EXHIBIT 10.5

 

2014 Senior Management Incentive Bonus Plan

 

Participants:        Marc D. Grodman, MD, CEO

Wendy Chung, CSO

Howard Dubinett, COO

Charles T. Todd, Sr. VP Marketing & Sales

Amar Karnath, VP Marketing

Gary Reeves, VP, Women’s Health

Scott Montgomery, VP, Clinical

Don Fowler, VP, Oncology

Warren Erdmann, SVP Operations

Nick Cetani, VP Laboratory Director

Ron Rayot, VP

Chris Smith, VP

Sam Singer, CFO

Sally Howlett, VP Billing

Nick Papazicos, SVP Financial Operations

James Weisberger, MD, CMO

Maryanne Amato, Director, Genpath

Sherri Bale, CCO GeneDx

Dean Gaalaas, COO GeneDx

Richard L. Faherty, CIO

John Mooney, VP

Cory Fishkin, COO CareEvolve

J. David Liss, VP, External Relations

 

Proposed Plan:

 

A.            The Senior Management Incentive Bonus Plan (the “Plan”) will be
based on two (2) separate financial calculations. The first formula will be
based on “Operating Income” as a percent of “Net Revenues” pursuant to the
Consolidated Financial Statements of the Company. The second formula will be
based on the percentage increase of “Operating Income” from fiscal 2013 to
fiscal 2014 pursuant to the Consolidated Financial Statements of the Company.

 

B.            There will be one class of participation.

 

C.            Calculations for the first portion of the program will be as
follows:

 

1.              Operating Income shall consist of the Total Operating Income
(hereinafter referred to as “TOI”) for the Entire Company including all
divisions and subsidiaries.

 

2.              In the event that TOI shall be equal to or greater than 11.00%,
then and in such event, the participants will be entitled to a bonus based on
the participant’s annual gross wages including any CPI adjustment paid to him or
her in fiscal 2014 exclusive of any bonus, option exercise, auto or airplane
usage expense charge-back, or other unearned revenue (“Annual Gross Wages”),
pursuant to the following schedule:

 

If TOI is greater than or
equal to

 

and less than

 

Percent Bonus

 

12.25

%

12.75

%

4

%

12.75

%

13.25

%

6

%

13.25

%

13.75

%

8

%

13.75

%

NIA

 

10

%

 

3.             The maximum bonus to be paid under this portion of the program
will be 10% of the Annual Gross Wages paid to the participant in fiscal 2014
regardless of TOI.

 

D.                  Calculations for the second portion of the program will be
as follows:

 

1.              Operating Income will consist of Operating Income before
interest and taxes for the Entire Company including all divisions and
subsidiaries.

 

2.              Percentage increase on a year over year basis will be determined
by subtracting the Operating Income as reported in the Company’s Consolidated
Financial Statements for the 2013 fiscal year (“Base Year”) from the Operating
Income as reported in the Company’s Consolidated Financial Statements for the
2014 fiscal year (“Current Year”).  This will

 

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result in a difference (“Diff’).  The Diff will be divided by the Base Year to
determine the percentage of change (“PC”) in Operating Income between the Base
Year and the Current Year.

 

3.              In the event that the PC is positive (an increase) and equal to
or greater than 25%, then and in such event, each participant will be entitled
to a bonus based on the participant’s Annual Gross Wages pursuant to the
following schedule:

 

If PC is greater than or
equal to:

 

and less than

 

Percent Bonus

 

25.00

%

30.00

%

6

%

30.00

%

35.00

%

9

%

35.00

%

40.00

%

12

%

40.00

%

NIA .

 

15

%

 

4.              The maximum bonus to be paid under this portion of the program
will be 15% of Annual Gross Wages regardless of Operating Income.

 

E.                The two portions shall be calculated separately and shall not
be dependent on each other. Participants may earn a bonus from either or both
financial calculations. Regardless, however, of the Company achievements, the
maximum bonus to be paid under the Plan will be 25% of Annual Gross Wages in
fiscal 2014.

 

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