Transactions with Related Persons and Indemnifications
year ended December 31, 2022, John Maetzold, Emily Kirk, Peter Maetzold and Greg Holzapfel received aggregate compensation of $1,030,418, $412,178, $297,858 and $516,123, respectively, of which $622,609, $164,951, $72,294 and $234,117, respectively, represents the aggregate grant date fair value of stock awards. For the year ended December 31, 2021, John Maetzold, Emily Kirk, Peter Maetzold and Greg Holzapfel received aggregate compensation of $982,604, $688,109, $597,814 and $389,313, respectively, of which $628,068, $460,884, $406,857 and $226,844, respectively, represents the aggregate grant date fair value of option awards and stock awards.
Included in the aggregate grant date fair value of option awards and stock awards for the year ended December 31, 2021 for John Maetzold, Emily Kirk and Peter Maetzold are $453,062, $343,376 and $332,341, respectively, of compensation related to RSUs granted on October 1, 2021 as approved by the Audit Committee, at the recommendation of our Compensation Committee, which we determined to be outside the ordinary course of business. Under the Code, those owning more than a specified percentage of a company’s stock are not eligible to receive certain preferential tax benefits that are afforded to qualifying stock compensation arrangements. In determining eligibility under the Code, when calculating the number of shares of common stock owned, an individual must attribute all shares owned by specified family members. Because of the stock ownership of Derek J. Maetzold and this attribution requirement, his three children have not been eligible to participate in the ESPP and, at times, have not qualified to receive stock option grants on terms as favorable as those received by other similar employees. Our Compensation Committee recommended, and our Audit Committee approved, a one-time grant with immediate vesting of RSUs designed to compensate the three children for these differences.
Tobin W. Juvenal’s son, Ryan Juvenal is employed by the Company in a non-officer position. Ryan Juvenal is a Regional Business Director. For the years ended December 31, 2022, and 2021, Ryan Juvenal received aggregate compensation of $481,311 and $580,126, respectively, of which $149,990 and $278,531, respectively, represents the aggregate grant date fair value of stock awards.
Kristen M. Oelschlager’s two children, Allysa Topel, Shelby Oelschlager, and son-in-law, Joshua Albers are employed by the Company in non-officer positions. Allysa Topel is our Manager of Clinical Services, Shelby Oelschlager is a Clinical Research Associate and Joshua Albers is our Director of Software & Application Development. For the year ended December 31, 2022, Allysa Topel, Shelby Oelschlager and Joshua Albers received aggregate compensation of $208,065, $153,007 and $498,247, respectively, of which $49,707, $32,297 and $234,117, respectively, represents the aggregate grant date fair value of stock awards. For the year ended December 31, 2021, Allysa Topel, Shelby Oelschlager and Joshua Albers received aggregate compensation of $215,432, $168,309 and $331,785, respectively, of which $74,516, $94,718 and $117,508, respectively, represents the aggregate grant date fair value of option awards and stock awards.
These amounts of compensation were calculated using the same methodology as used in the Summary Compensation Table in the section titled “Executive Compensation.” Each of the foregoing transactions were reviewed and approved by our Audit Committee in accordance with Rule 5630(a) of the Nasdaq listing rules.
AltheaDx Merger Agreement
On April 26, 2022, we completed the acquisition of 100% of the equity interests in AltheaDx, a commercial-stage molecular diagnostics company specializing in the field of pharmacogenomics (“PGx”), pursuant to an Agreement and Plan of Merger dated April 4, 2022 (the “Merger Agreement”).
We paid $47.6 million in initial consideration to AltheaDx security holders, consisting of $30.5 million in cash and 763,887 shares of our common stock, which were valued at $17.1 million using the closing price of our common stock on April 26, 2022 of $22.40 per share. Further, up to an additional $75.0 million in cash and Castle common stock was initially payable in connection with the achievement of certain milestones based on 2022, 2023 and 2024 performance and expanded Medicare coverage for IDgenetix, AltheaDx’s PGx test for depression and anxiety. Currently, up to an additional $57.5 million of milestone payments remain payable. Under the Merger Agreement, the maximum number of Castle shares issuable to former AltheaDx securityholders may not exceed 1,271,718 shares. Therefore, taking into consideration the number of shares already issued at closing, a maximum of 507,831 additional shares of our common stock remain issuable with respect to these milestone payments.
Derek J. Maetzold, our President and CEO and a member of our board of directors, and Daniel M. Bradbury, the Chair of our board of directors, each served on the board of directors of AltheaDx until the time of the closing of the transaction. Further, each of the following individuals was a direct or indirect beneficial owner of AltheaDx securities and received the following amounts of initial consideration: Mr. Bradbury ($3,682,959); Mr. Maetzold ($1,347,172); Thomas Sullivan ($202,089), John Maetzold ($53,914) and Peter Maetzold ($33,693), immediate family members of Mr. Maetzold; Frank Stokes, the Company’s Chief Financial Officer ($67,388); Tobin W. Juvenal, the Company’s Chief Commercial Officer ($134,739); Kristen Oelschlager, the Company’s Chief Operating Officer ($404,178); and Joshua Albers ($33,693) and Allysa Topel ($13,492), immediate family members of Ms. Oelschlager. In calculating the foregoing amounts, the Castle shares issued to these individuals were valued using the closing price of our common stock on April 26, 2022 of $22.40 per share. Assuming that all milestone payments under
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CASTLE BIOSCIENCES | 2023 Proxy Statement |
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