SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
§240.14a-12
required
(1)Title of each class of securities to which transaction applies: Common Stock, par value $[______]
(2)Aggregate number of securities to which transaction applies: [________] shares of Common Stock
(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0‑11
(4)Proposed maximum aggregate value of transaction: $[____]
(5)Total fee paid: $[____]
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materials
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:
13, 2023
meeting.
Proxy Statement.
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PacBio.
President and Chief Executive Officer
May 24, 2023
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19, 20215, 2023 are entitled to receive notice of, attend, and vote at the Annual Meeting. A complete list of these stockholders will be available at our corporate offices at 1305 O’Brien Drive, Menlo Park, California 94025 during regular business hours for ten days prior to the Annual Meeting. This list also will be available during the Annual Meeting on the virtualmeeting website during the meeting. A stockholder may examine the list for any legally valid purpose related to the Annual Meeting.May 3, 2021,April 13, 2023, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement for the Annual Meeting and Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“Annual Report”).our 2022 annual report. This Notice provides instructions on how to vote online or by telephone and includes instructions on how to receive a paper copy of proxy materials by mail. We also include in the Notice instructions on how you can request a paper copy of the proxy materials.Your vote This proxy statement and our 2022 annual report can be accessed at the following Internet address: http://www.proxyvote.com. All you have to do is important.enter the control number located on your proxy card.
General Counsel and Corporate Secretary
April 30, 2021
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THESE PROXY MATERIALS | | | | | 1 | | |
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1305 O’Brien Drive,
Menlo Park, California 94025
_______________________
FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 16, 2021
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Beneficial Owner. You are a beneficial owner if at 5:00 p.m. Pacific Time on the record date your shares were held by a brokerage firm, bank or other nominee and not in your name. Being a beneficial owner means that, like many of our stockholders,
If you request a printed copy of the proxy materials by mail, your broker or nominee will provide a voting instruction card for you to use.
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take advantage of the availability of our proxy materials on the internet to help reduce the environmental impact of our annual meetings of stockholders.
How can
Meeting virtually?
You will be able to attend the Annual Meeting online and submit your questions during the meeting by visiting www.meetingcenter.io/247446671. You also will be ableTime.
To participate inor submit a question during the Annual Meeting, you will need to reviewfollow the informationinstructions posted at www.proxyvote.com and www.virtualshareholdermeeting.com/PACB2023 and will need the control number included on your Notice on youror proxy card or on the instructions that accompanied your proxy materials. The password forcard. If you do not have a control number, you will be able to listen to the meeting is PACB2021.
Ifonly and you holdwill not be able to vote or submit your shares through an intermediary, such as a bank or broker, you must register in advance usingquestions during the instructions below.
meeting.
How do I register to attend the Annual Meeting virtually on the Internet?
If you are a registered stockholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Annual Meeting virtually on the internet. Please follow the instructions on the notice or proxy card that you received.
If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting virtually on the internet.
To register to attend the Annual Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Company holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on June 10, 2021.
You will receive a confirmation of your registration by email after we receive your registration materials.
Requests for registration should be directed to us at the following:
By email:
Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com
By mail:
ComputersharePacific Biosciences of California, Inc. Legal ProxyP.O. Box 43001Providence, RI 02940-3001
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Do I have to do anything in advance if I plan to attend the Virtual Annual Meeting?
If you are a stockholder of record, you do not need to do anything in advance to attend or vote your shares electronically at the virtual Annual Meeting. If you are a beneficial owner, you must bring a legal proxy from the organization that holds your shares in order to vote your shares electronically at the virtual Annual Meeting.
Why would you hold a virtual Annual Meeting?
How do I ask questions duringattend an annual meeting of stockholders in person.
Because the Annual Meeting is held virtually, youlegal proxy from their broker, bank, or other nominee will be able to attend the Annual Meeting onlineby www.virtualshareholdermeeting.com/PACB2023, which will allow such stockholders to submit questions before and submit yourduring the Annual Meeting and vote shares electronically prior to or during the meeting. We believe our stockholders’ increased opportunity to participate in the Annual Meeting virtually should alleviate any concerns about disenfranchisement of our stockholder base as a result of our decision not to hold the Annual Meeting in person.
event a stockholder encounters any difficulties accessing the virtual meeting.
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Beneficial Owners.
All votes must be received by the independent inspector before the polls close during the meeting.
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Can I revoke or change my vote after I submit my proxy?
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What constitutes a quorum, and why is a quorum required?Beneficial Owners.and Brett Atkins and Michele Farmer have been designated as proxies by our Board of Directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the virtual Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our Board of Directors. If any matters not described in this proxy statement are properly presented at the virtual Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the virtual Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.Whatdo not specify how myfail to provide timely directions?to be voted?Stockholders of Record. If you are a stockholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:·“FOR” each of the three nominees for our Class II directors (Proposal 1);·“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 (Proposal 2); and·In the discretion of the named proxies regarding any other matters properly presented for a vote at the Annual Meeting.Beneficial Owners. If you are a beneficial owner and you do not provide the broker, bank or other nominee that holds your shares with voting instructions, the broker, bank or other nominee will determine if it has the discretionary authoritygenerally required to vote onsuch shares in the particular matter.manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole “routine” matter: Proposal 2the proposal to ratify the appointment of Ernst & Young LLP. Brokers, banks and other nominees doLLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023. Your broker will not have discretion to vote on non-routineany other proposals, which are “non-routine” matters, such as Proposal 1. Therefore, if you do not provide voting instructions to your broker, bank or other nominee, your broker, bank or other nominee may not vote your shares on Proposal 1.5
Meeting.
What is the effect of a broker non-vote?
Brokers, banks or other nominees who hold shares of our common stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A broker non-vote occurs when a broker, bank or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the virtual Annual Meeting, but will not be counted for purposes of determining the number of votes present remotely or represented by proxy and entitled to vote with respect to a particular proposal.
Thus, a broker non-vote will not impact our ability to obtain a quorum and will not otherwise affect the outcome of the vote on a proposal that requires a plurality of votes cast or the approval of a majority of the votes present remotely or represented by proxy and entitled to vote (Proposals 1 and 2).
Proposal | | | Vote Required | | | Broker Discretionary Voting Allowed | |
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Proposal 1 | | | Majority of the | | | No | |
Proposal 2 | | | Majority of the voting power of the shares | | | Yes | |
Proposal 3 — Advisory Vote on Approval of Executive Compensation | | | Majority of the voting power of the shares present virtually or represented by proxy and entitled to vote on the subject matter | | | No | |
Proposal 4 — Advisory Vote on the Frequency of the Advisory Vote to Approve Executive Compensation | | | The alternative among “ONE YEAR,” “TWO YEARS” or “THREE YEARS” that receives the plurality of votes cast | | | No | |
Proposal 5 — Advisory Vote Regarding Retention of the Classified Board of Directors | | | Majority of the voting power of the shares present virtually or represented by proxy and entitled to vote on the subject matter | | | No | |
Who
Computershare Trust Company, N.A., our transfer agent, has been engagedsame effect as a vote AGAINST Proposal 3.
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Who is paying for the costs of this proxy solicitation?
beneficial owners. We have hired Alliance Advisors, LLC (“Alliance”) to help us solicit proxies. We expect to pay Alliance a base fee of $20,000 plus reimbursement of reasonable out-of-pocket expenses. Proxy solicitations will be made primarily through the mail, but may be supplemented by telephone, facsimile, Internet, or personal solicitation by Alliance.
What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?
Stockholder Proposals for 2022 Annual Meeting
The submission deadline for stockholder proposals to be included in our proxy materials for the 2022 annual meeting of stockholders pursuant to Rule 14a-8 of the Exchange Act is December 31, 2021 except as may otherwise be provided in Rule 14a-8. All such proposals must be in writing and received by our Corporate Secretary at Pacific Biosciences of California, Inc., 1305 O’Brien Drive, Menlo Park, CA 94025 by close of business on the required deadline in order to be considered for inclusion in our proxy materials for the 2022 annual meeting of stockholders. Submission of a proposal before the deadline does not guarantee its inclusion in our proxy materials.
Advance Notice Procedure for 2022 Annual Meeting
Under our Bylaws, director nominations and other business may be brought at an annual meeting of stockholders only by or at the direction of the Board of Directors or by a stockholder entitled to vote who has submitted a proposal in accordance with the requirements of our Bylaws as in effect from time to time. For the 2022 annual meeting of stockholders, a stockholder notice must be received by our Corporate Secretary at Pacific Biosciences of California, Inc., 1305 O’Brien Drive, Menlo Park, CA 94025, no earlier than February 16, 2022 and no later than March 18, 2022. However, if the 2022 annual meeting of stockholders is advanced by more than 25 days prior to or delayed by more than 25 days after the one-year anniversary of the 2020 Annual Meeting of Stockholders, then, for notice by the stockholder to be timely, it must be received by our Corporate Secretary not earlier than the close of business on the 120th day prior to the 2022 annual meeting of stockholders and not later than the close of business on the later of (i) the 90th day prior to the 2022 annual meeting of stockholders, or (ii) the tenth day following the day on which public announcement of the date of such annual meeting is first made. Please refer to the full text of our advance notice Bylaw provisions for
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additional information and requirements. A copy of our Bylaws has been filed with the Annual Report and may be obtained by writing to our Corporate Secretary at the address listed above.
Directors. The Board of Directors has determined that the separation of the roles of ChairmanChair of the Board of Directors and President and Chief Executive Officer iswas appropriate at this time as it allows our President and Chief Executive Officer to focus primarily on management responsibilities and corporate strategy, while allowing the ChairmanChair to focus on leadership of the Board of Directors, providing feedback and advice to the President and Chief Executive Officer and providing a channel of communication between the members of the Board of Directors and the President and Chief Executive Officer. The ChairmanChair of the Board of Directors presides over all meetings of our Board of Directors and works with the President and Chief Executive Officer to develop agendas for meetings of our Board of Directors. HeThe Chair also works with the Board of Directors to drive decisions about particular strategies and policies and, in concert with the independent committees of the Board of Directors, facilitates a performance evaluation process of the Board of Directors.
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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 | | | 1 | | | 0 | | | 0 | | | 0 | |
Alaskan Native or Native American | | | 0 | | | 0 | | | 0 | | | 0 | |
Asian | | | 0 | | | 0 | | | 0 | | | 0 | |
Hispanic or Latinx | | | 0 | | | 0 | | | 0 | | | 0 | |
Native Hawaiian or Pacific Islander | | | 0 | | | 0 | | | 0 | | | 0 | |
White | | | 2 | | | 6 | | | 0 | | | 0 | |
Two or More Races or Ethnicities | | | 0 | | | 0 | | | 0 | | | 0 | |
LGBTQ+ | | | 0 | | |||||||||
Did Not Disclose Demographic Background | | | 0 | |
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a specific policy with respect to board diversity, the Board of Directors believes that it should be a diverse body and the Corporate Governance and Nominating Committee considers a broad range of backgrounds and experiences. The Corporate Governance Guidelines, Stockholder Nomination Policy (as hereinafter defined)corporate governance guidelines, stockholder nomination policy and Charterthe charter of the Corporate Governance and Nominating Committee set out that in making determinations regarding nominations of directors, the Corporate Governance and Nominating Committee considers factors such as character, integrity, judgment, diversity, independence, area of expertise, corporate experience, length of service, and understanding of the Company’s business. The Corporate Governance and Nominating Committee considers the following minimum qualifications to be satisfied by any nominee to the Board of Directors: the highest personal and professional ethics and integrity; proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment; skills that are complementary to those of the existing Board of Directors; the ability to assist and support management and make significant contributions to the Company’s success; and an understanding of the fiduciary responsibilities that is
The Corporate Governance and Nominating Committee has a
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Name of Director | |
| Age |
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David Botstein, Ph.D. | |
| 80 |
| | Director | | | Class III, term expires | | |
William Ericson | |
| 64 |
| | Director | | | Class III, term expires | | |
Christian O. Henry | |
| 55 | | | Director, President and Chief Executive Officer | | | Class I, term expires 2023 | | |
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| 69 |
| | Director | | | Class II, term expires | | |
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John F. Milligan, Ph.D. | |
| 62 |
| | Chair of the Board of Directors | | | Class I, term expires 2023 | | |
Marshall Mohr | |
| 67 |
| | Director | | | Class II, term expires | | |
Kathy Ordoñez | |
| 72 |
| | Director | | | Class III, term expires | | |
Lucy Shapiro, Ph.D. | |
| 82 |
| | Director | | | Class I, term expires 2023 | | |
Hannah A. Valantine, M.D. | |
| 71 |
| | Director | | | Class II, |
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The principal occupations and positions and directorships for at least the past five years of our directors and director nominees, as well as certain information regarding their individual experience, qualifications, attributes and skills that led our Board of Directors to conclude that they should serve on the Board of Directors, are described below. There are no family relationships among any of our directors or executive officers.
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President & Chief Financial Officer from 2007 to 2009, and Vice President & Chief Financial Officer from 2005 to 2006. Prior to joining Illumina, Mr. Henry served as the Chief Financial Officer of Tickets.com, Inc. from 2003 to 2005. From 1999 to 2003, Mr. Henry served as Vice President, Finance & Corporate Controller of Affymetrix, Inc. (acquired by Thermo Fisher Scientific in 2016). In 1997, Mr. Henry joined Nektar Therapeutics (formerly Inhale Therapeutic Systems, Inc.), as Corporate Controller, and later as its Chief Accounting Officer from 1997 to 1999. In 1996, Mr. Henry served as General Accounting Manager of Sugen, Inc. Mr. Henry began his career in 1992 at Ernst & Young LLP, where he was a Senior Accountant through 1996. Mr. Henry currently serves as a director and Chairman of the board of WAVE Life Sciences Ltd., and serves as chairman of its compensation committee and a member of its audit committee. Mr. Henry serves as a director of CMLS HoldingsGinkgo Bioworks, Inc and serves on its audit committee and compensation committee, and was also a director of CM Life Sciences III LLC. LLC from April 2021 to December 2021.
David Botstein, Ph.D. has been a member of our Board of Directors since 2012. Since January 2014, Dr. Botstein has been the Chief Scientific Officer at Calico Life Sciences, L.L.C. Dr. Botstein was formerly Director of the Lewis-Sigler Institute for Integrative Genomics and Anthony B. Evnin Professor of Genomics at Princeton University, where he served from 2003 to 2013. From 1990 to 2003 he was Chairman of the Department of Genetics at Stanford University. Previously, he was Vice President for Science at Genentech, Inc. He is a member of the National Academy of Sciences and the Institute of Medicine and has received numerous awards for his achievements in science. Dr. Botstein has made fundamental contributions to modern genetics, including the discovery of many yeast and bacterial genes and the establishment of key techniques that are commonly used today. In 1980, Dr. Botstein and three colleagues proposed a method for mapping genes that laid the groundwork for the Human Genome Project. Dr. Botstein holds a Ph.D. in Human Genetics from the University of Michigan and an A.B. in Biochemical Sciences from Harvard. We believe that Dr. Botstein possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his extensive experience in the life sciences industry.
William Ericson has been a member of our Board of Directors since 2004. Mr. Ericson has been the Founding Partner at Wildcat Venture Partners since 2016 where he focuses on investments in Digital Health. He is also a Managing Partner at Mohr Davidow Ventures (MDV) where he has led the firm’s focus on personalized medicine investing since 2003. Mr. Ericson has also served as a director of Adamas Pharmaceuticals, Inc. since 2005. Mr. Ericson holds a B.S.F.S. from Georgetown University School of Foreign Service and a J.D. from Northwestern University School of Law. We believe that Mr. Ericson possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his experience with multiple companies in the life sciences industry and his focus on companies with molecular diagnostic platforms that concentrate on personalized medicine.
Michael Hunkapiller, Ph.D. became our President and Chief Executive Officer in 2012. He was Chairman of our Board of Directors from 2011 until March 2, 2020 and has served on our Board of Directors since 2005. Dr. Hunkapiller stepped down as the President and Chief Executive Officer of the Company on September 14, 2020 and he assumed the position of Senior Fellow focused on technology development until his departure from the Company as an employee effective December 31, 2020. Since November 2004, Dr. Hunkapiller has been a General Partner at Alloy Ventures, or Alloy, a venture capital firm. Prior to Alloy, Dr. Hunkapiller spent 21 years at Applied Biosystems Inc. At Applied Biosystems, he held various positions, most recently serving as president and general manager. Dr. Hunkapiller holds a Ph.D. in Chemical Biology from the California Institute of Technology and a B.S. in Chemistry from Oklahoma Baptist University. We believe that Dr. Hunkapiller possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his long history with us, as well as his extensive experience at Applied Biosystems. Dr. Hunkapiller will continue to serve as a member of our Board of Directors until the expiration of his current term ending on the date of the Annual Meeting.
Randy Livingston has been a member of our Board of Directors since 2009. He has served as Vice President for Business Affairs and Chief Financial Officer of Stanford University since March 2001. In October 2017, he
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was also named University Liaison for Stanford Medicine and a director of Stanford Health Care and Lucile Packard Children’s Hospital at Stanford. Before joining Stanford University, Mr. Livingston served as chief financial officer for multiple technology and life science companies in Silicon Valley. Mr. Livingston currently serves as a director of eHealth, Inc. He also served as a director of Genomic Health, Inc. from 2004 to 2016. Mr. Livingston holds a B.S. in Mechanical Engineering and an M.B.A. from Stanford University. We believe that Mr. Livingston possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his executive experience and his financial and accounting expertise with public companies.
John F. Milligan, Ph.D.has been a member of our Board of Directors since 2013 and became ChairmanChair in September 2020. Dr. Milligan joined Gilead Sciences Inc. in 1990 as a research scientist and was appointed Director of Project Management and Project Team Leader for the Gilead Hoffmann-La Roche Tamiflu®Tamiflu® collaboration in 1996. In 2002, Dr. Milligan was appointed Chief Financial Officer of Gilead. He was named Gilead’s Chief Operating Officer in 2007 and President in 2008. Dr. Milligan was appointed Chief Executive Officer and elected to the board of directors of Gilead in 2016. On December 31, 2018, Dr. Milligan retired as Chief Executive Officer of Gilead and resigned from the board of directors. Dr. Milligan is currently the Executive ChairmanChair of 4D Molecular Therapeutics (NASDAQ: FDMT). Dr. Milligan is also the Chair of the board of trustees of Ohio Wesleyan University. Dr. Milligan received his B.A. from Ohio Wesleyan University, his Ph.D. in biochemistry from the University of Illinois and was an American Cancer Society postdoctoral fellow at the University of California at San Francisco. We believe that Dr. Milligan possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his executive experience and his financial expertise in the life sciences industry.
Marshall Mohr has been a member of our Board of Directors since 2012. Since March 2006, he has been Executive Vice President and Chief Financial Officer of Intuitive Surgical, Inc., a provider of surgical robotics. Prior to joining Intuitive Surgical, Mr. Mohr served as Vice President and Chief Financial Officer of Adaptec, Inc. Before 2003, Mr. Mohr was an audit partner with PricewaterhouseCoopers LLP where he was most recently the managing partner of the firm’s West Region Technology Industry Group and led its Silicon Valley accounting and audit advisory practice. Since 2005, Mr. Mohr has been a member of the board of directors and Chairman of the audit committee of Plantronics, Inc., a provider of lightweight communications headsets and telephone headset systems, and also served as a member of the board of directors and Chairman of the audit committee of Atheros Communications, Inc., a developer of semiconductor system solutions for wireless communications products, from November 2003 to May 2011 when Atheros was sold to Qualcomm, Inc. Mr. Mohr holds a Bachelor of Business Administration in Accounting and Finance from Western Michigan University. We believe that Mr. Mohr possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his experience in financial and accounting matters.
Kathy Ordoñez has been a member of our Board of Directors since December 2014. She served as our Chief Commercial Officer and Executive Vice President from October 2017 to October 2018. Ms. Ordoñez brings more than 30 years of experience in the life sciences and diagnostics industries. From January 2012 until June 2013, Ms. Ordoñez was a Senior Vice President at Quest Diagnostics Incorporated, a leading provider of diagnostic information services, where she was initially responsible for leading their R&D effort and later provided oversight to multiple businesses commercializing diagnostic products and testing services. Ms. Ordoñez joined Quest Diagnostics as part of its acquisition in 2011 of Celera Corporation, a leading provider of genetic testing products for HIV resistance, cystic fibrosis and high complexity tissue transplantation. From April 2002 until May 2011, Ms. Ordoñez was the Chief Executive Officer at Celera, and she founded Celera Diagnostics in December 2000. From 1985 until 2000, Ms. Ordoñez held several senior positions at Hoffmann-La Roche, overseeing the formation of Roche Molecular Systems, where she served as President and Chief Executive Officer, and led the wide-scale commercial application of the Polymerase Chain Reaction (PCR) technology to the research, diagnostic and forensic fields. Ms. Ordoñez also served as a Director, non-executive Chairman, and Chief Executive Officer of RainDance Technologies, Inc., which was sold to Bio-Rad Laboratories, Inc. in February 2017. We believe that Ms. Ordoñez possesses specific attributes that qualify her to serve as a member of our Board of Directors, including her extensive experience in the life sciences and diagnostic industries. Ms. Ordoñez holds a B.A. in Chemistry and honorary Doctorate of Science from Hartwick College.
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Lucy Shapiro, Ph.D.has been a member of our Board of Directors since 2012. Dr. Shapiro currently serves as the Virginia and D.K. Ludwig Professor of Cancer Research and the Director of the Beckman Center for Molecular and Genetic Medicine at Stanford University’s School of Medicine, where she has been a faculty member since 1989. Dr. Shapiro is a co-founder and director of Anacor Pharmaceuticals, Inc. which was acquired by Pfizer Inc. in 2016. In 2016 she founded a second anti-infectives company, Boragen, LLC. In 1989, Dr. Shapiro founded Stanford University’s Department of Developmental Biology, and served as its Chairman from 1989 to 1997. Prior to that, Dr. Shapiro served as Chair of the Department of Microbiology and Immunology in the College of Physicians and Surgeons of Columbia University. She received a B.A. from Brooklyn College and a Ph.D. in Molecular Biology from the Albert Einstein College of Medicine. Dr. Shapiro has received numerous awards including the National Medal of Science. She has been elected to the National Academy of Sciences, the American Academy of Microbiology, the American Academy of Arts and Sciences and the National Academy of Medicine for her work in the fields of molecular biology and microbiology. Dr. Shapiro previously served as a non-executive director of GlaxoSmithKline plc from 2001 to 2006 and Anacor Pharmaceuticals, Inc. from 2001 to 2016. Dr. Shapiro is currently a director of 5Metis, Inc., and was also a director of Gen-Probe, Inc. from 2008 to 2012. We believe that Dr. Shapiro possesses specific attributes that qualify her to serve as a member of our Board of Directors, including her extensive experience in the life sciences industry.
Name of Director | | | Audit | | | Compensation | | | Corporate Governance and Nominating | | | Science and Technology | |
David Botstein, Ph.D. | | | | | | | | | | | | X | |
William Ericson | | | | | | X (chair) | | | X | | | | |
Randy Livingston | | | X (chair) | | | | | | X | | | | |
John F. Milligan, Ph.D. | | | X | | | X | | | | | | | |
Marshall Mohr | | | X | | | X | | | | | | | |
Kathy Ordoñez | | | | | | X(1) | | | | | | X (chair) | |
Lucy Shapiro, Ph.D. | | | | | | | | | X (chair) | | | X | |
Hannah A. Valantine, M.D. | | | | | | | | | X | | | X | |
Number of meetings held during 2022 | | | 5 | | | 7 | | | 3 | | | 5 | |
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Name of Director |
| Audit |
| Compensation |
| Corporate Governance and Nominating |
| Science and Technology |
David Botstein, Ph.D. |
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| X |
William Ericson |
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| X (chair) |
| X |
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Michael Hunkapiller, Ph.D. |
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| X |
Randy Livingston |
| X (chair) |
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| X |
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John F. Milligan, Ph.D. |
| X |
| X |
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Marshall Mohr |
| X |
| X |
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Kathy Ordoñez |
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| X (chair) |
Lucy Shapiro, Ph.D. |
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| X(chair) |
| X |
Number of meetings held during 2020 |
| 9 |
| 12 |
| 13 |
| 3 |
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Corporate Governance and Nominating Committee
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Through June 2020,
a general guideline for the appropriate level of cash and equity compensation, but did not attempt to benchmark cash or equity compensation to any specific percentile. A summary of our amended non-employee director compensation program, which became effective as of April 21, 2021, is set forth below.
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(1) In April 2019, in lightEach non-employee director is paid an annual cash retainer of the then-in-process merger with Illumina,$40,000. There are no per-meeting attendance fees for attending Board meetings or meetings of any committee of the Board of Directors decided to amend the Company’s Outside Director Compensation Policy to terminate each non-employee director’s annual stock option grant to purchase 25,000 of the Company’s common stock and increase each non-employee director’s cash retainer from $35,000 to $135,000, effective April 11, 2019.
Directors.
$40,000.
In connection with Mr. Henry’s appointment as Chairman of the Board, effective March 2, 2020, Mr. Henry received an additional annual retainer of $35,000 as well as a stock option to purchase 35,000 shares of the Company’s common stock.
Our Compensation Committee consulted with an independent compensation consultant, Radford, to perform an analysis of our non-employee director compensation policy relative to prevailing market data. Based on its review, the Board of Directors decided to make changes to the cash and equity-based compensation levels. With respect to Board service, our Board of Directors approved compensation to each non-employee member of the Board as follows, effective June 21, 2020:
Cash compensation: Each non-employee member of the Board of Directors was eligible to receive the following cash compensation:
(1) Each Outside Director will be paid an annual cash retainer of $35,000. There are no per‑meeting attendance fees for attending Board meetings. This cash compensation will be paid quarterly in equal installments in advance.
(2) The chair of our Audit Committee is paid an annual retainer of $20,000 and members of our Audit Committee other than the chair are paid an annual retainer of $10,000;
17
(3) The chair of our Compensation Committee is paid an annual retainer of $14,000, and members of our Compensation Committee other than the chair are paid an annual retainer of $7,000;
(4) The chair of our Corporate Governance and Nominating Committee is paid an annual retainer of $10,000, and members of our Corporate Governance and Nominating Committee other than the chair are paid an annual retainer of $5,000;
(5) The chair of our Science and Technology Committee is paid an annual retainer of $10,000, and the members of our Science and Technology Committee other than the chair are paid an annual retainer of $5,000; and
(6) The chair of the Board is paid an annual retainer of $35,000.
We reimburse our non-employee directors for all reasonable out-of-pocket expenses incurred in the performance of their duties as directors.
Equity compensation:
Each new non-employee director receives a stock option grant to purchase 35,000 shares of our common stock under the terms of the 2010 Director Plan, or, following termination of such plan, the Company’s 2020 Equity Incentive Plan. These initial awards will vest over three years, with one-third of the shares subject to the option vesting on the one-year anniversary of the date of grant, and the remaining shares vesting monthly over the following two years, provided such non-employee director continues to serve as a director through each vesting date.
In addition, each non-employee director automatically receives an annual stock option grant with a grant date fair value of $100,000,$200,000, beginning on the date of the first annual meeting of our stockholders that is held at least four months after such non-employee director initially began to provide continuous service as a non-employee director, provided that the grant date fair value of such first annual stock option grant shall be pro-rated based on the number of months of continuous service prior to such first annual meeting as a non-employee director where service in any month counts as a full month of service, and provided further that such non-employee director continues to serve as a director through such date. Such annualAnnual awards vest monthly over one year, or if earlier, on the date of the next annual meeting of our stockholders, provided such non-employee director continues to serve as a director through each vesting date.
In connection with Dr. Milligan’s appointment as Chairman of the Board, effective September 14, 2020, Dr. Milligan received an additional annual retainer of $35,000 as well as a stock option to purchase 35,000 shares of the Company’s common stock.
In 2021, our Compensation Committee again consulted with Radford to perform an analysis of our non-employee director compensation policy relative to prevailing market data. Based on its review, the Board decided to approve the following adjustments in compensation non-employee member of the Board as follows, effective March 10, 2021:
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Limitation:
Non-employee directors may not be granted, in any fiscal year, awards and any other compensation (including without limitation any cash retainers or fees) that, in the aggregate, exceed $500,000, provided that such amount is increased to $1,000,000 in the fiscal year of his or her initial service as a non-employee director. Any awards or other compensation provided to an individual for his or her services as an employee or consultant (other than as a non-employee director) are excluded from such calculation.
For the avoidance of doubt, all new awards will be granted under the 2020 Plan.
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2022
Name | | | Fees earned or paid in cash ($) | | | Option Awards ($)(1)(2) | | | Total ($) | | |||||||||
David Botstein, Ph.D | | | | | 45,000 | | | | | | 199,998 | | | | | | 244,998 | | |
William Ericson | | | | | 59,000 | | | | | | 199,998 | | | | | | 258,998 | | |
Randy Livingston | | | | | 65,000 | | | | | | 199,998 | | | | | | 264,998 | | |
John F. Milligan, Ph.D. | | | | | 97,000 | | | | | | 199,998 | | | | | | 296,998 | | |
Marshall Mohr | | | | | 57,000 | | | | | | 199,998 | | | | | | 256,998 | | |
Kathy Ordoñez | | | | | 52,917 | | | | | | 199,998 | | | | | | 252,915 | | |
Lucy Shapiro, Ph.D. | | | | | 55,000 | | | | | | 199,998 | | | | | | 254,998 | | |
Hannah A. Valantine, M.D. | | | | | 50,000 | | | | | | 199,998 | | | | | | 249,998 | | |
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| All Other Compensation |
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Name |
| Fees earned or paid in cash ($) |
| Option Awards ($) |
| Reimbursement for Income Taxes ($) |
| Total ($) |
David Botstein, Ph.D. |
| 81,667 |
| 100,000 |
| — |
| 181,667 |
William Ericson |
| 95,667 |
| 100,000 |
| — |
| 195,667 |
Christian O. Henry (1) |
| 90,667 |
| 142,620 |
| — |
| 233,287 |
Randy Livingston |
| 101,667 |
| 100,000 |
| — |
| 201,667 |
John F. Milligan, Ph.D. (2) |
| 102,417 |
| 378,320 |
| — |
| 480,737 |
Marshall Mohr |
| 93,667 |
| 100,000 |
| — |
| 193,667 |
Kathy Ordoñez (3) |
| 86,667 |
| 100,000 |
| 48,449 |
| 235,116 |
Lucy Shapiro, Ph.D. |
| 91,667 |
| 100,000 |
| — |
| 191,667 |
__________________
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The aggregate number of shares subject to stock options outstanding and exercisable and restricted stock units with time-based vesting (“RSUs”) outstanding atas of December 31, 20202022 for each non-employee director is as follows:
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Name |
| Aggregate Number of Stock Options Outstanding | Aggregate Number of Stock Options Exercisable |
| Aggregate Number of RSUs Outstanding |
David Botstein, Ph.D. |
| 231,499 | 200,500 |
| — |
William Ericson |
| 233,999 | 203,000 |
| — |
Christian O. Henry (1) |
| 1,616,499 | 43,693 |
| 750,000 |
Randy Livingston |
| 238,999 | 208,000 |
| — |
John F. Milligan, Ph.D. |
| 131,499 | 65,500 |
| — |
Marshall Mohr |
| 256,499 | 225,500 |
| — |
Kathy Ordoñez (2) |
| 593,999 | 451,535 |
| 21,875 |
Lucy Shapiro, Ph.D. |
| 129,833 | 98,834 |
| — |
_______________
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Name | | | Aggregate Number of Stock Options Outstanding | | | Aggregate Number of Stock Options Exercisable | | ||||||
David Botstein, Ph.D. | | | | | 147,399 | | | | | | 121,143 | | |
William Ericson | | | | | 272,399 | | | | | | 246,143 | | |
Randy Livingston | | | | | 247,399 | | | | | | 221,143 | | |
John F. Milligan, Ph.D. | | | | | 207,399 | | | | | | 171,420 | | |
Marshall Mohr | | | | | 272,399 | | | | | | 246,143 | | |
Kathy Ordoñez(3) | | | | | 484,020 | | | | | | 457,764 | | |
Lucy Shapiro, Ph.D. | | | | | 205,733 | | | | | | 179,477 | | |
Hannah A. Valantine, M.D. | | | | | 92,007 | | | | | | 51,255 | | |
Name of Director | | | Age | | | Principal Occupation | | | Director Since | |
Class I Nominees (term for which nominated expires in 2026) | | |||||||||
Christian O. Henry | | | 55 | | | President and Chief Executive Officer of Pacific Biosciences of California, Inc. | | | 2018 | |
John F. Milligan, Ph.D. | | | 62 | | | Chair of the Board of Directors of Pacific Biosciences of California, Inc. | | | 2013 | |
Lucy Shapiro, Ph.D. | | | 82 | | | Virginia and D.K. Ludwig Professor of Cancer Research and the Director of the Beckman Center for Molecular and Genetic Medicine at Stanford University’s School of Medicine | | | 2012 | |
Class II Directors (term expires in 2024) | | |||||||||
Randy Livingston | | | 69 | | | Vice President for Business Affairs and Chief Financial Officer of Stanford University | | | 2009 | |
Marshall Mohr | | | 67 | | | Executive Vice President, Global Business Services of Intuitive Surgical, Inc. | | | 2012 | |
Hannah A. Valantine, M.D. | | | 71 | | | Professor of Medicine (Cardiovascular) at the Stanford University Medical Center | | | 2021 | |
Class III Directors (term expires in 2025) | | |||||||||
David Botstein, Ph.D. | | | 80 | | | Former Chief Scientific Officer of Calico Life Sciences | | | 2012 | |
William Ericson | | | 64 | | | Founding Partner of Wildcat Venture Partners | | | 2004 | |
Kathy Ordoñez | | | 72 | | | Director | | | 2014 | |
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Name of Director |
| Age |
| Principal Occupation |
| Director Since |
Class II Nominees (term to expire in 2024) |
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Randy Livingston |
| 67 |
| Vice President for Business Affairs and Chief Financial Officer of Stanford University |
| 2009 |
Marshall Mohr |
| 65 |
| Senior Vice President and Chief Financial Officer of Intuitive Surgical, Inc. |
| 2012 |
Hannah A. Valantine, M.D. |
| 69 |
| Professor of Medicine (Cardiovascular) at the Stanford University Medical Center |
| N/A |
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Class III Directors (term to expire in 2022) |
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David Botstein, Ph.D. |
| 78 |
| Chief Scientific Officer of Calico Life Sciences |
| 2012 |
William Ericson |
| 62 |
| Managing Partner of Mohr Davidow Ventures and Founding Partner of Wildcat Venture Partners |
| 2004 |
Kathy Ordoñez |
| 70 |
| Director |
| 2014 |
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Class I Directors (term to expire in 2023) |
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Christian O. Henry |
| 52 |
| President and Chief Executive Officer of Pacific Biosciences of California, Inc. |
| 2018 |
John F. Milligan, Ph.D. |
| 60 |
| Chairman of the Board of Directors of Pacific Biosciences of California, Inc. |
| 2013 |
Lucy Shapiro, Ph.D. |
| 80 |
| Virginia and D.K.Ludwig Professor of Cancer Research and the Director of the Beckman Center for Molecular and Genetic Medicine at Stanford University's School of Medicine |
| 2012 |
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There are no family relationships among any of the nominees, directors and/or any of our executive officers. Our executive officers serve at the discretion of the Board of Directors. Further information about
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Fee Category | | | 2022 | | | 2021 | | ||||||
Audit Fees | | | | $ | 1,672 | | | | | $ | 2,035 | | |
Audit-related Fees | | | | | — | | | | | | 260 | | |
Tax Fees | | | | | — | | | | | | — | | |
All Other Fees | | | | | 2 | | | | | | 4 | | |
Total Fees | | | | $ | 1,674 | | | | | $ | 2,299 | | |
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Fee Category |
| 2020 |
| 2019 | ||
Audit Fees |
| $ | 1,255 |
| $ | 1,197 |
Audit-related Fees |
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Tax Fees |
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All Other Fees |
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| 2 |
Total Fees |
| $ | 1,255 |
| $ | 1,199 |
Audit Fees consisted of professional services rendered in connection with the audit of our annual consolidated financial statements, including the audit of internal control over financial reporting, and quarterly review of our condensed financial statements. This category also includes advice on accounting matters that arose during the audit or the review of interim financial statements.
statements, comfort letters, consents, and statutory audits required in non-U.S. jurisdictions.
statements or internal control over financial reporting and are not reported under “Audit Fees,” as well as fees related to due diligence related to mergers and acquisitions.
23
Employment of Related Persons
Kathryn Keho, who is the daughter of Dr. Michael Hunkapiller, our former Chief Executive Officer and President and a current member of the Board of Directors, previously served as our Senior Director, Market Development. Ms. Keho’s annual base salary was $265,225 for the year ended December 31, 2020. Ms. Keho also earned $62,727 of cash incentive compensation for the year ended December 31, 2020.
Ms. Keho was granted the following options and restricted stock units during the years ended December 31, 2018, 2019 and 2020, respectively:
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Grant Date |
| All Other Option Awards: Number of Securities Underlying Options (#) (1) |
| All Other Awards: Number of Shares of Stock or Units (#) |
| Exercise or Base Price of Option Award ($) |
| Grant Date Fair Value of Stock and Option Awards ($) |
2/15/2018 |
| 20,000 |
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| 2.54 |
| 29,648 |
2/15/2019 |
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| 5,000 | (2) |
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| 35,650 |
3/15/2019 |
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| 2,500 | (2) |
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| 18,400 |
2/18/2020 |
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| 12,500 | (3) |
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| 56,313 |
2/18/2020 |
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| 25,000 | (4) |
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| 112,625 |
___________________
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We believe that Ms. Keho’s compensation, which was periodically reviewed by the Compensation Committee, was comparable with compensation paid to other employees with similar levels of responsibility and years of experience.
Stanford University
Calico Life Sciences LLC
David Botstein, Ph.D. is the Chief Scientific Officer of Calico Life Sciences, LLC. For the years ended December 31, 2020 and 2019, we recognized revenue relating to Calico Life Sciences, LLC with a total value of approximately $35,000 and $87,000, respectively. As of both December 31, 2020 and 2019, $0 of our accounts receivable balance of $16,837,000 and $15,266,000, respectively, related to Calico Life Sciences, LLC.
Name and address of beneficial owner(1) | | | Number of Shares Owned(2) | | | Right to Acquire Shares(3) | | | Total Beneficial Ownership | | | Percent of Class | | ||||||||||||
5% Stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | |
ARK Investment Management LLC(4) | | | | | 25,691,681 | | | | | | — | | | | | | 25,691,681 | | | | | | 10.3% | | |
The Vanguard Group(5) | | | | | 20,279,035 | | | | | | — | | | | | | 20,279,035 | | | | | | 8.1% | | |
BlackRock, Inc.(6) | | | | | 18,534,459 | | | | | | — | | | | | | 18,534,459 | | | | | | 7.4% | | |
Madrone Opportunity Fund, L.P.(7) | | | | | 16,415,933 | | | | | | — | | | | | | 16,415,933 | | | | | | 6.6% | | |
Jackson Square Partners, LLC(8) | | | | | 15,005,177 | | | | | | — | | | | | | 15,005,177 | | | | | | 6.0% | | |
Nikko Asset Management Americas, Inc.(9) | | | | | 14,166,193 | | | | | | — | | | | | | 14,166,193 | | | | | | 5.7% | | |
Named executive officers, directors, and director nominees: | | | | | | | | | | | | | | | | | | | | | | | | | |
Christian O. Henry | | | | | 165,127 | | | | | | 1,334,078 | | | | | | 1,499,205 | | | | | | * | | |
David Botstein, Ph.D. | | | | | — | | | | | | 147,399 | | | | | | 147,399 | | | | | | * | | |
William Ericson | | | | | 18,795 | | | | | | 247,399 | | | | | | 266,194 | | | | | | * | | |
Randy Livingston | | | | | — | | | | | | 247,399 | | | | | | 247,399 | | | | | | * | | |
John F. Milligan, Ph.D. | | | | | 110,000 | | | | | | 202,538 | | | | | | 312,538 | | | | | | * | | |
Marshall Mohr | | | | | 60,000 | | | | | | 272,399 | | | | | | 332,399 | | | | | | * | | |
Kathy Ordoñez | | | | | 18,595 | | | | | | 484,020 | | | | | | 502,615 | | | | | | * | | |
Lucy Shapiro, Ph.D. | | | | | — | | | | | | 205,733 | | | | | | 205,733 | | | | | | * | | |
Hannah A. Valantine, M.D. | | | | | — | | | | | | 81,537 | | | | | | 81,537 | | | | | | * | | |
Jeff Eidel(10) | | | | | 6,610 | | | | | | — | | | | | | 6,610 | | | | | | * | | |
Susan G. Kim | | | | | 51,155 | | | | | | 348,437 | | | | | | 399,592 | | | | | | * | | |
Mark Van Oene | | | | | 115,496 | | | | | | 572,868 | | | | | | 688,364 | | | | | | * | | |
All current directors and executive officers as a group (12 people) | | | | | 545,778 | | | | | | 4,143,807 | | | | | | 4,689,585 | | | | | | 1.9% | | |
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Name and address of beneficial owner (1) |
| Number of Shares Owned (2) |
| Right to Acquire Shares (3) |
| Total Beneficial Ownership |
| Percent of Class (4) |
5% Stockholders: |
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ARK Investment Management, LLC (5) |
| 28,504,629 |
| — |
| 28,504,629 |
| 14.4% |
SB Northstar LP (6) |
| 9,861,089 |
| 20,689,650 |
| 30,550,739 |
| 13.9% |
BlackRock Inc. (7) |
| 15,115,490 |
| — |
| 15,115,490 |
| 7.6% |
The Vanguard Group (8) |
| 14,320,299 |
| — |
| 14,320,299 |
| 7.2% |
Jackson Square Partners, LLC (9) |
| 13,474,438 |
| — |
| 13,474,438 |
| 6.8% |
Named executive officers, directors, and director nominees: |
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Christian O. Henry |
| — |
| 83,414 |
| 83,414 |
| * |
Michael Hunkapiller, Ph.D. (10) |
| 910,905 |
| 8,334 |
| 919,239 |
| * |
William Ericson (11) |
| 4,598,397 |
| 222,374 |
| 4,820,771 |
| 2.4% |
David Botstein, Ph.D. |
| — |
| 59,874 |
| 59,874 |
| * |
Randy Livingston |
| — |
| 159,874 |
| 159,874 |
| * |
John F. Milligan, Ph.D. |
| 110,000 |
| 84,874 |
| 194,874 |
| * |
Marshall Mohr |
| — |
| 244,874 |
| 244,874 |
| * |
Kathy Ordoñez |
| 10,938 |
| 333,206 |
| 344,144 |
| * |
Lucy Shapiro, Ph.D. |
| — |
| 118,208 |
| 118,208 |
| * |
Hannah A. Valantine, M.D. |
| — |
| — |
| — |
| * |
Susan G. Kim |
| — |
| 787 |
| 787 |
| * |
Susan K. Barnes (12) |
| 702,938 |
| — |
| 702,938 |
| * |
Denis Zaccarin, Ph.D. |
| 27,470 |
| 212,817 |
| 240,287 |
| * |
All current directors and executive officers as a group (14 people) (13) |
| 5,682,217 |
| 1,717,703 |
| 7,399,920 |
| 3.7% |
_____________
April 5, 2023.
(5)
27
(6) Consists of 20,689,650 shares issuable upon conversion of the 1.50% Convertible Senior Notes due February 15, 2028 and 9,861,089 shares as of March 31, 2021, in each case beneficially owned by SB Northstar LP, which is an indirect subsidiary of SoftBank Group Corporation. The principal business address of SB Northstar LP is 190 Elgin200 Central Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands. The principal business address of SoftBank Group Corporation is 1-9-1, Higashi-Shimbashi Minato-ku, Tokyo 105-7303 Japan.
(7) St. Petersburg, FL 33701.
(8)
(9) 2 Circle Star Way, San Carlos, CA 94070.
(10) Dr. Hunkapiller is not standing for re-election, but will continue to serve
(11) Number ofcommon stock and that such shares are owned, includes 4,598,397 shares held of record by funds affiliated with Mohr Davidow Ventures where Mr. Ericson is a Managing Partner. Mr. Ericson disclaims beneficial ownership of any shares held of record by funds affiliated with Mohr Davidow Ventures except to the extent of his pecuniary interest therein. Shares of record includes (i) 4,318,915 shares held by MDV VII LP as nominee for MDV VII MDV VII Leaders Fund LP MDV ENF VIIA; (ii) 201,857 shares held by MDV VII Leaders Fund LP; (iii) 77,625 shares held by MDV ENF VIIA LP AND MDV ENF VIIB LP. The address of these entities is c/o Mohr Davidow Ventures, 3000 Sand Hill Road, Building 3, Suite 290, Menlo Park, CA 94025. Each of Jonathan Feiber, Nancy Schoendorf, and Seventhor may be deemed to sharebe beneficially owned, by its parent holding companies, Sumitomo Mitsui Trust Holdings Inc. and Nikko Asset Management Co., Ltd. Nikko Asset Management Americas, Inc., Sumitomo Mitsui Trust Holdings, Inc. and Nikko Asset Management Co., Ltd. reported having shared voting and dispositive power over theas to all of these shares. The business address for Nikko Asset Management Americas, Inc. is 605 Third Avenue, 38
(12) Ms. Barnes retired from her role as Executive Vice President and Chief Financial Officer on August 7, 2020.
(13) Number of shares owned does not include shares owned by Ms. Barnes because Ms. Barnes retired from her role as Executive Vice President and Chief Financial Officer on August 7, 2020. Includes shares owned by Messrs. Peter Fromen, Chris Seipert and Mark Van Oene as of March 31, 2021.for which Mr. Seipert was appointed as an executive officer of the Company effective April 1, 2020. Messrs. Fromen and Van Oene were appointed as executive officers of the Company effective January 8, 2021.
Peter Fromen
Accounting.
The following report of the Compensation Committee shall not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act except to the extent that the Company specifically incorporates it by reference into such filing.
The Compensation Committee has reviewedDiscussion and discussed with management the disclosures contained in the following section entitled “Executive Compensation”. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the section entitled “Executive Compensation” be included in this Proxy Statement for the Annual Meeting.
Members of the Compensation Committee
William Ericson (Chair)
Marshall Mohr
John F. Milligan, Ph.D.
We are a “smaller reporting company” under Item 10 of Regulation S-K promulgated under the Securities and Exchange Act of 1934, and the following compensation disclosure is intended to comply with the requirements applicable to smaller reporting companies. Although the rules allow us to provide less detail about our executive compensation program, the Compensation Committee is committed to providing additional, voluntary disclosure to help stockholders understand its executive compensation-related decisions. Accordingly, this section includes supplemental narratives that describe the executive compensation program for our named executive officers during 2020.
Name | | | Position | |
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Christian O. Henry | |
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| Chief Financial Officer | |
Mark Van Oene | | | Chief Operating Officer | |
Jeff Eidel(1) | | | Chief Commercial Officer | |
Peter Fromen(2) | | | Former Chief Commercial Officer | |
August 16, 2022.
(3)Ms. Kim was appointed as Chief Financial Officer effective September 28, 2020.
(4)Ms. Barnes retired from her role as Executive Vice President and Chief Financial Officer on August 7, 2020.
(5)Dr. Zaccarin was appointed as an executive officer of the Company effective April 1, 2020.
30
Executive Summary
The past year for Pacific Biosciences was one of uncertainty, change, and growth. Our business, and particularly our revenues, was negatively impacted as many ofproviding our customers with advanced sequencing technologies with higher throughput and improved workflows that we believe will enable dramatic advancements in multiple regions around the world shut down operations for various, lengthy periods of time in efforts in response to the COVID-19 pandemic. This resulted in lower product revenues of $65.4 million for 2020 compared to $77.7 million in the prior year.
routine healthcare. Our customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations (CROs), pharmaceutical companies and agricultural companies.
While our annual performance may have fallen slightly short of the prior year due in a large part to the global pandemic, our financial performance in the fourth quarter was strong and we are excited to build on this momentum into 2021.
We finished 2020 with strong momentum which has continued into 2021.
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Leadership Transitions
While our employees
In June 2020, we announced that Michael Hunkapiller would transition from his role as our President Inc, the NASDAQ Composite Index
and Chief Executive Officer by the endNASDAQ Biotechnology Index
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the expiration of his current termdividends. Fiscal year ending on the date of the Annual Meeting. Concurrent with this announcement we also announced that Susan Barnes was retiring in August 2020 from her role as Executive Vice President and Chief Financial Officer.
In August 2020, our Board of Directors, following an internal and external search, announced that Christian Henry, our Chairman of the Board of Directors since March 2020, would be the company’s new Chief Executive Officer. Mr. Henry had served on our board since 2018 and brings tremendous experience of driving commercial growth in the life sciences industry. We are fortunate that he has served on our board and has a solid understanding of our products and markets.
Mr. Henry’s initial compensation package consisted of:
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Shortly thereafter, we announced the hiring of Susan Kim as our new Chief Financial Officer. Ms. Kim brings deep experience in all aspects of financial operations.
Ms. Kim’s initial compensation package consisted of:
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In early 2021, we continued to strengthen our senior leadership team with two additional hires: effective January 8, 2021, Mark Van Oene was hired as our Chief Operating Officer, while Peter Fromen was hired as our Chief Commercial Officer. Both newly established positions will play critical roles in growing our research and development, manufacturing, and corporate development capabilities.
Pacific Biosciences has exciting times ahead, with ample opportunities to grow and innovate, and we believe this new leadership team will help accelerate our long-term strategy and deliver value for all our stakeholders.
Highlights of our Executive Compensation Practices
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Element | | | Performance Period | | | Objective | |
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Base Salary |
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| Annual | | | • Recognizes an individual’s contribution and performance
• Rewards for the experience, education and criticality to the business
• Serves as an important retention vehicle | |
Short-term Cash Incentives |
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| Annual | | | • Rewards achievement of financial and
• In | |
Annual Equity Awards
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| Long-term | | | • Supports the achievement of strong stock price growth
• Aligns the interests of executives and stockholders over time
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Element | | | Performance Period | | | Objective | |
| | | | | | • Serves as an important retention tool with awards vesting over time tied to continued service
• Options may vest over one to four years,
• RSUs vest in equal installments over two to four years, on each anniversary of the grant date | |
What We Do | | What We Avoid | | | ||||
Pay for performance philosophy and culture |
| | Excise tax gross-ups | | | |||
Majority of pay is |
| | Significant perquisites | | | |||
Double-trigger change-in-control equity provisions |
| | Guaranteed salary increases | | | |||
Compensation recoupment (“clawback”) policy |
| | Contracts that guarantee employment | | | |||
Engage an independent compensation consultant |
| | Margin accounts, hedging, pledging, derivatives or short sale transactions in our stock | | | |||
Responsible use of shares in our long-term incentive program |
| | Repricing stock options without | | | |||
Annually assesses compensation risk | | | | | | | |
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Recent “Say-on-Pay” Vote
Stockholders have the opportunity to participate in a say-on-pay vote during the Annual Meeting. We value the opinions of our stockholders.
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Role of Compensation Consultant
Radford
When considering
In late 2019, Radford provided to the Compensation Committee a detailed market analysis using compensation survey data for the technology and life sciences industries generally within:
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to reflect thehighly competitive market for talent at companies of a similar profile as the Company.
For 2020 compensation decisions, the Compensation Committee did not rely on a specific named peer group, instead relying on custom survey data from Radford Global Life Science Survey and Radford Technology Survey (the “Survey Data”) to examine market information that is specific to the technical and scientific nature of the role requirements for our named executive officers. This information is used by the Compensation Committee to assist in determining the overall level of pay including base salary, target variable cash incentives, and equity awards, as applicable, for the named executive officers. Radford provided the Compensation Committee with market data and analysis to help guide the Compensation Committee’s decision making regarding the compensation packages for each of Mr. Henry, Ms. Kim and Dr. Zaccarin.
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2021 Peer Group
In the fourth quarter of 2021, the Compensation Committee engaged Aon to assist in reviewing the peer group established in late 2020 uponand to determine the recommendation of Radfordappropriate updated peer group in setting 2022 compensation for the NEOs (the “Peer Group”). Upon consultation with Aon and a review of market and peer practices, the Compensation Committee determined to develop a peer group of specific companies, for use in 2021 compensation decisions. The Compensation Committee set the following criteria for consideration:
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| 10x Genomics, Inc. | | | Guardant Health, Inc. | | | Nevro Corp. | |
| Adaptive Biotechnologies Corporation | | | Invitae Corporation | | | Penumbra Inc. | |
| Axonics, Inc. | | | iRhythm Technologies, Inc. | | | Quanterix Corporation | |
| Berkeley Lights, Inc. | | | Maravai LifeSciences Holdings, Inc. | | | Repligen Corporation | |
| CareDx, Inc. | | | NanoString Technologies, Inc. | | | Twist Bioscience Corporation | |
| Castle Biosciences, Inc. | | | Natera, Inc. | | | Veracyte, Inc. | |
| Codexis, Inc. | | | NeoGenomics, Inc. | | | | |
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Role of Executive Officers in Compensation Decisions
Prior to the 2020 CEO and CFO role transitions, for executive officers other than our Chief Executive Officer and Chief Financial Officer, our
Following our 2020 leadership changes, our Compensation Committee has sought and consideredconsiders input from our Chief Executive Officer regarding our executive officers’ responsibilities, performance and compensation. Our Compensation Committee considers our Chief Executive Officer’s (and formerly, our Chief Financial Officer’s) recommendations as well as any other relevant factors (for example, market data, Company performance, internal equity, and the executive’s experience, tenure, skills, and historical and future expected contributions), and approves the specific compensation for all such executive officers. Our Compensation Committee discusses with the Chief Executive Officer the core operational and financial metrics to drive the business forward, and how various forms of variable and incentive compensation can be applied at the executive level to achieve our goals. Our Compensation Committee meets in executive session, without our Chief Executive Officer, and Chief Financial Officer, when discussing or making recommendations regarding theirhis compensation.
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Components of our Executive Compensation Program
For 2020, base
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Name | | | As of Fiscal Year End 2021 ($) | | | As of Fiscal Year End 2022 ($) | | | Change (%) | | |||||||||
Christian O. Henry | | | | | 650,000 | | | | | | 670,000 | | | | | | 3.1% | | |
Susan G. Kim | | | | | 430,000 | | | | | | 443,000 | | | | | | 3.0% | | |
Mark Van Oene | | | | | 550,000 | | | | | | 567,000 | | | | | | 3.1% | | |
Jeff Eidel(1) | | | | | — | | | | | | 438,000 | | | | | | — | | |
Peter Fromen(2) | | | | | 425,000 | | | | | | 438,000 | | | | | | 3.1% | | |
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Name |
| 2020 ($) |
| 2019 ($) |
| Change (%) |
Christian O. Henry (1) |
| 650,000 |
| N/A |
| N/A |
Michael Hunkapiller, Ph.D. (2) |
| 582,900 |
| 582,900 |
| 0% |
Susan G. Kim (3) |
| 415,000 |
| N/A |
| N/A |
Susan K. Barnes (4) |
| 401,500 |
| 401,500 |
| 0% |
Denis Zaccarin, Ph.D. (5) |
| 330,000 |
| N/A |
| N/A |
___________________
August 16, 2022.
(3)Ms. Kim was appointed as Chief Financial Officer effective September 28, 2020.
(4)Ms. Barnes retired from her role as Executive Vice President and Chief Financial Officer on August 7, 2020.
(5)Dr. Zaccarin was appointed as an executive officer of the Company effective April 1, 2020, at which time his annual salary of $330,000 took effect.
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Name | | | Target Incentive Opportunity for 2022 as Percentage of Base Salary(1) | | | Target Incentive Opportunity for 2022 ($) | | ||||||
Christian O. Henry | | | | | 100% | | | | | | 670,000 | | |
Susan G. Kim | | | | | 50% | | | | | | 221,500 | | |
Mark Van Oene | | | | | 60% | | | | | | 340,200 | | |
Jeff Eidel(1) | | | | | 50% | | | | | | 82,800 | | |
Peter Fromen | | | | | 50% | | | | | | 219,000 | | |
GivenCompensation Committee, the then pending transaction with Illumina, the Company had not established aBoard of Directors approved our 2022 variable cash incentive program, for 2020 by early in the year. After the announcement in January 2020 that Illumina would not pursue its acquisition of the Company following regulatory challenges, the Company reset its strategic priorities, including updating its annual operating plan and business strategy for 2020, tounder which the Company’s cash incentive program typically is closely aligned. The onset of the global pandemic in the first half of the year additionally prompted the Board and Compensation Committee to further reevaluate the performance criteria to be applicable to cash incentive opportunities for the year. Due to these unanticipated events, for 2020, no variable cash incentive plan was established for the first half of the year. In July 2020, the Board approved a variable cash incentive plan for the second half of 2020 based on performance criteria to be achieved for each of the third and fourth fiscal quarters of the year.
Variable cash incentives offered to our named executive officers during the second half of 2020participating NEOs were afforded the opportunity for the executives to earn awards based on the achievement of specified corporate objectives. certain preestablished performance criteria. These performance criteria included:
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Generally, performancethese goals were evaluated independentlyappropriate for 2022 given that the Company intended to advance the development of current products and assigned separate weightings for each fiscal quarter. The portionfuture product candidates. Due to certain of the bonus allocatedgoals relating to our product development portfolios, certain manufacturing and quality initiatives, research efforts and workforce changes, being closely tied to the Company’s business strategy or other confidential information of the Company, any additional information otherwise considered material regarding performance goal targets were not provided in order to avoid competitive harm to the Company’s business (and ultimately to the Company’s stockholders) from such disclosures.
In connection with his appointment as Chief Executive Officer in September 2020, Mr. Henry’s target bonus opportunity for 2020 was determined as 50% based on the bonus program in which our other named executive officers participated and the remaining 50% based on achieving personal management by objective (or “MBO”) goals generally relating to certain personnel objectives, strategic goals and execution on certain operating goals, with each such category assigned a one-third weighting.
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The target incentive opportunities for our named executive officers for the second halfend of the year, were as follows:
___________________
(1)Amount shown relatesthe Compensation Committee and the Board of Directors assessed the extent of achievement of the performance criteria established under the 2022 variable cash incentive program. Our 2022 revenue was under the threshold of $130 million required to pay bonuses under the 2022 variable cash incentive program. In reviewing our revenue results, the Compensation Committee and the Board of Directors noted that the decline in revenue was primarily caused by a decrease in instrument revenue, due in part to the target incentive opportunityrobust demand for Revio, which displaced previously anticipated Sequel IIe sales; the Compensation Committee and the Board of Directors believed that revenues for 2022 likely would have exceeded $130 million had Revio not displaced these sales. The Compensation Committee and the Board of Directors also noted that 2022 revenue of $128.3 million was substantially close to achievement of the $130 million threshold. Based on such considerations, the Compensation Committee and the Board of Directors waived the requirement to achieve a threshold 2022 revenue of $130 million under theour 2022 variable cash incentive plan approved by the Board in July 2020. Mr. Henry was appointed as Chief Executive Officer effective September 14, 2020. His target incentive opportunity amount is prorated to reflect his appointment midyear. His target bonus opportunity for his personal MBO goals was $108,333.
(2)Ms. Kim was appointed as Chief Financial Officer effective September 28, 2020. Her target incentive opportunity amount is prorated to reflect her appointment midyear.
program.
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| Corporate Objectives |
| Annual Variable Incentive Payout |
Fiscal Year |
| Achieved (%) |
| (as a % of target opportunity) |
2020 |
| 80% |
| 80% |
2019 |
| 90% |
| 90% |
2018 |
| 46% |
| 46% |
various goals. The Compensation Committee believes that this approach appropriately motivatesrecommended, and the participantsBoard of Directors approved, the following achievements:
Performance Objectives | | | Achievement | |
Financial Goals (Collectively Weighted at 20%) | | | | |
Exceeding $180 million in fiscal year 2022 revenue | | | $128.3 million, resulting in achievement at 0% | |
Exceeding non-GAAP gross margin of 47% in fiscal year 2022 | | | 39%, resulting in achievement at 0% | |
Achieving Adjusted EBITDA of $(190 million) in fiscal year 2022 | | | $(216 million), resulting in achievement at 0% | |
Non-Financial Goals (Collectively Weighted at 80%) | | | | |
Achievement of certain platform development and system output goals (collectively weighted at 45%) | | | 9 goals achieved at a total of approximately 30.0% achievement | |
Achievement of certain manufacturing and quality goals (which collectively include six sub-goals) (collectively weighted at 15%) | | | 6 goals achieved at a total of approximately 9.6% achievement | |
Driving certain research efforts (collectively weighted at 10%) | | | 3 goals achieved at total of approximately 10.0% | |
Developing an inspired workforce, and optimizing organizational structure, including the integration of Omniome into the organization (collectively weighted at 10%) Total Score for Goals: | | | 4 goals achieved at a total of approximately 6.3% achievement Of the 25 goals, including both financial and non-financial goals, achievement at a total of approximately 56% | |
Concurrently with approving the2022 variable cash incentive plan for the second half of 2020, the Board also considered the performance criteria that the Board and Compensation Committee previously had considered for the first two fiscal quarters of 2020, but had not formally adopted prior to the completion of such fiscal quarters. These performance criteria generally fell into the same seven categories that applied to the third and fourth fiscal quarters of 2020, with the exception that the Board considered a bookings metric for the second fiscal quarter in lieu of revenue. In lightprogram. Based on achievement of the significant effortsnon-financial goals for 2022, the bonuses were paid at 56% of target bonus opportunities and progress made against these contemplated performance criteria,our NEOs received bonus payouts in the Board approved certain discretionary bonuses to recognize performance during the first half of 2020 (the “1H2020 bonuses”). By combining the 1H2020 bonuses intended to reward our named executive officersfollowing amounts for performance during the first two completed fiscal quarters of 2020, with the cash incentive opportunities for the second two fiscal quarters of the 2020 based on performance against the applicable corporate objectives, the Board intended for the combined bonuses to approximate the cash incentives that might have become payable to the named executive officers under a cash incentive plan had it been in effect for the full 2020 year. The annualized target incentive opportunity for each of our named executive officers that the Board considered in
Name | | | 2021 Target Bonus Opportunity (as a % of salary) | | | 2022 Salary | | | 2022 Actual Bonus (as a% of Target Bonus Opportunity) | | | 2022 Actual Bonus ($) | | ||||||||||||
Christian O. Henry | | | | | 100% | | | | | $ | 670,000 | | | | | | 56% | | | | | $ | 375,200 | | |
Susan G. Kim | | | | | 50% | | | | | $ | 443,000 | | | | | | 56% | | | | | $ | 124,040 | | |
Mark Van Oene | | | | | 60% | | | | | $ | 567,000 | | | | | | 56% | | | | | $ | 190,512 | | |
Jeff Eidel | | | | | 50% | | | | | $ | 438,000 | | | | | | 56% | | | | | $ | 46,368(1) | | |
Peter Fromen | | | | | 50% | | | | | $ | 438,000 | | | | | | — | | | | | | —(2) | | |
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establishing the 1H2020 bonuses and the cash incentive plan for the third and fourth quarters of 2020 is approximately as follows (the “Annualized Target”), expressed as a percentage of base salary:
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Name 1H2020 Bonus Cash Incentive Amount Paid for Third and Fourth Fiscal Quarter Performance ($) Total ($) Christian O. Henry (1) 31,677 54,990 86,667 Michael Hunkapiller, Ph.D. (2) — — — Susan G. Kim (3) 20,224 35,109 55,333 Susan K. Barnes (4) — — — Denis Zaccarin, Ph.D. (5) 43,421 75,379 118,800(1)HenryEidel was appointed as Chief Executive Officerto his position effective September 14, 2020. The Board determined the general incentive design for Mr. Henry at the time of his appointment. For Mr. Henry, the Annualized TargetAugust 16, 2022. His bonus amount shown above also includes his personal MBO incentive opportunity.Any 1H2020 bonus approved for a named executive officer required continued employment to the same extent as applicable under the cash incentive plan. The 1H2020 bonuses and performance-based bonuses for the third and fourth fiscal quarters that were paid to our named executive officers are as follows:
Amount Paid ($)___________________(1)Mr. Henry was appointed as Chief Executive Officer effective September 14, 2020.(2)Dr. Hunkapiller stepped down from his role as Chief Executive Officer and President effective September 14, 2020, and he assumed the position of Senior Fellow focused on technology development until his departure from the Company as an employee effective December 31, 2020. Dr. Hunkapiller is not standing for re-election, but will continue to serve as a member of our board of directors until the expiration of his current term ending on the date of the Annual Meeting. He did not receive any bonuses for 2020.(3)Ms. Kim was appointed as Chief Financial Officer effective September 28, 2020.(4)Ms. Barnes retired from her role as Executive Vice President and Chief Financial Officer on August 7, 2020. Accordingly, she was not eligible to receive any bonuses for 2020.(5)Dr. Zaccarin was appointed as an executive officer of the Company effective April 1, 2020.Combined with the corporate performance the Board reviewed in July 2020 in relation to the 1H2020 bonuses, the Board considered overall corporate performance achievement to be approximately 80% for the 2020 year.With respect to Mr. Henry’s personal MBO bonus opportunity, the Board determined that overall the MBOs were substantially overachieved, resulting in a payout to him of $128,333 for such bonus. On an aggregated basis, the bonuses paid to Mr. Henry were approximately 100% of his Annualized Target (proratedprorated to reflect the portion of the yearperiod during which he was employed with us), Ms. Kim were approximately 80%us in 2022.her Annualized Target (prorated$225,000. This bonus was negotiated with Mr. Eidel in connection with his hire. The Compensation Committee believed that this bonus was appropriate, including in part to reflectcompensate him for compensation awards he would have been eligible to receive from his former employer that he forfeited upon commencing employment with us. In the event that Mr. Eidel resigns for any reason prior to completing
The 2021 incentive plan for all of our participating named executive officers will be based on the achievement of corporate operational and financial metrics. The goals and objectives we have established are aggressive, but attainable, and are based on goals we believe align the compensation of our senior management team and executives with the priorities for the Company that we anticipate will drive additional value for our stockholders. The Company must meet the target level of performance for the named executive officers to earn
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the target award. Our Chief Executive Officer may recommend adjustments to these awards other than for himself although the Compensation Committee retains the sole authority to approve awards for the named executive officers under the plan. For 2021, any awards under the plan are expected to be paid only in cash.
Equity Incentives
We maintain atime-based restricted stock option granting policy, pursuant tounits, which stock options granted to our employees below the level of vice president generally become effective on the first 15th day of the month to occur following approval of the equity award by the Compensation Committee (orand the Board of Directors as applicable), whereas stock options grantedbelieved was appropriate in order to align their interests with the development of long-term value to our employees atstockholders. Our equity incentive award program for 2023 includes PSUs, as described above, to further align the level of vice president and above generally become effective on the date of approval by the Compensation Committee. Any equity awards to be granted to newly hired employees below the level of vice president generally are not considered for approval until at least the month following the month in which employment begins. If any equity awards are granted to continuing employees below the level of vice president, the equity awards generally will not become effective until the first 15th day of the month to occur following approval of the grant. The Compensation Committee has delegated authority to an Equity Award Grant Committee consistinginterests of our Chief Executive Officer, Chief Financial Officer, Vice President of Human Resources and General Counsel, to approve equity awards covering sharesexecutives with those of our common stock, withinstockholders.
In determiningannual equity awards for 20202022 to the named executive officers,NEOs, the Compensation Committee and the Board of Directors considered the Survey Data provided by Radford outlining equity compensation practices in the technology and life sciences industries,Peer Group data, including the size of the awards as a percent of the Company as well as on a grant date value basis. This information as well as overall company dilution arewere considered when determining any grants to our named executive officers.NEOs. The Compensation Committee also considersconsidered the realized or unrealized value of prior equity awards.awards (if any, e.g., other than for newly hired executives). There is no set formula for weighting these factors given the critical nature of each role to the Company, and how this might vary from roles at similarly situated companies.
For 2022, the Compensation Committee and the Board of Directors believed that a greater emphasis on stock options would be appropriate for incentive to drive future growth and business success for the Company. Accordingly, the mix of equity awards for 2022 generally was weighted more heavily in stock options than RSUs. The Compensation Committee, and the Board of Directors with respect to our Chief Executive Officer, continued to grant RSUs to balance the objectives of incentive and retention as well as in consideration of factors such as overall dilution, burn rate and overhang.
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The following table sets forth the number of shares of our common stock subject to the stock options and RSUs granted to our named executive officers forNEOs in 2022:
| | | Annual Equity Grants(1) | | | New Hire Equity Grants(1) | | ||||||||||||||||||
Name | | | RSUs (#) | | | Stock Options (#) | | | RSUs (#) | | | Stock Options (#) | | ||||||||||||
Christian O. Henry | | | | | 107,500 | | | | | | 642,300 | | | | | | — | | | | | | — | | |
Susan G. Kim | | | | | 40,000 | | | | | | 239,000 | | | | | | — | | | | | | — | | |
Mark Van Oene(2) | | | | | 372,500 | | | | | | 433,200 | | | | | | — | | | | | | — | | |
Jeff Eidel(3) | | | | | — | | | | | | — | | | | | | 300,000 | | | | | | 600,000(4) | | |
Peter Fromen | | | | | 50,000 | | | | | | 298,700 | | | | | | — | | | | | | — | | |
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| Annual Equity Grants |
| New Hire Equity Grants | ||||
Name |
| RSUs (#) |
| Stock Options (#) |
| RSUs (#) |
| Stock Options (#) |
Christian O. Henry (1) |
| — |
| — |
| 750,000 |
| 1,500,000 |
Michael Hunkapiller, Ph.D. (2) |
| 150,000 |
| — |
| — |
| — |
Susan G. Kim (3) |
| — |
| — |
| 150,000 |
| 400,000 |
Susan K. Barnes (4) |
| 100,000 |
| — |
| — |
| — |
Denis Zaccarin, Ph.D. (5) |
| 40,000 |
| — |
| — |
| — |
___________________
(1)Compensation Committee additionally approved a grant of time-based RSUs covering 300,000 shares of our common stock to Mr. HenryVan Oene.
(2)Dr. Hunkapiller stepped down from his role as Chief Executive Officer and President effective September 14,August 16, 2022.
(3)Ms. Kim was appointed as Chief Financial Officer effective September 28, 2020.
(4)Ms. Barnes retired from her role as Executive Vice President and Chief Financial Officer on August 7, 2020 and her 2020 RSU award was forfeited in its entirety.
(5)Dr. Zaccarin was appointed as an executive officer of the Company effective April 1, 2020.
Other 2020 Equity Grants
In February 2020, as part of the overall compensation review, the onset of the global pandemic, and for retention,Mr. Van Oene, the Compensation Committee additionally approved a one-time special retention grant of time-based RSUs covering 300,000 shares of our common stock to our then named executive officers. The grants were made with a 2-year vesting period as the company reset the strategic priorities following the announcement that Illumina would not pursue its acquisition of the Company following regulatory challenges. The following grants were issued:
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(1)Mr. Henry was appointed as Chief Executive Officer effective September 14, 2020 and therefore was not eligible for this grant.
(2)Ms. Kim was appointed as Chief Financial Officer effective September 28, 2020 and therefore was not eligible for this grant.
Other Compensation Policies and Practices
Van Oene.
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Clawback Policy
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We also previously entered into an employment agreement with Dr. Hunkapiller in connection with his appointment as our President and Chief Executive Officer in 2012. Dr. Hunkapiller’s employment agreement provides for certain severance benefits outside of the context of a change in control event which were negotiated with Dr. Hunkapiller in connection with such appointment. We believe that non-change in control severance benefits can help secure an executive’s continued dedication to their work notwithstanding the possibility of a termination by us and provide incentive to continue employment with the Company. In connection with Dr. Hunkapiller’s departure from the Company as an employee, he received the severance benefits under his employment agreement as discussed further below under the section titled “Potential Payments Upon Involuntary Termination or Change in Control.”
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Tax Considerations
Mr. Henry served as a member of the Compensation Committee until his appointment as Chief Executive Officer on September 14, 2020.
2022.
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Name and principal position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Option Awards ($)(1) | | | Non-equity Incentive Plan Compensation ($)(2) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||
Christian O. Henry(3) President, Chief Executive Officer | | | 2022 | | | | | 666,667 | | | | | | — | | | | | | 1,257,750 | | | | | | 4,260,247 | | | | | | 375,200 | | | | | | 56,387(4) | | | | | | 6,616,251 | | |
| 2021 | | | | | 650,000 | | | | | | — | | | | | | 695,550 | | | | | | 752,502 | | | | | | 754,650 | | | | | | 14,229(5) | | | | | | 2,866,931 | | | ||
| 2020 | | | | | 194,583 | | | | | | 31,677(6) | | | | | | 5,490,000 | | | | | | 6,345,900 | | | | | | 183,323 | | | | | | 233,287(7) | | | | | | 12,478,770 | | | ||
Susan G. Kim(8) Chief Financial Officer | | | 2022 | | | | | 440,833 | | | | | | — | | | | | | 468,000 | | | | | | 1,585,239 | | | | | | 124,040 | | | | | | — | | | | | | 2,618,112 | | |
| 2021 | | | | | 421,875 | | | | | | — | | | | | | 292,131 | | | | | | 316,051 | | | | | | 249,615 | | | | | | — | | | | | | 1,279,672 | | | ||
| 2020 | | | | | 108,538 | | | | | | 95,224(9) | | | | | | 1,440,000 | | | | | | 2,219,320 | | | | | | 35,109 | | | | | | — | | | | | | 3,898,191 | | | ||
Mark Van Oene(10) Chief Operating Officer | | | 2022 | | | | | 564,167 | | | | | | — | | | | | | 2,918,250 | | | | | | 2,873,329 | | | | | | 190,512 | | | | | | 17,433(11) | | | | | | 6,563,691 | | |
| 2021 | | | | | 539,776 | | | | | | 200,000(12) | | | | | | 12,294,500 | | | | | | 14,889,375 | | | | | | 375,782 | | | | | | — | | | | | | 28,299,433 | | | ||
Jeff Eidel(13) Chief Commercial Officer | | | 2022 | | | | | 164,250 | | | | | | 225,000(12) | | | | | | 2,400,000 | | | | | | 2,965,867 | | | | | | 46,368 | | | | | | — | | | | | | 5,801,485 | | |
Peter Fromen(14) Former Chief Commercial Officer | | | 2022 | | | | | 170,506 | | | | | | — | | | | | | 585,000 | | | | | | 1,981,217 | | | | | | — | | | | | | 168,976(15) | | | | | | 2,905,699 | | |
| 2021 | | | | | 417,099 | | | | | | 125,000(12) | | | | | | 5,872,000 | | | | | | 6,352,800 | | | | | | 241,981 | | | | | | 329,010(16) | | | | | | 13,337,890 | | |
Summaryimputed income of $40,245 in connection with non-Company personnel who accompanied Mr. Henry on certain business trips on aircraft paid for by the Company; no additional amounts were actually paid in connection with the additional personnel who traveled on the aircraft with Mr. Henry. Mr. Henry fully reimburses the Company for all applicable withholding taxes associated with the imputed income related to such travel.
Name | | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | Estimated Future Payments Under Equity Incentive Plan Awards (#) | | | 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 ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards ($)(2) | | |||||||||||||||||||||||||||||||||||||||||||||
| Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Christian O. Henry | | | | | 02/01/2022(3) | | | | | | — | | | | | | 670,000 | | | | | | 804,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 107,500(4) | | | | | | — | | | | | | — | | | | | | 1,257,750 | | | ||
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 642,300(4) | | | | | | 11.70 | | | | | | 4,260,247 | | | ||
Susan G. Kim | | | | | 02/01/2022(3) | | | | | | — | | | | | | 221,500 | | | | | | 265,800 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,000(4) | | | | | | — | | | | | | — | | | | | | 468,000 | | | ||
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 239,000(4) | | | | | | 11.70 | | | | | | 1,585,239 | | | ||
Mark Van Oene | | | | | 02/01/2022(3) | | | | | | — | | | | | | 340,200 | | | | | | 408,240 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 72,500(4) | | | | | | — | | | | | | — | | | | | | 848,250 | | | ||
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 433,200(4) | | | | | | 11.70 | | | | | | 2,873,329 | | | ||
| | | 08/25/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 300,000(4) | | | | | | — | | | | | | — | | | | | | 2,070,000 | | | ||
Jeff Eidel | | | | | 02/01/2022(3) | | | | | | — | | | | | | 82,800(5) | | | | | | 99,360(5) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 08/16/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 300,000(4) | | | | | | — | | | | | | — | | | | | | 2,400,000 | | | ||
| | | 08/16/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 475,000(6) | | | | | | 8.00 | | | | | | 2,347,978 | | | ||
| | | 08/16/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 125,000(4) | | | | | | 8.00 | | | | | | 617,889 | | | ||
Peter Fromen | | | | | 02/01/2022(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000(4) | | | | | | — | | | | | | — | | | | | | 585,000 | | | ||
| | | 03/02/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 298,700(4) | | | | | | 11.70 | | | | | | 1,981,217 | | |
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| Name and principal position |
| Year |
| Salary ($) |
| Bonus ($) |
| Stock Awards ($) (1) |
| Option Awards ($) (2) |
| Non-equity Incentive Plan Compensation ($) (3) |
| All Other Compensation ($) |
| Total ($) |
| Christian O. Henry (4) |
| 2020 |
| 194,583 |
| 31,677 |
| 5,490,000 |
| 6,345,900 |
| 183,323 |
| 233,287 |
| 12,478,770 |
| President, Chief Executive Officer |
|
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|
| Michael Hunkapiller, Ph.D. (5) |
| 2020 |
| 582,900 |
| — |
| 551,250 |
| — |
| — |
| 582,900 |
| 1,717,050 |
| Former President, Chief |
| 2019 |
| 582,900 |
| — |
| 276,288 |
| — |
| 523,502 |
| — |
| 1,382,690 |
| Executive Officer | �� | 2018 |
| 1 |
| — |
| 427,375 |
| 153,490 |
| 1,030,000 |
| — |
| 1,610,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Susan G. Kim (6) |
| 2020 |
| 108,538 |
| 95,224 |
| 1,440,000 |
| 2,219,320 |
| 35,109 |
| — |
| 3,898,191 |
| Chief Financial Officer |
|
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|
|
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|
|
|
|
| Susan K. Barnes (7) |
| 2020 |
| 281,365 |
| — |
| 676,500 |
| — |
| — |
| — |
| 957,865 |
| Former Executive Vice |
| 2019 |
| 401,500 |
| — |
| 151,513 |
| — |
| 234,382 |
| — |
| 787,395 |
| President & Chief Financial Officer |
| 2018 |
| 1 |
| — |
| 373,953 |
| 134,304 |
| 617,500 |
| — |
| 1,125,758 |
|
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|
|
|
|
|
|
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|
|
|
|
|
|
| Denis Zaccarin, Ph.D. (8) |
| 2020 |
| 321,625 |
| 43,421 |
| 270,600 |
| — |
| 75,379 |
| — |
| 711,025 |
| Senior Vice President, |
|
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|
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| Research and Development |
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__________________
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45
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2022. The table excludes Mr. Fromen, who served as our Chief Commercial Officer until May 20, 2022, because Mr. Fromen had no equity awards outstanding as of December 31, 2022, due to the termination of his employment with us in May 2022.
| | | | | | | | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||
Name | | | Grant Date | | | Number of Securities Underlying Unexercised Options | | | Option Exercise Price ($/sh) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | ||||||||||||||||||||||||
| Exercisable (#) | | | Unexercisable (#) | | ||||||||||||||||||||||||||||||||||||||
Christian O. Henry | | | | | 7/27/2018 | | | | | | 35,000 | | | | | | — | | | | | | 3.66 | | | | | | 7/27/2028 | | | | | | | | | | | | | | |
| | | 3/16/2020 | | | | | | 32,083 | | | | | | 2,917(3) | | | | | | 2.45 | | | | | | 3/16/2030 | | | | | | | | | | | | | | | ||
| | | 8/4/2020 | | | | | | 46,499 | | | | | | — | | | | | | 3.89 | | | | | | 8/4/2030 | | | | | | | | | | | | | | | ||
| | | 9/15/2020 | | | | | | 843,742 | | | | | | 656,258(4) | | | | | | 7.32 | | | | | | 9/15/2030 | | | | | | | | | | | | | | | ||
| | | 9/15/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 375,000(5) | | | | | | 3,067,500 | | | ||
| | | 2/16/2021 | | | | | | 13,749 | | | | | | 16,251(6) | | | | | | 46.37 | | | | | | 2/16/2031 | | | | | | | | | | | | | | | ||
| | | 2/16/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,250(5) | | | | | | 92,025 | | | ||
| | | 3/2/2022 | | | | | | 120,429 | | | | | | 521,871(6) | | | | | | 11.70 | | | | | | 3/2/2032 | | | | | | | | | | | | | | | ||
| | | 3/2/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 107,500(5) | | | | | | 879,350 | | | ||
Susan G. Kim | | | | | 9/28/2020 | | | | | | 224,998 | | | | | | 175,002(4) | | | | | | 9.60 | | | | | | 9/28/2030 | | | | | | | | | | | | | | |
| | | 9/28/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 75,000(5) | | | | | | 613,500 | | | ||
| | | 2/16/2021 | | | | | | 5,774 | | | | | | 6,826(6) | | | | | | 46.37 | | | | | | 2/16/2031 | | | | | | | | | | | | | | | ||
| | | 2/16/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,725(5) | | | | | | 38,651 | | | ||
| | | 3/2/2022 | | | | | | 44,811 | | | | | | 194,189(6) | | | | | | 11.70 | | | | | | 3/2/2032 | | | | | | | | | | | | | | | ||
| | | 3/2/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,000(5) | | | | | | 327,200 | | | ||
Mark Van Oene | | | | | 1/8/2021 | | | | | | 359,372 | | | | | | 390,628(4) | | | | | | 36.70 | | | | | | 1/8/2031 | | | | | | | | | | | | | | |
| | | 1/8/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 251,250(5) | | | | | | 2,055,225 | | | ||
| | | 3/2/2022 | | | | | | 81,223 | | | | | | 351,977(6) | | | | | | 11.70 | | | | | | 3/2/2032 | | | | | | | | | | | | | | | ||
| | | 3/2/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 72,500(5) | | | | | | 593,050 | | | ||
| | | 8/25/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 300,000(5) | | | | | | 2,454,000 | | |
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| �� | Option Awards |
| Stock Awards | ||||||||
|
|
|
| Number of Securities Underlying Unexercised Options |
| Option Exercise Price |
| Option Expiration |
| Number of Shares or Units of Stock That Have Not Vested |
| Market Value of Shares or Units of Stock That Have Not Vested | ||
Name |
| Grant Date |
| Exercisable (#) |
| Unexercisable (#) |
| ($/sh) |
| Date |
| (#) (1) |
| ($) (2) |
Christian O. Henry |
| 7/27/2018 |
| 28,194 |
| 6,806 | (3) | 3.66 |
| 7/27/2028 |
|
|
|
|
|
| 3/16/2020 |
| — |
| 35,000 | (3) | 2.45 |
| 3/16/2030 |
|
|
|
|
|
| 8/4/2020 |
| 15,499 |
| 31,000 | (4) | 3.89 |
| 8/4/2030 |
|
|
|
|
|
| 9/15/2020 |
| — |
| 1,500,000 | (5) | 7.32 |
| 9/15/2030 |
| 750,000 | (7) | 19,455,000 |
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|
Michael Hunkapiller, Ph.D. |
| 3/15/2013 |
| 367,500 |
| — |
| 2.27 |
| 3/15/2023 |
|
|
|
|
|
| 3/17/2014 |
| 500,000 |
| — |
| 6.14 |
| 3/17/2024 |
|
|
|
|
|
| 3/16/2015 |
| 400,000 |
| — |
| 5.72 |
| 3/16/2025 |
|
|
|
|
|
| 3/15/2016 |
| 400,000 |
| — |
| 7.87 |
| 3/15/2026 |
|
|
|
|
|
| 2/15/2017 |
| 400,000 |
| — |
| 5.27 |
| 2/15/2027 |
|
|
|
|
|
| 3/15/2018 |
| 83,332 |
| 16,668 | (6) | 2.63 |
| 3/15/2028 |
| 12,500 | (7) | 324,250 |
|
| 3/16/2020 |
|
|
|
|
|
|
|
|
| 112,500 | (7) | 2,918,250 |
|
| 3/16/2020 |
|
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|
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|
|
| 37,500 | (8) | 972,750 |
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|
Susan G. Kim |
| 9/28/2020 |
| — |
| 400,000 | (5) | 9.60 |
| 9/28/2030 |
| 150,000 | (7) | 3,891,000 |
|
|
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|
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|
Denis Zaccarin, Ph.D. |
| 6/15/2011 |
| 5,000 |
| — |
| 11.64 |
| 6/15/2021 |
|
|
|
|
|
| 2/15/2012 |
| 28,000 |
| — |
| 4.79 |
| 2/15/2022 |
|
|
|
|
|
| 2/15/2013 |
| 20,000 |
| — |
| 2.18 |
| 2/15/2023 |
|
|
|
|
|
| 2/18/2014 |
| 50,000 |
| — |
| 7.05 |
| 2/18/2024 |
|
|
|
|
|
| 2/17/2015 |
| 50,000 |
| — |
| 6.91 |
| 2/17/2025 |
|
|
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|
|
| 2/16/2016 |
| 60,000 |
| — |
| 8.90 |
| 2/16/2026 |
|
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|
|
| 2/15/2017 |
| 62,290 |
| 2,710 | (6) | 5.27 |
| 2/15/2027 |
|
|
|
|
|
| 2/15/2018 |
| 31,874 |
| 13,126 | (6) | 2.54 |
| 2/15/2028 |
| 5,000 | (7) | 129,700 |
|
| 2/18/2020 |
|
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|
|
| 40,000 | (7) | 1,037,600 |
|
| 2/18/2020 |
|
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|
|
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|
|
| 20,000 | (8) | 518,800 |
__________________
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| |
| | | | | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||
Name | | | Grant Date | | | Number of Underlying Unexercised Options | | | Option Exercise Price ($/sh) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | ||||||||||||||||||||||||
| Exercisable (#) | | | Unexercisable (#) | | ||||||||||||||||||||||||||||||||||||||
Jeff Eidel | | | | | 8/16/2022 | | | | | | — | | | | | | 125,000(4) | | | | | | 8.00 | | | | | | 8/16/2032 | | | | | | | | | | | | | | |
| | | 8/16/2022 | | | | | | — | | | | | | 475,000(4) | | | | | | 8.00 | | | | | | 8/16/2032 | | | | | | | | | | | | | | | ||
| | | 8/16/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 300,000(5) | | | | | | 2,454,000 | | |
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46
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For RSUs and PSUs vested, the2022.
None of our NEOs exercised stock options during the year ended December 31, 2022.
| | | Stock Awards | | |||||||||
Name | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | ||||||
Christian O. Henry | | | | | 191,250 | | | | | | 1,283,925 | | |
Susan G. Kim | | | | | 39,075 | | | | | | 238,086 | | |
Mark Van Oene | | | | | 83,750 | | | | | | 1,403,650 | | |
Jeff Eidel | | | | | — | | | | | | — | | |
Peter Fromen | | | | | 40,000 | | | | | | 670,400 | | |
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|
| Option Awards |
| Stock Awards | ||||
Name |
| Number of Shares Acquired on Exercises (#) |
| Value Realized on Exercise ($) |
| Number of Shares Acquired on Vesting (#) |
| Value Realized on Vesting ($) |
Christian O. Henry |
| — |
| — |
| — |
| — |
Michael Hunkapiller, Ph.D. |
| 700,000 |
| 15,490,128 |
| 138,750 |
| 2,503,963 |
Susan G. Kim |
| — |
| — |
| — |
| — |
Susan K. Barnes |
| 1,173,173 |
| 2,891,391 |
| 32,188 |
| 147,099 |
Denis Zaccarin, Ph.D. |
| — |
| — |
| 16,000 |
| 62,820 |
Employment Agreements and Change in Control Arrangements
Dr. Hunkapiller stepped down from his role as Chief Executive Officer and President effective September 14, 2020, and he assumed the position of Senior Fellow focused on technology development until his departure from the Company as an employee effective December 31, 2020. Dr. Hunkapiller continues to serve on the Board of Directors. Dr. Hunkapiller received $582,900 of cash severance during 2020 in connection with his departure from the Company as an employee. Dr. Hunkapiller no longer is eligible to receive any cash severance benefits under his change in control and severance agreement. Dr. Hunkapiller also received accelerated vesting to December 31, 2020 on 87,500 RSUs and 8,333 stock options under the terms of his equity award agreements.
Ms. Barnes’ role as Executive Vice President and Chief Financial Officer terminated on August 7, 2020, in connection with her retirement. Accordingly, Ms. Barnes no longer is eligible to receive any benefits under her change in control and severance agreement.
47
The change in control and severance agreements with Mr. Henry, Ms. Kim, Mr. Van Oene, Mr. Fromen and Mr. ZaccarinEidel provide that if we terminate his or her employment with us for a reason other than “cause,” his or her death or “disability,” or he or she resigns for “good reason,” in each case, as set forth in the applicable change in control and severance agreement, he or she would be entitled to:
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48
Each severance agreement provides that, if any payment or benefits to the applicable named executive officerNEO (including the payments and benefits under his or her severance agreement) would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code and therefore would be subject to an excise tax under Section 4999 of the Internal Revenue Code, then such payments and benefits will be either (1) reduced to the largest portion of the payments and benefits that would result in no portion of the payments and benefits being subject to the excise tax; or (2) not reduced, whichever, after taking into account all applicable federal, state, and local employment taxes, income taxes and the excise tax, results in his or her receipt, on an after-tax basis, of the greater payments and benefits.
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49
Equity Incentive Plans
As
The following table describes the potential payments and benefits to each of our named executive officersNEOs that were so designated and eligible for severance benefits as of December 31, 2020,2022, (1) following a termination of employment without cause, and other than due to the executive officer’s death or a disability, or his or her resignation for good reason and (2) following a termination of employment without cause, and other than due to the executive officer’s death or a disability, or his or her resignation for good reason during a change in control period, based on the severance and change in control provisions described above and based on equity awards outstanding as of December 31, 2020. Dr. Hunkapiller departed the Company as an employee effective December 31, 2020 and was not eligible for any further cash severance payments, but continued to serve on the Board of Directors and hold equity awards that were subject to potential acceleration following a change in control as described in Note (1) to the table. Ms. Barnes was not eligible for severance benefits due to her retirement on August 7, 2020.2022. Actual amounts payable to each named executive officerNEO listed below upon termination can only be determined definitively at the time of each executive’s actual departure. In addition to the amounts shown in the table below, each executive officer would receive payments for amounts of base salary and vacation time accrued through the date of termination and payment for any reimbursable business expenses incurred.
50
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Compensation and Benefits |
| Involuntary Termination ($) |
| Involuntary Termination On or Within 12 Months Following Change In Control ($) |
Christian O. Henry |
|
|
|
|
Salary |
| 975,000 |
| 975,000 |
Performance-based cash bonus |
| — |
| 650,000 |
Equity acceleration (1) |
| 985,176 |
| 49,042,338 |
Health care benefits |
| 58,758 |
| 58,758 |
Total |
| 2,018,934 |
| 50,726,096 |
Michael Hunkapiller, Ph.D. |
|
|
|
|
Salary (2) |
| 582,900 |
| — |
Equity acceleration (3) |
| 2,463,992 |
| 4,603,781 |
Total |
| 3,046,892 |
| 4,603,781 |
Susan G. Kim |
|
|
|
|
Salary |
| 415,000 |
| 415,000 |
Performance-based cash bonus |
| — |
| 207,500 |
Equity acceleration (1) |
| — |
| 10,427,000 |
Health care benefits |
| — |
| — |
Total |
| 415,000 |
| 11,049,500 |
Denis Zaccarin, Ph.D. |
|
|
|
|
Salary |
| 165,000 |
| 247,500 |
Performance-based cash bonus |
| — |
| 148,500 |
Equity acceleration (1) |
| — |
| 2,049,264 |
Health care benefits |
| 12,593 |
| 18,889 |
Total |
| 177,593 |
| 2,464,153 |
______________
Compensation and Benefits(1) |
| |
|
Involuntary Termination ($) |
| |
|
51
|
Control ($) | | |||||||||||
Christian O. Henry Salary Performance-based cash bonus Equity acceleration(2) Health care benefits Total | | | | | 1,005,000 — 428,474 46,332 1,479,806 | | | | | | 1,005,000 670,000 4,619,971 46,332 6,341,303 | | |
Susan G. Kim Salary Performance-based cash bonus Equity acceleration(2) Health care benefits Total | | | | | 443,000 — — — 443,000 | | | | | | 443,000 221,500 979,351 — 1,643,851 | | |
Compensation and Benefits(1) | | | Involuntary Termination ($) | | | Involuntary Termination On or Within 12 Months Following Change In Control ($) | | ||||||
Mark Van Oene Salary Performance-based cash bonus Equity acceleration(2) Health care benefits Total | | | | | 567,000 — — 30,888 597,888 | | | | | | 567,000 340,200 5,102,275 30,888 6,040,363 | | |
Jeff Eidel Salary Performance-based cash bonus Equity acceleration(2) Health care benefits Total | | | | | 438,000 — — 30,888 468,888 | | | | | | 438,000 219,000 2,562,000 30,888 3,249,888 | | |
Year | | | Reported Summary Compensation Table (“SCT”) Total for PEO 1 | | | Compensation Actually Paid to PEO 1(2) | | | Reported Summary Compensation Table Total for PEO 2 | | | Compensation Actually Paid to PEO 2(2) | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs(3) | | | Average Compensation Actually Paid to Non-PEO NEOs(2)(3) | | | Value of Initial Fixed $100 Investment(1) | | | Net Income (in millions) | | | Company Selected Measure: Revenue (in millions)(5) | | |||||||||||||||||||||||||||||||||
| Company Total Shareholder Return | | | Peer Group Shareholder Return(4) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | | | | $ | 6,616,251 | | | | | $ | (13,137,692) | | | | | | N/A | | | | | | N/A | | | | | $ | 4,472,247 | | | | | $ | (842,693) | | | | | $ | 159 | | | | | $ | 114 | | | | | $ | (314.2) | | | | | $ | 128.3 | | |
2021 | | | | $ | 2,866,931 | | | | | $ | (6,449,458) | | | | | | N/A | | | | | | N/A | | | | | $ | 11,099,491 | | | | | $ | 6,128,515 | | | | | $ | 398 | | | | | $ | 126 | | | | | $ | (181.2) | | | | | $ | 130.5 | | |
2020 | | | | $ | 12,478,770 | | | | | $ | 51,604,237 | | | | | $ | 1,717,050 | | | | | $ | 8,398,519 | | | | | $ | 1,855,694 | | | | | $ | 4,749,166 | | | | | $ | 505 | | | | | $ | 126 | | | | | $ | 29.4 | | | | | $ | 78.9 | | |
Year | | | Executives | | | SCT Total | | | Deduct SCT Stock & Option Awards | | | Add Year-End Value of Unvested Awards Granted in Year(a) | | | Add Change in Value of Unvested Awards Granted in Prior Years(a) | | | Add Fair Value of Vested Awards Granted in Year(a) | | | Add Change in Value of Vested Awards Granted in Prior Years(a) | | | Deduct Fair Value of Forfeited Awards in Year(a) | | |||||||||||||||||||||
2022 2022 | | | PEO 1 | | | | $ | 6,616,251 | | | | | $ | (5,517,997) | | | | | $ | 3,572,661 | | | | | $ | (11,593,565) | | | | | $ | 485,101 | | | | | $ | (6,700,144) | | | | | $ | 0 | | |
| Non-PEO NEOs* | | | | $ | 4,472,247 | | | | | $ | (3,944,226) | | | | | $ | 2,962,458 | | | | | $ | (2,161,553) | | | | | $ | 141,415 | | | | | $ | (1,075,233) | | | | | $ | (1,237,802) | | | ||
2021 2021 | | | PEO 1 | | | | $ | 2,866,931 | | | | | $ | (1,448,052) | | | | | $ | 574,247 | | | | | $ | (8,880,638) | | | | | $ | 94,868 | | | | | $ | 343,184 | | | | | $ | 0 | | |
| Non-PEO NEOs* | | | | $ | 11,099,491 | | | | | $ | (10,246,763) | | | | | $ | 5,818,159 | | | | | $ | (603,005) | | | | | $ | 25,851 | | | | | $ | 34,783 | | | | | $ | 0 | | | ||
2020 2020 2020 | | | PEO 1 | | | | $ | 12,478,770 | | | | | $ | (11,835,900) | | | | | $ | 50,961,367 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| PEO 2 | | | | $ | 1,717,050 | | | | | $ | (551,250) | | | | | $ | 3,891,000 | | | | | $ | 592,015 | | | | | $ | 1,945,500 | | | | | $ | 1,061,203 | | | | | $ | (257,000) | | | ||
| Non-PEO NEOs* | | | | $ | 1,855,694 | | | | | $ | (1,535,473) | | | | | $ | 4,481,588 | | | | | $ | 138,827 | | | | | $ | 0 | | | | | $ | (8,737) | | | | | $ | (182,732) | | |
| Most Important Financial Performance Measures | |
| Revenue | |
| Non-GAAP Gross Margin | |
| Adjusted EBITDA | |
Plan category | | | Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) (#) | | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($)(1) | | | Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) (#) | | |||||||||
Equity compensation plans approved by security holders(2) | | | | | 18,519,495(3) | | | | | | 8.03 | | | | | | 28,109,043 | | |
Equity compensation plans not approved by security holders(4) | | | | | 4,891,855 | | | | | | 20.59 | | | | | | 738,731 | | |
Total equity compensation plans | | | | | 23,411,350 | | | | | | 10.50 | | | | | | 28,847,774 | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan category |
| Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) (#) |
| Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($)(1) |
| Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) (#) |
Equity compensation plans approved by security holders (2) |
| 20,500,857 |
| 5.42 |
| 13,820,427 |
Equity compensation plans not approved by security holders (3) |
| 150,000 |
| 20.90 |
| 2,350,000 |
Total equity compensation plans |
| 20,650,857 |
| 5.53 |
| 16,170,427 |
______________
units or restricted stock units, which do not have an exercise price.
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www.pacb.com.
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Marshall Mohr
John F. Milligan, Ph.D.
53
Stockholders Sharing the Same Address
The SEC has adopted rules that allow a company to deliver a single proxy statement or annual report to an address shared by two or more of its stockholders. This method of delivery, known as “householding,” permits us to realize significant cost savings, reduces the amount of duplicate information stockholders receive, and reduces the environmental impact of printing and mailing documents to our stockholders. Under this process, certain stockholders will receive only one copy of our proxy materials and any additional proxy materials that are delivered until such time as one or more of these stockholders notifies us that they want to receive separate copies. Any stockholders who object to or wish to begin householding may notify our Investor Relations Department at ir@pacificsciences.com or (650) 521-8450 or Investor Relations, Pacific Biosciences of California, Inc., 1305 O’Brien Drive, Menlo Park, CA 94025.
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Fiscal Year 20202022 Annual Report and SEC Filings
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| Gross profit | | | | $ | 49,035 | | |
| Amortization of intangible assets | | | | | 733 | | |
| Non-GAAP gross profit | | | | $ | 49,768 | | |
| Net (loss) income | | | | $ | (314,248) | | |
| Interest expense on borrowings | | | | | 14,690 | | |
| Depreciation | | | | | 9,480 | | |
| Amortization of intangible assets | | | | | 913 | | |
| Share-based compensation | | | | | 78,613 | | |
| Change in fair value of contingent consideration | | | | | 2,377 | | |
| Other income, net | | | | | (7,638) | | |
| Adjusted EBITDA | | | | $ | (215,813) | | |