code.
“Substitute Award” means any Award granted in assumption of or in substitution for an award of a company or business acquired by the Company or an Affiliate or with which the Company or an Affiliate combines.
“Ten Percent Stockholder” means an individual who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.
“Termination Date” means the date that is ten years after the Effective Date, unless the Plan is earlier terminated by the Board under Section 5.2.
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3.1. General
The Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s articles of incorporation, bylaws and applicable law. The Board shall have the power and authority to delegate its powers and responsibilities under the Plan to the Committee, which shall have full authority to act in accordance with its charter, and with respect to the authority of the Board to act under the Plan. All references to the Board shall be deemed to include a reference to the Committee, to the extent such power or responsibilities have been delegated. Except as specifically provided in Section 15 or as otherwise may be required by applicable law, regulatory requirement or the articles of incorporation or the bylaws of the Company, the Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and conditions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan. The Committee shall administer the Plan provided that the Board shall retain the right to exercise the authority of the Committee to the extent consistent with applicable law and the applicable requirements of any securities exchange on which the Common Stock may then be listed. The interpretation and construction by the Board of the Plan, any Award or any Award Agreement shall be final, binding and conclusive. Without limitation, the Board shall have full and final authority, subject to the other terms and conditions of the Plan, to:
(i) construe and interpret the Plan and apply its provisions;
(ii) designate Grantees;
(iii) determine the types of Awards to be made to a Grantee;
(iv) determine the number of Shares to be subject to an Award;
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(v) establish the terms and conditions of each Award (including the Option Price of any Option and the SAR Exercise Price of any SAR, the nature and duration of any restriction or condition (or provision for lapse thereof)13 relating to the vesting, exercise, transfer or forfeiture of an Award oradjustments upon changes in securities, the Shares subject thereto, and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options);
(vi) prescribe the form of each Award Agreement; and
(vii) amend, modify or supplement the terms and conditions of any outstanding Award, including the authority, in order to effectuate the purposes of the Plan, to modify Awards to foreign nationals or individuals who are employed outside the U.S. to recognize differences in local law, tax policy, or custom.
To the extent permitted by applicable law, the Board may delegate its authority as set forth in the Plan to any individual or committee of individuals (who need not be directors), including the authority to make Awards to Grantees who are not subject to Section 16 of the Exchange Act. To the extent that the Board delegates its authority to make Awards as provided by this Section 3.1, all references in the Plan to the Board’s authority to make Awards and determinations with respect thereto shall be deemed to include the Board’s delegate. Any such delegate shall serve at the pleasure of, and may be removed at any time by, the Board.
3.2. No Repricing
Notwithstanding any other term or condition of the Plan, the repricing of Options or SARs is prohibited without prior approval of the Stockholders. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing an Option or SAR to lower its Option Price or SAR Exercise Price; (ii) repurchasing for cash or canceling an Option or SAR at a time when its Option Price or SAR Exercise Price is greater than the Fair Market Value of the underlying Shares in exchange for another Award; and (iii) any other action that is treated as a “repricing” under GAAP, unless the actions contemplated in clauses (i), (ii), or (iii) occur in connection with a change in capitalization or similar change under Section 16. A cancellation, exchange or substitution under clause (ii) would be considered a “repricing” regardless of whether it is treated as a “repricing” under GAAP and regardless of whether it is voluntary on the part of the Grantee.
3.3. Separation from Service for Cause and Clawbacks
3.3.1. Separation from Service for Cause
The Company may cause an Award to be forfeited if the Grantee incurs a Separation from Service for Cause.
3.3.2. Clawbacks
Except to the extent otherwise provided in a Grantee’s Award Agreement, all awards, amounts or benefits received or outstanding under the Plan shall be subject to clawback, cancellation, recoupment, rescission, payback, reduction or other similar action in accordance with the Company clawback policy (“Clawback Policy”) or any applicable law related to such actions. In addition, a Grantee may be required to repay to the Company previously paid compensation, whether providedsold pursuant to the Plan or an Award Agreement in accordance with the Clawback Policy. A Grantee’s acceptance of an Award shall be deemed to constitute the Grantee’s acknowledgement of and consent to the Company’s application, implementation and enforcement of any applicable Company clawback or similar policy that may apply to the Grantee, whether adopted before or after the Effective Date, and any applicable law relating to clawback,
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cancellation, recoupment, rescission, payback or reduction of compensation, and the Grantee’s agreement that the Company may take any actions that may be necessary to effectuate any such policy or applicable law, without further consideration or action.
3.4. Deferral Arrangement
The Board may permit or require the deferral of any Award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish and in accordance with Section 409A of the Code, which may include terms and conditions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred units.
3.5. No Liability
No member of the Board shall be liable for any action or determination made in good faith with respect to the Plan, any Award or Award Agreement.
3.6. Book Entry
Notwithstanding any other term or condition of the Plan, the Company may elect to satisfy any requirement under the Plan for the delivery of stock certificates through the use of book-entry.
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4.1. Authorized Number of Shares
Subject to adjustment under Section 16, the total number of Shares authorized to be awardedRights granted under the Plan shall not exceed anin the aggregate share reserve of 3,975,0003,500,000 shares. In addition, Shares underlying any outstanding award granted under a Prior Plan that, after the Effective Date, expires or is terminated, surrendered or forfeited for any reason without issuance of Shares, or if any Shares are not delivered because they were used to satisfy the applicable withholding obligation, then such Shares shall be available for the grant of new Awards. As provided in Section 1, no new awards shall be granted under the Prior Plan after the Effective Date. Shares issued under the Plan shall consist in whole or in part of authorized but unissued Shares, treasury Shares or Shares purchased on the open market or otherwise, all as determined by the Company from time to time.
4.2. Share Counting
4.2.1. General
Each Share (regardless of the award type) granted in connection with an Award shall be counted as one Share against the limit in Section 4.1, subject to this Section 4.2. Share-based Performance Awards shall be counted assuming maximum performance results (if applicable) until such time as actual performance results can be determined.
4.2.2. Cash-Settled Awards
Any Award settled in cash shall not be counted as Shares for any purpose under the Plan.
4.2.3. Expired or Terminated Awards
If any Award expires or is terminated, surrendered, canceled or forfeited, in whole or in part, the unissued Shares covered by that Award shall again be available for the grant of Awards.
4.2.4. Repurchased, Surrendered or Forfeited Awards
If Issued Shares are repurchased by, or are surrendered or forfeited to, the Company at no more than cost, such Shares shall again be available for the grant of Awards.
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4.2.5. Payment of Option Price, Purchase Price or Tax Withholding in Shares
Shares subject to an Award under the Plan shall again be made available for issuance or delivery under the Plan if such Shares are (i) Shares tendered in payment of an Option, (ii) Shares delivered or withheld by the Company to satisfy any tax withholding obligation, (iii) Shares covered by a Share-settled SAR or other Shares that were not issued upon the settlement of the SAR or (iv) Shares covered by a cash-settled RSU.
4.2.6. Substitute Awards
In the case of any Substitute Award, such Substitute Award shall not be counted against the number of Shares reserved under the Plan.
4.3. Award Limits
Subject to adjustment under Section 16, 3,975,000 Shares available for issuance under the Plan shall be available for issuance as Incentive Stock Options.
5. EFFECTIVE DATE, DURATION AND AMENDMENTS
5.1. Term
The Plan shall be effective as of the Effective Date but no Award shall be exercised or paid unless and until the Plan has been approved by the Stockholders, which approval shall be within 12 months after the date the Plan is adopted by the Board. The Plan shall terminate automatically on the ten-year anniversary of the Effective Date and may be terminated on any earlier date as provided in Section 5.2.
5.2. Amendment and Termination of the Plan
The Board may, at any time and from time to time, amend, suspend or terminate the Plan as to any Awards that have not been made. An amendment shall be contingent on approval of the Stockholders to the extent stated by the Board, required by applicable law or required by applicable securities exchange listing requirements. No Awards may be granted after the Termination Date. The applicable terms and conditions of the Plan, and any terms and conditions applicable to Awards granted before the Termination Date shall survive the termination of the Plan and continue to apply to such Awards. No amendment, suspension or termination of the Plan shall, without the consent of the Grantee, materially impair rights or obligations under any Award made before such amendment, suspension or termination.
6. AWARD ELIGIBILITY AND LIMITATIONS
6.1. Service Providers
Awards may be made to any Service Provider selected and designated by the Board from time to time, subject to Section 9.7 in the case of an Incentive Stock Option. The Board may grant an Award to a person who is reasonably expected to become a Service Provider provided that such grant is contingent on such person becoming a Service Provider.
6.2. Successive Awards
An eligible person may receive more than one Award, subject to such restrictions as are provided in the Plan.
6.3. Stand-Alone, Additional, Tandem, and Substitute Awards
The Board may grant Awards either alone or in addition to, in tandem with or in substitution or exchange for any other Award or any award granted under another plan of the Company, any Affiliate
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or any business entity to be acquired by the Company or an Affiliate, or any other right of a Grantee to receive payment from the Company or any Affiliate. Such additional, tandem and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award, the Board shall have the right to require the surrender of such other Award in consideration for the grant of the new Award. Subject to Section 3.2, the Board shall have the right to make Awards in substitution or exchange for any other award under another plan of the Company, any Affiliate or any business entity to be acquired by the Company or an Affiliate. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Affiliate, in which the value of Shares subject to the Award is equivalent in value to the cash compensation (for example, RSUs or Restricted Shares).
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Each Award shall be evidenced by an Award Agreement, in such forms as the Board determines from time to time. Without limiting the foregoing, an Award Agreement may be provided in the form of a notice that provides that acceptance of the Award constitutes acceptance of all terms and conditions of the Plan and the notice. Award Agreements granted from time to time or at the same time need not contain similar terms and conditions but shall be consistent with the terms and conditions of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be Nonstatutory Stock Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed Nonstatutory Stock Options.
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If specified in the Award Agreement, the recipient of an Award may be entitled to receive dividend equivalent rights with respect to the Shares or other securities covered by an Award. The terms and conditions of a dividend equivalent right may be set forth in the Award Agreement. Dividend equivalents credited to a Grantee may be paid in cash or deemed to be reinvested in additional Shares or other securities of the Company at a price per unit equal to the Fair Market Value of a Share on the date that such dividend was paid to Stockholders. Notwithstanding the foregoing, dividends or dividend equivalents shall not be paid on any Award or portion thereof that is unvested or on any Award that is subject to the achievement of performance criteria before the Award has become earned and payable.
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9.1. Option Price
The Option Price of each Option shall be fixed by the Board and stated in the related Award Agreement. Each Option shall be separately designated in the Award Agreement as either an Incentive Stock Option or Nonstatutory Stock Option. The Option Price of each Option (except those that constitute Substitute Awards) shall be at least the Fair Market Value of a Share on the Grant Date. In the event that a Grantee is a Ten Percent Stockholder as of the Grant Date, the Option Price of an Option granted to such Grantee that is intended to be an Incentive Stock Option shall be not less than 110% of the Fair Market Value of a Share on the Grant Date. In no case shall the Option Price of any Option be less than the par value of a Share.
9.2. Vesting
Subject to Section 9.3, each Option shall become exercisable at such times and under such terms and conditions (including performance requirements) as may be determined by the Board and stated in the Award Agreement. The Board may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event and at any time after the Grant Date of the Award.
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9.3. Term
Each Option shall terminate, and all rights to purchase Shares thereunder shall cease, upon the expiration of a period not to exceed tenyears from the Grant Date, or under such circumstances and on any date before ten years from the Grant Date as may be set forth in the Plan or as may be fixed by the Board and stated in the related Award Agreement. In the event that the Grantee is a Ten Percent Stockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option at the Grant Date shall not be exercisable after the expiration of five years from its Grant Date.
9.4. Limitations on Exercise of Option
Notwithstanding any other term or condition of the Plan, in no event may any Option be exercised, in whole or in part, (i) prior to the date the Plan is approved by the Stockholders, (ii) after the defined Term is exceeded or (iii) after the occurrence of an event that results in termination of the Option.
9.5. Method of Exercise
An Option that is exercisable may be exercised by the Grantee’s delivery of a notice of exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. To be effective, notice of exercise must be made in accordance with procedures established by the Company from time to time. No Option may be exercised for a fraction of a Share.
9.6. Rights of Holders of Options
Unless otherwise stated in the related Award Agreement, a Grantee holding or exercising an Option shall have none of the rights of a Stockholder (for example, the right to receive cash or dividend payments or distributions attributable to the subject Shares or to direct the voting of the subject Shares) until the Shares covered by the Option are fully paid and issued to the Grantee. Except as provided in Section 16 or the related Award Agreement, no adjustment shall be made for dividends, distributions or other rights for which the record date is before the date of such issuance.
9.7. Limitations on Incentive Stock Options
An Option shall constitute an Incentive Stock Option only (i) if the Grantee of the Option is an employee of the Company or any Subsidiary; (ii) to the extent specifically provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the Shares with respect to which all Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed $100,000. This limitation shall be applied by taking Options into account in the order in which they were granted. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the Stockholders in a manner intended to comply with the stockholder approval requirements of Section 422 of the Code, provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval. In such case, such Option shall be treated as a Nonstatutory Stock Option unless and until such approval is obtained.
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10.1. Right to Payment
A SAR shall confer on the Grantee a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the SAR Exercise Price. The Award Agreement for a SAR (except those that constitute Substitute Awards) shall specify the SAR Exercise Price, which shall be fixed on the Grant Date at a price that is not less than the Fair Market Value of a
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Share on that date. SARs may be granted alone or in conjunction with all or part of an Option or at any subsequent time during the term of such Option or in conjunction with all or part of any other Award. A SAR granted in tandem with an outstanding Option after the Grant Date of such Option shall have a SAR Exercise Price that is equal to the Option Price, provided that the SAR Exercise Price may not be less than the Fair Market Value of a Share on the Grant Date of the SAR to the extent required by Section 409A of the Code.
10.2. Rights of Holders of SARs
Unless otherwise stated in the related Award Agreement, a Grantee holding a SAR shall have none of the rights of a Stockholder (for example, the right to receive cash or dividend payments or distributions attributable to the subject Shares or to direct the voting of the subject Shares) until the Shares covered by the SAR are fully paid and issued to the Grantee. Except as provided in Section 16 or the related Award Agreement, no adjustment shall be made for dividends, distributions or other rights for which the record date is before the date of such issuance.
10.3. Other Terms
The Board shall determine at the Grant Date the times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals or future service requirements), the times at which SARs shall cease to be or become exercisable after Separation from Service or upon such other terms or conditions determined by the Board, the method of exercise, whether or not a SAR shall be in tandem or in combination with any other Award and any other terms and conditions of any SAR.
10.4. Term of SARs
The term of a SAR granted under the Plan shall be determined byfor any reason terminate without having been exercised, the Board and stated in the related Award Agreement, provided thatShares not purchased under such termRight shall not exceed ten years.
10.5. Payment of SAR Amount
Upon exercise of a SAR, a Grantee shall be entitled to receive payment from the Company (in cash or Shares) in an amount determined by multiplying (i) the difference between the Fair Market Value of a Share on the date of exercise over the SAR Exercise Price by (ii) the number of Shares with respect to which the SAR is exercised.
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11.1. Restrictions
At the time of grant, the Board may establish a period of time (a “Restricted Period”) and any additional restrictions including the satisfaction of corporate or individual performance objectives applicable to an Award of Restricted Shares or RSUs in accordance with Section 13. Each Award of Restricted Shares or RSUs may be subject to a different Restricted Period and additional restrictions. Neither Restricted Shares nor RSUs may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period or before the satisfaction of any other applicable restrictions.
11.2. Restricted Share Certificates
The Company shall issue, in the name of each Grantee to whom Restricted Shares have been granted, stock certificates or other evidence of ownership representing the total number of Restricted Shares granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an Award Agreement that either (i) the Secretary of the Company shall hold such
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certificatesagain become available for the Grantee’s benefit until such timePlan.”
11.3. Rights of Holders of Restricted Shares
Unless the Board otherwise provides in an Award Agreement and subject to Section 8, holders of Restricted Shares shall have rights as Stockholders, including voting and dividend rights.
11.4. Rights of Holders of RSUs
11.4.1 Settlement of RSUs
RSUs may be settled in cash or Shares, as determined by the Board and set forth in the Award Agreement. The Award Agreement shall also set forth whether the RSUs shall be settled (i) within the time period specified for “short term deferrals” under Section 409A of the Code or (ii) otherwise within the requirements of Section 409A of the Code, in which case the Award Agreement shall specify upon which events such RSUs shall be settled.
11.4.2. Voting and Dividend Rights
Unless otherwise stated in the applicable Award Agreement and subject to Section 8, holders of RSUs shall not have rights as Stockholders, including no voting or dividend or dividend equivalents rights.
11.4.3. Creditor’s Rights
A holder of RSUs shall have no rights other than those of a general creditor of the Company. RSUs represent an unfunded and unsecured obligation of the Company, subject to the applicable Award Agreement.
11.5. Purchase of Restricted Shares
The Grantee shall be required, to the extent required by applicable law, to purchase Restricted Shares from the Company at a Purchase Price equal to the greater of the aggregate par value of the Restricted Shares or the Purchase Price, if any, specified in the related Award Agreement. If specified in the Award Agreement, the Purchase Price may be deemed paid by services already rendered. The Purchase Price shall be payable in a form described in Section 12 or, if permitted by the Board, in consideration for past services rendered.
11.6. Delivery of Shares
Upon the expiration or termination of any Restricted Period and the satisfaction of any other terms and conditions prescribed by the Board, the restrictions applicable to Restricted Shares or RSUs settled in Shares shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate for such Shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be.
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12.1. General Rule
Payment of the Option Price for an Option or the Purchase Price for Restricted Shares shall be made in cash or in cash equivalents acceptable to the Company, except as provided in this
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Section 12. Notwithstanding any provision of this Section 12, during any period for which the Common Stock is publicly traded (i.e., the Common Stock is listed on any established stock exchange or a national market system) an exercise by a Non-Employee Director or officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under this Plan.
12.2. Surrender of Shares
To the extent the Award Agreement so provides, payment of the Option Price for an Option or the Purchase Price for Restricted Shares may be made all or in part through the tender to, or withholding by, the Company of Shares that shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price for Restricted Shares has been paid thereby, at their Fair Market Value on the date of exercise or surrender. Notwithstanding the foregoing, in the case of an Incentive Stock Option, the right to make payment in the form of already owned Shares may be authorized only at the time of grant.
12.3. Cashless Exercise
With respect to an Option only (and not with respect to Restricted Shares), to the extent permitted by law and to the extent the Award Agreement so provides, payment of the Option Price may be made all or in part by delivery (on a form acceptable to the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes described in Section 18.3.
12.4. Other Forms of Payment
To the extent the Award Agreement so provides, payment of the Option Price or the Purchase Price for Restricted Shares may be made in any other form that is consistent with applicable laws, regulations, and rules, including the Company’s withholding of Shares otherwise due to the exercising Grantee.
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The right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance terms conditions as may be specified by the Board. The Board may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance terms or conditions.
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14.1. Grant of Other Stock-Based Awards
Other Stock-Based Awards may be granted either alone or in addition to or in conjunction with other Awards. Other Stock-Based Awards may be granted in lieu of other cash or other compensation to which a Service Provider is entitled from the Company or may be used in the settlement of amounts payable in Shares under any other compensation plan or arrangement of the Company. Subject to the terms and conditions of the Plan, the Board shall determine the persons to whom and the times at which such Awards may be made, the number of Shares to be granted under such Awards and all other terms and conditions of such Awards. Unless the Board determines otherwise, any such Award shall be confirmed by an Award Agreement, which shall contain such terms and conditions as the Board determines to be necessary or appropriate to carry out the intent of the Plan with respect to such Award.
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14.2. Terms of Other Stock-Based Awards
Any Shares subject to Awards made under this Section 14 may not be sold, assigned, transferred, pledged or otherwise encumbered before the date on which the Shares are issued or, if later, the date on which any applicable restriction, performance or deferral period lapses.
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15.1. General
The Company shall not be required to sell or issue any Shares under any Award if the sale or issuance of such Shares would constitute a violation by the Grantee, any other individual or the Company of any law or regulation of any governmental authority, including any federal or state securities laws or regulations. If at any time the Company determines that the listing, registration or qualification of any Shares subject to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a term or condition of, or in connection with, the issuance or purchase of Shares under the Plan, no Shares may be issued or sold to the Grantee or any other individual exercising an Option unless such listing, registration, qualification, consent or approval has been effected or obtained free of any terms and conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Award. Specifically, in connection with the Securities Act, upon the exercise of any Option or the delivery of any Shares underlying an Award, unless a registration statement under the Securities Act is in effect with respect to the Shares covered by such Award, the Company shall not be required to sell or issue such Shares unless the Board has received evidence satisfactory to it that the Grantee or any other individual exercising an Option may acquire such Shares under an exemption from registration under the Securities Act. The Company may, but shall not be obligated to, register any securities covered by the Plan under the Securities Act. The Company shall not be obligated to take any affirmative action to cause the exercise of an Option or the issuance of Shares under the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that an Option shall not be exercisable until the Shares covered by such Option are registered or are exempt from registration, the exercise of such Option (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned on the effectiveness of such registration or the availability of such an exemption. The Board may require the Grantee to sign such additional documentation, make such representations and furnish such information as the Board may consider appropriate in connection with the grant of Awards or issuance or delivery of Shares in compliance with applicable laws.
15.2. Rule 16b-3
During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards and the exercise of Options granted to officers and directors underimplication amended hereby, the Plan shall qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any term or condition of the Plan or action by the Board does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Board may modify the Planremain in any respect necessary to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement.
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16.1. Changes in Common Stock
If (i) the number of outstanding Shares is increased or decreased or the Shares are changed into or exchanged for a different number or kind of shares or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of
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shares, stock dividend or other distribution payable in capital stock, or other increase or decrease in such Shares effected without receipt of consideration by the Company occurring after the Effective Date or (ii) there occurs any spin-off, split-up, extraordinary cash dividend or other distribution of assets by the Company, (A) the number and kinds of shares for which grants of Awards may be made, (B) the number and kinds of shares for which outstanding Awards may be exercised or settled and (C) the performance goals relating to outstanding Awards shall be equitably adjusted by the Company, provided that any such adjustment shall comply with Section 409A of the Code. In addition, in the event of any such increase or decrease in the number of outstanding shares or other transaction described in clause (ii) above, the number and kind of shares for which Awards are outstanding and the Option Price per share of outstanding Options and SAR Exercise Price per share of outstanding SARs shall be equitably adjusted, provided that any such adjustment shall comply with Section 409A of the Code.
16.2. Effect of a Change in Control
In the event of a Change in Control, the Committee may, but shall not be obligated to: (i) accelerate, vest or cause the restrictions to lapse with respect to all or any portion of any Award; (ii) cancel Awards and cause to be paid to the holders of vested Awards the value of such Awards, if any, as determined by the Committee, in its sole discretion, it being understood that in the case of any Option with an Option Exercise Price or SAR with a SAR Exercise Price that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option or SAR without the payment of consideration therefor; (iii) provide for the issuance of substitute Awards or the assumption or replacement of such Awards; (iv) provide written notice to Grantees that for a period of at least ten days prior to the Change in Control, such Awards shall be exercisable, to the extent applicable, as to all shares of Common Stock subject thereto and upon the occurrence of the Change in Control, any Awards not so exercised shall terminate and be of no furtherfull force and effect; or (v) otherwise treat such Awards in the manner set forth in the agreement pursuant to which the Change in Control is consummated. The obligations of the Company under the Plan shall be binding on any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company or on any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.
16.3. Adjustments
Adjustments under this effect.
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The grant of Awards shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.
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18.1. Disclaimer of Rights
No term or condition of the Plan or any Award Agreement shall be construed to confer on any individual the right to remain in the employ or service of the Company or any Affiliate or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payments to any individual at any time or to terminate any employment or other relationship between any individual and the Company. In addition, notwithstanding any other
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term or condition of the Plan, unless otherwise stated in the applicable Award Agreement, no Award shall be affected by any change of duties or position of the Grantee, so long as such Grantee continues to be a Service Provider. The obligation of the Company to pay any benefits under the Plan shall be interpreted as a contractual obligation to pay only those amounts described in the Plan, in the manner and under the terms and conditions prescribed in the Plan. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the Plan.
18.2. Nonexclusivity of the Plan
Neither the adoption of the Plan nor the submission of the Plan to the Stockholders for approval shall be construed as creating any limitations on the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to one or more classes of individuals or specifically to one or more particular individuals), including the granting of Options as the Board determines desirable.
18.3 Withholding Taxes
The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, local or foreign taxes of any kind required by law to be withheld (i) with respect to the vesting of or other lapse of restrictions applicable to an Award, (ii) upon the issuance of any Shares upon the exercise of an Option or SAR or settlement of an RSU or (iii) otherwise due in connection with an Award. At the time of such vesting, lapse, exercise or settlement, the Grantee shall pay to the Company or the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably determine to be necessary to satisfy such withholding obligation. The Company or the Affiliate, as the case may be, may require or permit the Grantee to satisfy such obligations, in whole or in part, (A) by causing the Company or the Affiliate to withhold the required number of Shares otherwise issuable to the Grantee as may be necessary to satisfy such withholding obligation or (B) by delivering to the Company or the Affiliate Shares already owned by the Grantee. The Shares so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value of the Shares used to satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the date that the amount of tax to be withheld is to be determined. To the extent applicable, a Grantee may satisfy Grantee’s withholding obligation only with Shares that are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
18.4. Other Terms and Conditions; Employment Agreements
Each Award Agreement may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Board. In the event of any conflict between the terms and conditions of an employment agreement and the Plan, the terms and conditions of the employment agreement shall govern.
18.5. Severability
If any term or condition of the Plan or any Award Agreement is determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining terms and conditions of the Plan and the Award Agreement shall be severable and enforceable, and all terms and conditions shall remain enforceable in any other jurisdiction.
18.6. Governing Law
The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Nevada without regard to the principles of conflicts of law that could cause the
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application of the laws of any jurisdiction other than the State of Nevada. For purposes of resolving any dispute that arises under the Plan, each Grantee, by virtue of receiving an Award, shall be deemed to have submitted to and consented to the exclusive jurisdiction of the State of Nevada and to have agreed that any related litigation shall be conducted solely in the state courts of Nevada or the federal courts for the U.S. located in Fort Myers, Florida, where the Plan is made and to be performed, and no other courts. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974.
18.7. Section 409A of the Code
The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance with Section 409A and the applicable regulations and guidance thereunder. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable laws require otherwise. For purposes of Section 409A of the Code, each installment payment under the Plan shall be treated as a separate payment. Notwithstanding any other term or condition of the Plan, to the extent required to avoid accelerated taxation or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided under the Plan during the six-month period immediately after the Grantee’s Separation from Service shall instead be paid on the first payroll date after the six-month anniversary of the Grantee’s Separation from Service (or the Grantee’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Board shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Grantee under Section 409A of the Code and neither the Company nor the Board shall have any liability to any Grantee for such tax or penalty.
18.8. Separation from Service
The Board shall determine the effect of a Separation from Service on Awards, and such effect shall be set forth in the appropriate Award Agreement. Without limiting the foregoing, the Board may provide in the Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, the actions that may be taken upon the occurrence of a Separation from Service, including accelerated vesting or termination, depending on the circumstances surrounding the Separation from Service.
18.9. Transferability of Awards and Issued Shares
18.9.1. Transfers in General
No Award shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution, and, during the lifetime of the Grantee, only the Grantee personally (or the Grantee’s personal representative) may exercise rights under the Plan.
18.9.2. Family Transfers
If authorized in the applicable Award Agreement or otherwise approved by the Board, a Grantee may transfer, not for value, all or part of an Award (other than Incentive Stock Options) to any Family Member. For the purpose of this Section 18.9.2, a “not for value” transfer is a transfer that is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights or (iii) a transfer to an entity in which more than 50% of the voting interests are owned by Family Members (or the Grantee) in exchange for an interest in that entity. After a transfer under this Section 18.9.2, any such Award shall continue to be subject to the same terms and conditions as were applicable immediately before transfer. Subsequent transfers of transferred Awards are prohibited except to Family Members of the original Grantee in accordance with this Section 18.9.2 or by will or the laws of descent and distribution.
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18.10. Data Protection
A Grantee’s acceptance of an Award shall be deemed to constitute the Grantee’s acknowledgement of and consent to the collection and processing of personal data relating to the Grantee so that the Company can meet its obligations and exercise its rights under the Plan and generally administer and manage the Plan. This data shall include data about participation in the Plan and Shares offered or received, purchased or sold under the Plan and other appropriate financial and other data (such as the date on which the Awards were granted) about the Grantee and the Grantee’s participation in the Plan.
18.11. Disqualifying Dispositions
Any Grantee who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of Shares acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the Shares acquired upon exercise of such Incentive Stock Option shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.
18.12. Plan Construction
In the Plan, unless otherwise stated, the following uses apply:
(i) references to a statute or law refer to the statute or law and any amendments and any successor statutes or laws and to all valid and binding governmental regulations, court decisions and other regulatory and judicial authority issued or rendered thereunder, as amended, or their successors, as in effect at the relevant time;
(ii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to and including”;
(iii) indications of time of day shall be based on the time applicable to the location of the principal headquarters of the Company;
(iv) the words “include,” “includes” and “including” (and the like) mean “include, without limitation,” “includes, without limitation” and “including, without limitation” (and the like), respectively;
(v) all references to articles and sections are to articles and sections in the Plan;
(vi) all words used shall be construed to be of such gender or number as the circumstances and context require;
(vii) the captions and headings of articles and sections have been inserted solely for convenience of reference and shall not be considered a part of the Plan, nor shall any of them affect the meaning or interpretation of the Plan;
(viii) any reference to an agreement, plan, policy, form, document or set of documents, and the rights and obligations of the parties under any such agreement, plan, policy, form, document or set of documents, shall mean such agreement, plan, policy, form, document or set of documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof; and
(ix) all accounting terms not specifically defined shall be construed in accordance with GAAP.
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IN WITNESS WHEREOF, I hereby certify that the foregoing NeoGenomics, Inc. 2023 Equity Incentive Plan was duly adopted by the Board of Directors of NeoGenomics, Inc. on March 28, 2023.
NEOGENOMICS, INC.
Sign Name: /s/ Jeffrey Sherman
Print Name: Jeffrey Sherman
Title: Chief Financial Officer
Date: March 28, 2023
* * * * *
IN WITNESS WHEREOF, I hereby certify that the foregoing NeoGenomics, Inc. 2023 Equity Incentive Plan was approved by the stockholders of NeoGenomics, Inc. on May , 2023.
NEOGENOMICS, INC.
Sign Name:
Print Name:
Title: Chief Financial Officer
Date: May , 2023
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
V07024-P91163 KEEP THIS PORTION FOR YOUR RECORDS
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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V07025-P91163
NEOGENOMICS, INC.
Annual Meeting of Stockholders
May 25, 2023 10:00 AM (Eastern Time)
This proxy is solicited by the Board of Directors
The undersigned hereby appoints Alicia C. Olivo and Jeffrey S. Sherman, and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of NeoGenomics, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN PROPOSAL 1, FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS IN PROPOSAL 2, FOR THE APPROVAL OF THE NEOGENOMICS, INC. 2023 EQUITY INCENTIVE PLAN IN PROPOSAL 3, AND FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN PROPOSAL 4.
Continued and to be signed on reverse side