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CELERA CORP DEF 14A 2009 Table of ContentsUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant x Filed by a Party other than the Registrant ¨ Check the appropriate box:
Celera Corporation
(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):
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1401 Harbor Bay Parkway Alameda, California 94502 Notice of 2009 Annual Meeting of Stockholders
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the meeting, please submit your proxy as soon as possible. You may vote in person at the meeting even if you previously returned your proxy.
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1401 Harbor Bay Parkway Alameda, California 94502 April 10, 2009 Proxy Statement GENERAL INFORMATION We are providing these proxy materials in connection with the solicitation of proxies by the Board of Directors of Celera Corporation for use at our 2009 Annual Meeting of Stockholders to be held on Wednesday, May 20, 2009, at 9:00 a.m. Pacific Time for the following purposes:
The Annual Meeting will be held at Celera Corporation, 1311 Harbor Bay Parkway, Alameda, California 94502. The location is accessible to handicapped persons. This proxy statement and the accompanying proxy card are being mailed starting on or about April 14, 2009. Only holders of record of Celera common stock at the close of business on April 3, 2009, the record date for the meeting, are entitled to receive these proxy materials and vote their shares at the meeting. As of the record date, there were 81,817,855 shares of Celera common stock outstanding and entitled to vote at the meeting. At the meeting, each outstanding share of Celera common stock will be entitled to one vote. Prior to July 1, 2008, we were a wholly owned business segment of Applied Biosystems, Inc., formerly known as Applera Corporation. During the period between 1999 and June 30, 2008, the relative performance of Celera was reflected by the Celera Group tracking stock, a class of common stock of Applied Biosystems. On May 8, 2008, Applied Biosystems’ Board of Directors approved the split-off of the Celera Group into an independent company. The split-off was effective on July 1, 2008, when each holder of Celera Group tracking stock received one share of Celera Corporation common stock. In July 2008, our Board of Directors changed our fiscal year to a 52- to 53-week fiscal year generally ending on the last Saturday in December. The fiscal year end change resulted in an interim reporting period beginning on July 1, 2008 and ending on December 27, 2008, which we refer to herein as the six-month transition period ended December 27, 2008. Throughout this proxy statement, we refer to Celera Corporation as “Celera,” the “Company,” “we,” “us,” or “our.” How to Vote If you are a stockholder of record (that is, if you hold shares of Celera common stock in your own name in our stock records maintained by our transfer agent, Computershare Trust Company, N.A.) as of April 3, 2009, you have four ways to vote. You may:
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The shares represented by a properly signed proxy card or voted over the Internet or by telephone will be voted at the meeting as specified by the stockholder. If a proxy card is properly signed and returned but no specific choices are made, the shares represented by the proxy card will be voted in favor of the election of all of the nominees for director named in this proxy statement and “for” each of the proposals set forth on the proxy card. If you are a “street name” stockholder (that is, if you hold shares of Celera common stock through a bank, broker, or other nominee), you are considered the “beneficial owner” of the shares, and these proxy materials, together with a voting instruction form, are being forwarded to you by your bank, broker, or other nominee. As a beneficial owner, you must instruct your bank, broker, or other nominee how to vote. Depending on your bank, broker, or other nominee, you may be able to submit your voting instructions by toll-free telephone or over the Internet. Please refer to the enclosed voting form for instructions on how to vote electronically. You may also submit your voting instructions by signing, dating, and returning the enclosed voting instruction form. Because a beneficial owner is not the stockholder of record, if you wish to vote your shares in person at the meeting, you must first obtain a “legal proxy” from the bank, broker, or other nominee that holds your shares, giving you the right to vote the shares at the meeting. How to Revoke a Proxy If you are a stockholder of record, you may revoke a proxy, including a proxy submitted over the Internet or by telephone, at any time before it is voted at the meeting by:
If you are a street name stockholder, and you wish to revoke your voting instructions, you must submit later-dated voting instructions to your bank, broker, or other nominee. You may also revoke your voting instructions at any time prior to exercise by attending the meeting and voting in person, although attendance at the meeting will not in and of itself constitute revocation of your voting instructions. However, because a beneficial owner is not the stockholder of record, if you wish to vote your shares in person at the meeting, you must first obtain a “legal proxy” from the bank, broker, or other nominee that holds your shares, giving you the right to vote the shares at the meeting. Quorum We need a quorum to transact business at the meeting. This means that the holders of at least a majority of the outstanding shares of Celera common stock must be present at the meeting, either in person or by proxy. Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining whether a quorum exists. As of the record date, there were 81,817,855 shares of Celera common stock outstanding and entitled to vote at the annual meeting and thus, to constitute a quorum, 40,908,928 shares of Celera common stock must be present at the meeting, either in person or by proxy. A “broker non-vote” occurs when a bank, broker, or other nominee does not vote on a particular proposal because it does not have discretionary voting authority for that proposal and has not received voting instructions
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Table of Contentsfrom the beneficial owner. Brokers and other nominees have power to vote without receiving voting instructions from the owner in an uncontested election of directors and on the ratification of the appointment of independent registered public accountants. If you are a street name stockholder, your bank, broker, or other nominee will have the discretion to vote on the proposals related to the election of directors (Proposal 1) and the ratification of the selection of PwC as our independent registered public accounting firm (Proposal 2). Vote Required Election of Directors. In an uncontested election of directors, such as this election, each director must be elected by the affirmative vote of a majority of the votes cast with respect to such director by the shares present in person or represented by proxy and entitled to vote at the meeting. A “majority of votes cast” means that the number of votes “FOR” a director nominee must exceed the number of votes “AGAINST” that director nominee. In the election of directors, you may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each of the nominees. If you elect to abstain in the election of directors, the abstention will not have any effect on the election of directors. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted. Each current director who is standing for reelection at the annual meeting has tendered an irrevocable resignation from the Board of Directors that the Nominating and Corporate Governance Committee or another committee of the Board of Directors may accept or reject if the director fails to receive the required majority vote. Ratification of Selection of PwC. The affirmative “FOR” vote of a majority of the shares present in person or by proxy and entitled to vote at the meeting is required to ratify the selection of PwC as our independent registered public accounting firm (Proposal 2). You may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to the proposal to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm. An abstention will not be counted as a vote “for” or “against” the proposal. Therefore, an abstention will have the same effect as a vote “AGAINST” the proposal. Voting on Other Matters If other matters are properly presented at the meeting for consideration, the persons named as proxies on the accompanying proxy card will have the discretion to vote on these matters in accordance with their best judgment. As of the date of this proxy statement, we do not know of any matters to be brought before the meeting other than those described in this proxy statement. Costs of Proxy Solicitation We will bear the costs of soliciting proxies for the meeting. In addition to solicitation by mail, proxies may be solicited on our behalf by our directors, officers, or employees in person or by telephone, facsimile, e-mail, or other electronic means. No additional compensation will be paid to these officers, directors or employees for these services. We will also reimburse brokerage houses and other custodians, nominees, and fiduciaries holding shares of Celera common stock in their names or those of their nominees for expenses they incur in sending proxy materials to the beneficial owners of Celera common stock and obtaining their proxies.
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Table of ContentsHouseholding of Annual Meeting Materials Some banks, brokers, and other nominee record holders may participate in the practice of “householding” proxy statements and annual reports. This means that only one copy of this Proxy Statement and our Transition Report on Form 10-KT may have been sent to multiple stockholders in your household. If you would like to obtain another copy of either document, please contact our Secretary at 1401 Harbor Bay Parkway, Alameda, California 94502, telephone 510-749-4200. If you want to receive separate copies of our proxy statement and annual report in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address or telephone number. IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 20, 2009: Our Proxy Statement dated April 10, 2009 and our Transition Report on Form 10-KT for the six-month transition period ended December 27, 2008 are available electronically at www.proxyvote.com. Electronic Access to Future Proxy Statements and Annual Reports If you are a stockholder of record and would like to view future proxy statements and annual reports over the Internet instead of receiving copies in the mail, follow the instructions provided when you submit your proxy over the Internet or call our toll-free stockholder services number at 1-800-690-6903. If you hold your shares through a bank, broker, or other holder, check the information provided by that entity for instructions on how to elect to view future proxy statements and annual reports and submit voting instructions over the Internet. Opting to receive your proxy materials electronically saves us the cost of printing and mailing these materials to you.
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Table of ContentsDIRECTORS AND EXECUTIVE OFFICERS The following table sets forth information concerning the persons who serve as our directors and executive officers as of April 1, 2009. Our Bylaws provide that our Board of Directors shall be comprised of no fewer than three directors, divided into three classes, with each class having a three-year term. Our Board of Directors currently has eight members. Each class consists, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial term of the Class I directors, who are Jean-Luc Bélingard, Peter Barton Hutt and Gail K. Naughton, will expire on the date of the 2009 annual meeting of stockholders; the term of the initial Class II directors, who are Richard H. Ayers, Wayne I. Roe and Bennett M. Shapiro, will terminate on the date of the 2010 annual meeting of stockholders; and the term of the initial Class III directors, who are William G. Green and Kathy Ordoñez, will terminate on the date of the 2011 annual meeting of stockholders. The business address of each of the individuals listed below is Celera Corporation, 1401 Harbor Bay Parkway, Alameda, California, 94502. Each of the individuals listed below, other than Mr. Bélingard, is a citizen of the United States.
Directors Richard H. Ayers, age 66, has served as a director of Celera since February 2008 and was a director of Applera Corporation until June 2008. He is the retired Chairman and Chief Executive Officer of The Stanley Works, a tool and hardware manufacturer. He was an advisor to the Chairman and Chief Executive Officer of Stanley from January 1997 to October 1997 after having served as Chairman and Chief Executive Officer of Stanley from May 1989 to December 1996. Mr. Ayers is a Trustee of MassMutual Select Funds and MML Series Investment Fund. Jean-Luc Bélingard, age 60, has served as a director of Celera since February 2008 and was a director of Applera Corporation until June 2008. He is Chairman and Chief Executive Officer of Ipsen S.A., a diversified French healthcare holding company, and has served in that position since January 2002. He previously served as Chief Executive Officer of bioMérieux-Pierre Fabre Group, a diversified French healthcare holding company, from 1999 to December 2001, and as Director General of the Diagnostics Division and a member of the
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Table of ContentsExecutive Committee of F. Hoffmann-La Roche Ltd., a healthcare company, from 1990 to 1998. Mr. Bélingard is also a director of Laboratory Corporation of America® Holdings, NicOx S.A. (France), and bioMérieux S.A. William G. Green, age 64, has served as a director of Celera since July 2008. Mr. Green has been General Counsel and Secretary of the Gordon and Betty Moore Foundation, a private, philanthropic foundation dedicated to advancing environmental conservation and research around the world, since December 2003, and also served as the foundation’s Chief Program Officer – Environmental Conservation from November 2004 until July 2008. He previously served as Senior Vice President, General Counsel and Secretary of Chiron Corporation, a biotechnology company, from 1990 to October 2004 and Senior Vice President and Special Counsel to the President of Chiron from 2004 to 2006. Peter Barton Hutt, age 74, has served as a director of Celera since August 2008. Mr. Hutt is a senior counsel at the law firm of Covington & Burling and has been an attorney with that firm since 1975. He served as Chief Counsel for the Food and Drug Administration between 1971 and 1975. Mr. Hutt is a member of the Institute of Medicine of the National Academy of Sciences and teaches a course on food and drug law each winter term at Harvard Law School. He serves on a number of academic, philanthropic and venture capital advisory boards, and is a director of Xoma Ltd., ISTA Pharmaceuticals, Inc., and Momenta Pharmaceuticals, and several privately-held life sciences companies. Gail K. Naughton, age 53, has served as a director of Celera since July 2008. Dr. Naughton has been Dean of the College of Business Administration at San Diego State University since August 2002 and Chairman and Chief Executive Officer of Histogen, Inc., a regenerative medicine company, since June 2007. She was Vice Chairman of Advanced Tissue Sciences, Inc. (ATS), a company involved in human-based tissue engineering, from March 2002 to October 2002, President from August 2000 to March 2002, President and Chief Operating Officer from 1995 to 2000, and co-founder and director since inception in 1991. She is also a director of C.R. Bard, Inc. Kathy Ordoñez, age 58, has served as our Chief Executive Officer, and as a director of Celera, since February 2008. She joined Applied Biosystems in December 2000, and held various positions, including President of Celera Diagnostics LLC, a wholly owned subsidiary of Applied Biosystems, prior to being named to her current position. Prior to December 2000, Ms. Ordoñez was employed by Hoffmann-La Roche, a leading international healthcare company, where she was President and Chief Executive Officer of Roche Molecular Systems from 1991 to 2000. Wayne I. Roe, age 58, has served as a director of Celera since December 2008. Mr. Roe has been a general partner of DFJ In-Cube Ventures, an early stage medical technology fund, since 2007. From 2001-2007, he served as a consultant on life science marketing and pharmacoeconomic strategy. Mr. Roe was the founding Chief Executive Officer and Chairman of Covance Health Economics and Outcomes Services, Inc. from 1988 to 1999 and previously served as Vice President for Economic and Health Policy for the Health Industry Manufacturers Association. He currently sits on the boards of directors of ISTA Pharmaceuticals, Inc. and a number of privately-held companies. Mr. Roe also serves on the executive committee of the Maryland Angels Fund. Bennett M. Shapiro, age 69, has served as a director of Celera since May 2008. Dr. Shapiro has been a director and Partner of PureTech Ventures, a venture capital firm specializing in investments in novel therapeutics, medical devices, and research technologies, since August 2003. From September 1990 to July 2003, Dr. Shapiro was Executive Vice President of Merck & Co., Inc., a research-based pharmaceutical company, in charge of Worldwide Basic and Preclinical Research and Licensing and External Research. He is also a director of Momenta Pharmaceuticals, Inc. Executive Officers Paul D. Arata, age 54, has served as our Vice President of Human Resources and Administration since February 2008. Prior to joining Applied Biosystems’ Celera Group, Mr. Arata held various human resources
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Table of Contentspositions with Applied Biosystems from 2001 to 2008, most recently serving as Vice President of Human Resources and Site Services. Prior to joining Applied Biosystems, Mr. Arata held various human resources and administrative and management roles with Charles Schwab & Co., Inc., SBC Communications Inc. and Pacific Telesis Group. Christopher Hall, age 40, has held several executive and senior positions at Berkeley HeartLab, or BHL, over the last seven years, including serving as Chief Business Officer since October 2008 and Chief Clinical Operations Officer from 2005-2008. Before that, Mr. Hall served as Vice President of Marketing where he was instrumental in repositioning BHL from a specialty laboratory for advanced lipid blood tests to a cardiovascular disease management company. Prior to joining BHL, he held management and financial positions with Asimba, Inc., and Symmetrix. BHL is a wholly owned subsidiary of the Company. Joel R. Jung, age 51, has served as our Chief Financial Officer since February 2008. Mr. Jung joined Applied Biosystems’ Celera Group as Vice President of Finance in 2006. From 1995 to 2006, Mr. Jung held various management and finance positions with Chiron Corporation, an international manufacturer of biopharmaceuticals, vaccines, and blood testing products, including Vice President and Treasurer from 2003 to 2006. Victor K. Lee, age 50, has served as our Chief Intellectual Property Counsel since July 2008 and as our Assistant Secretary since November 2008. Dr. Lee served as our Secretary from July 2008 to November 2008. Dr. Lee joined Applied Biosystems’ Celera Group in July 2001 as Senior Patent Attorney and Licensing Director, and held the position of Vice President and Chief Group Counsel between May 2004 and June 2008. Prior to joining Celera, Dr. Lee worked for Roche Molecular Systems as Chief Patent Counsel. He previously held faculty positions in the Department of Medicine at the University of Washington. Scott K. Milsten, age 39, has served as our Vice President, General Counsel and Corporate Secretary since November 2008. Previously, Mr. Milsten was Deputy General Counsel for Gen-Probe Incorporated between May 2005 and October 2008. Prior to Gen-Probe, Mr. Milsten practiced corporate law with the law firm of Latham & Watkins LLP from 1996 to 2005, where he specialized in mergers and acquisitions, proxy contests and securities offerings for life science and technology companies. Stacey R. Sias, age 55, has served as our Chief Business Officer since February 2008. She joined Applied Biosystems’ Celera Group in April 2001 and held various positions, including Vice President, Marketing and Business Development. Prior to this, Dr. Sias was the Vice President of Licensing at Roche Molecular Systems and held various positions within Hoffmann La-Roche. She previously served as a patent agent at Cetus Corporation and as a molecular biologist at Codon Corporation and Genentech, Inc. Thomas J. White, age 63, has served as our Chief Scientific Officer since February 2008. He joined Applied Biosystems’ Celera Group in November 2000 and held various positions, including Vice President, Research and Development. Prior to this, Dr. White was employed by Roche Molecular Systems, where he was Senior Vice President of Research and Development from 1989 through 2000. From 1978 to 1989, Dr. White held various positions at Cetus Corporation, including Vice President of Research and Associate Director of Research and Development. Michael A. Zoccoli, age 58, has served as our General Manager, Products Business since February 2008. He joined Applied Biosystems’ Celera Group in January 2002, and held various positions, including Vice President of Development, Vice President of Development, Instruments Systems and Software, and Vice President of Development and Manufacturing, prior to being named to his current position. He previously worked in product development and project management at a number of companies, including Cetus Corporation, Roche Molecular Systems, Applied Imaging Corporation, and Bayer Diagnostics.
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Table of ContentsBOARD OF DIRECTORS AND CORPORATE GOVERNANCE Our business is managed under the direction of our Board of Directors. Members of the Board of Directors are kept informed of our business through discussions with officers and other employees, by reviewing materials relating to the Company, and by participating in meetings of the Board of Directors and its committees. William G. Green has been elected non-executive Chairman of the Board. There were three Board of Directors meetings and 14 committee meetings during the six-month transition period ended December 27, 2008. Each director attended at least 75% of the meetings of the Board of Directors and of the committees on which he or she served, except for Dr. Shapiro who was unable to attend one meeting of the Board and the committees on which he serves due to illness. All directors are encouraged to attend our annual meetings of stockholders, and all directors are expected to attend the Company’s 2009 annual meeting of stockholders. Director Independence The Board of Directors has determined that each of the non-employee directors is independent and that each director who serves on its committees is independent, as such term is defined by rules of The NASDAQ Stock Market (NASDAQ) and the Securities and Exchange Commission (SEC). Board Committees Our Board of Directors has established three committees to assist it in carrying out its responsibilities: an Audit and Finance Committee, Compensation Committee, and Nominating and Corporate Governance Committee. The Board of Directors may also establish other committees from time to time. Each of these committees operates under a written charter, copies of which are available in the Corporate section of our website at www.celera.com under the heading “About Us — Corporate Governance — Committee Charters.” The committee charters are also available in print to any stockholder on request to: Secretary, Celera Corporation, 1401 Harbor Bay Parkway, Alameda, California 94502. Audit and Finance Committee. The Audit and Finance Committee, which was established by the Board of Directors in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the Exchange Act), oversees accounting, finance, and internal control matters. The Committee is responsible for the appointment, compensation, evaluation, and oversight of the work of our independent registered public accounting firm for the purpose of preparing or issuing an audit report or performing other services. In addition, the Committee, among other things:
The Committee also reviews and approves all related party transactions pursuant to a Related Party Transaction Policy described in more detail below. Each member of the Audit and Finance Committee is independent as defined by the rules of NASDAQ and also satisfies the independence requirements for members of audit committees prescribed under the Sarbanes-Oxley Act of 2002. The Board of Directors has determined
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Table of Contentsthat at least one audit committee financial expert serves on the Audit and Finance Committee, and that director is Richard H. Ayers. The Audit and Finance Committee met eight times during the six-month transition period ended December 27, 2008. The members of the Audit and Finance Committee are Richard H. Ayers, William G. Green, Gail K. Naughton and Wayne I. Roe, with Richard H. Ayers serving as chair. Compensation Committee. The Compensation Committee oversees compensation policies and practices for our officers and other members of senior management, including salary, bonus, and incentive awards. The details of the processes and procedures that we use in the consideration and determination of executive compensation are described below under “Compensation Discussion and Analysis.” The Compensation Committee met three times during the six-month transition period ended December 27, 2008. The members of the Compensation Committee are Jean-Luc Bélingard, Richard H. Ayers and Bennett M. Shapiro, with Jean-Luc Bélingard serving as chair. The Committee retains an independent compensation consulting firm to assist it in identifying appropriate peer companies for consideration in its analysis of officer compensation, preparing executive compensation analyses, and providing ongoing advice to the Committee as requested. Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee evaluates our Board of Directors’ effectiveness and generally takes a leadership role in advising the Board of Directors on corporate governance and related matters. The Nominating and Corporate Governance Committee met three times during the six-month transition period ended December 27, 2008. The members of the Nominating and Corporate Governance Committee are Gail K. Naughton, Bennett M. Shapiro and Peter Barton Hutt, with Gail K. Naughton serving as chair. The committee also assists the Board of Directors in identifying individuals qualified to serve as members of the Board of Directors. Under the Committee’s charter, nominees for director are selected based on their independence, personal and professional integrity, ethics and values, experience in corporate management, experience in our industry and with relevant social policy concerns, experience as a board member of other publicly held companies, academic expertise, and business judgment, among other relevant considerations. Final approval of the nomination of a new nominee is determined by the full Board of Directors. The Committee considers nominations for directors recommended by member of the Board of Directors, Company management, stockholders, and other sources. Consideration of Stockholder Nominees for Director Pursuant to our Bylaws, a stockholder who wishes to nominate persons for election to the Board of Directors at an annual meeting or at a special meeting (but only if the Board of Directors has first determined that directors are to be elected at such special meeting) must be a stockholder of record when giving us notice and at the meeting, must be entitled to vote at the meeting and must comply with the notice provisions in our Bylaws. In order to nominate a person for election to the Board of Directors at an annual meeting, a stockholder’s notice must be provided to our Secretary not less than 90 nor more than 120 days before the anniversary date of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, the notice must be delivered not earlier than the 120th day prior to such annual meeting and not later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made. In order to nominate a person for election to the Board of Directors at a special meeting, a stockholder’s notice must be provided to our Secretary not earlier than the 120th day prior to such special meeting and not later than the 90th day prior to such special meeting or, if later, the 10th day following the day on which public disclosure of the date of such special meeting was first made. If the number of directors to be elected to the Board of Directors is increased and there is no public announcement by the Company naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is provided to our Secretary not later than the close of business on the 10th day following the day on which such public disclosure is first made.
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Table of ContentsGenerally, the stockholder’s notice must include the following information for the person making the nomination, the beneficial owner, if different, on whose behalf the nomination is being made, any affiliate or associate of such beneficial owner and any other person with whom the beneficial owner is acting in concert (as defined in the Bylaws) (together, the “Nominating Person”):
The stockholder’s notice must also include the following information for each proposed director nominee:
The stockholder’s notice must be updated and supplemented, if necessary, so that the information required to be provided in the notice is true and correct as of the record date for the meeting and as of the date that is ten business days prior to the meeting. If the nomination was made in accordance with the procedures in our Bylaws, the Nominating and Corporate Governance Committee will evaluate director candidates proposed by stockholders in the same manner it evaluates other candidates.
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Table of ContentsCompensation Committee Interlocks and Insider Participation During the six-month transition period ended December 27, 2008, the Compensation Committee consisted of Messrs. Bélingard, Ayers, and Shapiro. None of these members is or has been an officer or employee of the Company, and none of our executive officers serves as a director or member of the compensation committee of another entity that has one or more executives serving on our Board of Directors or Compensation Committee. In November 2007, we established a collaboration with Societe de Conseils, de Recherche et d’Applications Scientifiques SAS, a wholly owned subsidiary of Ipsen S.A., to develop biomarker and pharmacogenomic tests for patients with growth failure. We have received a total of $650,000 under this collaboration since its inception. We are eligible to earn additional milestone payments of up to $1.35 million under this collaboration, and as yet undetermined amounts in the event that Ipsen asks us to develop and manufacture reagents for use in the clinical trials of an Ipsen product. Mr. Bélingard is Chairman and Chief Executive Officer of Ipsen. Communications with Directors Any stockholder or other interested parties may communicate directly with the Board of Directors or the non-management directors. All communications should be in writing and should be directed to the Company’s Secretary at the address given above. The sender should indicate in the address whether it is intended for the entire Board of Directors, the non-management directors as a group, or an individual director. Each communication intended for the Board of Directors or non-management directors received by the Secretary will be forwarded to the intended recipients subject to compliance with instructions from the Board of Directors in effect from time to time concerning the treatment of inappropriate communications.
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Table of ContentsReport of the Audit and Finance Committee The information contained in this report shall not be deemed to be “soliciting material,” to be “filed” with the SEC or be subject to Regulation 14A or Regulation 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference in future filings with the SEC except to the extent that Celera specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act. The Audit and Finance Committee has reviewed and discussed with management and PwC the audited consolidated financial statements of Celera contained in our Transition Report on Form 10-KT for the six-month transition period ended December 27, 2008. The Committee also discussed with PwC the matters required to be discussed by Statement on Auditing Standards No. 114, “The Auditor’s Communication With Those Charged With Governance.” The Audit and Finance Committee has received written disclosures from PwC required by PCAOB Rule 3526, “Communications with Audit Committees Concerning Independence,” and has discussed with PwC its independence from Celera and its management. Based on the reviews and discussions referred to above, the Audit and Finance Committee recommended to the Board of Directors, and the Board of Directors has approved, the inclusion of the audited consolidated financial statements of Celera in our Transition Report on Form 10-KT for the six-month transition period ended December 27, 2008, for filing with the SEC. The Audit and Finance Committee has also appointed PwC to audit our consolidated financial statements for the fiscal year ending December 26, 2009, subject to stockholder ratification of that appointment.
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Table of ContentsCompensation of Directors in Six-Month Transition Period Ended December 27, 2008 We adopted a director compensation policy, which became effective as of July 1, 2008. Pursuant to the policy, each non-employee director shall receive an annual cash retainer of $45,000, which is payable quarterly. The Chairman of the Board and committee chairs shall receive the following additional cash compensation, which amounts are added to their annual cash retainers: Chairman of the Board — $45,000; Audit and Finance Committee — $15,000; Compensation Committee — $10,000; and Nominating and Corporate Governance Committee — $10,000. Pursuant to the policy, new Celera non-employee Board of Directors members shall receive an initial option grant of 30,000 shares, which vests in three equal annual installments following the date of grant, and an annual option grant of 20,000 shares, which vests one year after the date of grant. The annual option grant is awarded to directors on the date of our annual meeting of stockholders. The Company did not pay any additional amounts for attendance at meetings, participation on committees, or serving as a co-chair of a committee. The following table shows the compensation we paid to each of our non-management directors during the six-month transition period ended December 27, 2008:
During the six-month transition period ended December 27, 2008, each director received an initial grant of 30,000 options upon joining the Board. The grant date fair value of these awards determined in accordance with SFAS No. 123R were as follows: Richard Ayers — $159,600 (30,000 multiplied by $5.32); Jean-Luc Bélingard — $159,600 (30,000 multiplied by $5.32); William Green — $159,600 (30,000 multiplied by $5.32); Peter Barton Hutt — $190,200 (30,000 multiplied by $6.34); Gail Naughton — $159,600 (30,000 multiplied by $5.32); Wayne Roe — $122,700 (30,000 multiplied by $4.09); and Bennett Shapiro — $159,600 (30,000 multiplied by $5.32). The aggregate number of option awards issued and outstanding as of December 27, 2008 for each non-management director was as follows:
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Related Party Transaction Policy Our Board of Directors has adopted a written Related Party Transaction Policy for the review, approval, and ratification of transactions involving Celera Corporation and “related parties.” Under the policy, the Audit and Finance Committee reviews the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, and takes into account the conflicts of interest and corporate opportunity provisions of the Company’s Code of Business Conduct and Ethics before approving or disapproving the related party transaction. For purposes of the policy, related parties are defined as directors and nominees for director, executive officers, and immediate family members of the foregoing, as well as security holders known to beneficially own more than five percent of our common stock and immediate family members of such security holders. Related Transactions with Directors In November 2007, we established a collaboration with Societe de Conseils, de Recherche et d’Applications Scientifiques SAS, a wholly owned subsidiary of Ipsen S.A., to develop biomarker and pharmacogenomic tests for patients with growth failure. We have received a total of $650,000 under this collaboration since its inception. We are eligible to earn additional milestone payments of up to $1.35 million under this collaboration, and as yet undetermined amounts in the event that Ipsen asks us to develop and manufacture reagents for use in the clinical trials of an Ipsen product. Mr. Bélingard, one of our directors, is Chairman and Chief Executive Officer of Ipsen. EQUITY COMPENSATION PLAN INFORMATION The following table provides certain information regarding the Company’s 2008 Stock Incentive Plan as of December 27, 2008. This was the only equity compensation plan in effect as of December 27, 2008:
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Table of ContentsOWNERSHIP OF COMMON STOCK The following table sets forth, as of March 1, 2009, information concerning the beneficial ownership of our common stock by:
Based on information furnished to us or on filings made under the Exchange Act by or on behalf of such person or entity, except as otherwise indicated in the footnotes below, we believe that each person or entity has sole voting and investment power with respect to the shares of common stock set forth opposite such person’s or entity’s name. Beneficial ownership is determined in accordance with the rules of the SEC and generally attributes beneficial ownership of securities to persons who possess sole or shared voting or investment power with respect to such securities. Shares of our common stock subject to options that are currently exercisable for shares of our common stock or other securities evidencing the right to receive shares of our common stock that are vested, or that will be exercisable for shares of our common stock or that will vest within 60 days after March 1, 2009, are deemed to be outstanding and beneficially owned by the person holding such options or other securities for the purpose of computing the percentage ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise noted below, the address for each person listed in the following table is: Celera Corporation, 1401 Harbor Bay Parkway, Alameda, California, 94502.
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Section 16(a) Beneficial Ownership Reporting Compliance We are required to identify any officer, director, or beneficial owner of more than 10% of Celera common stock who failed to timely file with the SEC a required report relating to beneficial ownership of stock under Section 16(a) of the Exchange Act. Based solely on a review of information provided to us, all persons subject to these reporting requirements filed the required reports on a timely basis during the six-month transition period ended December 27, 2008.
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Table of ContentsCOMPENSATION DISCUSSION AND ANALYSIS Overview of Compensation Program Prior to the split-off from Applied Biosystems (now Life Technologies Corporation following its merger with Invitrogen Corporation) on July 1, 2008, the compensation of Celera executives was determined by Applied Biosystems’ Management Resources Committee. Following the split-off, we adopted a new compensation program, the philosophy of which is to ensure that all elements of the program work together to attract, motivate and retain the executive, managerial and professional talent needed to achieve our strategy, goals and objectives. Our company, and our Compensation Committee, is committed to the principles inherent in paying for performance and we have structured the compensation program to deliver rewards for exemplary performance and to withhold rewards and impose other consequences in the absence of such performance. Our compensation programs work together to achieve several key objectives, including the payment of compensation related to company performance and the collective efforts of our employees. In particular, the primary goals of our executive compensation program are to:
While we do not use any formulaic policies that state a specific market percentile position for defining individual compensation levels or any specific percentage mix of base, bonus, benefits, and equity as part of total compensation, we consider each of these factors. Affordability, business conditions, and an assessment of the degree to which an executive is subject to being recruited by other companies are also taken into account in making decisions about compensation. Roles and Responsibilities Pertaining to Compensation Management Kathy Ordoñez, our Chief Executive Officer, with the assistance of Paul Arata, our Vice President of Human Resources and Administration, provides recommendations to the Compensation Committee with regard to compensation philosophy, the structure and design of programs and policies in which our executives may participate, and specific compensation awards for each of our executive officers other than for herself. Mr. Arata provides compilations of total compensation values and reviews of performance against objectives for the Compensation Committee. Our Chief Financial Officer prepares information for the Compensation Committee with regard to financial targets and metrics upon which the incentive compensation programs and equity programs are based. The Compensation Committee is responsible for making decisions regarding our Chief Executive Officer’s compensation and for reviewing and approving her recommendations regarding the compensation of the other executive officers. The Compensation Committee retained Radford Surveys + Consulting (Radford) as of July
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Table of Contents2008 as an independent executive compensation consulting firm and has requested that Radford prepare executive compensation analyses and reports and provide ongoing advice to the Compensation Committee as it deems appropriate. Among other things, Radford has assisted the Compensation Committee in identifying appropriate peer companies for consideration in its analysis of director and officer compensation and participates in Compensation Committee meetings where the executive compensation analyses and recommendations are discussed. In order to maintain an objective external perspective, Radford does not provide any services to Celera outside of its support to the Compensation Committee. Competitive Assessment Process Prior to July 1, 2008, Applied Biosystems (now Life Technologies) reviewed annually its pay practices for each of its executive officers with the practices of its peer companies. Companies were selected as its peers based on the following criteria: (i) being engaged substantially in the same business, (ii) revenues, and (iii) market capitalization, each as compared to Applied Biosystems (now Life Technologies). Following our split-off from Applied Biosystems (now Life Technologies), we engaged, with Radford’s assistance, in our own peer group analysis and selected companies as our peers based on the following criteria:
In addition, we also consider whether we compete with such companies for executives and whether the executive officers of such companies provide appropriate benchmarks relative to the specific duties and responsibilities of our executive officers. Our peer companies are set out below:
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Compared to our peer group, Celera’s rankings were as follows as of the most recent date of analysis:
For the six-month transition period beginning July 1, 2008, we prepared competitive analyses for each of our executive officers against executives of the relevant peer group. These included a review of base salary levels, actual short-term incentive levels (i.e., annual bonus), and the value of any long-term and equity compensation in the year of grant. As stated above, although the Compensation Committee does not establish compensation levels based solely on formulas or a specific percentile of our peer group, the Compensation Committee believes that reviewing the compensation practices of our peer group is important to help ensure that our compensation practices are competitive as well as reasonable. The Compensation Committee expects to further evaluate the Company’s peer group in 2009 to take into account, among other things, the Company’s annual revenues following the completion of a full year since the acquisition of Berkeley HeartLab in October 2007. Effect of Change in Fiscal Year As described above, in July 2008, our Board of Directors approved a change in our fiscal year end to align our fiscal year with the calendar year and provide that our fiscal year will generally end on the last Saturday in December. The fiscal year end change resulted in an interim reporting period beginning on July 1, 2008 and ending on December 27, 2008, and the Summary Compensation Table and related explanatory tables report executive compensation information for this six-month transition period ended December 27, 2008.
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Table of ContentsTax Considerations Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of certain compensation in excess of one million dollars paid to a company’s chief executive officer and the three other most highly compensated executive officers, except for the chief financial officer. While we seek to maximize the deductibility of compensation paid to our executive officers, we intend to maintain flexibility to pay compensation that may not be deductible under Section 162(m) if that would be in the best interests of our stockholders. Components of Compensation for Our Executive Officers We utilize compensation programs and elements that are aligned with and support our compensation philosophies. These components work together to provide flexibility to help us manage through change and a dynamic business climate. These compensation programs or elements consist of:
We believe that these components work in balance with one another to support our overarching goals of motivating our executives and recognizing positive results. From time to time we may revise our programs or add new programs to achieve our goals. Base Salary Base salary is a fixed compensation amount paid during the course of the fiscal year. It is designed to recognize demonstrated mastery of the day-to-day requirements of the position and pay competitive amounts that reflect the individual attributes of each executive officer. Base salaries are generally reviewed annually and are individually determined taking into consideration each executive’s unique set of skills, experience, and level of responsibility. The following table provides information about the base salary paid in the six-month transition period ended December 27, 2008, as well as the year ended June 30, 2008, to our chief executive officer and chief financial officer, as well as to the three other most highly paid individuals who serve as executive officers. We refer to these persons collectively as our “Named Executive Officers.” The salary increases for each Named Executive Officer, including Ms. Ordoñez, were consistent with the trend increase in base salary compensation for the industry as a whole and were intended to keep the executives’ base salary in line with competitive conditions and to compensate them for the increased responsibilities associated with operating as a stand-alone public company following the split-off from Applied Biosystems (now Life Technologies). In establishing the increases applicable for the six-month transition period ended December 27, 2008, the Compensation Committee determined that the base salaries for our Named Executive Officers would also remain in effect for calendar year 2009, absent changes in market conditions requiring any further adjustment.
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Table of ContentsAnnual Incentive Compensation Our executive officers participated in an incentive compensation program (ICP) for the six-month transition period ended December 27, 2008. The program was a variable annual bonus plan based on the achievement of pre-determined financial and business objectives and also includes a discretionary amount to reflect personal performance and contribution. The objective of the program was to provide a competitive and performance based earnings opportunity that fluctuates year to year based on specific business and individual achievements. Awards under our program were determined by multiplying an individual’s salary earned during the fiscal period by the following (each expressed as a percentage):
This formula takes into consideration both business and individual performance and reflects the strong teamwork orientation of our company. Target Bonus Level. We conduct an assessment of competitive target incentive compensation levels annually based on the practices of the relevant peer group and an internal determination of the value of the role of each executive officer to the organization. Management may recommend changes in the incentive plan targets for an executive officer. These targets will be expressed as a percentage of base salary. For the six-month transition period ended December 27, 2008, bonus targets for each of the Named Executive Officers were as follows:
Business Modifier. We identify specific business performance criteria that we believe contribute to increasing and maintaining stockholder value. The target and target performance for each criterion are generally established at the beginning of the fiscal period by the Compensation Committee and reviewed by the Compensation Committee against actual performance at the conclusion of the fiscal period. For the six-month transition period ended December 27, 2008, the Compensation Committee established goals for revenue, earnings before interest and taxation (EBIT), and business goals (including quality systems and controls, product development and commercialization marketing, and activities to support the separation from Applied Biosystems (now Life Technologies)). At the February 12, 2009 Board of Directors meeting, the Compensation Committee reviewed the results of the six-month transition period ended December 27, 2008 against the targets and approved a business modifier of 102.4%, calculated as follows:
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Table of ContentsPersonal Modifier. Following the end of the six-month transition period ended December 27, 2008, Ms. Ordoñez, based on her review of the individual performance of each executive officer other than herself over the course of the transition period, proposed to the Compensation Committee a personal modifier to reflect each executive’s personal performance and contribution (either positive or negative) to the overall business results. Using similar criteria, the Compensation Committee made a decision on the personal modifier applicable to Ms. Ordoñez. Ms. Ordoñez completed individual performance appraisals for each of her direct reports and reviewed their performance and contributions against their own personal goals established at the beginning of the six-month transition period. Personal goals for Mr. Jung included: development of financial and information technology functions to support operating Celera as a stand-alone publicly traded company following the split-off from Applied Biosystems (now Life Technologies). Personal goals for Dr. White included: advancing next-generation genetic tests towards commercialization and commencing outcome studies. Personal goals for Dr. Sias included: restructuring our relationship with Abbott and completing activities to support our separation from Applied Biosystems (now Life Technologies). Personal goals for Mr. Arata included: developing benefits, administration and payroll functions to support operating Celera as a stand-alone publicly traded company following the split-off from Applied Biosystems (now Life Technologies). The table below summarizes the ICP awards for Ms. Ordoñez and the other Named Executive Officers for the six-month transition period ended December 27, 2008. These award amounts took into consideration actual base salary earned during the period, the individual’s target bonus, the applicable business modifier as approved by the Compensation Committee and the discretionary personal modifiers recommended by Ms. Ordoñez for the other Named Executive Officers. With regard to Ms. Ordoñez, the Compensation Committee determined a discretionary personal modifier of 100% based on her performance, Company performance, and the Compensation Committee’s overall satisfaction with Ms. Ordoñez’s management and leadership of the Company. The Compensation Committee evaluated Ms. Ordoñez’s performance against the following primary individual goals: execution of the business against financial metrics and advancing the Company’s governance, quality and strategic planning objectives.
Long-term and Equity Incentive Compensation We provide executives with various forms of equity incentives that generally vest over multiple years and, in some cases, vest based on pre-established business or stock price performance goals. The Company has historically utilized an equity incentive strategy with the following primary objectives:
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This strategy uses a combination of stock options and performance-vested restricted stock units which may be awarded in various proportions and in alternating grant cycles. We believe that awarding a combination of equity vehicles to our senior executives best addresses and supports various objectives, including improving stockholder return, maintaining employee retention, increasing top-line (revenue) growth, and delivering operational excellence. Restricted Stock Units. In fiscal 2006, Applied Biosystems (now Life Technologies) introduced a performance-based restricted stock unit program. The restricted stock units represent the right to receive one share of Celera stock at the time they vest. The restricted stock units vest in three increments of up to 16.67% of the total grant based on the attainment of revenue objectives for Celera for the years ended June 30, 2007, June 30, 2008, and June 27, 2009, and a fourth increment of up to 50% of the total grant based on profitability objectives for Celera for the years ended June 30, 2008 and June 27, 2009. The threshold, target, and out-performance levels of attainment were based on business plan forecasts established at the time these restricted stock units were granted. Revenue was determined as an appropriate metric because of the top line growth initiatives for Celera. In addition, a profit metric was used for the third year of the performance cycle to coincide with the objective to achieve profitability during the years ended June 30, 2008 and June 27, 2009. The results of the 2006 performance stock unit programs for the year ended June 30, 2008 were as follows:
At the August 2008 Board of Directors meeting, the Compensation Committee reviewed the Company’s performance compared to its performance target for the year ended June 30, 2008 and approved the restricted stock unit vesting of an amount equal to 92.3% of the target award for the year ended June 30, 2008, corresponding to approximately 15.0% of each grant, which is less than the full 16.67% increment of the grant tied to performance for the year ended June 30, 2008. The remaining portion of these grants will potentially vest on June 27, 2009 based on the level of achievement of the performance goals. None of the above-mentioned restricted stock units vested at the end of the six-month transition period ended December 27, 2008. In addition, no new restricted stock units were granted to our Named Executive Officers during the six-month transition period ended December 27, 2008. 2008 Performance Share Units. We continue to believe that it is in the Company’s best interest to grant performance share units to certain management and other employees in order to achieve the Company’s long-term growth objectives and to align employee and stockholder interests. We consider the grant of performance share units to the Named Executive Officers and other employees in conjunction with, or alternating with, periodic grants of performance-based restricted stock units and, potentially, other long-term incentive vehicles. This methodology is intended to balance the growth oriented incentive of stock options and stock price appreciation with the retention and share ownership qualities of stock grants. The Applied Biosystems Board of Directors, Management Resources Committee (MRC) granted Celera’s 2008 Performance Share Units at its meeting in January 2008. No performance share units were granted to the Named Executive Officers during the six-month transition period ended December 27, 2008.
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Table of ContentsThe Performance Share Unit grants for Ms. Ordoñez and the other Named Executive Officers made in January 2008 considered the value of other equity grants and the retentive value of the executive’s compensation package as a whole. The number of Performance Share Units granted to each of the Named Executive Officers in January 2008 is set forth below:
The results of the 2008 Performance Share Unit program for year ended June 30, 2008 were as follows:
At the August 2008 Board of Directors meeting, the Compensation Committee determined that Celera had achieved its performance target for the year ended June 30, 2008; and, therefore, the Compensation Committee approved the performance share unit vesting for each grant; an amount equal to 115% of the target award for the year ended June 30, 2008, corresponding to approximately 12.46% of each grant, which is less than the full 13.00% increment of the grant tied to performance for the year ended June 30, 2008. The remaining portion of these grants will potentially vest on June 27, 2009, July 3, 2010 and July 2, 2011 based on the level of achievement of the performance goals. Benefits and Perquisites We offer a competitive level of benefits to executives as part of our total executive compensation program. These benefits are intended to help recruit and retain senior executives. We will review our benefit programs on a periodic basis by benchmarking against the relevant peer group companies, reviewing published survey information, and obtaining advice from various independent benefit consultants. The following programs are available to all eligible Celera employees, including our executive officers:
A description of the non-qualified savings and deferral plan is set forth below under the heading “Nonqualified Deferred Compensation as of December 27, 2008.” In addition, during the year ended June 30, 2008 we provided annual physicals, excess liability insurance, car allowance and financial and tax planning services to some of our executive officers under the Applied Biosystems (now Life Technologies) program. In July 2008, and in connection with the split-off, we discontinued the car allowance and financial and tax planning benefits as these benefits were less common for companies of our size and industry (as compared to Applied Biosystems (now Life Technologies)).
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Table of ContentsPotential Payments upon Termination of Employment Except as described below with respect to certain terminations following an acquisition of Celera, any severance benefits payable to our Named Executive Officers will be determined by the Compensation Committee on a case-by-case basis in its discretion consistent with our prior practices and the treatment of other similarly situated executives. Effective July 1, 2008, the Board of Directors adopted an executive change in control policy that provides severance benefits to our executive officers in the event that they are terminated following a change in control of Celera without cause or leave Celera with good reason within two years of the change in control. The policy was amended in December 2008 to ensure that the executives covered by the policy will not be subject to the penalty tax imposed pursuant to Section 409A of the Internal Revenue Code. Our executive officers other than our CEO would receive severance in the amount of 24 months of base pay plus targeted bonus and health care/dental benefits, and our CEO would receive severance in the amount of 36 months of base pay plus targeted bonus and health care/dental benefits. The foregoing severance benefits are paid in a lump sum within 60 days following the termination date, subject to the executive officer’s delivery of an irrevocable release of claims against Celera. In addition, the policy provides the executive officer with the right to receive outplacement services for 12 months following a qualifying termination. This policy is intended to help alleviate both the negative effects on productivity during the uncertainty of a change in control and the transition period that follows a change in control and the potential for economic hardship of affected employees. The Compensation Committee also believes that this policy is a competitive requirement to attracting and retaining highly-qualified senior executives. Although the Company did not engage a consultant to formally propose a recommendation of our change in control policy, our Vice President of Human Resources and Administration did work with J. Richards & Co., a consulting firm, to review the change in control policy. Our Vice President of Human Resources and Administration reviewed the public filings of executive compensation data from a list of competitors (which included deCODE Genetics, Inc., Luminex Corp., Monogram Biosciences, Inc., Myriad Genetics, Inc., and Sequenom, Inc.), and together with some general guidance from J. Richards & Co. and its knowledge of current trends in executive packages, Mr. Arata recommended the design, conditions and payout amounts of the change in control policy to the Compensation Committee. In addition, J. Richards & Co. reviewed the change in control policy and believes the policy is competitive and in line with the current practice of our competitors. J. Richards & Co. does not perform any other services for the Company. Executive Officer Compensation The compensation amounts set forth below represent compensation paid to our Named Executive Officers in the six-month transition period ended December 27, 2008, as well as the years ended June 30, 2008 and 2007 in connection with their service to Celera. The compensation and benefits provided to our executive officers by us may differ from the compensation and benefits previously provided to the executive officers by Applied Biosystems (now Life Technologies). Following the split-off, we have developed compensation programs for each of our executive officers, more detailed descriptions of which can be found above under the heading “Compensation Discussion and Analysis.”
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Table of ContentsSummary Compensation Table for the Six-Month Transition Period Ended December 27, 2008 and Years Ended June 30, 2008 and 2007 The following table provides information about the compensation provided to our Named Executive Officers during the six-month transition period ended December 27, 2008 and the years ended June 30, 2008 and 2007:
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Table of ContentsGrants of Plan-Based Awards during Six-Month Transition Period Ended December 27, 2008 There were no grants of stock options, restricted stock units or other equity compensation awards to the Named Executive Officers during the six-month transition period ended December 27, 2008. The following table below provides information about incentive compensation awards granted to the Named Executive Officers during the six-month transition period ended December 27, 2008.
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Table of ContentsOutstanding Equity Awards as of the End of Six-Month Transition Period Ended December 27, 2008 The following table provides information about equity awards granted to each of the Named Executive Officers with respect to Celera stock that were outstanding as of December 27, 2008.
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Options Exercised and Stock Vested in Six-Month Transition Period ended December 27, 2008 The following table provides information about the value realized by each of the Named Executive Officers on exercises of stock options and the vesting of restricted stock units and stock awards with respect to Celera common stock during the six-month transition period ended December 27, 2008.
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Table of ContentsNonqualified Deferred Compensation as of December 27, 2008 The following table provides information as of the end of our six-month transition period ended December 27, 2008 with respect to our Non-Qualified Savings and Deferral Plan. In November 2008, our Board of Directors approved the consolidation of our separate deferred compensation plan and excess savings plan into the Non-Qualified Savings and Deferral Plan.
Non-Qualified Savings and Deferral Plan At the time of the split-off from Applied Biosystems (now Life Technologies), our Board of Directors adopted a deferred compensation plan and excess savings plan for eligible employees. In November 2008, our Board of Directors approved the consolidation of the two separate plans and adopted the Celera Corporation Non-Qualified Savings and Deferral Plan. The non-qualified savings and deferral plan allows eligible participants to defer a percentage of compensation each year on a pre-tax basis. We do not pay “above market” interest on deferred compensation. Amounts deferred are credited to individual accounts under the plan.
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Table of ContentsWe also make employer contributions to the plan based on the matching contributions that we cannot make to the accounts of participants in our 401(k) Savings Plan by reason of the Internal Revenue Code limit on tax-deferred contributions to qualified plans. These contributions vest in the same manner as our match under the 401(k) Savings Plan — 25% per year for the first four years of employment. Participants are able to direct the investment of their accounts among various measurement funds. These funds may change from time to time and include domestic and international equity, income, and blended funds. The non-qualified savings and deferral plan also includes account balances previously deferred under the Applied Biosystems Deferred Compensation Plan and the Applied Biosystems Excess Benefit Plan, which have been transferred to the Company following the split-off. Participants are fully vested in the amounts in their accounts in the plan, except with respect to the employer 401(k) contributions which vest as described above. These amounts will be paid on the earliest of:
Payment may be made in a lump sum or in installments over a period of up to 15 years, depending on the terms of the plan and the participant’s payment election. Potential Payments Upon Termination or Change in Control Severance Arrangements As described above, our executive officers are eligible to receive post-termination payments pursuant to our executive change in control policy. We do not have any other individual severance arrangements with our Named Executive Officers. The table below was prepared as though a change in control occurred and the Named Executive Officer’s employment was terminated as of December 26, 2008 (due to a termination by Celera without cause or a resignation for good reason), the last business day of the six-month transition period ended December 27, 2008, and using the closing share price of Celera common stock as of that day. As described above, for purposes of calculating the benefits for each Named Executive Officer, the executive change in control policy provides for a severance period of 36 months for Ms. Ordoñez and a severance period of 24 months for the other executive officers.
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Recent Events On April 3, 2009, the Company entered into a General Release and Separation Agreement (the “Agreement”) with Joel Jung, the Company’s Chief Financial Officer, whereby Mr. Jung resigned from his employment with the Company as of the date of the Agreement. The Agreement provides that the Company will pay Mr. Jung a lump sum of $328,750. This payment includes a lump sum amount of $100,000 and an amount equal to nine months of base salary. The Company will also make COBRA premium payments for Mr. Jung and his eligible dependents until the earlier of (i) nine months following the effective date of the Agreement or (ii) the first date that Mr. Jung is eligible to participate in another employer’s health benefit program. The Company will also provide Mr. Jung with transition support services for twelve months. On April 6, 2009, the Company announced that it had named Ugo DeBlasi as Chief Financial Officer, effective as of the date of the announcement. Compensation Committee Report The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or be subject to Regulation 14A or Regulation 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference in future filings with the SEC except to the extent that Celera specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended or the Exchange Act. The Compensation Committee oversees compensation policies and practices for our senior management, including salary, bonus, and incentive awards. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis presented above. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
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Table of ContentsPROPOSAL 1 — ELECTION OF DIRECTORS The Board of Directors has nominated the three persons named below for election as directors of the Company at the meeting. Each nominee elected as a director will serve until his or her successor has been elected at our 2012 annual meeting or until his or her earlier resignation, removal, retirement, disqualification or death. Each of the nominees is currently serving as a director of the Company, and each of the nominees has agreed to serve if elected. If a nominee becomes unavailable to serve as a director for any reason, the shares represented by proxies voted “FOR” the nominee will be voted for such other person as may be designated by the Board of Directors, unless the Board of Directors decides to leave the vacancy temporarily unfilled or to reduce the number of directors serving on the Board of Directors. Majority Vote Standard for Election of Directors; Director Resignation Policy Our Bylaws require that each director be elected by the affirmative vote of a majority of the votes cast with respect to such director in uncontested elections such as this one (the number of shares voted “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee). In a contested election, the standard for election of directors would be the affirmative vote of a plurality of the votes cast by the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. A contested election is one in which the Board of Directors has determined that the number of nominees exceeds the number of directors to be elected at the meeting and has not rescinded this determination by the record date for the meeting as initially announced. If a nominee who is serving as a director is not elected at the annual meeting, under Delaware law the director would continue to serve on the Board of Directors as a “holdover director” until his or her successor is elected and qualified, or until his or her earlier resignation or removal pursuant to our Bylaws. In accordance with our board policy regarding majority voting, our Board of Directors expects each incumbent director who is nominated for re-election to resign from the Board of Directors if he or she fails to receive the required number of votes for re-election in accordance with our Bylaws and the Board of Directors or a duly authorized committee of the Board of Directors determines to accept such resignation. This policy provides that, in considering whether to nominate any incumbent director for re-election, the Board of Directors will take into account whether the director has tendered an irrevocable resignation that will be effective upon the Board of Directors’ acceptance of such resignation in the event the director fails to receive the required vote to be re-elected. In the case of a proposed nominee who is not an incumbent director, the Board of Directors will take into account whether the individual has agreed to tender such a resignation prior to being nominated for re-election. If a nominee who is an incumbent director does not receive the required vote for re-election, the Nominating and Corporate Governance Committee or another committee of the Board will decide whether to accept or reject such director’s resignation (if the director has tendered such a resignation), or whether to take other action, within 90 days after the date of the certification of the election results. The committee’s decision will be publicly disclosed in a filing with the SEC. If a nominee who was not already serving as a director fails to receive the required votes to be elected at the annual meeting, he or she will not become a member of the Board. All director nominees are currently serving on the Board, and each nominee has submitted an irrevocable resignation of the type described above. The principal occupation and other information about each of the nominees as of April 1, 2009, is provided below.
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Table of ContentsThe Board of Directors recommends that you vote “FOR” each of the nominees listed below. Jean-Luc Bélingard, age 60, has served as a director of Celera since February 2008 and was a director of Applera Corporation until June 2008. He is Chairman and Chief Executive Officer of Ipsen S.A., a diversified French healthcare holding company, and has served in that position since January 2002. He previously served as Chief Executive Officer of bioMérieux-Pierre Fabre Group, a diversified French healthcare holding company, from 1999 to December 2001, and as Director General of the Diagnostics Division and a member of the Executive Committee of F. Hoffmann-La Roche Ltd., a healthcare company, from 1990 to 1998. Mr. Bélingard is also a director of Laboratory Corporation of America® Holdings, NicOx S.A. (France), and bioMérieux S.A. Peter Barton Hutt, age 74, has served as a director of Celera since August 2008. Mr. Hutt is a senior counsel at the law firm of Covington & Burling and has been an attorney with that firm since 1975. He served as Chief Counsel for the Food and Drug Administration between 1971 and 1975. Mr. Hutt is a member of the Institute of Medicine of the National Academy of Sciences and teaches a course on food and drug law each winter term at Harvard Law School. He serves on a number of academic, philanthropic and venture capital advisory boards, and is a director of Xoma Ltd., ISTA Pharmaceuticals, Inc., and Momenta Pharmaceuticals, and several privately-held life sciences companies. Gail K. Naughton, age 53, has served as a director of Celera since July 2008. Dr. Naughton has been Dean of the College of Business Administration at San Diego State University since August 2002 and Chairman and Chief Executive Officer of Histogen, Inc., a regenerative medicine company, since June 2007. She was Vice Chairman of Advanced Tissue Sciences, Inc. (ATS), a company involved in human-based tissue engineering, from March 2002 to October 2002, President from August 2000 to March 2002, President and Chief Operating Officer from 1995 to 2000, and co-founder and director since inception in 1991. She is also a director of C.R. Bard, Inc.
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Table of ContentsPROPOSAL 2 — RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit and Finance Committee of the Board of Directors has selected PwC, an independent registered public accounting firm, to audit our books, records, and accounts for the fiscal year ending December 26, 2009. We are asking you to ratify this selection at the meeting. Neither the Company’s Bylaws nor other governing documents or law require stockholder ratification of the selection of PwC as the Company’s independent registered public accounting firm. However, the Audit and Finance Committee of the Board of Directors is submitting the selection of PwC to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit and Finance Committee of the Board of Directors will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit and Finance Committee of the Board of Directors in its discretion may direct the appointment of different independent auditors at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. A representative of PwC is expected to attend the meeting to answer appropriate questions and to make a statement if he or she desires. The affirmative “FOR” vote of a majority of the shares present in person or by proxy and entitled to vote at the meeting is required to ratify the selection of PwC as our independent registered public accounting firm. The Board of Directors recommends that you vote “FOR” this proposal. Audit and Non-Audit Fees The table below presents fees for professional services billed by PwC for the audit of the Company’s consolidated financial statements for the year ended June 30, 2008 and billed or to be billed for the six-month transition period ended December 27, 2008, and fees for other services rendered by PwC during those periods.
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Table of ContentsPre-Approval Policies and Procedures Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. Prior to engagement of the independent registered public accounting firm for the next year’s audit, the Audit Committee pre-approves services in four categories of services: 1. Audit services include audit work performed in the preparation of financial statements, as well as work that generally only the independent registered public accounting firm can reasonably be expected to provide, including consultation regarding financial accounting and reporting standards. 2. Audit-Related services are for related services that are reasonably related to the performance of the audit and review of financial statements, including benefit plan audits. 3. Tax services include all services performed by the independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and include fees in the areas of tax compliance, tax planning, and tax advice. 4. All Other Fees are those associated with services not captured in the other categories. The Audit Committee must specifically approve the terms of the annual audit engagement and all internal control related services. The Audit Committee pre-approves specific types of services within these categories as well as maximum charges for the services. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services or increase the maximum amount of authorized charges not contemplated in the original pre-approval. In those instances, the Audit Committee must pre-approve the services before the firm is engaged or increase the authorization before approved services may be continued. All of the services for which fees were disclosed in the table above for the six-month transition period ended December 27, 2008 were pre-approved by the Audit Committee. STOCKHOLDER PROPOSALS Any stockholder who wishes to submit a proposal to be included in the proxy statement for our 2010 annual meeting must deliver the proposal to us no later than December 15, 2009. All proposals should be sent in writing to: Secretary, Celera Corporation, 1401 Harbor Bay Parkway, Alameda, California 94502, and must include specified information about the proposal and stockholder required by the SEC. In addition, our Bylaws contain certain procedures that a stockholder must follow to nominate a person for election as a director or present a proposal for action at any annual meeting of stockholders. See “BOARD OF DIRECTORS AND CORPORATE GOVERNANCE — Consideration of Stockholder Nominees for Director” above with respect to stockholder nominations. The procedures set forth in our Bylaws are separate and apart from the SEC requirements noted above that a stockholder must meet in order to have a proposal included in our proxy statement. In general, our Bylaws provide that items of business to be brought before an annual meeting of stockholders must include specified information and be delivered to or mailed and received at the principal executive offices of the Company not less than 90 days or more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 120th day prior to such annual meeting and not later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was made. In the case of our 2010 annual meeting, this advance notice must be received no earlier than January 20, 2010, or later than February 19, 2010, assuming the date of the 2010 annual meeting occurs within 30 days before or 60 days after the anniversary date of the 2009 annual meeting. We will have discretionary authority to vote on any stockholder proposals presented at our 2010 annual meeting that do not comply with these notice requirements.
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Table of ContentsThe chairman of the meeting has the power to determine whether any business proposed to be brought before the meeting has been made in accordance with the foregoing procedures and may refuse to allow the transaction of any business not in compliance with these procedures. Additional information regarding the submission of nominations for director or other items of business may be obtained from the Secretary of the Company at the address provided below. ADDITIONAL INFORMATION If you have questions or need more information about the meeting or any of the matters described in this proxy statement, please write to: Secretary, Celera Corporation, 1401 Harbor Bay Parkway, Alameda, California 94502, or call us at 510-749-4200. Our Transition Report on Form 10-KT, which includes our audited financial statements for the six-months ended December 27, 2008, has accompanied this proxy statement. You may also access a copy of our Transition Report on Form 10-KT in the Corporate section of www.celera.com or at www.proxyvote.com. Upon your request, we will provide, without charge, a copy of any exhibit to our Form 10-KT. Requests should be directed to our Secretary at the address set forth above, and should identify the person making the request as a stockholder of the Company as of the record date.
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Table of ContentsImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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