qtnt-def14a_20201029.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

Filed by the Registrant   

Filed by a Party other than the Registrant   

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

QUOTIENT LIMITED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

(5)

Total fee paid:

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing:

 

(1)

Amount previously paid:

 

 

(2)

Form, Schedule or Registration Statement No:

 

 

(3)

Filing Party:

 

 

(4)

Date Filed:

 

 

 

 

 


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September 8, 2020

To our shareholders:

I am pleased to invite you to the 2020 Annual General Meeting of Shareholders (the "Annual General Meeting") of Quotient Limited (“Quotient”, the “Company” or "we", "us" and "our") to be held on October 29, 2020, at 10:00 a.m., local time, at Hotel Drei Könige AG, Paracelsuspark 1, 8840 Einsiedeln, Switzerland. Information about the meeting is presented on the following pages.

Details regarding admission to the meeting and the business that will be conducted are described in the accompanying Notice of Annual General Meeting (the "AGM Notice") and Proxy Statement.  

 

In accordance with the “notice and access” rules and regulations adopted by the Securities and Exchange Commission (the "SEC"), instead of mailing a printed, paper copy of our proxy materials to each shareholder who holds shares in street name (the “full set delivery” option), we are furnishing proxy materials to those shareholders over the Internet (the “notice only” option). A company may use either option, “notice only” or “full set delivery,” for all of its shareholders or may use one method for some shareholders and the other method for others. We believe the “notice only” process expedites shareholders’ receipt of proxy materials and reduces the costs and environmental impact of our Annual General Meeting. We will bear the entire cost of the solicitation. On or about September 8, 2020, we will begin mailing a notice (the "Notice of Availability") to our shareholders containing instructions on how to access online our Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, filed with the SEC on June 12, 2020 (our "Annual Report"),  vote online, and receive paper copies of these documents for shareholders who so select, as well as a link containing instructions on how to vote by telephone. Our Proxy Statement and the Annual Report are also available at https://quotientbd.com/page/investors.

All shareholders who do not receive a Notice of Availability will receive a printed, paper copy of our proxy materials by mail. Whether or not you plan to attend the meeting, your vote is important, and we encourage you to review the proxy materials and vote as soon as possible using the instructions provided in the proxy materials.  If you received a paper copy of our proxy materials by mail, or you received a Notice of Availability by mail and have opted to receive a paper copy of our proxy materials by mail, please sign, date and mail the proxy card in the envelope provided. You may also vote your shares over the Internet or via a toll-free (in the United States) telephone number contained in the voting instructions included with your proxy materials. Instructions regarding the methods of voting are contained in the Notice of Availability or proxy card.

Thank you for your continued support of Quotient. We look forward to seeing you on October 29, 2020.

 

Important note regarding the COVID-19 pandemic:  As required by our organizational documents, we intend to hold the Annual General Meeting in person.  Although you would ordinarily be entitled to attend the Annual General Meeting and vote in person, in light of the rapidly changing COVID-19 pandemic, attendance in person may be discouraged or prohibited by government regulations or action or based on general health and safety considerations.  Your vote is important and we encourage you to review the proxy materials and vote your shares by proxy as soon as possible prior to the Annual General Meeting.

 

 

 

Sincerely,

 

Heino von Prondzynski

Chairman of the Board of Directors

 


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Notice of Annual General Meeting of Shareholders

To Be Held on October 29, 2020 at Hotel Drei Könige AG, Paracelsuspark 1, 8840 Einsiedeln, Switzerland

DATE: October 29, 2020

TIME: 10:00 a.m., local time

PLACE: Hotel Drei Könige AG, Paracelsuspark 1, 8840 Einsiedeln, Switzerland

RECORD DATE: the close of business on August 31, 2020 (for beneficial owners of ordinary shares held in street name)

PURPOSE OF MEETING: Presenting the Company’s accounts for the fiscal year ended March 31, 2020, together with the auditors’ reports on those accounts, to the shareholders at the Annual General Meeting and passing the following ordinary resolutions and transacting such other business as may properly come before the Annual General Meeting:

ORDINARY RESOLUTIONS

Election of directors

1) THAT Franz Walt be elected as a director of the Company.

2) THAT Isabelle Buckle be elected as a director of the Company.

3) THAT Frederick Hallsworth be elected as a director of the Company.

4) THAT Catherine Larue be elected as a director of the Company.

5) THAT Brian McDonough be elected as a director of the Company.

6) THAT Heino von Prondzynski be elected as a director of the Company.

7) THAT Zubeen Shroff be elected as a director of the Company.

8) THAT John Wilkerson be elected as a director of the Company.

Compensation of our named executive officers ("say on pay")

9) THAT the shareholders approve, on a non-binding, advisory basis, the compensation paid to the Company's named executive officers, as described in the "Compensation Discussion and Analysis" section of the Company's proxy statement (the "Proxy Statement") and the related compensation tables, notes and narrative discussion.

Frequency of future shareholder advisory "say on pay" votes

10) THAT the shareholders determine, on a non-binding, advisory basis, the frequency of future advisory votes to approve the compensation paid to the Company's named executed officers.

Increase in shares available for issuance and amendment of the "evergreen" provision under the 2014 Equity Plan

11) THAT the third amended and restated 2014 Stock Incentive Plan (the "Third Amended and Restated 2014 Plan") be approved, which reflects amendments to the Second Amended and Restated 2014 Stock Incentive Plan (the "2014 Plan") to (a) increase the number of ordinary shares authorized for issuance by 750,000 shares and to increase the maximum number of shares that may be issued upon the exercise of incentive stock options by 750,000 shares, and (b) modify the "evergreen" provision, pursuant to which the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2021 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by our board of directors or the remuneration  committee.


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Auditors

12) THAT Ernst & Young LLP be re-appointed as the auditors of the Company to hold office from the conclusion of this meeting until the conclusion of the Annual General Meeting of the Company to be held in 2021, that the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for purposes of United States securities law reporting for the fiscal year ending March 31, 2021 be ratified and that the directors be authorized to determine the fees to be paid to the auditors.

Record Date

Beneficial owners of Quotient shares held in street name are entitled to vote only if they were a shareholder of Quotient at the close of business on August 31, 2020. Shareholders on Quotient's register of members 48 hours before the time the Annual General Meeting is to be held are also entitled to vote. Holders of ordinary shares of Quotient are entitled to one vote for each share held.

 

Attendance at the Annual General Meeting

As required by our organizational documents, we intend to hold the Annual General Meeting in person.  Although you would ordinarily be entitled to attend the Annual General Meeting and vote in person, in light of the rapidly changing COVID-19 pandemic, attendance in person may be discouraged or prohibited by government regulations or action or based on general health and safety considerations.  As a result, we encourage you to vote by proxy.  If you nevertheless expect to attend, please check the appropriate box on the proxy card when you return your proxy. If you hold your shares in street name, you may also follow the instructions included in the proxy materials to vote and confirm your attendance by telephone or Internet.

Where to Find More Information about the Resolutions and Proxies

Further information regarding the above business and resolutions is set out in the proxy statement (the “Proxy Statement”) and other proxy materials, which are available at https://quotientbd.com/page/investors.

You are entitled to appoint one or more proxies to attend the Annual General Meeting and vote on your behalf and your proxy need not also be a shareholder of the Company. Instructions on how to appoint a proxy are set out in the Proxy Statement and on the proxy card.

 

 

BY ORDER OF THE BOARD OF DIRECTORS

 

Heino von Prondzynski

Chairman

 

PLEASE NOTE THAT THE COVID-19 PANDEMIC MAY IMPACT YOUR ABILITY TO ATTEND TO THE ANNUAL GENERAL MEETING IN PERSON.  IF YOU INTEND TO ATTEND THE MEETING IN PERSON, YOU WILL NEED PROOF THAT YOU OWN QUOTIENT SHARES AS OF THE RECORD DATE  (FOR BENEFICIAL OWNERS OF SHARES HELD IN STREET NAME) OR 48 HOURS PRIOR TO THE TIME OF THE ANNUAL GENERAL MEETING (FOR RECORD HOLDERS) TO BE ADMITTED TO THE ANNUAL GENERAL MEETING.

Record shareholder: If your shares are registered directly in your name, please bring proof of such ownership.  

Shares held in street name by a broker or a bank: If your shares are held for your account in the name of a broker, bank or other nominee, please bring a current brokerage statement, letter from your stockbroker or other proof of ownership to the meeting together with a proxy issued in your name should you wish to vote in person at the Annual General Meeting.

This Notice of Annual General Meeting and the Proxy Statement are being distributed on or about September 8, 2020.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on October 29, 2020

Our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (our "Annual Report"), notice of 2020 Annual General Meeting, the Proxy Statement and proxy card are available in the “Financials & Filings” section of our website at https://quotientbd.com/page/investors.

 

 

 


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TABLE OF CONTENTS

 

 

 

Page

GENERAL INFORMATION

 

 

1

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

 

 

5

BOARD PRACTICES

 

 

8

RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

 

10

ELECTION OF DIRECTORS (RESOLUTIONS 1 TO 8)

 

 

13

COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS ("SAY ON PAY") (RESOLUTION 9)

 

 

16

FREQUENCY OF FUTURE SHAREHOLDER ADVISORY "SAY ON PAY" VOTES (RESOLUTION 10)

 

 

17

APPROVE THE THIRD AMENDED AND RESTATED 2014 PLAN, WHICH REFLECTS AMENDMENTS TO THE 2014 PLAN TO (A) INCREASE SHARES AVAILABLE FOR ISSUANCE AND (B) MODIFY THE "EVERGREEN" PROVISION UNDER THE 2014 PLAN (RESOLUTION 11)

 

 

18

NON-EMPLOYEE DIRECTOR COMPENSATION

 

 

22

REMUNERATION COMMITTEE REPORT

 

 

28

EXECUTIVE COMPENSATION

 

 

29

REPORT OF THE AUDIT COMMITTEE

 

 

46

APPOINTMENT OF AND PAYMENT TO AUDITORS (RESOLUTION 12)

 

 

48

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

 

49

OTHER INFORMATION

 

 

51

EXHIBIT A

 

 

52

 

 

 

 

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QUOTIENT LIMITED

PROXY STATEMENT

FOR

ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Board of Directors (the "Board") of QUOTIENT LIMITED (“Quotient,” the “Company,” or “we”, “us” and “our”) is soliciting proxies for use at the 2020 Annual General Meeting of Shareholders to be held on October 29, 2020 (the “Annual Meeting”), and at any adjournment or postponement of the Annual Meeting. A notice of the Annual Meeting will be distributed to shareholders who hold ordinary shares of Quotient as of August 31, 2020, the Record Date (as defined below) for the Annual Meeting, on or about September 8, 2020. Quotient Limited is a limited liability no par value company incorporated under the laws of Jersey, Channel Islands.

GENERAL INFORMATION

What am I voting on?

You will be voting on the following proposals at our Annual Meeting:

 

to elect eight directors;

 

to approve, on a non-binding, advisory basis, the compensation paid to our named executive officers;

 

to determine, on a non-binding, advisory basis, the frequency of future shareholder advisory votes to approve the compensation paid to our named executive officers;

 

to approve the Third Amended and Restated 2014 Stock Incentive Plan (the "Third Amended and Restated 2014 Plan"), which reflects amendments to the Second Amended and Restated 2014 Stock Incentive Plan (the "2014 Plan") to (a) increase the number of ordinary shares authorized for issuance by 750,000 shares and to increase the maximum number of shares that may be issued upon the exercise of incentive stock options by 750,000 shares, and (b) modify the "evergreen" provision, pursuant to which the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2021 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by the Board or the remuneration committee;

 

to re-appoint Ernst & Young LLP as the Company’s auditors, ratify their appointment as independent registered public accounting firm and to authorize the directors to determine the fees to be paid to the auditors; and

 

to transact such other business as may properly come before the Annual Meeting.

What are the recommendations of the Board?

All shares represented by a properly executed proxy will be voted unless the proxy is revoked and, if a choice is specified, your shares will be voted in accordance with that choice. If no choice is specified but the proxy card is signed, the proxy holders will vote your shares according to the recommendations of the Board, which are included in the discussion of each matter later in this proxy statement. The Board recommends that you vote:

FOR the election of each of the eight nominees as directors;

FOR the approval, on a non-binding, advisory basis, of the compensation paid to our named executive officers as described in the "Compensation Discussion and Analysis" of this proxy statement and the related compensation tables, notes and narrative discussion;

EVERY ONE YEAR for the determination, on a non-binding, advisory basis, of the frequency of future advisory votes to approve the compensation paid to our named executive officers;

FOR the approval of the Third Amended and Restated 2014 Plan, which reflects amendments to the 2014 Plan to (a) increase the number of ordinary shares authorized for issuance by 750,000 shares and to increase the maximum number of shares that may be issued upon the exercise of incentive stock options by 750,000 shares, and (b) modify the "evergreen" provision, pursuant to which the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2021 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by our Board or the remuneration committee; and

 

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FOR the re-appointment of Ernst & Young LLP as our auditors, ratification as our independent registered public accounting firm and the authorization of the directors to determine the fees to be paid to the auditors.

In addition, the proxy holders may vote in their discretion with respect to any other matter that properly comes before the Annual Meeting.

Who is entitled to vote?

For each proposal to be voted on, each shareholder is entitled to one vote for each ordinary share.   For beneficial owners of ordinary shares held in street name, the record date for the Annual Meeting is the close of business on August 31, 2020 (the "Record Date"). Shareholders of record on our register of members 48 hours before the time the Annual Meeting is to be held are also entitled to vote.   As of the close of business on July 22, 2020, there were 80,606,822 ordinary shares outstanding.

How do I vote by proxy in lieu of attending the Annual Meeting?

If you received a printed, paper copy of our proxy materials by mail, or you received a Notice of Availability by mail and have opted to receive a paper copy of our proxy materials by mail, you may vote by proxy by completing, dating and signing your proxy card and mailing it in the envelope provided. You must sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as officer of a corporation, guardian, executor, trustee or custodian), you must indicate your name and title or capacity.

If you received a Notice of Availability by mail, you will not receive a printed, paper copy of the proxy materials unless you request to receive one. Instead, the Notice of Availability will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice of Availability also instructs you as to how you may submit your proxy on the Internet and contains a link to instructions on how to submit your proxy by telephone. If you received a Notice of Availability by mail and would like to receive a paper copy of our proxy materials, including a proxy card, you should follow the instructions for requesting such materials included in the Notice of Availability.

If you vote via the Internet or by telephone, your vote must be received by 11:59 p.m., Eastern Time, on October 28, 2020. If you vote by Internet or telephone, you should not return your proxy card.

You may also vote in person at the Annual Meeting or you may be represented by another person at the Annual Meeting by executing a proxy designating that person.  However, in light of the rapidly changing COVID-19 pandemic, attendance in person may be discouraged or prohibited by government regulations or action or based on general health and safety considerations.  As a result, we encourage you to vote by proxy using one of the other voting methods described above.

If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the beneficial owner of shares held in “street name.” The street name holder will provide you with instructions that you must follow in order to have your shares voted.

If you hold your shares in street name and you wish to vote in person at the Annual Meeting, you must obtain a proxy issued in your name from the street name holder.  As noted above however, in light of the COVID-19 pandemic, attendance in person may be discouraged or prohibited.  As a result, we encourage you to vote by proxy using one of the other voting methods described above.

May I change my mind after submitting a proxy?

If you are a shareholder of record, you may revoke your proxy before it is exercised by:

 

Written notice of revocation to Ernest Larnach, our Head of Financial Accounting and Treasury, at Quotient Limited, 5 James Hamilton Way, Milton Bridge, Penicuik, Midlothian, EH26 0BF, United Kingdom, and execution of a later dated proxy relating to the same shares, delivered to our Head of Financial Accounting and Treasury, at or before the final vote at the meeting; or

 

Voting in person at the Annual Meeting.

If you are a beneficial owner of shares held in street name, you may revoke prior and submit new, voting instructions by contacting your brokerage firm, bank or other holder of record.

 

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What are broker non-votes?

A broker non-vote occurs when the broker that holds your shares in street name is not entitled to vote on a matter without instruction from you and you do not give any instruction. Unless instructed otherwise by you, brokers will not have discretionary authority to vote on any matter other than Resolution 12, which is considered to be routine for these purposes. It is important that you cast your vote for your shares to be represented on all matters.

What is the required vote?

To be approved, Resolutions 1 to 12 require a simple majority of the votes cast at the Annual Meeting in favor of each Resolution. If a director does not receive a majority of the vote for his or her election, then that director will not be re-elected to the Board and the Board may fill the vacancy with a different person, or the Board may reduce the number of directors to eliminate the vacancy. The vote on Resolutions 9 and 10 are advisory and are not binding on our Board or the Company. For Resolution 10, the number of years for the frequency of future advisory votes on executive compensation that receives the highest number of votes will be considered the frequency preferred by our shareholders. Votes that are withheld with respect to the election of directors and abstentions on the other matters are not counted as votes cast.

What will constitute the quorum for the Annual Meeting?

A quorum will consist of two or more shareholders present in person or by proxy who hold or represent shares between them of not less than 50% of the total shares in issue as of the date of the Annual Meeting.

How can I attend the Annual Meeting?

As required by our organizational documents, we intend to hold the Annual Meeting in person.  Although you would ordinarily be entitled to attend the Annual Meeting and vote in person, in light of the rapidly changing COVID-19 pandemic, attendance in person may be discouraged or prohibited by government regulations or action or based on general health and safety considerations.  As a result, we encourage you to vote by proxy.  

If you nevertheless plan to attend the Annual Meeting, you will not be admitted without proof that you own Quotient shares.

 

Record Shareholders. If you are a record shareholder (i.e., a person who owns shares registered directly in his or her name with Continental Stock Transfer & Trust Company, Quotient’s transfer agent) and plan to attend the Annual Meeting, please indicate this when voting by marking the attendance box on the proxy card.

 

Owners of Shares Held in Street Name. Beneficial owners of Quotient ordinary shares held in street name by a broker, bank or other nominee will need proof of ownership to be admitted to the Annual Meeting. A recent brokerage statement or letters from the broker, bank or other nominee are examples of proof of ownership. If your shares are held in street name and you want to vote in person at the Annual Meeting, you must obtain a written proxy from the broker, bank or other nominee holding your shares.

Can I access these proxy materials on the Internet?

This proxy statement and our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (our "Annual Report") are available at https://quotientbd.com/page/investors.

Can I get hard copies of the proxy materials?

In accordance with rules adopted by the SEC, instead of mailing a printed, paper copy of our proxy materials to our shareholders who hold their shares in street name, we are furnishing proxy materials, including this Proxy Statement and our Annual Report to shareholders, by providing access to these documents on the Internet. Accordingly, on or about September 8, 2020, a Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) will be sent to beneficial owners of our ordinary shares. The Notice of Availability provides you with instructions regarding the following: (1) viewing our proxy materials for the Annual Meeting on the Internet; (2) voting your shares after you have viewed our proxy materials; (3) requesting a paper copy of the proxy materials; and (4) instructing us to send our future proxy materials to you. We believe the delivery options allow us to provide our shareholders with the proxy materials they need, while lowering the cost of the delivery of the materials and reducing the environmental impact of printing and mailing. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.

In addition, certain holders of record of our ordinary shares will be sent, by mail, this proxy statement and the related proxy card on or about September 8, 2020.

 

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Who pays for this proxy solicitation and how much did it cost?

We will pay the cost for soliciting proxies for the Annual Meeting. Quotient will distribute proxy materials and follow-up reminders by mail and electronic means. We have engaged Okapi Partners LLC (“Okapi”) at 1212 Avenue of the Americas, 24th Floor, New York, New York 10036 to assist with the solicitation of proxies. We will pay Okapi a fee of $8,500, plus reasonable out-of-pocket expenses. Certain Quotient employees, officers, and directors may also solicit proxies by mail, telephone, or personal visits. They will not receive any additional compensation for their services.

We will reimburse brokers, banks, and other nominees for their expenses in forwarding proxy materials to beneficial owners.

How can I obtain the Company’s corporate governance information?

These documents are posted on Quotient’s website at www.quotientbd.com. Click on the tab “Investors” and then the caption “Corporate Governance.”

 

Corporate Governance Guidelines

 

Board Committee Charters

 

Code of Business Conduct and Ethics

 

Insider Trading Policy

 

Related Party Transaction Policy

 

Shareholder Communication Policy

 

Disclosure Procedure Policy

Where can I find voting results for this Annual Meeting?

The voting results will be published in a current report on Form 8-K, which will be filed with the SEC no later than four business days after the Annual Meeting. The voting results will also be accessible through our website at www.quotientbd.com at the same time.

 

 

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MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

 

During the fiscal year ended March 31, 2020, the Board met seven times, and the audit committee met six times. Attendance at Board and audit committee meetings exceeded 90% and no director attended less than 90% of the aggregate number of such Board and committee meetings for meetings that they were eligible to attend. The remuneration and the nominating and corporate governance committees each met four times during the fiscal year ended March 31, 2020.

Our Board currently has three committees, as described below. Each committee has a separate written charter that is available on Quotient’s website at www.quotientbd.com.

Our business and affairs are managed under the direction of our Board. At each annual meeting of our shareholders, each of our directors must “retire,” and, if they wish to continue to serve as a director, they become subject to re-election to the Board by our shareholders.  Historically, our Board has been composed of eight directors. Two of our directors, Mr. Bologna and Ms. O'Connor, informed the Board that they would not stand for re-election at the Annual Meeting and the Board also appointed two new directors to the Board, Ms. Buckle and Ms. Larue, effective as of September 1, 2020. As a result, immediately prior to the Annual Meeting, our Board will be composed of ten directors, and immediately following the Annual Meeting, our Board will be composed of eight directors.

We are subject to the listing standards of Nasdaq, which require that, subject to specified exceptions and permitted phase-in periods, each member of a listed company’s audit, remuneration and nominating and corporate governance committees be independent. In addition, the listing standards of Nasdaq require that audit committee members satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and that the remuneration committee members satisfy independence criteria set forth in Rule 5605(d) of Nasdaq rules. The listing standards of Nasdaq further provide that a director will only qualify as an “independent director” if, in the opinion of that company’s Board, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In addition, the listing standards of Nasdaq require that a majority of the members of a listed company’s Board be independent. Our Board has determined that Messrs. Bologna, Hallsworth, McDonough, von Prondzynski, Shroff and Wilkerson, Ms. O’Connor, Buckle and Larue, are independent directors under the applicable Nasdaq listing rules. In making these determinations, our Board considered the relationships that each such non-employee director has with our company and all other facts and circumstances that our Board deemed relevant in determining their independence, including beneficial ownership of our ordinary shares.  Mr. Bologna and Ms. O'Connor will not stand for re-election at the Annual Meeting.

During the fiscal year ended March 31, 2020, the Board evaluated our Board and committee composition, which has resulted in changes to the composition of the Board, the rotation of certain committee members and the appointment of new chairpersons to our remuneration committee and nominating and corporate governance committee.  We believe these changes will bring a fresh perspective and add new experience and skill sets to the Board and our committees.  Unless otherwise noted, the disclosure that follows is based on the current composition of the Board and our committees. 

Audit Committee

Our audit committee is composed of Messrs. Bologna, Hallsworth, and Shroff, with Mr. Hallsworth serving as chairman of the committee. Our Board has determined that all these committee members meet the independence requirements of Rule 10A-3 under the Exchange Act and the applicable listing standards of Nasdaq.  Our Board has determined that Mr. Hallsworth is an “audit committee financial expert” within the meaning of SEC regulations and applicable listing standards of Nasdaq. The audit committee met six times during the year ended March 31, 2020. Mr. Bologna will not stand for re-election at the Annual Meeting.  Upon completion of the Annual Meeting, if elected, Ms. Larue will join the audit committee. Our Board has determined that Ms. Larue also meets the independence requirements of Rule 10A-3 under the Exchange Act and the applicable listing standards of Nasdaq.

The audit committee’s responsibilities include:

 

appointing, approving the compensation of, and assessing the qualifications, performance and independence of our independent registered public accounting firm;

 

pre-approving audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

 

reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements;

 

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reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;

 

reviewing the adequacy of our internal control over financial reporting, financial and critical accounting practices and policies relating to risk assessment and management;

 

establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;

 

reviewing and discussing with management and our independent registered public accounting firm our audited financial statements to be included in our Annual Report on Form 10-K;

 

monitoring our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;

 

preparing the audit committee report required by the rules of the SEC to be included in our annual proxy statement;

 

reviewing the cyber-security risk management program and reporting to the Board regarding strategies for improvement;

 

reviewing and assessing the adequacy of the committee charter and submitting any changes to our Board for approval;

 

viewing all related party transactions for potential conflict of interest situations and approving all such transactions; and

 

reviewing and discussing with management and our independent registered public accounting firm our earnings releases and scripts.

Remuneration Committee

Our remuneration committee is composed of Messrs. McDonough, von Prondzynski and Shroff, with Mr. Shroff serving as chairman of the committee. Our Board has determined that all these committee members are independent as defined under the applicable listing standards of Nasdaq. The remuneration committee met four times during the fiscal year ended March 31, 2020. The remuneration committee’s responsibilities include:

 

determining and approving the remuneration of our chief executive officer and other named executive officers;

 

reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and other named executive officers;

 

evaluating the performance of our chief executive officer and other named executive officers in light of such corporate goals and objectives;

 

overseeing and administering our compensation and equity-based plans;

 

making recommendations to the Board about amendments to such plans and the adoption of any new employee incentive compensation plans;

 

appointing, compensating and overseeing the work of any compensation consultant, legal counsel or other advisor retained by the remuneration committee;

 

conducting the independence assessment outlined in the rules of Nasdaq with respect to any compensation consultant, legal counsel or other advisor retained by the remuneration committee;

 

producing a remuneration committee report on executive compensation as required by the rules of the SEC to be included in our annual proxy statement;

 

reviewing our incentive compensation arrangements to determine whether they encourage excessive risk-taking;

 

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reviewing at least annually the relationship between risk management policies and practices and compensation and evaluating compensation policies and practices that could mitigate any such risk;

 

annually reviewing and reassessing the adequacy of the committee charter in its compliance with the listing requirements of Nasdaq;

 

reviewing and establishing our overall management compensation philosophy and policy;

 

reviewing and approving our policies and procedures for the grant of equity-based awards; and

 

reviewing and making recommendations to our Board with respect to director compensation.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee is composed of Ms. O’Connor and Messrs. von Prondzynski and Wilkerson, with Mr. von Prondzynski serving as chair of the committee. Our Board has determined that these committee members are independent as defined under the applicable listing standards of Nasdaq. The committee met four times during the fiscal year ended March 31, 2020. Ms. O'Connor will not stand for re-election at the Annual Meeting. Upon completion of the Annual Meeting, if elected, Ms. Buckle will join the nominating and corporate governance committee. Our Board has also determined that Ms. Buckle is independent as defined under the applicable listing standards of Nasdaq.

The nominating and corporate governance committee’s responsibilities include:

 

identifying individuals qualified to become members of our Board, consistent with criteria approved by our Board;

 

establishing a policy under which our shareholders may recommend a candidate to the nominating and corporate governance committee for consideration for nomination as a director;

 

recommending to our Board qualified individuals to serve as members of the committees of our Board;

 

developing, updating and recommending to our Board a set of corporate governance principles;

 

assisting the Board in developing and evaluating potential candidates for executive positions (including the chief executive officer) and overseeing the development of executive succession plans;

 

articulating to each director what is expected, including reference to the corporate governance principles and directors’ duties and responsibilities;

 

reviewing and recommending to our Board practices and policies with respect to directors;

 

reviewing and assessing the adequacy of the committee charter and submitting any changes to our Board for approval;

 

overseeing the systems and processes established by us to ensure compliance with our Code of Business Conduct and Ethics; and

 

performing an evaluation of the performance of the committee.

 

 

 

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BOARD PRACTICES

To help our shareholders better understand our Board practices, we are including the following description of current practices. The nominating and corporate governance committee periodically reviews these practices.

Size of the Board

Historically, the Board has consisted of eight directors as described in more detail above. Our Memorandum and Articles of Association provides that our Board must consist of a minimum of two directors. The exact number of members on our Board will be determined from time to time by our full Board.  Two of our directors, Mr. Bologna and Ms. O'Connor, informed the Board that they would not stand for re-election at the Annual Meeting and the Board also appointed two new directors to the Board, Ms. Buckle and Ms. Larue, effective as of September 1, 2020. As a result, immediately prior to the Annual Meeting, our Board will be composed of ten directors, and immediately following the Annual Meeting, our Board will be composed of eight directors.

Leadership Structure

Heino von Prondzynski, an independent, non-employee director, serves as the Chairman of the Board.

Director Independence

The Board believes that a substantial majority of its members should be independent, non-employee directors. Only one member of the Board, Mr. Walt, who serves as our Chief Executive Officer, is an employee of Quotient. The non-employee directors of the Company are Messrs. Bologna, Hallsworth, McDonough, von Prondzynski, Shroff and Wilkerson, Ms. O’Connor and, effective as of September 1, 2020, Ms. Buckle and Ms. Larue. The Board has determined that Messrs. Bologna, Hallsworth, McDonough, von Prondzynski, Shroff and Wilkerson, Ms. O’Connor, Ms. Buckle and Ms. Larue, are independent directors under the applicable Nasdaq listing rules.  In addition, the Board has determined that Messrs. Bologna, Hallsworth and Shroff, each of whom serves on our audit committee, is independent under Rule 10A-3 under the Exchange Act. In particular, in making such determinations, the Board specifically considered Mr. Shroff’s role as managing director of Galen Partners and Mr. Wilkerson’s role as senior advisor to Galen Partners and the attribution to each of them of beneficial ownership of shares beneficially owned by Galen Partners, and determined that their service in such roles and the resulting attribution of beneficial ownership of our shares did not hinder their independence under applicable Nasdaq or Exchange Act rules.  As noted above, Mr. Bologna and Ms. O’Connor will not stand for re-election at the Annual Meeting.

Audit Committee Financial Expert

The Board has determined that all of the members of the audit committee are financially literate and that Mr. Hallsworth, the chairman of the audit committee, is an “audit committee financial expert” within the meaning of SEC regulations and applicable listing standards of Nasdaq.  The Board has also determined that Dr. Larue is financially literate.

Evaluation of Board Performance

The nominating and corporate governance committee coordinates an annual evaluation process by which the directors evaluate the Board’s and its committees’ performance and procedures. This self-evaluation leads to a full Board discussion of the results. The committees of the Board each conduct an annual evaluation of their committee’s performance and procedures.

As discussed above under “Meetings of the Board and Committees of the Board”, during the fiscal year ended March 31, 2020, the Board evaluated our Board and committee composition, which resulted in certain changes to our Board committee members and committee chairpersons. This evaluation was undertaken in lieu of the annual evaluation process that the Board and committees normally undertake.

Nomination of Directors

The nominating and corporate governance committee recommends individuals for membership on the Board. In making its recommendations, the nominating and corporate governance committee considers an individual’s independence based on Nasdaq independence requirements and the criteria determined by the Board.

The nominating and corporate governance committee considers not only a candidate’s qualities, performance and professional responsibilities, but also the composition of the Board and the challenges and needs of the Board at that time. The Board as a whole is constituted to be strong in its diversity and collective knowledge of accounting and finance, management and leadership, vision and strategy, business operations, business judgment, crisis management, risk assessment, industry knowledge, corporate governance and global markets.

 

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The culture of the Board enables the Board to operate swiftly and effectively in making key decisions and when facing major challenges. Board meetings are conducted in an environment of trust, confidentiality, open dialogue, mutual respect and constructive commentary.

The nominating and corporate governance committee views diversity in its broadest sense, which includes gender, ethnicity, education, experience and leadership qualities. The nominating and corporate governance committee will use the same process and criteria for evaluating all nominees, regardless of who submits the nominee for consideration.

Shareholders are encouraged to submit the name of any candidate they believe to be qualified to serve on the Board, together with background information on the candidate, to the chair of the nominating and corporate governance committee. In accordance with procedures set forth in our Memorandum and Articles of Association, shareholders may propose, and the nominating and corporate governance committee will consider, nominees for election to the Board at the next annual general meeting by giving timely written notice to Viviane Montarnal, our Head of Legal and Compliance, which must be received at our registered office no later than the close of business on the date that is 90 days before the first anniversary of the last annual general meeting of the Company, or August 2, 2021, and no earlier than the date that is 120 days before the first anniversary of the last annual general meeting of the Company, or July 1, 2021. The notice periods may change in accordance with the procedures set out in our Memorandum and Articles of Association. Any such notice must include the name of the nominee, a biographical sketch and resume, contact information and such other background materials on such nominee as the nominating and corporate governance committee may request.

Executive Sessions

Non-employee directors meet together as a group during each Board meeting, without the Chief Executive Officer or any other employees in attendance. Mr. von Prondzynski, as our Board’s Chairman, presides over each executive session of the Board. There is also an executive session during each committee meeting at which committee members meet without the Chief Executive Officer or any other employees in attendance. In addition, as required under Nasdaq listing standards, independent directors must meet together as a group at least twice a year.

Board’s Role in Risk Oversight

The Board takes an active role in risk oversight related to the Company both as a full Board and through its committees. While the Company’s management is responsible for day-to-day management of the various risks facing the Company, the Board is responsible for monitoring management’s actions and decisions. The Board, as apprised by the audit committee, determines that appropriate risk management and mitigation procedures are in place and that senior management takes the appropriate steps to manage all major risks.

Attendance at Shareholder Meetings

The Board does not have a formal policy regarding director attendance at shareholder meetings. Messrs. Walt, Hallsworth, McDonough, and von Prondzynski attended the 2019 annual general meeting of shareholders.

As required by our organizational documents, we intend to hold the 2020 Annual Meeting in person.  As a result of the rapidly changing COVID-19 pandemic, certain of our directors may be unable to attend the meeting in person.

Governance Principles

The Board maintains a formal statement of Corporate Governance Guidelines that sets forth the corporate governance practices for Quotient. The Corporate Governance Guidelines are available on our website at www.quotientbd.com. Click on the tab “Investors” and then the caption “Corporate Governance.”

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer and principal financial officer. A current copy of the code is posted on the investor section of our website, www.quotientbd.com. We intend to disclose any amendment to the code, or any waivers of its requirements, on our website.

Communications with the Board

The Board believes that it is in the best interests of the Company and its shareholders to provide to every shareholder the ability to communicate with the Board as a whole, or with an individual director, through an established process for shareholder communication. The shareholder communication policy is posted on Quotient’s website at www.quotientbd.com. Click on the tab “Investors” and then the caption “Corporate Governance.”

 

 

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RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of transactions, since April 1, 2018, in which (a) we were a participant, (b) the amount involved exceeded $120,000 and (c) one or more of our executive officers, directors or 5% shareholders, or their immediate family members, each of whom we refer to as a “related person,” had a direct or indirect material interest. We refer to these as “related person transactions.”

Public Share Offerings

On December 11, 2018, as part of a public offering, we issued the following amounts of ordinary shares at a price of $6.50 per share:

 

692,308 ordinary shares to Polar Capital LLP for a total consideration of $4,500,002

 

2,000,000 ordinary shares to Perceptive Advisors LLC for a total consideration of $13,000,000

 

10,000 ordinary shares to Frederick Hallsworth (our director) for a total consideration of $65,000

On November 12, 2019, as part of a public offering, we issued the following amounts of ordinary shares at a price of $7.00 per share:

 

900,000 ordinary shares to Polar Capital LLP for a total consideration of $6,300,000

 

2,500,000 ordinary shares to Perceptive Advisors LLC for a total consideration of $17,500,000

 

285,714 ordinary shares to Cormorant Asset Management, LP for a total consideration of $1,999,998

 

350,000 ordinary shares to Highbridge Capital Management LLC for a total consideration of $2,450,000

Exercise of Warrants

On various dates prior to July 31, 2018, we issued the following ordinary shares upon the exercise of warrants at $5.80 per share:

 

2,306,034 ordinary shares to Perceptive Advisors LLC for consideration of $13,374,997

 

1,724,137 ordinary shares to Polar Capital LLP for consideration of $9,999,995

 

1,012,930 ordinary shares to Cormorant Asset Management, LLC for consideration of $5,874,994

 

419,728 ordinary shares to Galen Partners for consideration of $2,434,422

 

2,099 ordinary shares to Thomas Bologna (our director) for consideration of $12,174

 

5,247 ordinary shares to Frederick Hallsworth (our director) for consideration of $30,433

 

10,493 ordinary shares to Brian McDonough (our director) for consideration of $60,859

 

2,099 ordinary shares to Sarah O’Connor (our director) for consideration of $12,174

 

1,049 ordinary shares to Heino von Prondzynski (our Chairman of the Board) for consideration of $6,084

 

52,465 ordinary shares to Christopher Lindop (our former Chief Financial Officer) for consideration of $304,297

 

2,099 ordinary shares to Jeremy Stackawitz (our Chief Operating Officer) for consideration of $12,174

 

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Private Placement of Shares

On August 3, 2018, we entered into two subscription agreements:

 

between us and Franz Walt, our Chief Executive Officer, pursuant to which Mr. Walt subscribed for, and we agreed to issue, 45,000 ordinary shares at a price of $7.54 per share (which was equal to the closing bid price of our ordinary shares as reported on the Nasdaq Global Market on August 2, 2018) for aggregate proceeds of $339,300; and

 

between us and Heino von Prondzynski, the Chairman of our Board, pursuant to which Mr. von Prondzynski subscribed for, and we agreed to issue, 10,000 ordinary shares at a price of $7.54 per share (which was equal to the closing bid price of our ordinary shares as reported on the Nasdaq Global Market on August 2, 2018) for aggregate proceeds of $75,400.

Transition Agreement – Christopher Lindop

On January 3, 2020, we entered into a transition, separation and consultancy agreement with Mr. Christopher Lindop, our former Chief Financial Officer, and we agreed to make certain payments to Mr. Lindop in consideration for his service to the Company and employment with the Company through his retirement on May 31, 2020. For additional information, see “Executive Compensation—Agreements with our Executive Officers— Transition Agreement – Christopher Lindop.”

Transition Agreement – Roland Boyd

On December 10, 2019, we entered into a transition agreement with Mr. Roland Boyd, our former Group Financial Controller & Treasurer, and we  agreed to make certain payments to Mr. Boyd in consideration for his service to the Company and employment with the Company through his retirement on December 31, 2019. For additional information, see “Executive Compensation—Agreements with our Executive Officers—Transition Agreement – Roland Boyd.”

Registration Rights Agreement

On December 13, 2019, we entered into a Registration Rights Agreement with Mr. Heino von Prondzynski, our Chairman, Mr. Franz Walt, our Chief Executive Officer, and Mr. Christopher Lindop, our former Chief Financial Officer, with respect to an aggregate of 105,000 ordinary shares owned by these individuals that were originally subscribed for by them in separate private placements that occurred in February 2017 and August 2018, respectively (the “registrable shares”). We refer to these individuals, in their capacities as parties to the Registration Rights Agreement, as the “holders.”  The purpose of the Registration Rights Agreement is to permit the public offer and resale of the registrable shares by the holders. In accordance with the terms of the Registration Rights Agreement, we filed with the SEC a shelf registration statement on Form S-3 to register the registrable shares to be sold by the holders from time to time (the “Shelf Registration Statement”), and we have agreed to use our reasonable best efforts to keep the Shelf Registration Statement continuously effective until the registrable shares are sold or otherwise cease to be registrable shares for purposes of the Registration Rights Agreement or the agreement is otherwise terminated.

Employment Agreements

On July 2, 2019, we entered into an amendment to our employment agreement with Mr. Franz Walt to provide for automatic renewal of its term for an additional twelve months, subject to either party giving the other party at least three months’ written notice that the term of the agreement will not be extended.

On December 12, 2019, we entered into an amendment to our employment agreement with Mr. Ernest Larnach, which sets forth the terms and conditions under which Mr. Larnach will serve as our Head of Financial Accounting and Treasury.

On January 3, 2020, we entered into an employment agreement with Mr. Peter Buhler, which sets forth the terms and conditions under which Mr. Buhler will serve as our Chief Financial Officer.

On January 7, 2020 we entered into amendments respectively to our employment agreement, dated November 21, 2012, with Mr. Edward Farrell and to our employment agreement, dated March 9, 2009, with Mr. Jeremy Stackawitz, in connection with the appointment effective retroactively as of January 1, 2020 of Mr. Farrell as our Chief Operating Officer, and Mr. Stackawitz as our Chief Commercial Officer.

For additional information on our employment agreements with our executive officers, see “Executive Compensation—Agreements with our Executive Officers—Employment Agreements.”

 

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Equity Awards

We have issued certain shares and granted share options, or multi-year, performance-based restricted share units, or MRSUs, and/or restricted share units, or RSUs, to our executive officers and our directors. For additional information, see “Executive Compensation—Outstanding Equity Awards at Fiscal Year End” and “—Director Compensation.”

Change in Control

We are party to change in control agreements with certain of our executive officers. We also include information of change of control agreements with certain of our former executive officers. For additional information, see “Executive Compensation—Agreements with our Executive Officers—Change in Control Agreements.”

Indemnification

We have entered into indemnification agreements with each of our officers and directors to indemnify them against certain liabilities and expenses arising from their being an officer or director (but specifically excluding any circumstance where they are determined to have violated their fiduciary duty to us). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Non-Employee Director Appointment Letters

We have entered into letters of appointment with certain of our non-employee directors. These letters set forth the main terms on which each of our non-employee directors serve on our Board. Continued appointment under the letter is contingent on continued satisfactory performance, re-nomination by the nominating and corporate governance committee and approval of the Board, re-election by the shareholders and any relevant statutory provisions and provisions of our articles of association relating to removal of a director.

Procedures for Approval of Related Party Transactions

Currently, under our Related Party Transaction Policy, our audit committee is charged with the primary responsibility for determining whether, based on the facts and circumstances, a related person has a direct or indirect material interest in a proposed or existing transaction. To assist our audit committee in making this determination, the policy sets forth certain categories of transactions that are deemed not to involve a direct or indirect material interest on behalf of the related person. If, after applying these categorical standards and weighing all of the facts and circumstances, our audit committee determines that the related person would have a direct or indirect material interest in the transaction, the audit committee must review and either approve or reject the transaction in accordance with the terms of the policy. If any executive officer becomes aware of a related party transaction that the audit committee has not approved or ratified, he or she shall promptly inform the audit committee or such other person designated by the audit committee.

Composition of our Board of Directors and Director Independence

For information about the composition of our Board and director independence, please see “Board Practices-Director Independence.”

Remuneration Committee Interlocks and Insider Participation

None of the members of our remuneration committee has at any time during the prior three years been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the Board or remuneration committee of any entity that has one or more executive officers serving on our Board or remuneration committee.

Family Relationships

There is no family relationship between any director, executive officer or person nominated to become a director or executive director.

 

 

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ELECTION OF DIRECTORS (RESOLUTIONS 1 TO 8)

Messrs. Walt, von Prondzynski, Shroff, McDonough, Hallsworth and Wilkerson, and Mses. Buckle and Larue, who are the eight nominees for director, are each nominated for one-year terms expiring in 2021. The Board has been informed that each of these director nominees are willing to serve as a director. If a director does not receive a majority of the vote for his or her election then that director will not be elected to the Board and the Board may fill the vacancy with a different person, or the Board may reduce the number of directors to eliminate the vacancy.

The following sets forth information concerning the eight nominees for director. Messrs. Hallsworth, Shroff, McDonough and Wilkerson were members of our Board immediately prior to our initial public offering in April 2014. Mses. Buckle and Larue were appointed to the Board, effective as of September 1, 2020. Information below as to each such member’s tenure on our Board also reflects their tenure on our Board prior to our initial public offering.

Franz Walt

Mr. Walt, 61, joined the Board in February 2018, was appointed Interim Chief Executive Officer in March 2018 and was subsequently appointed Chief Executive Officer in May 2018. Mr. Walt served as President of Siemens Healthineers Laboratory Diagnostics, the laboratory diagnostics provider within the healthcare division of Siemens AG, the German based conglomerate, from March 2014 to December 2017. From January 2012 to February 2014, Mr. Walt was the Senior Vice President and head of Siemen Healthineers’ Diagnostic Division North America. Prior to joining Siemens Healthineers, from June 1989 to November 2011, Mr. Walt served in various capacities at F. Hoffman-La Roche Ltd., a Swiss based healthcare company that develops diagnostics and therapeutic products, including as Geschäftsführer (CEO) of Roche Diagnostics GmbH in Mannheim from January 2007 to November 2011, and as a board member of the Roche Diagnostic Executive Committee (DiaEC), from November 1998 to December 2006. During his time as a board member of the DiaEC, Mr. Walt served, among other capacities, as President and Consejero Delegado (CEO) of Roche Diagnostics Spain and Regional President for the LATAM Region from October 2004 to December 2006, and as Managing Director of Roche Diagnostics Asia Pacific Pte Ltd. and Regional President for the APAC Region from November 1998 to September 2004. Mr. Walt holds undergraduate degrees in management from the IMAKA Institute of Management in Zürich, and in marketing from the Swiss Institute of Economics in Zürich, and an MBA from City University of Seattle.

The Board believes that Mr. Walt is qualified to serve as a Director based upon his extensive leadership, executive, managerial, business and healthcare industry experience, along with his years of experience in the development of healthcare diagnostic products.

 

 

Frederick Hallsworth

Frederick Hallsworth, 67, was appointed as a Director in February 2011. Mr. Hallsworth spent 25 years with Arthur Andersen, becoming a partner in 1989. At Arthur Andersen, Mr. Hallsworth held a number of senior management positions, including Head of Corporate Finance, Head of Audit and Managing Partner of Cambridge, UK office of Arthur Andersen and Managing Partner and Head of Audit of Arthur Andersen, Scotland. He joined Deloitte in 2002, where he served as Senior Client Service Partner and Head of TMC Practice in Scotland until 2005. He is also currently a director of memsstar (2006 to present), CMA Scotland (2007 to present), and Offshore Renewable Energy Catapult (2015 to present). Former directorships include: Scottish Enterprise (2004-2010), Microvisk (2006-2012), Forth Dimension Displays (2007-2011), Elonics (2006-2010), Golden Charter (2009-2011), Infinite Data Storage plc (2005-2007), 3Way Networks (2005-2007), Innovata plc (2005-2007), Metaforic (2009-2014) and AT Communications plc (2008-2009). Mr. Hallsworth has been a Member of the Institute of Chartered Accountants of Scotland since 1978. Mr. Hallsworth received a Bachelor of Accountancy from Glasgow University 1974.

The Board believes that Mr. Hallsworth is qualified to serve as a Director based upon his extensive accounting experience and experience providing strategic direction to multiple life science and technology companies.

Brian McDonough

Brian McDonough, 73, was appointed as a Director in May 2012. Mr. McDonough is presently a Principal of Dx Consulting, a consultancy specializing in transfusion diagnostics. From 2003 through 2009, Mr. McDonough was Vice President, Worldwide Marketing, Donor Screening at Ortho-Clinical Diagnostics. From 2000 through 2003, he was President of the North American Blood Products Group of the Medical Division of Pall Corporation, a company specializing in medical filtration products. Prior to holding these senior executive positions, Mr. McDonough had an extensive career at the American Red Cross spanning over 30 years. From 1968 through 1982 Mr. McDonough worked in American Red Cross BioMedical Services as Executive Head of the St. Louis Regional Blood Services Unit. In 1982, he became the Executive Director of the Irwin Memorial Blood Bank of San Francisco, where he also served on several public health committees addressing the spread of AIDS. In 1987, Mr. McDonough returned to the American Red Cross as Regional Vice President of BioMedical Services and in 1994 served under Elizabeth Dole as Chief Operating Officer, Blood Services of the American Red Cross BioMedical Services, with overall responsibility for national blood and plasma programs. Mr. McDonough received a B.A. in liberal arts from Wichita State University and an M.H.A. from Central Michigan University.

 

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The Board believes that Mr. McDonough is qualified to serve as a Director based upon his extensive experience within the transfusion diagnostics industry and operational experience at the American Red Cross.

Heino von Prondzynski

Heino von Prondzynski, 70, was appointed as a director in September 2014 and as our Chairman in March 2018. He joined the Board as our Lead Independent Director in September 2014. Mr. von Prondzynski served as chief executive officer of Roche Diagnostics and as a member of the executive committee of F. Hoffman-La Roche Ltd., a Swiss based healthcare company that develops diagnostics and therapeutic products, from early 2000 to 2006, retiring from Roche at the end of 2006. From 1996 to 2000, Mr. von Prondzynski held several executive positions, including president of the vaccine business, at Chiron Corporation, a multinational biotechnology firm that developed biopharmaceuticals, vaccines and blood-testing products. Earlier in his career, Mr. von Prondzynski held sales and marketing and general management positions at Bayer AG, a German based maker of healthcare products, specialty materials and agricultural products. Mr. von Prondzynski also serves on the board of Epigenomics AG. Mr. von Prondzynski also has served as a director of Koninklijke Philips Electronics NV (from 2007 to 2019), Hospira, Inc. (from 2009 to 2015), Nobel Biocare Holding AG, Switzerland (from 2010 to 2011) and Qiagen NV (from 2007 to 2013). Mr. von Prondzynski studied maths, geography and history at Westfälische Wilhelms University, Münster, Germany.

The Board believes that Mr. von Prondzynski’s substantial history of leadership positions at major international healthcare companies allows him to provide a global business perspective to his service on the Board and makes him well qualified to serve on the Board.

Zubeen Shroff

Zubeen Shroff, 55, was appointed as a Director in July 2013.  Mr. Shroff is a Managing Director of Galen Partners, a leading healthcare growth equity firm founded in 1990. Mr. Shroff has over 25 years of experience working with entrepreneurs and their Boards of Directors in building high-growth healthcare companies. Mr. Shroff joined Galen in 1996 from The Wilkerson Group, where he was a Principal with a client base including pharmaceutical, diagnostics, device and biotech companies, plus a select number of venture capital firms. Prior to joining The Wilkerson Group, Mr. Shroff worked at Schering-Plough France, a manufacturer of healthcare products and medicines, where he helped launch their biotech product, alpha-Interferon, in several new indications. Mr. Shroff is currently serving as the First Vice-Chair of WMC Health, a public benefit corporation, which provides healthcare services to Hudson Valley New York residents, in addition to serving as the Chairman of its’ Charitable Foundation. He is the Chair of the Dean’s Advisory Board for Boston University School of Public Health. In addition, Mr. Shroff is a Fellow of the New York Academy of Medicine. Mr. Shroff has served on the board of directors of numerous privately held Galen portfolio companies. Mr. Shroff previously served on the public board of directors of Tactile Systems Technology, Inc. until May 2017, of Pet DrRx Corporation until July 2010, and of Encore Medical until June 2006. Mr. Shroff received a B.A; in Biological Sciences from Boston University and an M.B.A. from the Wharton School, University of Pennsylvania.

The Board believes that Mr. Shroff is qualified to serve as a Director based upon his extensive experience in providing strategic guidance to companies in the healthcare industry, particularly in the areas of medical devices, diagnostics, and capital equipment.

Dr. John Wilkerson

Dr. John Wilkerson, 77, was appointed as a Director in February 2012. Dr. Wilkerson co-founded Galen Partners in 1990 and currently serves as a Senior Advisor to Galen. Dr. Wilkerson has focused on healthcare throughout his career, beginning as a Group Product Director for Ortho-Clinical Diagnostics Inc. He was a Vice President covering medical device companies at Smith Barney before moving in 1980 to Channing, Weinberg & Co., Inc., a management consulting firm for pharmaceutical, diagnostic, medical device and biotechnology companies, which he acquired and renamed The Wilkerson Group.  The Wilkerson Group was subsequently acquired by IBM in 1996.

Dr. Wilkerson was previously a director of Sonacare Medical and was the Chairman of Atlantic Health Systems, a New Jersey hospital system. He is a trustee and former President of the Museum of American Folk Art and founder of the E.L. Rose Conservancy. Dr. Wilkerson received a Ph.D. from Cornell University.

The Board believes that Dr. Wilkerson is qualified to serve as a Director based upon his extensive experience providing strategic direction to companies in the life sciences industry, as well as his operational experience in the transfusion diagnostics industry.

 

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Dr. Isabelle Buckle

Dr. Isabelle Buckle, 58, serves as Executive Vice-President of Technology Transfer and Industrial Partnership at Institut Pasteur, a private non-profit foundation with global outreach, dedicated to research, teaching and public health initiatives in the field of emerging viruses, infections, epidemics and diseases.  Dr. Isabelle Buckle has over 25 years of scientific commercial and business experience in the biotechnology sector including previously serving as Global Vice President of Clinical Mass Spectrometry at Bruker Daltonics, CEO and Chairman at InGen Biosciences (an in vitro diagnostics group headquartered in France), Global Head European Pharma’s Accounts at Life Technologies (now part of Thermo Fisher Scientific), and Regional Director Head of Business Development at Ciphergen Biosystems Inc.  Dr. Buckle holds a Ph.D. in Biochemistry from the University Paris VII, Institut Pasteur.

The Board believes that Dr. Buckle is qualified to serve as a Director based upon her extensive experience in the biotechnology sector, her scientific training and background as well as her operational experience in the field of emerging viruses and epidemics.

Dr. Catherine Larue

 

Dr. Catherine Larue, 64, serves as Director of External Affairs at the Integrated Biobank of Luxemburg (IBBL), which is organized within the Luxemburg Institute of Health (LIH) and dedicated to supporting biomedical research, providing biospecimen and biobanking services and infrastructure for applied medical research.  Dr. Catherine Larue began her career at Sanofi in the cardiovascular R&D department before joining Sanofi Diagnostics Pasteur in Minneapolis, Minnesota, where she was responsible for assay development on the Access instrument in the immunodiagnostic area. Dr. Larue also served as a Director of business unit at Bio-Rad Laboratories Inc., and Executive Vice President of Biomarkers at GENFIT, before serving as CEO of IBBL. Dr. Larue has authored 87 publications (h index 19) and filed 13 patents, while also creating and chairing the “Biomarkers Group” in the Competitiveness Bio-cluster (Medicen, Paris). She sits on the boards of Fondation ARC, an organization of public utility focused on cancer research, Genfit a biopharmaceutical company, and Information Technology for Translational Medicine (ITTM S.A.), a clinical data processing company.  Dr. Larue holds a Ph.D. in immunology from the University of Rouen and a Master in Business Administration from St. John’s University and ISM Paris.

The Board believes that Dr. Larue is qualified to serve as a Director based upon her extensive experience in the diagnostics industry, her scientific background as well as her experience in providing strategic guidance to companies in the life sciences industry.

The Board of Directors recommends a vote “FOR” each of the eight director nominees named above. If you complete the enclosed proxy card, unless you direct to the contrary on that card, the shares represented by that proxy will be voted FOR the election of all eight nominees.


 

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ADVISORY APPROVAL OF THE COMPENSATION PAID TO THE COMPANY'S NAMED EXECUTIVE OFFICERS (RESOLUTION 9)

Background

In accordance with applicable SEC rules, we are providing our shareholders with the opportunity to cast a non-binding, advisory vote on the compensation paid to our named executive officers, or a “say on pay” proposal, as described in greater detail below. We believe it is appropriate to seek the views of our shareholders on our executive compensation program.

Summary

Our executive compensation program is designed to focus executive behavior on achievement of both our annual and long-term objectives and strategy as well as align the interests of management to those of our shareholders.  Consequently, our executive compensation plan is comprised of four principal elements – salary, benefits, long-term equity interest and cash bonuses based on annual individual and corporate performance. Consistent with our strategic goals, we have designed and implemented a performance-based award that aligns equity compensation with outstanding returns to our shareholders over several years.  

When designing our  executive compensation program, the remuneration committee periodically reviews commercially available, industry specific compensation data for: (i) companies in the global diagnostics industry; (ii) companies addressing the donor testing market; and (iii) companies in the European biotechnology industry, as a general guide for establishing its compensation practices and structures. The remuneration committee, along with the Board, also reviews and approves corporate objectives used in our executive compensation program to confirm that appropriate goals have been established and tracks performance against them.  On an annual basis the remuneration committee reviews tally sheets reflecting each named executive officer’s compensation history with respect to each element of compensation.

We have achieved important milestones with respect to the development and commercialization of MosaiQ, and we believe the compensation paid to our named executive officers in fiscal 2020 reflects our strong pay-for-performance philosophy.

For additional information about our executive compensation program, please refer to the section of this proxy statement entitled "Compensation Discussion and Analysis" and the related compensation tables, notes and narrative discussion.

Proposal

In accordance with Section 14A of the Exchange Act, we are asking our shareholders to vote FOR the approval of the following resolution at the Annual Meeting:

“THAT the shareholders approve, on a non-binding, advisory basis, the compensation paid to the Company's named executive officers, as described in the "Compensation Discussion and Analysis" section of the Proxy Statement for the Company's 2020 Annual General Meeting and the related compensation tables, notes and narrative discussion.”

Effect of Proposal

The resolution above reflects a non-binding, advisory proposal. The approval or disapproval of this proposal by shareholders will not require our Board or our remuneration committee to take any action regarding our executive compensation practices. The final determination of the compensation of our executive officers remains with our Board and our remuneration committee. Our Board, however, values the opinions of our shareholders as expressed through their votes, as well as through other communications with us. Although the resolution is non-binding, our Board and our remuneration committee will carefully consider the outcome of this advisory vote, as well as shareholder opinions received from other communications, when making future executive compensation decisions.

Required Vote

The approval, on a non-binding, advisory basis, of the compensation paid to our named executive officers as disclosed in the “Compensation Discussion and Analysis” section of this proxy statement and the related compensation tables, notes and narrative discussion requires the affirmative vote of a majority of votes cast at the Annual Meeting. This proposal is considered a non-routine matter under applicable rules. A broker, bank or other nominee may not vote without instructions on this matter, so there may be broker non-votes in connection with this proposal. Broker non-votes will have no effect on the result of the vote. If no contrary indication is made, returned proxies will be voted for the proposal.

The Board recommends a vote “FOR” this proposal. If you complete the enclosed proxy card, unless you direct to the contrary on that card, the shares represented by that proxy will be voted FOR the approval, on a non-binding, advisory basis, of the compensation paid to our named executive officers.


 

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ADVISORY APPROVAL OF THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION PAID TO THE COMPANY'S NAMED EXECUTIVE OFFICERS (RESOLUTION 10)

Background

In accordance with applicable SEC rules, we are providing our shareholders with the opportunity to indicate their preference, on a non-binding, advisory basis, regarding how frequently we should solicit an advisory vote on the compensation paid to our named executive officers. Accordingly, we are seeking an advisory vote from our shareholders on how often we should submit a “say on pay” proposal, such as provided for in Proposal 9, to our shareholders.

You may cast your vote for one of the following options as to the frequency with which we should submit a “say on pay” proposal to our shareholders: every “One Year,” “Two Years” or “Three Years.” Alternatively, you can choose to abstain from voting when you vote in response to the resolution set forth below.

Summary

Our Board believes that the “say on pay” advisory vote should be submitted to our shareholders annually, and therefore recommends that you vote for a “One Year” interval. We believe this frequency is in alignment with our executive compensation practices, as we review the core elements of our executive compensation program annually. We also believe this frequency is consistent with the practices of many of our peer group companies and the expectations of investors. An annual vote will provide shareholders more frequent opportunities to evaluate the effectiveness of our executive compensation policies and the related business outcome from a pay-for-performance perspective. In addition, we value and encourage constructive dialogue with our shareholders on executive compensation matters, and an annual advisory vote on executive compensation will allow our shareholders to provide us with their input on our executive compensation practices as disclosed in the proxy statement every year.

Proposal

In accordance with Section 14A of the Exchange Act, we are asking our shareholders to vote for a frequency of every “One Year” with respect to the following resolution at the Annual Meeting:

“THAT the shareholders determine, on a non-binding, advisory basis, that the frequency of future advisory votes to approve the compensation paid to the Company's named executed officers is: every one year, two years, or three years.”

Effect of Proposal

The advisory approval of the frequency of future shareholder advisory votes to approve the compensation of our named executive officers is non-binding. The outcome of this vote will not require our Board or our nominating and corporate governance committee to take any action regarding the frequency of future advisory votes to approve the compensation of our named executive officers. However, our Board and our nominating and corporate governance committee value the opinions of our shareholders and will take into consideration the outcome of the vote when considering the frequency of future votes to approve the compensation of our named executive officers.

Required Vote

The option (every “One Year,” “Two Years” or “Three Years”), if any, that receives the highest number of votes will be considered the frequency preferred by our shareholders. This proposal is considered a non-routine matter under applicable rules. A broker, bank or other nominee may not vote without instructions on this matter, so there may be broker non-votes in connection with this proposal. Broker non-votes will have no effect on the result of the vote. If no contrary indication is made, returned proxies will be voted for every “One Year.”

The Board recommends a vote for a frequency of every "ONE YEAR" for this proposal. If you complete the enclosed proxy card, unless you direct to the contrary on that card, the shares represented by that proxy will be voted for a frequency of every ONE YEAR.


 

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Approval of the Third Amended and Restated 2014 Plan, which reflects amendments to the 2014 Plan TO (a) increase the number of ordinary shares authorized for issuance by 750,000 shares and to increase the maximum number of shares that may be issued upon the exercise of incentive stock options by 750,000 shares, and (b) modify the "evergreen" provision, pursuant to which the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2021 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by our Board or the remuneration committee
(Resolution 11)

 

Background and Purpose of the Proposal

 

The 2014 Plan was previously adopted by the Board and approved by our shareholders to be effective April 24, 2014. An amendment and restatement of the plan to increase the awards available under the plan, and the maximum number of shares that may be issued upon the exercise of incentive share options under the plan, by 750,000 was approved at the Annual Shareholder meeting on October 31, 2016 (the First Amended and Restated 2014 Plan) and a further amendment and restatement of the plan to increase the awards available under the plan, and the maximum number of shares that may be issued upon the exercise of incentive share options under the plan, by 550,000 was approved at the Annual Shareholder meeting on October 31, 2018 (the Second Amended and Restated 2014 Plan or the "2014 Plan"). The use of share-based awards under the 2014 Plan continues to be a key element of our compensation program. The 2014 Plan currently authorizes an aggregate of 3,970,205 ordinary shares for issuance in connection with awards under the 2014 Plan, but as of July 22, 2020, only 65,116 ordinary shares remained available. In connection with the appointments of Ms. Buckle and Ms. Larue, on September 1, 2020, the Company expects to grant share options and RSUs under the 2014 Plan having an aggregate value of $53,334, the terms of which will be determined on the date of grant consistent with the Company's non-employee director compensation program. In addition, Mr. Shroff has deferred receipt of, and we have accrued liabilities in respect of, $110,000 in cash fees he has earned for serving on various committees. On July 22, 2020, the Board authorized a grant to Mr. Shroff of 13,382 RSUs under the 2014 Plan, representing the accrued liability, for his prior service on the Board's committees. The RSUs vested and settled on the grant date. The closing sale price of our ordinary shares as of July 22, 2020 was $8.22 per share, as reported on The Nasdaq Global Market. The remuneration committee is concerned that there are not sufficient ordinary shares available for issuance under the 2014 Plan to meet our needs for future grants during the coming years, and has determined that an increase in available ordinary shares is appropriate to continue to attract and retain the services of qualified employees, officers, directors, consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of our business depends.

 

 

Accordingly, shareholders are being asked to approve the Third Amended and Restated 2014 Plan, which provides for (i) the issuance of an additional 750,000 ordinary shares thereunder and a 750,000 increase of the maximum number of shares that may be issued upon the exercise of incentive share options under the plan and (ii) the amendment of the "evergreen" provision, pursuant to which the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2021 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by our Board or the remuneration committee.

 

If our shareholders approve this proposal, we intend to file, pursuant to the Securities Act, a registration statement on Form S-8 to register the 750,000 additional ordinary shares available for issuance pursuant to the Third Amended and Restated 2014 Plan. The increase of 750,000 ordinary shares was determined subjectively by the remuneration committee based on the number of ordinary shares currently available as well as our annual equity burn rates (which are discussed in more detail below), taking into account the effect of the proposed amendment to the "evergreen" provision. Further, in determining the amount of the increase and the proposed amendment to the evergreen provision, the remuneration committee took into account that the Third Amended and Restated 2014 Plan would terminate on April 24, 2024 and, as a result, the amended evergreen provision would only increase the shares reserved under the plan three times – on April 1 of each of 2021, 2022 and 2023.  The remuneration committee feels it important to have adequate ordinary shares available to appropriately compensate current and future employees.

 

In fiscal years 2020, 2019 and 2018, our annual equity burn rates (calculated by dividing the number of shares subject to equity awards granted during the year under the 2014 Plan by the weighted-average number of shares outstanding during the applicable year) under our 2014 Plan were 0.7%, 1.9% and 1.6%, respectively, or 1.4% on average. Over the past three years, our burn rate was less than 3.4%, which is  the median burn rate over the last three years of the peer group that we used for compensation purposes in 2020, according to an analysis prepared by our independent compensation consultant, Willis Towers Watson, or WTW.

 

We expect the proposed aggregate share reserve under the Third Amended and Restated 2014 Plan and the related amendment of the plan's evergreen provision to provide us with enough shares for awards until the termination of the plan in April 2024, assuming we continue to grant awards consistent with our current practices and historical burn rates and assuming we receive the maximum annual evergreen increases under the Third Amended and Restated 2014 Plan.    Following the termination of the Third Amended and Restated 2014 Plan, we expect we would adopt a new equity incentive plan and submit such plan to our shareholders for their approval.    

 

 

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Our expectations regarding our expected burn rates and the adequacy of the proposed aggregate share reserve under the Third Amended and Restated 2014 Plan are dependent on the price of our shares and hiring activity during the next few years, the vesting schedules and types of awards we grant,  the amount of forfeitures of outstanding awards and that no future circumstances occur that may require us to change our current equity grant practices. Moreover, the full impact that the COVID-19 global pandemic may have on our future equity grant practices, the future price of our shares or our future retention and hiring activity has yet to be determined, and our remuneration committee therefore believes it is prudent to seek to have additional shares reserved and available for issuance under the Third Amended and Restated 2014 Plan. We cannot predict our future equity grant practices, the future price of our shares or future hiring activity with any degree of certainty at this time, and the share reserve under the Third Amended and Restated 2014 Plan could last for a shorter or longer time than estimated.

 

 

Summary of the Third Amended and Restated 2014 Plan

 

The following summary of the Third Amended and Restated 2014 Plan and the material changes to the 2014 Plan are qualified in their entirety by the actual text of the Third Amended and Restated 2014 Plan, which is attached to this proxy statement as Exhibit A.  The Third Amended and Restated 2014 Plan will provide us flexibility with respect to our ability to attract and retain the services of qualified employees, officers, directors, consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of our business depends, and to provide additional incentives to such persons to devote their effort and skill to the advancement and betterment of our company, by providing them an opportunity to participate in the ownership of our company and thereby have an interest in its success and increased value.

 

We are amending the 2014 Plan to increase the number of ordinary shares reserved for issuance to an aggregate of 4,720,205 ordinary shares under the Third Amended and Restated 2014 Plan, which reflects an increase in the base number of ordinary shares authorized for issuance from 2,800,000 under the 2014 Plan to 3,550,000 under the Third Amended and Restated 2014 Plan, and includes the 1,170,205 additional ordinary shares we are authorized to issue under the 2014 Plan as a result of automatic annual increases in the numbers of shares authorized for issuance pursuant to the terms of the 2014 Plan through the date hereof, as described further below. In addition, we are amending the 2014 Plan to increase the number of ordinary shares that may be issued upon the exercise of incentive share options to an aggregate of 5,050,000 shares, which reflects a 750,000 increase from 4,300,000 under the 2014 Plan. The aggregate number of ordinary shares will be subject to adjustment in the event of a recapitalization, share split, share consolidation, reclassification, share dividend or other change in our capital structure. To the extent that an award terminates, or expires for any reason, then any shares subject to the award may be used again for new grants. However, shares which are (i) not issued or delivered as a result of the net settlement of outstanding share appreciation rights, or SARs, or options, (ii) used to pay the exercise price related to outstanding options, (iii) used to pay withholding taxes related to outstanding options or SARs or (iv) repurchased on the open market with the proceeds from an option exercise, will not be available for re-grant under the Third Amended and Restated 2014 Plan.

 

Under the 2014 Plan, the number of ordinary shares reserved for issuance automatically increases on April 1 of each year, from April 1, 2015 through April 1, 2023, by the lesser of 1% of the total number of our ordinary shares outstanding on March 31 of the preceding year, 200,000 shares or such smaller amount as determined by our Board. As of April 1, 2020, we were authorized to issue 1,170,205 additional ordinary shares under the 2014 Plan as a result of such automatic annual increases. Under the Third Amended and Restated 2014 Plan, the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2021 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by our Board or the remuneration committee.

 

The Third Amended and Restated 2014 Plan will permit us to make grants of (i) incentive share options pursuant to Section 422 of the Code and (ii) nonqualified share options. Incentive share options may only be issued to our employees. Nonqualified share options may be issued to our employees, directors, consultants and other service providers. The option exercise price of each option granted pursuant to the Third Amended and Restated 2014 Plan will be determined by our remuneration committee and may not be less than 100% of the fair market value of the ordinary shares on the date of grant, subject to certain exceptions. The term of each option will be fixed by our remuneration committee and may not exceed ten years from the date of grant. All option grants under the Third Amended and Restated 2014 Plan will be made pursuant to a written option agreement.

 

The Third Amended and Restated 2014 Plan will permit us to sell or make grants of restricted shares. Restricted shares may be sold or granted to our employees, directors, consultants and other service providers (or of any current or future parent or subsidiary of our company). Restricted shares issued under the Third Amended and Restated 2014 Plan will be sold or granted pursuant to a written restricted shares purchase agreement.

 

The Third Amended and Restated 2014 Plan will also permit us to issue SARs. SARs may be issued to our employees, directors, consultants and other service providers. The base price per share of ordinary shares covered by each SAR may not be less than 100% of the fair market value of the ordinary shares on the date of grant, subject to certain exceptions.  SAR grants under the Third Amended and Restated 2014 Plan will be made pursuant to a written SAR agreement.  Further, the Third Amended and Restated 2014 Plan will permit us to issue RSUs. RSUs may be issued to our employees, directors, consultants and other service providers. RSU grants under the Third Amended and Restated 2014 Plan will be made pursuant to a written RSU agreement.

 

 

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As of March 31, 2020, 399 employees and eight directors were eligible to participate in the 2014 Plan and will continue to be eligible to participate in the Third Amended and Restated 2014 Plan. The Third Amended and Restated 2014 Plan will be administered by our remuneration committee, which has the authority to control and manage the operation and administration of the 2014 Plan. In particular, the remuneration committee has the authority to determine the persons to whom, and the time or times at which, incentive share options, nonqualified share options, restricted shares, SARs or RSUs shall be granted, the number of shares to be represented by each option agreement or covered by each restricted share purchase agreement, SAR agreement or RSU agreement and the exercise price of such options and the base price of such SARs. In addition, our remuneration committee has the authority to accelerate the exercisability or vesting of any award, and to determine the specific terms, conditions and restrictions of each award. The remuneration committee is composed exclusively of individuals intended to be, to the extent provided by Rule 16b-3 of the Exchange Act, independent directors.

 

Unless provided otherwise within each written option agreement, restricted share purchase agreement, SAR agreement or RSU agreement as the case may be, the vesting of all options, restricted share, SARs and RSUs granted under the Third Amended and Restated 2014 Plan shall accelerate automatically in the event of a “change in control” (as defined in the Third Amended and Restated 2014 Plan) effective as of immediately prior to the consummation of the change in control unless such equity awards are to be assumed by the acquiring or successor entity (or parent thereof) or equity awards of comparable value are to be issued in exchange therefor or the equity awards granted under the Third Amended and Restated 2014 Plan are to be replaced by the acquiring entity with other incentives under a new incentive program containing such terms and provisions as our remuneration committee in its discretion may consider equitable.

 

Our Board may from time to time alter, amend, suspend or terminate the Third Amended and Restated 2014 Plan in such respects as our Board may deem advisable, provided that no such alteration, amendment, suspension or termination shall be made which shall substantially affect or impair the rights of any participant under any awards previously granted without such participant’s consent.

 

No awards may be granted under the Third Amended and Restated 2014 Plan after April 24, 2024.

 

Federal Income Tax Consequences

The following discussion is for general information only and is intended to summarize briefly the U.S. federal tax consequences to participants arising from participation in the Third Amended and Restated 2014 Plan. This description is based on current law, which is subject to change (possibly retroactively). The tax treatment of participants in the Third Amended and Restated 2014 Plan may vary depending on the particular situation and therefore may be subject to special rules not discussed below. No attempt has been made to discuss any potential foreign, state or local tax consequences.

 

Incentive Options; Nonqualified Options; SARs

Participants will not realize taxable income upon the grant of a nonqualified stock option or a SAR. Upon the exercise of a nonqualified stock option or a SAR, a participant will recognize ordinary compensation income (subject to withholding) in an amount equal to the excess of (1) the amount of cash and the fair market value of the ordinary shares received, over (2) the exercise price (if any) paid. A participant will generally have a tax basis in any ordinary shares received pursuant to the exercise of a SAR, or pursuant to the cash exercise of a nonqualified stock option, that equals the fair market value of such shares on the date of exercise. We will be entitled to a deduction for federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by a participant under the rules described above. Participants eligible to receive an incentive stock option will not recognize taxable income on the grant of an incentive stock option. Upon the exercise of an incentive stock option, a participant will not recognize taxable income, although the excess of the fair market value of the ordinary shares received upon exercise of the incentive stock option (“ISO Shares”) over the exercise price will increase the alternative minimum taxable income of the participant, which may cause such participant to incur alternative minimum tax. The payment of any alternative minimum tax attributable to the exercise of an incentive stock option would be allowed as a credit against the participant’s regular tax liability in a later year to the extent the participant’s regular tax liability is in excess of the alternative minimum tax for that year. Upon the disposition of ISO Shares that have been held for the requisite holding period (generally, at least two years from the date of grant and one year from the date of exercise of the incentive stock option), a participant will generally recognize capital gain (or loss) equal to the excess (or shortfall) of the amount received in the disposition over the exercise price paid by the participant for the ISO Shares. However, if a participant disposes of ISO Shares that have not been held for the requisite holding period (a “Disqualifying Disposition”), the participant will recognize ordinary compensation income in the year of the Disqualifying Disposition in an amount equal to the amount by which the fair market value of the ISO Shares at the time of exercise of the incentive stock option (or, if less, the amount realized in the case of an arm’s length disposition to an unrelated party) exceeds the exercise price paid by the participant for such ISO Shares. A participant would also recognize capital gain to the extent the amount realized in the Disqualifying Disposition exceeds the fair market value of the ISO Shares on the exercise date. If the exercise price paid for the ISO Shares exceeds the amount realized (in the case of an arm’s length disposition to an unrelated party), such excess would ordinarily constitute a capital loss. Generally, we will not be entitled to any federal income tax deduction upon the grant or exercise of an incentive stock option, unless a participant makes a Disqualifying Disposition of the ISO Shares. If a participant makes a Disqualifying Disposition, we will then be entitled to a tax deduction that corresponds as to timing and amount with the compensation income recognized by a participant under the rules described in the preceding paragraph.

 

 

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Restricted Shares; RSUs

In general, a participant will recognize ordinary compensation income as a result of the receipt of shares pursuant to a restricted share award, in an amount equal to the fair market value of the shares when such shares are received; provided, however, that if the shares are not transferable and are subject to a substantial risk of forfeiture when received, a participant will recognize ordinary compensation income in an amount equal to the fair market value of the shares (1) when the shares first becomes transferable or no longer subject to a substantial risk of forfeiture in cases where a participant does not make an valid election under Section 83(b) of the Code or (2) when the shares are received in cases where a participant makes a valid election under Section 83(b) of the Code. A participant will generally not recognize taxable income at the time of grant of an award in the form of an RSU award denominated in shares, but rather, will generally recognize ordinary compensation income at the time he receives cash or shares.

 

A participant will be subject to withholding for federal, and generally for state and local, income taxes at the time he recognizes income under the rules described above for shares or cash received. Dividends that are received by a participant before the shares are taxed to the participant under the rules described in the preceding paragraph are taxed as additional compensation, not as dividend income. The tax basis in the ordinary shares received by a participant will equal the amount recognized by him as compensation income under the rules described in the preceding paragraph, and the participant’s capital gains holding period in those shares will commence on the later of the date the shares are received or the restrictions lapse.

 

We will be entitled to a deduction for federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by a participant under the rules described above.

 

New Plan Benefits and Grants to be Made Under the Third Amended and Restated 2014 Plan

 

In connection with our proposed executive compensation for fiscal 2021, our remuneration committee has recommended to our Board that we grant option awards to Peter Buhler, Edward Farrell and Jeremy Stackawitz contingent upon the adoption of the Third Amended and Restated 2014 Plan. Although our Board is not required to follow the recommendations of the remuneration committee, it generally does approve the grants the committee recommends.  However, because the remuneration committee's recommendation was contingent upon the adoption of the Third Amended and Restated 2014 Plan, if our shareholders do not approve the Third Amended and Restated 2014 Plan during 2020, the committee’s recommendation to the Board will no longer be applicable.  The awards recommended by our remuneration committee to be granted upon approval of the Third Amended and Restated 2014 Plan are summarized below:

 

 

 

Name and Principal Position

 

Shares underlying

share option grants (1)

 

Peter Buhler, Chief Financial Officer

 

 

20,000

 

Edward Farrell, Chief Operating Officer

 

 

20,000

 

Jeremy Stackawitz, Chief Commercial Officer

 

 

30,000

 

 

(1)

Assuming the Board determines to follow the recommendations of the remuneration committee, the share options recommended to be granted by the remuneration committee upon adoption of the Third Amended and Restated Plan will be granted with an exercise price to be determined on the date of grant.  The share options would be subject to three year vesting, and would vest in equal installments on the first, second and third anniversary of grant.

 

Our remuneration committee has not recommended any, and we have not otherwise made any agreements to issue any, awards to any other directors or officers of the Company that are contingent upon the adoption of the Third Amended and Restated 2014 Plan.  Other awards, if any, that will be made to eligible persons under the Third Amended and Restated 2014 Plan are subject to the discretion of the remuneration committee and, therefore, we cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to our executive officers, employees, directors and other eligible persons under the Third Amended and Restated 2014 Plan. Therefore, a New Plan Benefits Table is not provided for any other awards.

 

Consequences of Failing to Approve the Proposal

The Third Amended and Restated 2014 Plan will not be implemented unless it is approved by our shareholders. If the Third Amended and Restated 2014 Plan is not approved by our shareholders, the 2014 Plan will remain in effect in its present form. Failure of our shareholders to approve this proposal also will not affect the rights of existing award holders under the 2014 Plan or under any previously granted awards under the 2014 Plan.  Failure of our shareholders to approve this proposal during 2020 will result in Peter Buhler, Ed Farrell and Jeremy Stackawitz not receiving certain option awards, as described above.  In addition, in light of the comparatively small amount of ordinary shares that remain available for future grant under the 2014 Plan, we will be limited in our ability to continue to grant equity awards to our non-employee directors in accordance with our non-employee director compensation program, to implement the share incentive portion of our executive compensation program and to otherwise grant equity awards to our employees.  

 

 

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The Board recommends a vote “FOR” the approval of the Third Amended and Restated 2014 Plan, which reflects amendments to the 2014 Plan to (a) increase the number of ordinary shares authorized for issuance by 750,000 shares and to increase the maximum number of shares that may be issued upon the exercise of incentive share options by 750,000 shares and (b) modify the "evergreen" provision, pursuant to which the aggregate number of shares authorized for issuance will be automatically increased each year beginning on April 1, 2020 by 0.75% of the number of ordinary shares issued and outstanding on the immediately preceding March 31, or such lesser number of shares as determined by our Board or the remuneration committee. If you complete the enclosed proxy card, unless you direct to the contrary on that card, the shares represented by that proxy will be voted FOR approval of the Third Amended and Restated 2014.

 

 

NON-EMPLOYEE DIRECTOR COMPENSATION

Seven out of eight of our director nominees are non-employee directors.  Five of these non-employee directors are unaffiliated with our significant shareholders: Messrs. Hallsworth, McDonough and von Prondzynski and Ms. Buckle and Ms. Larue. In addition, Mr. Bologna and Ms. O'Connor, both of whom have notified the Board that they will not stand for re-election at the Annual Meeting, are also non-employee directors that are unaffiliated with our significant shareholders. We seek to maintain a director compensation program for our non-employee directors to enable us to attract and retain, on a long-term basis, high-caliber non-employee directors. Employee directors do not receive compensation in respect of their service as a director.

Pursuant to our director compensation program in effect from April 1, 2018 to October 31, 2018, the annual retainers were as set out below.  As discussed in the notes to the table, the annual retainers for the chairman of our board of directors and all other directors comprised a cash component (except for directors affiliated with our significant shareholders) and an equity award component, and the annual retainers for committee chairpersons and committee members were paid in cash.

 

Board Member Compensation

 

Annual Retainer

Chairman

 

CHF 350,000(1)

Director

 

$200,000(2)

 

Committee Chairperson Compensation

 

Annual Retainer ($)

Audit Committee

 

15,000

Remuneration Committee

 

12,000

Nominating and Corporate Governance Committee

 

11,000

Strategy and Regulatory Committee

 

11,000

 

Committee Member Compensation

 

Annual Retainer ($)

Audit Committee

 

8,000

Remuneration Committee

 

6,000

Nominating and Corporate Governance Committee

 

6,000

Strategy and Regulatory Committee(3)

 

6,000

 

 

(1)

In recognition of Mr. von Prondzynski’s increased responsibilities as Chairman of the Board beginning in March 2018, the Board increased Mr. von Prondzynski’s annual compensation for the period from April 1, 2018 to October 31, 2018 from an annualized amount of  $145,000 to an annualized amount of CHF 350,000 (which equaled $375,830 based on the exchange rate in effect on July 22, 2020), of which 57% was payable quarterly in cash and 43% was payable by the grant of 33,150 RSUs. The RSUs were granted on April 4, 2018, and vested quarterly in equal installments over 12 months. These payments and grants were in lieu of any compensation Mr. von Prondzynski was entitled to receive as Lead Independent Director of the Board, in which capacity he served until his appointment as Chairman of the Board in March 2018, and exclusive of any other compensation, including option grants, which he was entitled to receive for his service as an independent director, member and chairperson of the Company’s remuneration committee and member of the Company’s nominating and corporate governance and strategy and regulatory committees.

 

(2)

$40,000 was paid in cash in twelve monthly installments to directors not affiliated with our significant shareholders, with the first installment beginning on November 30 of each year.  $120,000 was paid to all directors in the form of RSUs issued immediately following each annual general meeting, which vested in four quarterly installments on January 31, April 30, July 31 and October 31 of each year.  $40,000 was paid to all directors in the form of options to purchase ordinary shares also issued immediately following each annual general meeting, which vested in equal installments on the first, second and third anniversary of the date of grant.

 

(3)

The strategy and regulatory committee was disbanded in October 2018.

 

 

 

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Pursuant to our director compensation program in effect from November 1, 2018 to October 31, 2020, the annual retainers are set out below. As discussed in the notes to the table, the annual retainers for the chairman of our board of directors and all other directors comprise a cash component (except for directors affiliated with our significant shareholders) and an equity award component, and the annual retainers for committee chairpersons and committee members are paid in cash.

 

Board Member Compensation

 

Annual Retainer

Chairman

 

CHF 280,000(1)

Director

 

$ 200,000(2)

 

Committee Chairperson Compensation

 

Annual Retainer ($)

Audit Committee

 

24,000

Remuneration Committee

 

15,000

Nominating and Corporate Governance Committee

 

16,000

 

Committee Member Compensation

 

Annual Retainer ($)

Audit Committee

 

12,000

Remuneration Committee

 

8,000

Nominating and Corporate Governance Committee

 

8,000

 

 

 

(1)

CHF 120,000 (which equaled $128,856 based on the exchange rate in effect on July 22, 2020) is paid in cash in four equal quarterly installments on January 31, April 30, July 31 and October 31 of each year.  CHF 160,000 (which equaled $171,808 based on the exchange rate in effect on July 22, 2020) is paid in the form of RSUs to be issued immediately following each annual general meeting, which vest in four quarterly installments on January 31, April 30, July 31 and October 31 of each year. In respect of the fiscal year ended March 31, 2019, Mr. von Prondzynski was awarded 33,150 RSUs on April 4, 2018 and 13,812 of these RSUs (being five twelfths of 33,150 in respect of the period November 1, 2018 to March 31, 2019) counted towards the annual award made to Mr. von Prondzynski immediately following the October 31, 2018 annual general meeting. 10,990 RSUs were issued on October 31, 2018 to Mr. von Prondzynski in respect of the remaining amount of the CHF160,000 that was to be paid in RSUs.  

(2)

$40,000 is paid in cash in twelve monthly installments to directors not affiliated with our significant shareholders, with the first installment beginning on November 30 of each year.  $120,000 is paid to all directors in the form of RSUs to be issued immediately following each annual general meeting, which vest in four quarterly installments on January 31, April 30, July 31 and October 31 of each year.  $40,000 is paid to all directors in the form of share options to purchase ordinary shares also issued immediately following each annual general meeting and which vest in equal installments on the first, second and third anniversary of the date of grant.

The foregoing compensation is in addition to reimbursement of all out-of-pocket expenses incurred by directors in attending meetings of the Board.

 

Effective as of November 1, 2020, the amounts for the annual retainers will be as set out below. As discussed in the notes to the table, the annual retainers for the chairman of the Board and all other directors will comprise a cash component and an equity award component, and the annual retainers for committee chairpersons and committee members will be paid in cash.

 

Board Member Compensation

 

Annual Retainer

Chairman

 

CHF 280,000(1)

Director

 

$ 150,000(2)

 

Committee Chairperson Compensation

 

Annual Retainer ($)

Audit Committee

 

24,000

Remuneration Committee

 

15,000

Nominating and Corporate Governance Committee

 

16,000

 

Committee Member Compensation

 

Annual Retainer ($)

Audit Committee

 

12,000

Remuneration Committee

 

8,000

Nominating and Corporate Governance Committee

 

8,000

 

 

 

(1)

CHF 120,000 (which equaled $128,856 based on the exchange rate in effect on July 22, 2020) will be paid in cash in four equal quarterly installments on January 31, April 30, July 31 and October 31 of each year.  CHF 160,000 (which equaled $171,808 based on the exchange rate in effect on July 22, 2020) will be paid in the form of RSUs to be issued immediately following each annual general meeting, which will vest in four quarterly installments on January 31, April 30, July 31 and October 31 of each year.

 

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(2)

All directors other than Mr. Shroff and Mr. Wilkerson will be paid $40,000 in cash in twelve monthly installments with the first installment beginning November 30 of each year.  Until November 2019, Galen Partners beneficially owned more than 10% of the ordinary shares of the Company and was deemed by the board to be a significant shareholder of the Company.  As directors affiliated with Galen Partners, Mr. Shroff and Mr. Wilkerson were not entitled to receive the cash payment of $40,000 under the prior non-employee director compensation program.  In lieu of receiving a cash payment of $40,000 going forward, Mr. Shroff and Mr. Wilkerson have agreed to accept this payment in the form of RSUs. Accordingly, Mr. Shroff and Mr. Wilkerson will receive $110,000, and all other directors will receive $70,000, in the form of RSUs to be issued immediately following each annual general meeting, which vest in four quarterly installments on January 31, April 30, July 31 and October 31 of each year.  $40,000 will be paid to all directors in the form of share options to purchase ordinary shares also issued immediately following each annual general meeting and which vest on the first anniversary of the date of grant.

 

In connection with Mr. Bologna and Ms. O'Connor not standing for re-election at the Annual Meeting, all of Mr. Bologna's and Ms. O'Connor's issued but unvested RSUs will remain outstanding and vest on their regularly scheduled vesting dates. In addition, all of Ms. O'Connor's and Mr. Bologna's issued but unvested share options will vest at the expiry of their current terms of service.  We have also agreed to pay any outstanding non-employee director committee membership fees and monthly cash retainers due to them for their service on the Board.

In connection with the appointment of Ms. Buckle and Ms. Larue, on September 1, 2020, the Company expects to grant Ms. Buckle and Ms. Larue  share options and RSUs having an aggregate value of $53,334, the terms of which will be determined on the date of grant consistent with the Company's non-employee director compensation program. In addition, on September 1, 2020, the Company will grant each of Dr. Buckle and Dr. Larue share options providing for the right to purchase $100,000 of Quotient’s ordinary shares, at a price equal to the closing price of the Company’s ordinary shares as reported on the Nasdaq Global Market on the date of grant (the “Additional Share Options”). The grants of Additional Share Options, which will be issued outside of the Company’s 2014 Stock Incentive Plan, were approved by the Board and the remuneration committee pursuant to the inducement grant exception under Nasdaq Rule 5635(c)(4), as an inducement that is material to Dr. Buckle’s and Dr. Larue’s joining the Company's Board.

 

Stock-based awards and option awards in the following table are computed in accordance with the valuation principles used in the Company’s financial statements to compute the fair value of each award on the date of grant.

 

 

 

Fiscal

Year

Ended

March 31,

 

Fees

earned

in cash

 

 

Stock-

based

awards

 

 

Option

awards

 

 

Non-equity

incentive

plan

compensation

 

 

Change in

pension value

and

nonqualified

deferred

compensation

earnings

 

 

All other

compensation

 

 

Total

 

Heino von

 

2020

 

$

144,560

 

 

$

280,881

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

465,440

 

Prondzynski (1)

 

2019

 

$

145,588

 

 

$

346,584

 

 

$

25,105

 

 

$

 

 

$

 

 

$

 

 

$

517,277

 

Thomas Bologna

 

2020

 

$

60,000

 

 

$

119,999

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

219,998

 

 

 

2019

 

$

56,500

 

 

$

120,002

 

 

$

25,105

 

 

$

 

 

$

 

 

$

 

 

$

201,607

 

Frederick Hallsworth

 

2020

 

$

72,000

 

 

$

119,999

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

231,998

 

 

 

2019

 

$

65,583

 

 

$

120,002

 

 

$

25,105

 

 

$

 

 

$

 

 

$

 

 

$

210,690

 

Brian McDonough

 

2020

 

$

60,000

 

 

$

119,999

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

219,998

 

 

 

2019

 

$

60,000

 

 

$

120,002

 

 

$

25,105

 

 

$

 

 

$

 

 

$

 

 

$

205,107

 

Sarah O'Connor

 

2020

 

$

68,000

 

 

$

119,999

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

227,998

 

 

 

2019

 

$

62,750

 

 

$

120,002

 

 

$

25,105

 

 

$

 

 

$

 

 

$

 

 

$

207,857

 

Zubeen Shroff (2)

 

2020

 

$

16,000

 

 

$

119,999

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

175,998

 

 

 

2019

 

$

20,083

 

 

$

120,002

 

 

$

25,105

 

 

$

 

 

$

 

 

$

 

 

$

165,190

 

John Wilkerson

 

2020

 

$

 

 

$

119,999

 

 

$

39,999

 

 

$

 

 

$

 

 

$

 

 

$

159,998

 

 

 

2019

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

(1)

In respect of the fiscal years ended March 31, 2020 and 2019, it was subsequently determined that Mr. von Prondzynski (i) received in error an additional 34,145 RSUs and 14,398 Share Options having a combined value of $319,998 at the respective grant dates (the “overpayment”) and (ii) did not receive $28,401 of RSUs that he was otherwise entitled to receive pursuant to his Chairman compensation (the “underpayment”).  Upon learning of these issues, the overpayment RSUs that had not vested and the overpayment Share Options that had not been exercised were cancelled (resulting in the cancellation of 7,712 RSUs and 14,398 Share Options).  Further, Mr. von Prondzynski repaid the Company $71,679 in cash, which amount was based on the combined grant date value of

 

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the 26,422 RSUs that had vested, less the value of the underpayment, net of taxes paid by Mr. von Prondzynski in respect of the overpayment.

 

(2)

Mr. Shroff has deferred receipt of, and we have accrued liabilities in respect of, $110,000 in cash fees he has earned for serving on various committees. On July 22, 2020, the Board authorized a grant to Mr. Shroff of 13,382 RSUs under the 2014 Plan, representing the accrued liability, for his prior service on the Board’s committees. The RSUs vested and settled on the grant date.

 

 

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The following table sets forth the share options held by the non-employee directors as of March 31, 2020. All options are options to purchase ordinary shares.

 

Name

 

Vesting start date

 

Number of

securities

underlying

exercisable

options

 

 

Number of

securities

underlying

unexercisable

options(1)

 

 

Option

exercise

price(2)

 

 

Option expiration

date

Heino von Prondzynski (3)

 

October 31, 2016

 

 

4,303

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

Thomas Bologna

 

April 29, 2015

 

 

3,500

 

 

 

 

 

$

8.00

 

 

April 28, 2024

 

 

October 31, 2015

 

 

5,025

 

 

 

 

 

$

9.95

 

 

October 30, 2024

 

 

October 31, 2016

 

 

4,303

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

Frederick Hallsworth

 

February 13, 2014

 

 

20,014

 

 

 

 

 

$

1.44

 

 

August 30, 2022

 

 

April 29, 2015

 

 

5,000

 

 

 

 

 

$

8.00

 

 

April 28, 2024

 

 

October 31, 2015

 

 

5,025

 

 

 

 

 

$

9.95

 

 

October 30, 2024

 

 

October 31, 2016

 

 

7,505

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

Brian McDonough

 

November 14, 2014

 

 

40,029

 

 

 

 

 

$

1.44

 

 

August 30, 2022

 

 

April 29, 2015

 

 

10,000

 

 

 

 

 

$

8.00

 

 

April 28, 2024

 

 

October 31, 2015

 

 

5,025

 

 

 

 

 

$

9.95

 

 

October 30, 2024

 

 

October 31, 2016

 

 

4,303

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

Sarah O'Connor

 

August 6, 2015

 

 

10,800

 

 

 

 

 

$

9.26

 

 

August 5, 2024

 

 

October 31, 2015

 

 

5,025

 

 

 

 

 

$

9.95

 

 

October 30, 2024

 

 

October 31, 2016

 

 

4,303

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

Zubeen Shroff

 

April 29, 2015

 

 

5,000

 

 

 

 

 

$

8.00

 

 

April 28, 2024

 

 

October 31, 2015

 

 

5,025

 

 

 

 

 

$

9.95

 

 

October 30, 2024

 

 

October 31, 2016

 

 

7,505

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

John Wilkerson

 

April 29, 2015

 

 

3,500

 

 

 

 

 

$

8.00

 

 

April 28, 2024

 

 

October 31, 2015

 

 

5,025

 

 

 

 

 

$

9.95

 

 

October 30, 2024

 

 

October 31, 2016

 

 

7,505

 

 

 

 

 

$

11.62

 

 

October 30, 2025

 

 

October 31, 2017

 

 

8,726

 

 

 

 

 

$

5.73

 

 

October 30, 2026

 

 

October 31, 2018

 

 

6,398

 

 

 

3,199

 

 

$

5.21

 

 

October 30, 2027

 

 

October 31, 2019

 

 

2,080

 

 

 

4,160

 

 

$

6.41

 

 

October 30, 2028

 

 

October 31, 2020

 

 

 

 

 

8,158

 

 

$

7.78

 

 

October 30, 2029

 

 

 

(1)

Vesting of all options is subject to continued service through to the applicable vesting date.

 

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(2)

In certain cases, the option exercise prices are lower than the fair market value of the underlying securities on the date of grant. As part of the preparation for our initial public offering (which occurred in April 2014), the Board reviewed the fair value of our ordinary shares at the various dates in recent years when option and share awards were granted. This review resulted in certain instances in the Board concluding that the fair value of the underlying securities was higher than the option exercise prices determined at the time. The resulting increase in compensation expense has been reflected in our financial statements.

(3)

As discussed in more details in note (1) to the immediately preceding table, in respect of the fiscal years ended March 31, 2020 and 2019, it was subsequently determined that Mr. von Prondzynski received in error certain share options, which options have since been cancelled.

 

The following table sets forth the RSUs held by the non-employee directors as of March 31, 2020. All RSUs convert into ordinary shares on a one-for-one basis.

 

Name

 

Vesting start date

 

Number of

outstanding securities

underlying the award

 

 

Expiration date

Heino von Prondzynski (1)

 

January 31, 2020

 

 

27,077

 

 

October 31, 2020

Frederick Hallsworth

 

January 31, 2020

 

 

11,568

 

 

October 31, 2020

Thomas Bologna

 

January 31, 2020

 

 

11,568

 

 

October 31, 2020

Brian McDonough

 

January 31, 2020

 

 

11,568

 

 

October 31, 2020

Sarah O'Connor

 

January 31, 2020

 

 

11,568

 

 

October 31, 2020

Zubeen Shroff

 

January 31, 2020

 

 

11,568

 

 

October 31, 2020

John Wilkerson

 

January 31, 2020

 

 

11,568

 

 

October 31, 2020

 

(1)

As discussed in more detail in note (1) to the penultimately preceding table, in respect of the fiscal years ended March 31, 2020 and 2019, it was subsequently determined that Mr. von Prondzynski received in error certain RSUs, certain of which RSUs have since been cancelled. Mr. von Prondzynski made a net cash payment to the Company in relation to the RSUs that were not cancelled.

 

 

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REMUNERATION COMMITTEE REPORT

The information contained in this remuneration committee report shall not be deemed to be “soliciting material” or “filed” with the SEC under the Securities Act or the Exchange Act. No portion of this remuneration committee report shall be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, through any general statement incorporating by reference in its entirety this Proxy Statement in which this report appears, except to the extent that Quotient Limited specifically incorporates this statement or a portion of it by reference.

The remuneration committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the remuneration committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement for the fiscal year ended March 31, 2020.

 

 

Respectfully submitted,

 

Zubeen Shroff (Chairperson)

Brian McDonough

Heino von Prondzynski

 

 

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

Our "named executive officers" for the fiscal years ended March 31, 2020 and 2019 are Franz Walt, Christopher Lindop and Edward Farrell. This Compensation Discussion and Analysis explains our executive compensation program as it relates to our “named executive officers,” whose compensation information is presented in the following tables and discussion in accordance with the SEC rules, as well as to Jeremy Stackawitz and Peter Buhler.

 

Name

 

Position

Franz Walt

 

Chief Executive Officer

Christopher Lindop

 

Chief Financial Officer (until February 5, 2020) and Executive Vice President (as of February 5, 2020 until May 31, 2020)

Peter Buhler

 

Chief Financial Officer (as of February 5, 2020)

Edward Farrell

 

President (until January 1, 2020) and Chief Operating Officer (as of January 1, 2020)

Jeremy Stackawitz

 

President (until January 1, 2020) and Chief Commercial Officer (as of January 1, 2020)

 

Mr. Walt served as our Interim Chief Executive Officer from March 21, 2018 until May 24, 2018, on which date he was appointed our Chief Executive Officer.  In addition, Mr. Lindop served as our Chief Financial Officer until February 5, 2020, on which date he was succeeded by Mr. Buhler, and Messrs. Farrell and Stackawitz, our former Presidents, became our Chief Operating Officer and Chief Commercial Officer, respectively, as of January 1, 2020.  Mr. Lindop retired effective as of May 31, 2020.  

 

Our mission is to become the global leader for the development, manufacture and sale of transfusion diagnostics (blood grouping, serological disease screening and molecular disease screening), leveraging our proprietary MosaiQ™ technology platform. As MosaiQ is demonstrated to work for transfusion diagnostics, we will also seek to expand its utility elsewhere in the broader diagnostics market.

To achieve our mission, we must recruit, retain and motivate exceptional leaders with the ability to deliver superior results for our shareholders. The skills and knowledge built by the management team around MosaiQ, which represents a novel and highly disruptive technology platform for the broader diagnostics field, are unique and increasingly will become highly attractive to potential competitors.  Retention of existing senior management and recruitment of additional senior managers to augment the existing team is therefore critical. Our executive compensation program is instrumental in achieving this objective.

Our executive compensation program is designed to focus executive behavior on achievement of both our annual and long-term objectives and strategy as well as align the interests of management to those of our shareholders. Consequently, our executive compensation plan is comprised of four principal elements – salary, benefits, long-term equity interest and cash bonuses based on annual individual and corporate performance. Consistent with our strategic goals, we have designed and implemented a performance-based award that aligns equity compensation with outstanding returns to our shareholders over several years.

Executive compensation is discussed in greater detail below. The remuneration committee will continue to evaluate our overall compensation structure and awards to ensure they are: (i) reflective of the performance of our executive officers and the Company; and (ii) consistent with our compensation objectives.

Roles of the Remuneration Committee

General

It is the responsibility of the remuneration committee to administer the Company’s compensation practices, to ensure they are competitive, financially prudent and include incentives designed to appropriately drive performance. To achieve this, the remuneration committee periodically reviews commercially available, industry specific compensation data for: (i) companies in the global diagnostics industry; (ii) companies addressing the donor testing market; and (iii) companies in the European biotechnology industry, as a general guide for establishing its compensation practices and structures. The remuneration committee, along with the Board, also reviews and approves corporate objectives used in our executive compensation program to confirm that appropriate goals have been established and tracks performance against them and that compensation arrangements do not encourage excessive risk-taking.  On an annual basis the remuneration committee reviews tally sheets reflecting each named executive officer’s compensation history with respect to each element of compensation.

 

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The remuneration committee conducts an annual review of performance and compensation during the first quarter of each fiscal year for the purpose of determining the compensation of named executive officers. As part of this review, the CEO submits recommendations to the remuneration committee relating to the compensation of the named executive officers (other than the CEO). Following a review of these recommendations, the remuneration committee approves the compensation of these named executive officers, with such modifications to the CEO's recommendations as the remuneration committee considers appropriate.

The remuneration committee's review of the CEO's compensation is subject to separate procedures. With input from members of the entire Board, other than the CEO, the Chairman and the remuneration committee evaluate the CEO's performance and review the evaluation with him. Based on that evaluation and review, the remuneration committee then determines the CEO's compensation. The CEO is excused from meetings of the remuneration committee during voting or deliberations regarding his compensation.

Peer Group Companies

The remuneration committee seeks to identify an executive compensation peer group of approximately fifteen to twenty companies that may compete with the Company for executive talent (“Peer Group Companies”). The remuneration committee has focused on creating a peer group that:

 

Represented companies working in the global diagnostics industry, companies addressing the donor testing market or companies in the European biotechnology industry;

 

Contains a mix of pre-commercial development companies and some commercial stage companies;

 

Captures comparable companies in terms of employee numbers and market capitalization; or

 

Have achieved or expect to achieve a growth profile comparable to that expected for the Company.

With the assistance of WTW, the remuneration committee’s independent compensation consultant, a full review of the peer group was completed in March 2020.  Based on the above criteria, the following companies were included in the peer group:

 

Company

Product Focus

Accelerate Diagnostics

In vitro diagnostics for hospital acquired and drug resistant infections

BioCartis Group NV

Molecular diagnostics

Cerus Corp

Pathogen inactivation for donor blood, plasma and platelets

Chembio Diagnostics

Diagnostics test kits for infectious disease

ChemoCentryx

Development of therapeutics for autoimmune diseases, inflammatory disorders and cancer.

Clinigen Group

Lifesciences tools and services

Cytokenetics

Development of muscle activators and muscle inhibitors

Epigenomics AG

Molecular diagnostics – cancer

GenMark Diagnostics Inc.

Automated, multiplex molecular diagnostic testing systems

Meridian Bioscience Inc.

Develops, manufacture, commercialization of a range of innovative diagnostics test kits

Myriad Genetics Inc.

Molecular diagnostics

Nanostring Technologies Inc.

Life science tools for translational research and molecular diagnostic products

Omega Diagnostics Group

Development of diagnostic products for allergy and autoimmune, food intolerance and infectious disease.

Oxford Biomedica

Biopharmaceutical company focused on the development and commercialization of gene-based medicines

Oxford Immunotec Global

Diagnostic tests for immune-regulated conditions (e.g. Tuberculosis)

Quidel Corp.

Provision of cellular based virology assays and molecular diagnostics testing systems

Senseonics Holdings

Development of diagnostic products for diabetes

Stratec

Design and manufacture of complex analyzer system solutions for invitro diagnostics

T2 Biosystems

Clinical diagnostics for sepsis

Zealand Pharma

Development of innovative peptide-based medicines

 

As noted above, the remuneration committee retained WTW as its independent compensation consultant. WTW does not perform any other consulting work or other services for the Company, reports directly to the remuneration committee and takes direction from the Chairman of the remuneration committee. The remuneration committee has assessed the independence of WTW pursuant to the rules prescribed by the SEC and has concluded that no conflict of interest existed in the financial year ended March 31, 2020 or currently exists that would prevent WTW from serving as an independent consultant to the remuneration committee.

 

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Performance Graph

Below is a graph that compares the cumulative shareholder return on our ordinary shares from March 31, 2015 through March 31, 2020 against the cumulative total return for the same period on the Nasdaq Stock Market Composite Index and the Nasdaq Healthcare Index. The results are based on an assumed $100 invested on May 31, 2015.

 

COMPARISON OF 60 MONTH CUMULATIVE TOTAL RETURN* AMONG QUOTIENT LIMITED, THE NASDAQ STOCK MARKET COMPOSITE INDEX AND THE NASDAQ HEALTHCARE INDEX $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 03/31/2015 04/30/2015 05/31/2015 06/30/2015 07/31/2015 08/31/2015 09/30/2015 10/31/2015 11/30/2015 12/31/2015 01/31/2016 02/29/2016 03/31/2016 04/30/2016 05/31/2016 06/30/2016 07/31/2016 08/31/2016 09/30/2016 10/31/2016 11/30/2016 12/31/2016 01/31/2017 02/28/2017 03/31/2017 04/30/2017 05/31/2017 06/30/2017 07/31/2017 08/31/2017 09/30/2017 10/31/2017 11/30/2017 12/31/2017 01/31/2018 02/28/2018 03/31/2018 04/30/2018 05/31/2018 06/30/2018 07/31/2018 08/31/2018 09/30/2018 10/31/2018 11/30/2018 12/31/2018 01/31/2019 02/28/2019 03/31/2019 04/30/2019 05/31/2019 06/30/2019 07/31/2019 08/31/2019 09/30/2019 10/31/2019 11/30/2019 12/31/2019 01/31/2020 02/29/2020 03/31/2020 QUOTIENT LIMITED NASDAQ HEALTHCARE INDEX NASDAQ COMPOSITE * $100 invested on March 31, 2015 in stock or index including reinvestment of dividends. 60 Months ended March 31, 2020.

 

 

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Executive Compensation Programs

Overview and Objectives

Our executive compensation program for our named executive officers for fiscal years 2020 and 2021, each an Executive Compensation Program, was adopted on May 22, 2019 with respect to fiscal 2020 and May 19, 2020 with respect to fiscal 2021. Each year, the Remuneration Committee and the Board review the Executive Compensation Program for our named executive officers for the fiscal year to ensure that it is designed to achieve the following objectives:

 

Focus executive behavior on achievement of our annual and long-term strategic objectives,

 

Provide a competitive compensation package that enables the Company to attract and retain, on a long-term basis, talented executives,

 

Provide a total compensation structure that the remuneration committee believes is at least comparable with the total compensation structure of Peer Group Companies for which we would compete for talent and which consists of a mix of base salary, equity and cash incentives, and

 

Align the interests of management and shareholders by providing management with long-term incentives through equity ownership.

The Remuneration Committee will continue to review the Executive Compensation Program in future years to ensure that it is closely aligned with the interests of shareholders and reflects our business needs.

Each Executive Compensation Program has four principal elements, namely base salary, benefits, short-term incentives and long-term incentives.  A brief description of each element and their purpose at the Company is described below:

 

Compensation Element

Description

Purpose

Base salary

Fixed cash compensation based on role, job scope, experience, qualification and performance

To compensate for individual technical and leadership competencies required for a specific role and to provide economic security.  Notice periods for named executive officers vary between two and 12 months.  

Benefits

Competitive health, life assurance, disability and retirement benefits

To promote health and wellness in the workforce and to provide competitive retirement planning and saving opportunities.  Benefits vary depending on local employment practices and may include private health coverage, life insurance, a defined contribution pension scheme and/or provision of a company car.  There are no enhanced benefits for named executive officers.

Short-term incentive

Annual cash incentive opportunity payable based on achievement of corporate, business unit and individual objectives

To incentivize management to meet and exceed annual performance metrics and deliver on commitments to shareholders.

Long-term incentive

Annual equity award

To incentivize executive officers to increase shareholder value, reward long-term corporate performance and promote employee commitment through share ownership.

 

Our objective is to target total direct compensation for our named executive officers, including the annualized value of the incentive awards that are proposed to be granted in fiscal 2021 as part of our Executive Compensation Program, as follows: Base Salary & Benefits – 30%; Short-term Incentive – 15%; and Long-Term Incentive – 55%.

The amounts and mix attributable to base salary, short-term incentives and long-term incentives are determined by reference to market norms.  Our aim is to align individual compensation with the objectives of the applicable Executive Compensation Program.  While executive compensation mix is evaluated on an annual basis, we do not adhere to a rigid formula when determining the actual mix of compensation elements.  Instead, our current policy is to balance the short-term and long-term focus of our compensation elements to reward short-term performance while emphasizing long-term value creation.  These objectives are achieved by placing considerable weight on long-term, equity-based compensation while offering cash and short-term compensation to attract and retain executive talent.

 

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The primary objective of our compensation philosophy is to design and support total remuneration packages aligned with strong business performance and long-term value creation for our shareholders.  Each Executive Compensation Program in particular is designed with specific emphasis on accountability for the performance of the MosaiQ development and commercialization program in the short-term and shareholder return over the longer term.  This alignment is created through several mechanisms:

 

Compensation Mechanism

Methodology

Pay Positioning

To attract and retain the best executives, all components of executive compensation are targeted between the market’s median and 75th percentile.

Performance Target Setting

We set goals that we consider to be ambitious but achievable for ourselves and for the Company aligned with our commitment to building long-term sustainable value for our shareholders.

Compensation Elements

Base Salary

Sets baseline pay level.

Annual Incentive Plan

Annual incentive payment that rewards performance relative to annual financial goals and/or MosaiQ development goals.

RSUs

Long-term incentive with a three-year vesting period that rewards performance that enhances shareholder value.

Compensation Mix

Our compensation mix is weighted toward variable pay elements and long-term incentive pay elements

 

By applying the above methodologies, named executive officers are compensated at between the market’s median and 75th percentile when we meet our performance targets, deliver on the expectations we communicate to our shareholders and drive share price appreciation.  Should our performance exceed expectations, our executives will be compensated above target, and vice versa.  The significant weighting of long-term incentives ensures that the primary focus of our named executives is sustained long-term performance, while our short-term incentives motivate consistent annual achievement.

Fiscal 2020 Executive Compensation

Based on our assessment of the performance of the named executive officers and our compensation philosophy as described in this Compensation Discussion and Analysis, and to recognize the high level of performance of these individuals and their importance to the Company, we took the following actions regarding fiscal 2020 compensation:

 

On May 22, 2019, we:

 

o

increased the base salaries of Messrs. Lindop, Farrell and Stackawitz to $420,000 each, effective June 1, 2019,

 

o

decided to grant on May 24, 2019 annual equity awards to Messrs. Lindop, Farrell and Stackawitz consisting of RSU awards of 45,000, 45,000 and 35,000, respectively (equal in value to approximately $403,650, $403,650 and $313,950, respectively, based on the closing price of our ordinary shares on the Nasdaq Global Market on May 23, 2019 of $8.97 per share). These RSUs will vest in three equal annual installments beginning on May 24, 2020.

 

On July 16, 2019, we issued 28,517 options with an exercise price of $10.52 per share to Mr. Walt. These options vested on May 24, 2020.

 

Upon his appointment as Chief Operating Officer, effective January 1, 2020, we increased Mr. Farrell’s base salary to £346,340, or approximately $440,406 (based on the exchange rate in effect on July 22, 2020). On January 7, 2020 we also granted Mr. Farrell 2,232 RSUs (equal in value to approximately $20,356, based on the closing price of our ordinary shares on the Nasdaq Global Market on January 6, 2020 of $9.12 per share).  These RSUs will vest in three equal annual installments beginning on January 7, 2021.

 

On February 5, 2020, in connection with the appointment of Mr. Buhler as our Chief Financial Officer, we granted Mr. Buhler 50,000 RSUs and 25,000 options to purchase ordinary shares at an exercise price of $7.57 per share. The grants, which were issued outside of our 2014 Stock Incentive Plan, were approved by our Board and the remuneration committee of our Board pursuant to the inducement grant exception under Nasdaq Rule 5635(c)(4), as an inducement that was material to Mr. Buhler’s entering into employment with our company. The RSUs and the options vest in three equal installments on each first, second and third anniversary of the grant date. The options have a term of ten years and will be forfeited if not exercised before the expiration of their term. In addition, in the event Mr. Buhler’s employment is terminated, any RSUs or options not vested shall be forfeited upon termination

 

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Fiscal 2021 Executive Compensation

Based on our assessment of the performance of the named executive officers and our compensation philosophy as described in this Compensation Discussion and Analysis, and to recognize the high level of performance of these individuals and their importance to the Company, we took the following actions regarding fiscal 2021 compensation:

 

On May 19, 2020, we;

 

o

increased the base salary of Mr. Buhler to CHF400,000, approximately $429,520 based on the exchange rate in effect on July 22, 2020, effective June 1, 2020,

 

o

decided to grant on May 24, 2020 an equity award with time-based vesting to Mr. Walt consisting of 91,743 RSUs (equal in value to approximately $705,504, based on the closing price of our ordinary shares on the Nasdaq Global Market on May 22, 2020 of $7.69 per share), vesting in 12 equal monthly installments beginning on June 24, 2020  and 60,438 options with an exercise price of $7.69 per share, vesting on May 24, 2021.

 

o

decided to grant on May 24, 2020 annual equity awards with time-based vesting terms to Messrs. Buhler, Farrell and Stackawitz consisting of RSU awards of 55,000, 55,000 and 45,000, respectively (equal in value to approximately $422,950, $422,950 and $346,050, respectively, based on the closing price of our ordinary shares on the Nasdaq Global Market on May 22, 2020 of $7.69 per share).

 

On May 19, 2020, the remuneration committee recommended that we grant, contingent upon the adoption of the Third Amended and Restated 2014 Plan, annual equity awards with time-based vesting terms to Messrs. Buhler, Farrell and Stackawitz consisting of options to purchase 20,000, 20,000 and 30,000 ordinary shares, respectively.  Assuming the Third Amended and Restated 2014 Plan is approved by the shareholders and the Board approves the grants recommended by the remuneration committee, each grant would be subject to three year vesting, and would vest in equal installments on the first, second and third anniversary of the date of grant. The exercise price would be determined on the date of grant.

 

In addition, on January 3, 2020, we entered into a Transition, Separation and Consultancy Agreement with Mr. Lindop in connection with his retirement, pursuant to which, in recognition of Mr. Lindop’s service to us and for providing the services of Chief Financial Officer through February 5, 2020 and Executive Vice President through his retirement date of May 31, 2020, Mr. Lindop received a single cash payment of $420,000 (equal to 12 months base salary). In addition, the agreement provides that all unvested options held by Mr. Lindop that were scheduled to vest within 12 months following his retirement date remain outstanding and vest and become exercisable on their regular scheduled vesting dates. All other unvested options were forfeited and all vested options remain exercisable until May 31, 2021. Furthermore, all unvested RSUs held by Mr. Lindop that were scheduled to vest within 12 months following his retirement date remain outstanding and vest on their regular scheduled vesting dates. All other unvested RSUs were forfeited.  

Our executive compensation is discussed in greater detail in the sections that follow. The remuneration committee will continue to evaluate our overall compensation structure and awards to ensure they are reflective of the performance of our executive officers and our Company and consistent with our compensation objectives.

 

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Summary Compensation Table

The following table summarizes information regarding the compensation for the fiscal years ended March 31, 2020 and 2019 awarded to, earned by or paid to our named executive officers, as well as Messrs. Stackawitz and Buhler. See “Executive Compensation-Compensation Discussion and Analysis-Executive Summary” for more information regarding our named executive officers for fiscal 2020 and 2019.

 

 

Name and Principal Position

 

Fiscal Year

Ended

March 31,

 

Salary

 

 

Bonus

 

 

Option and

RSU awards

(5)

 

 

All other

compensation

(6)

 

 

Total

 

Franz Walt

 

2020

 

$

759,750

 

 

$

1,139,625

 

 

$

189,812

 

 

$

201,148

 

 

$

2,290,335

 

Chief Executive Officer (1)

 

2019

 

$

729,773