UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 16, 2017
OraSure Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware | 001-16537 | 36-4370966 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
220 East First Street Bethlehem, Pennsylvania |
18015-1360 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: 610-882-1820
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by a check mark whether the registrant is an emergent growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Compensation Arrangements
On May 16, 2017, the Board of Directors (the Board) of OraSure Technologies, Inc. (the Company) approved the terms of the Companys 2017 Incentive Plan (the 2017 Incentive Plan), based on the recommendation of the Compensation Committee of the Board (the Committee).
The 2017 Incentive Plan combines and supersedes the Companys 2017 Management Incentive Plan (the 2017 MIP), the terms of which were previously disclosed in a Current Report filed by the Company on February 24, 2017, and the 2017 Management and Employee Incentive Plan (the 2017 MEIP) adopted by the Companys wholly-owned subsidiary, DNA Genotek, Inc. (DNAG). The 2017 MIP and the 2017 MEIP provided for the payment of incentive cash bonuses to the management of each company and were combined in the 2017 Incentive Plan in order to reflect the recent restructuring of the Company and DNAG to operate as a single global organization.
The terms of the 2017 Incentive Plan are essentially the same as the 2017 Management Incentive Plan, except that the level of bonus pool funding and the aggregate dollar amount of incentive cash bonus payable for 2017 performance will be increased to reflect the addition of participants from DNAG.
Pursuant to the 2017 Incentive Plan, incentive cash bonuses may be paid out of a cash pool to be funded based on the Companys achievement of certain consolidated financial objectives. For 2017, specific financial objectives were established for consolidated revenues and operating income. These objectives will each be weighted at 50% in determining the pool funding amount. The impact of acquisitions and divestitures, exchange rate fluctuations and new litigation will be excluded in calculating consolidated revenues and operating income for purposes of determining bonus pool funding.
Under the 2017 Incentive Plan, Threshold, Target, High and Maximum performance levels have been established for each of the financial objectives to be used to fund the bonus pool. The Threshold levels represent the Companys actual consolidated financial results for 2016. The Target levels reflect the Companys annual budget or operating plan for 2017. The High and Maximum performance levels represent performance at 105% and 110% of the results reflected in the Companys 2017 operating plan, respectively.
Subject to Board approval, adjustments to the financial objectives may be made, where deemed appropriate, to reflect unexpected events, circumstances or market conditions.
Funding of the Bonus Pool. If the Company meets the Target performance levels for each of the objectives, then the pool would be funded at 100% of the aggregate target bonuses for all participants in the 2017 Incentive Plan, which currently is approximately $2.77 million. If only the Threshold performance levels are achieved, then the pool would be funded at 50% of those aggregate target bonuses or approximately $1.385 million. If the High performance levels are achieved, then the pool would be funded at 150% of those aggregate target bonuses or approximately $4.155 million. If the Company achieves a Maximum performance level, the pool can be funded up to 200% of the aggregate target bonuses or approximately $5.54 million.
Performance below Threshold will accrue no bonus pool funding for the applicable objective. Thus, management must deliver performance above our actual 2016 consolidated financial results in order to receive funding for a particular objective. Performance between Threshold and Target, Target and High and High and Maximum performance levels, will result in pro-rated funding on a linear basis for the applicable objectives.
2
The Committee and the Board have the discretion to approve bonus pool funding less than or in excess of amounts generated by the formula set forth in the 2017 MIP; provided that any such discretionary adjustments to pool funding shall be limited to +/- 10% of the pool amount otherwise determined by the plans self-funding formula.
Payments from the Bonus Pool. Specific bonus payments from the pool to the Companys senior management (other than the Chief Executive Officer (CEO) and Chief Financial Officer/Chief Operating Officer (CFO/COO)) will generally depend on an evaluation of the participants achievement of individual performance objectives for 2017. Bonus payments for the CEO and CFO/COO will be based on an assessment of the Companys overall performance. Bonus payments will be based on target bonus amounts, which are expressed as a percentage of annual base salary. Targets for the Companys named executive officers are set forth below, were established with input from an independent executive compensation consultant engaged by the Committee, and are similar to bonus targets offered at medical diagnostic and healthcare companies comparable to the Company.
Title |
Target Payouts (% of Base Salary) | |
President and CEO | 70% | |
CFO/COO | 50% | |
Executive Vice President and the Senior Vice President of DNAG | 40% | |
Senior Vice President | 35% |
Based on an assessment of performance, as described above, bonus payments of 100% of target may be awarded for a Meets Requirements assessment, bonus payments of 101% - 125% of target may be awarded for an Exceeds Requirements assessment and bonus payments of 125% - 150% of target may be awarded for an Outstanding assessment. Awards may be adjusted on a pro rata basis as determined in the Committees or Boards discretion to the extent any participant is employed for only a portion of the year.
The Committee recommends for Board approval any bonus awards for the CEO and CFO/COO. The CEO recommends individual awards for the other executive officers for approval by the Committee. The Committee and the Board shall have the right, in their sole discretion, to reject any or all of the recommended bonus awards or approve different bonus awards, even if the bonus pool has been funded and any and all applicable performance criteria have or have not been satisfied, based on the business conditions of the Company or other factors deemed relevant by the Committee or Board. All bonus awards under the 2017 Incentive Plan are subject to the Companys Compensation Recoupment Policy (i.e. clawback policy).
Item 5.07 - Submission of Matters to a Vote of Security Holders.
The following is a summary of the items considered by stockholders and the corresponding voting results at the Companys Annual Meeting of Stockholders held on May 16, 2017:
Item 1 - Election of Two Class II Directors for Terms Ending in 2020.
Nominee |
Votes For |
Votes Withheld |
Broker Non-Votes | |||
Ronny B. Lancaster |
41,806,922 | 1,667,227 | 9,684,315 | |||
Ronald H. Spair |
38,873,350 | 4,600,799 | 9,684,315 |
3
Item 2 - | Proposal to Ratify the Appointment of KPMG LLP as the Companys Independent Registered Public Accounting Firm for Fiscal Year 2017. |
Votes For |
Votes Against |
Abstentions | ||
52,959,594 |
133,420 | 65,450 |
Item 3 - Proposal to Approve an Advisory (Non-Binding) Resolution on the Companys Executive Compensation.
Votes For |
Votes Against |
Abstentions |
Broker Non-Votes | |||
41,996,326 |
1,409,223 | 68,600 | 9,684,315 |
Item 4 - Proposal on Frequency of Future Advisory (Non-Binding) Votes on Executive Compensation.
3 Years |
2 Years |
Every Year |
Abstentions |
Broker Non-Votes | ||||
7,687,935 |
149,942 | 35,593,992 | 42,280 | 9,684,315 |
Item 5 - Proposal to Approve the Companys Amended and Restated Stock Award Plan.
Votes For |
Votes Against |
Abstentions |
Broker Non-Votes | |||
38,033,280 |
5,369,122 | 71,747 | 9,684,315 |
4
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
ORASURE TECHNOLOGIES, INC. | ||||||
Date: May 19, 2017 | By: | /s/ Jack E. Jerrett | ||||
Jack E. Jerrett | ||||||
Senior Vice President, General Counseland Secretary |
5