DEF 14A of Twist Bioscience Corp, Jan 5, 2024

DEF 14A of Twist Bioscience Corp

Filed Jan 5, 2024 · FY20230001628280-24-000650

Open on EDGAR

  1. PROPOSAL 1 — ELECTION OF DIRECTORS

    PROPOSAL 1 — ELECTION OF DIRECTORS Pursuant to our certificate of incorporation and bylaws, our Board is divided into three classes with staggered three-year terms. The total number of authorized directors on our Board will be fixed at eight directors, effective as of the date of the Annual Meeting. The terms of our Class III directors will expire at the annual meeting of stockholders to be held in 2027. There are two nominees for Class III director at the Annual Meeting: Dr. Emily M. Leproust and Robert Chess. Dr. William Banyai’s term will expire at the Annual Meeting and he will cease to serve as a director following the Annual Meeting. Stockholders cannot submit proxies voting for a greater number of persons than the two nominees named in this Proposal 1. Each director to be elected will hold office until the annual meeting of stockholders to be held in 2027 and until her or his successor is elected and qualified or until the director’s death, retirement, resignation or removal. Each nominee is currently a director of the Company and has agreed to serve if elected, and we have no reason to believe that any nominee will be unable to serve. There are no family relationships between any of our directors, nominees or executive officers. There are also no arrangements or understandings between any director, nominee or executive officer and any other person pursuant to which he or she has been or will be selected as a director and/or executive officer.

  2. Nominees for Class III Directors

    Nominees for Class III Directors

  3. Nominees for Class III Directors

    | Name | Age | Class | Position | | Emily M. Leproust, Ph.D. | 50 | III | Chief Executive Officer and Board Chair | | Robert Chess | 66 | III | Compensation Committee Member, Nominating and Corporate Governance Committee Chair and Lead Independent Director |

  4. Nominees for Class III Directors

    Emily M. Leproust, Ph.D., age 50, has served as our Chief Executive Officer and a member of our Board since April 2013, our President from April 2013 to October 2022 and Chair of our Board since October 2018. Prior to co-founding Twist, Dr. Leproust served in various positions at Agilent, most recently as its Director, Applications and Chemistry R&D from February 2009 to April 2013. In addition, Dr. Leproust has served on GeneDx Holdings Corp.’s (formerly known as Sema4 Holdings Corp.) board of directors since September 2020. Dr. Leproust holds a M.Sc. in Industrial Chemistry from the Lyon School of Industrial Chemistry and a Ph.D. in Organic Chemistry from the University of Houston. Our Board believes that Dr. Leproust is qualified to serve as a director because of her operational and historical expertise gained from serving as our President (until October 2022) and Chief Executive Officer, and her extensive professional and educational experience in the biotechnology industry. Robert Chess, age 66, has served on our Board since July 2014, and he was appointed as lead independent director effective as of October 30, 2018. Mr. Chess is Chairman of the Board of Directors of Nektar Therapeutics, a publicly traded therapeutics company. He has served on the Board of Nektar Therapeutics as either Chief Executive Officer and/or Chairman since 1992 and has held the Chairman position since 1999. Mr. Chess has also served on the Board of Directors of Pharsight Corp., a publicly traded company that provides software and scientific consulting services to pharmaceutical and biotechnology companies, and CoTherix, Inc., a publicly traded biopharmaceutical company. Mr. Chess is also currently a director of two private companies. Mr. Chess currently serves as a lecturer at the Stanford Graduate School of Business, a position he has held since 2004. Mr. Chess holds a B.S. in Engineering with Honors from the California Institute of Technology and an M.B.A. from Harvard University. Our Board believes that Mr. Chess brings extensive board and executive experience managing the operations of biotechnology companies, and his service on a number of public company boards provides important industry and corporate governance experience, which qualifies him to serve as one of our directors.

  5. Continuing Directors

    Continuing Directors

  6. Continuing Directors

    | Name | Age | Class(1) | Position | | Nelson Chan | 62 | I | Director, Audit and Risk Committee Member and Nominating and Corporate Governance Committee Member, Lead Director for ESG | | Keith Crandell | 63 | II | Director, Compensation Committee Member and Nominating and Corporate Governance Committee Member | | Jan Johannessen | 67 | II | Director, Audit and Risk Committee Chair and Nominating and Corporate Governance Committee Member | | Xiaoying Mai | 36 | I | Director and Audit and Risk Committee Member | | Robert Ragusa | 63 | I | Director, Audit and Risk Committee Member and Compensation Committee Member | | Melissa A. Starovasnik, Ph.D. | 58 | I | Director and Compensation Committee Chair |

  7. Continuing Directors

    __________________ (1)The terms of Class I directors will expire at the 2025 annual meeting. The terms of Class II directors will expire at the 2026 annual meeting. Nelson C. Chan, age 62, has served on our Board since May 2019. From 2006 until 2008, Mr. Chan served as Chief Executive Officer of Magellan Navigation, Inc., a leader in the consumer, survey, GIS and OEM GPS navigation and positioning markets. From 1992 through 2006, Mr. Chan held various senior management positions at SanDisk Corporation, a leader in flash memory cards, including most recently as Executive Vice President and General Manager, Consumer Business. From 1983 to 1992, he held marketing and engineering positions at Chip and Technologies, Signetics, and Delco Electronics. Mr. Chan is Chairman of the Board of Synaptics Incorporated, a developer of custom-designed human interface solutions and a member of its Audit Committee and Nominating and Corporate Governance Committee. Mr. Chan is also a director and a member of the Audit Committee and Nominating and Corporate Governance Committee of Deckers Outdoor Corporation. He served as Chairman of the board of Adesto Technologies Corporation from 2010 until it was acquired in 2020 by Dialog Semiconductor PLC, and as a member of the board of Affymetrix Inc. from March 2010 to March 2016 until it was acquired by Thermo Fisher Scientific Inc. Mr. Chan was Chairman of the board of Outerwall Inc. from June 2013 to September 2016 and served on the board from June 2011 to June 2013 until it was acquired by Apollo Global Management. He was a director of Socket Mobile from 2016 until 2019, and as a director of Silicon Laboratories, Inc. from 2007 until 2010. Mr. Chan also currently serves as a member of the board of several privately-held companies. Mr. Chan holds a B.S. degree in electrical and computer engineering from the University of California at Santa Barbara and a M.B.A. from Santa Clara University. Our Board believes that Mr. Chan’s past experience as the Chief Executive Officer of Magellan, his senior management positions with other leading companies, his experience with ESG initiatives, risk management and commercial operations, and his service as a director and audit committee member of multiple public and private companies provide the requisite qualifications, skills, perspectives, and experiences that qualify him to serve on our Board and as our lead ESG director. Xiaoying Mai, age 36, has served on our Board since July 2018. Ms. Mai is an Executive Director of GF Investments (Hong Kong), a private equity investment firm based in Hong Kong China that specializes in investing in biotechnology companies, a position she has held since Nov 2021. Ms. Mai previously served as an investment director of GF Xinde, a venture arm for Guangfa Securities Co., Ltd, a publicly listed company in Hong Kong from 2015 to 2021, before which she was with the finance department of the group, where she specialized in preparing financial information for public disclosure and tax management. Ms. Mai holds a B.A. in Business Management from the Guangdong University of Foreign Studies and a M.A. in accountancy from George Washington University. Our Board believes that Ms. Mai brings extensive financial expertise and experience in the biotechnology industry and with markets in Asia, which qualifies her to serve as one of our directors. Keith Crandell, age 63, has served on our Board since October 2013. Mr. Crandell is a Managing Director of ARCH Venture Management, L.P., and its predecessor, a venture capital firm focused on early-stage technology companies, since 1986. Mr. Crandell is a director of several private companies and also serves on the board of directors of 908 Devices Inc., a publicly traded company focused on point-of-need chemical and biomolecular analysis devices. From 2007 to 2019, he served on the board of directors of Adesto Technologies Corporation, a publicly traded provider of application-specific and ultra-low power non-volatile memory products. Mr. Crandell holds a B.S. in Chemistry and Mathematics from St. Lawrence University, an M.S. in Chemistry from the University of Texas, Arlington, and an M.B.A. from the University of Chicago. Our Board believes that Mr. Crandell brings extensive experience in the technology, life sciences and biotechnology industries and that his service on a number of boards provides an important perspective on operations, finance and corporate governance matters, which qualifies him to serve as one of our directors. Jan Johannessen, age 67, has served on our Board since October 2018. Mr. Johannessen currently serves as an advisor to iGlobe Partners, a venture capital company. Mr. Johannessen served as Chief Operating Officer and Secretary at Conexant Systems, LLC, a semiconductor company, from May 2013 to August 2017 and also served as its Chief Financial Officer from May 2013 to May 2016 and as its Chief Executive Officer from May 2016 to August 2017. Mr. Johannessen served as Chief Financial Officer and Secretary at REC Silicon ASA, a company listed on the Oslo stock exchange from August 2008 to May 2013. He served as Interim Chief Executive Officer and President at Lattice Semiconductor Corporation, a publicly traded company, from May 2008 to August 2008 and as Chief Financial Officer and Secretary at Lattice Semiconductor Corporation from December 2003 to May 2008. Mr. Johannessen holds a B.S. in Business from the University of Houston, and an M.B.A. in International Business from Arizona State University. Our Board believes that Mr. Johannessen brings extensive executive experience in the technology industry and financial and accounting expertise, which qualifies him to serve as one of our directors. Robert Ragusa, age 64, has served on our Board since November 2016. Mr. Ragusa is currently the Chief Executive Officer of GRAIL, LLC. (“GRAIL”), a healthcare company focused on early detection of multiple cancers, which was acquired by Illumina, Inc. in August 2021. He has been the Chief Executive Officer of GRAIL since October 2021. Mr. Ragusa served as the Chief Operating Officer of Illumina, Inc., a publicly traded corporation providing sequencing and array-based solutions for genetic and genomic analysis from December 2013 to October 2021. Prior to joining Illumina, Inc., from April 2010 to November 2013, Mr. Ragusa was Executive Vice President, Global Operations and Service at Accuray Incorporated, a radiation oncology company that develops, manufactures, sells and supports cancer treatment solutions. Mr. Ragusa holds a B.S. in Biomedical and Electrical Engineering and an M.B.A. from the University of Connecticut, and an M.S. in Biomedical and Electrical Engineering from Carnegie-Mellon University. Our Board believes that Mr. Ragusa brings extensive experience in important ecosystem partners and managing operations of large public companies, and this, in addition to his education in biotechnology, finance and management, qualifies him to serve as one of our directors.

  8. Continuing Directors

    Melissa A. Starovasnik, Ph.D. age 58, has served on our Board since August 2021. Prior to joining our Board, Dr. Starovasnik served as Senior Scientific Advisor, Research at Genentech, Inc. (“Genentech”) from 2017 to 2021 and brings nearly three decades of experience in protein and antibody drug discovery and development. From 1993 to 2017, Dr. Starovasnik served at Genentech in roles of increasing responsibility and was an integral member of the research leadership team. As Vice President, Protein Sciences and Head of Large Molecule Drug Discovery from 2011 to 2017, she was responsible for protein and antibody therapeutics discovery, overseeing an organization of nearly 200 employees. Dr. Starovasnik holds a B.S. in Chemistry and a Ph.D. in Biochemistry from the University of Washington. She also currently serves as a Scientific Advisory Board Member for Aarvik Therapeutics Inc, Ambrx Inc, Denali Therapeutics Inc., and Expansion Therapeutics, among other advisory roles. Our Board believes that Dr. Starovasnik’s extensive experience in the biotechnology industry and significant leadership experience qualify her to serve as one of our directors.

  9. Director Compensation

    Director Compensation

  10. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards(2) ($) | All Other Compensation | Total ($) | | Nicolas Barthelemy | 21,949 | —(3) | — | — | 21,949 | | Nelson C. Chan | 70,000 | 214,990(3) | — | — | 284,990 | | Robert Chess | 88,988 | 214,990(3) | — | — | 303,978 | | Keith Crandell | 57,500 | 214,990(3) | — | — | 272,490 | | Jan Johannessen | 70,000 | 214,990(3) | — | — | 284,990 | | Xiaoying Mai | 55,000 | 214,990(3) | — | — | 269,990 | | Robert Ragusa | 56,354 | 214,990(3) | — | — | 271,344 | | Melissa A. Starovasnik | 61,622 | 214,990(3) | — | — | 276,612 |

  11. Director Compensation

    __________________ (1)The amounts reported in this column reflect the aggregate grant date fair value for financial statement reporting purposes of restricted stock units granted during the fiscal year ended September 30, 2023 as determined in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). These amounts reflect our accounting expense for these restricted stock units and do not represent the actual economic value that may be realized by each non-employee director. There can be no assurance that these amounts will ever be realized. For information on the assumptions used in valuing these awards, refer to Note 10 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. (2)None of our non-employee directors received options during the fiscal year ended September 30, 2023. As of September 30, 2023, the aggregate number of shares of Twist common stock underlying outstanding option awards for each non-employee director were: Mr. Chan: 38,396; Mr. Chess: 58,379; Mr. Crandell: 22,858; Mr. Johannessen: 45,162; Ms. Mai: 22,858; Mr. Ragusa: 12,270; and Dr. Starovasnik: 2,739. (3)This represents the grant date aggregate fair value of 8,212 restricted stock units (“RSUs”) granted on February 7, 2023, 100% of which vest on the earlier of (i) the one-year anniversary of the date of the grant or (ii) the date of the Company’s first annual meeting of stockholders following the date of the grant each subject to the non-employee director’s continuous service through the vesting date. As of September 30, 2023, there were 8,212 shares of Twist common stock underlying outstanding RSUs for each of our non-employee directors (other than Nicolas Barthelemy). Our non-employee director compensation policy is designed to provide the appropriate amount and form of compensation to our non-employee directors. Under this policy, we will pay our non-employee directors a cash retainer for service on the Board and an additional cash retainer for service on each committee on which the director is a member, which will be paid quarterly in arrears. The chair of each committee will receive higher retainers for such service. The fees paid to non-employee directors for service on the Board and for service on each committee of the Board on which the director is a member were as follows as of the beginning of fiscal year 2023:

  12. Director Compensation

    | | Member Annual Retainer | Chair or Lead Director Annual Retainer | | Board of Directors | $45,000 | $65,000 | | Audit Committee | 10,000 | 20,000 | | Compensation Committee | 7,500 | 15,000 | | Nominating and Corporate Governance Committee | 5,000 | 10,000 | | ESG | — | $10,000 |

  13. Director Compensation

    In February 2023, our Board amended our non-employee director compensation policy to (i) increase the compensation paid to the lead independent director of the Board by $10,000 such that the total compensation payable to the lead independent director in a fiscal year will be $45,000 for service on the Board and $30,000 for service as the Board’s lead independent director, and (ii) increase the compensation paid to the Chair of the Compensation Committee of the Board by $2,500 such that the total compensation payable to such Chair in a fiscal year for service on the Compensation Committee will be $7,500 for service on the Compensation Committee, and $10,000 for service as the Chair of such committee. The fees paid to a non-employee director for service on the Board and for service on each committee of the Board on which the director is a member remain unchanged.

  14. Director Compensation

    | | Member Annual Retainer | Chair or Lead Director Annual Retainer | | Board of Directors | $45,000 | $75,000 | | Audit Committee | 10,000 | 20,000 | | Compensation Committee | 7,500 | 17,500 | | Nominating and Corporate Governance Committee | 5,000 | 10,000 | | ESG | — | $10,000 |

  15. Director Compensation

    In addition, each non-employee director elected to our Board will, upon the date of his or her initial election or appointment to be a non-employee director, be granted an equity award value of $395,000, which will be in the form of restricted stock units. One-third of the shares subject to such initial RSU award will vest on each anniversary of the date of grant, subject to the director providing service through each vesting date. Further, at the close of business on the date of each annual stockholder meeting, each person who is currently a non-employee director will be granted additional equity awards using an aggregate cash value target of $215,000, which will be in the form of restricted stock units. 100% of the shares subject to such annual RSU grant will vest in full on the earlier of the one-year anniversary of the grant date or the next annual stockholder meeting, subject to the director providing service through the vesting date. All RSU awards to non-employee directors are made pursuant to the 2018 Plan. Notwithstanding the foregoing vesting schedules, if such director remains a service provider until immediately prior to the closing of a “change in control” (as defined in the applicable equity plan), the shares subject to his or her then-outstanding RSU award that was granted pursuant to the non-employee director compensation policy will become fully vested immediately prior to the closing of the change in control. We will also continue to reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending our board of director and committee meetings.

  16. Fiscal Year 2023 Overview

    | Financial Performance Goal | Weighting % | Threshold (50% Payout) | | Target (100% Payout) | | Maximum (200% Payout) | | FY2023 Results | | Payout(1) | | Revenue | 50 | $ | 228M | $ | 261M | $ | 303M | $ | 245M | 75.92% | | Adjusted Gross Profit(2) | 20 | $ | 87M | $ | 109M | $ | 163M | $ | 94M | 66.57% |

  17. Fiscal Year 2023 Overview

    __________________ (1)Results are linearly interpolated for performance between the threshold, target, and maximum goals. (2)Adjusted gross profit is a non-GAAP financial measure defined under the FY2023 annual incentive plan as gross profit excluding stock-based compensation expense. After considering the executive team’s achievement of revenue, adjusted gross profit, and individual strategic goals, our compensation committee objectively determined that incentive plan bonuses for 2023 performance were earned at 79.8% to 81.6% of target. In addition, in recognition of each NEO’s outstanding efforts in achieving individual performance goals, providing exceptional leadership in executing the restructuring plan during fiscal year 2023, and ending the fiscal year with a cash balance of $336M, compared to a target of $300M, the compensation committee, in consultation with its independent compensation consultant, approved an additional one-time performance award for our NEOs equal to 8% to 8.7% of each NEO’s target plan bonus opportunity. Accordingly, Dr. Leproust, Mr. Thorburn, Drs. Banyai and Finn, and Ms. Green received cash bonuses of $554,850, $222,846, $242,194, $253,800 and $157,500, respectively, representing 87.75% to 90% of target. •Key Strategic Objectives Achieved in Fiscal Year 2023 •Revenue increased by 20% to $245.1 million in fiscal year 2023, when compared to fiscal year 2022. •Adjusted gross profit increased by 13% to $94 million in fiscal year 2023, when compared to fiscal year 2022. •Continued Alignment with Performance-based Compensation Philosophy •In December 2022, the compensation committee approved our equity incentive program in respect of the first half of fiscal year 2023 to be comprised of performance-based restricted stock unit (“PRSU”) awards, which vest based on achievement of revenue growth (80% weight) and adjusted gross profit (20% weight) metrics, and time-based RSU (“RSU”) awards. The target values for these equity awards were set conservatively low at the beginning of fiscal year 2023 relative to the awards in fiscal year 2022, given the Twist stock price was significantly depressed compared to prior years. The compensation committee aimed to ensure that sufficient equity incentives remained available to provide pay for performance, reward achievement, promote retention and attract talent at non-executive employee levels, which are crucial to the Company’s growth and success. All Twist employees are shareholders and receive equity-based awards. •In September 2023, after confirming sufficient equity awards were available for grant at non-executive levels for fiscal year 2023, and considering the added efforts and requirements of the executives following the restructuring plan, the compensation committee approved our equity incentive program in respect of the second half of fiscal year 2023 to ensure executives would be compensated at levels consistent with peer practices while incentivizing the achievement of key operational metrics, to be comprised of PRSU awards, which vest based on achievement of fiscal year 2024 ending cash balance metrics, and RSU awards.

  18. Compensation Governance Highlights

    | What We Do: | | What We Do Not Do: | | | • | We reward performance that meets our predetermined goals | | Pay cash incentives if performance levels fall below pre-determined thresholds | | • | A significant portion of our Chief Executive Officer’s (“CEO”) and NEOs’ compensation is performance-based or at risk, and a majority of our CEO’s and NEOs’ compensation is in the form of equity awards under our long-term incentive plan | | Permit short-sales, hedging or pledging of our stock | | • | We have adopted stock ownership guidelines for our executives | | Enter into employment agreements that provide for fixed terms or automatic compensation increases or equity grants | | • | The compensation committee retains an independent compensation consultant | | Provide single-trigger change of control benefits | | • | The compensation committee is comprised of independent directors | | Provide for excessive cash severance | | • | We hold an annual advisory vote on executive compensation | | Provide our executives with golden parachute tax gross-ups and excessive perquisites | | • | We cap payouts under our plans to discourage inappropriate risk-taking by our NEOs | | Maintain any executive pension plans, or any retirement programs that are not generally available to all employees | | • | We provide for double-trigger change in control severance provisions | | | | • | We maintain a clawback policy that applies to both cash incentives and equity awards | | |

  19. Our Compensation Philosophy and Objectives

    | Attract and retain | Pay for performance | | Offer a total compensation program that flexibly adapts to changing economic, regulatory and organizational conditions, and takes into consideration the compensation practices of peer companies based on an objective set of criteria | Provide a significant portion of compensation through variable, performance-based components that are at-risk and based on satisfaction of designated financial and non-financial objectives | | Align executive interests with our stockholders | Reward actual achievement | | Compensate for achievement of short-term and long-term Company financial and operating goals and refrain from providing “golden parachute” excise tax gross-ups, or accelerated equity vesting except in limited circumstances | Align the interests of our executives with our stockholders by tying a significant portion of total compensation to our overall financial and operating performance and the creation of long-term stockholder value | | Balance Short-term and Long-term Incentives | | | Provide near-term and long-term financial incentives that align the executive officers’ interest with those of the shareholders and focus executive officer behavior on the achievement of near-term corporate goals, as well as long-term business strategies | |

  20. Fiscal Year 2023 Executive Compensation

    Fiscal Year 2023 Executive Compensation In fiscal year 2023, approximately 84% of our CEO’s target total direct compensation and approximately 78% on average of our other NEOs’ target total direct compensation was in the form of equity awards under our long-term incentive plan (with 50% of such long-term incentive plan awards in the form of PRSUs and 50% of such long-term incentive plan awards in the form of RSUs), approximately 8% of our CEO’s target total direct compensation and 8% on average of our other NEOs’ target total direct compensation was in the form of a short-term incentive plan opportunity under our Annual Incentive Bonus Plan, and approximately 8% of our CEO’s target total direct compensation and 14% on average of our other NEOs’ target total direct compensation was in the form of fixed base salary. As a result, approximately 50% of our CEO’s target total direct compensation and approximately 47% on average of our other NEOs’ target total direct compensation was performance-based, and approximately 91% of our CEO’s target total direct compensation and approximately 86% on average of our other NEOs’ target total direct compensation was “at-risk.” The following graphs reflect the mix of target total direct compensation of our CEO and our other NEOs in fiscal year 2023: *Reflects salary rates and target incentive amounts, and not amounts actually earned or paid out. Long-term incentive plan represents the target value of equity awards.

  21. Elements of Compensation

    | Compensation Element | Form of Compensation | Guaranteed vs. At-Risk | Performance vs. Time-based | | Base Salary | Cash | Guaranteed | N/A | | Annual Cash Incentive | Cash | At-Risk | Performance-based | | Long-term Incentive | PRSU awards | At-Risk | Performance-based | | | Time-based RSU awards | At-Risk | Time-based | | Termination and Change in Control Benefits | Cash/Equity/Other | N/A | N/A | | Other Benefits | Other | N/A | N/A |

  22. Annual Incentive Bonus Plan

    Annual Incentive Bonus Plan Our NEOs receive annual cash incentive awards through our annual incentive bonus plan, which rewards our executive officers for the achievement of predetermined annual financial and strategic goals.

  23. Annual Incentive Bonus Plan

    | Fiscal Year 2023 Annual Cash Incentive Program | | | | | Philosophy | Target Amount Considerations | Award Design Considerations | Performance Conditions | | •Pay for Performance: Establish appropriate short-term performance conditions that the compensation committee believes will drive our future growth and profitability •Reward Achievement: Reward achievement of short-term performance conditions •Align the interests of executives with those of our stockholders: 70% of payout tied to Company performance consistent with fiscal year 2023 financial plan •Attract and Retain Executives: Offer market competitive incentive opportunities | •Factors used to determine target amounts included: role, scope of responsibilities, individual and Company performance, current salary, equity ownership, internal equity, our peer group data and the recommendations of our CEO (other than with respect to her own compensation) | •Revenue and adjusted gross profit were chosen as the Company performance goal because the compensation committee believes they are (i) the best indicators of financial success for our Company, (ii) are significant drivers of stockholder value creation, and (iii) align with our overall operating strategy and our fiscal year 2023 financial plan and guidance •A portion of each individual’s bonus was also earned based on achievement of key individual specific strategic objectives that were set for each NEO at the beginning of the first half and second half of fiscal year 2023 •NEOs should not be awarded for performance that does not meet our Company financial plan; therefore, the thresholds goal should be rigorous, and no amounts should be earned if the threshold goals are not satisfied | •Annual revenue target of $261 million •Adjusted gross profit target of $109 million (excluding stock-based compensation) •First half and second half strategic goals were tied to each individual’s area of focus, but payout is on an annual basis •Opportunity to earn up to 200% of the target bonus amount for superior performance |

  24. Annual Incentive Bonus Plan

    Target Awards The compensation committee sets individual target incentive opportunities which are expressed as a percentage of each participant’s annual base salary, using the same criteria as described above for annual base salary. The target incentive opportunities are reviewed by the compensation committee each year. Following such review, the compensation committee determined that the target incentive opportunities for our NEOs for fiscal year 2022 remained appropriate for fiscal year 2023. The following table summarizes the annual target incentive percentages of our NEOs in fiscal year 2023, which remained unchanged from fiscal year 2022.

  25. Annual Incentive Bonus Plan

    | Name | 2022 Target Incentive (% of Base Salary) | 2023 Target Incentive (% of Base Salary) | | Emily M. Leproust, Ph.D. | 90% | 90% | | James M. Thorburn | 55% | 55% | | William Banyai, Ph.D. | 60% | 60% | | Patrick Finn, Ph.D. | 60% | 60% | | Paula Green | 50% | 50% |

  26. Annual Incentive Bonus Plan

    __________________ Financial Performance Measures For the fiscal year 2023, the compensation committee selected revenue and adjusted gross profit as the financial performance measures. Revenue was weighted 50% and adjusted gross profit was weighted 20% of the target award opportunity for our NEOs with the payout for each component ranging from 0% to 200% depending on achievement against such goals. Therefore, 70% of each NEO’s award was based on financial results relative to rigorous annual goals. The remaining 30% of awards was based on individual strategic goals, which in the case of the CEO, are tied to our strategic business priorities and in the case of our other NEOs, are tied to each individual’s area of focus, for the first and second half of fiscal year 2023. The compensation committee set each of the fiscal year 2023 revenue and adjusted gross profit goals above Company results for fiscal year 2022. The actual targets and payout percentages for revenue and adjusted gross profit are set forth in the table below. Results between indicated levels in the table were subject to linear interpolation.

  27. Annual Incentive Bonus Plan

    | Financial Performance Goal | Weighting % | Threshold (50% Payout) | | Target (100% Payout) | | Maximum (200% Payout) | | FY2023 Results | | Payout(1) | | Revenue | 50 | $ | 228M | $ | 261M | $ | 303M | | 245M | 75.92% | | Adjusted Gross Profit(2) | 20 | $ | 87M | $ | 109M | $ | 163M | $ | 94M | 66.57% |

  28. Annual Incentive Bonus Plan

    __________________ (1)Payouts are linearly interpolated for performance between the threshold, target, and maximum goals. (2)Adjusted gross profit is a non-GAAP financial measure defined under the FY2023 annual incentive plan as gross profit excluding stock-based compensation expense. Individual Strategic Goals Because we believe that achieving key elements of our business strategy is important to driving sustainable growth and value creation, we based 30% of each NEO’s fiscal year 2023 target award opportunity on individual, strategic goals tied to our strategic business priorities for the first half and second half of fiscal year 2022, with the payout for each NEO for this component ranging from 0% to 200% depending on their achievement against such goals. The strategic goals tied to our strategic business priorities for the first half and second half of fiscal year 2023 used to determine the individual performance factor for NEOs consist of measurable goals for one or more of the strategic areas set forth in the table below. The compensation committee, in consultation with Dr. Leproust, established these goals early in the applicable performance period.

  29. Annual Incentive Bonus Plan

    | NEOs | FY2023 Strategic Goal Categories | | | CEO | •Factory of the Future •Strategic Hires •Cash Balance | •IT General Controls •Abveris Integration •Data Storage | | Other NEOs | •Drive Revenue Growth •Scale Organizational Capabilities •Operational Excellence | •Expand the Future •Expand New Product Footprint |

  30. Annual Incentive Bonus Plan

    The compensation committee evaluated the performance of our CEO and determined the portion of her award that was based on achieving these goals in its sole discretion. Dr. Leproust evaluated the performance level of each of the other NEO’s individual performance against the pre-determined goals following the end of fiscal year, then submitted recommendations with respect to each of the other NEOs and the final determination of awards was made by the compensation committee. The table below summarizes the individual performance payout determined by the compensation committee for each NEO and the reasoning for such determinations.

  31. Annual Incentive Bonus Plan

    | Name | Total Individual Performance Payout | Reasoning | | Emily M. Leproust, Ph.D. | 100% | Exceeded manufacturing targets for the Factory of the Future, demonstrating commitment to operational excellence and efficiency Achieved significant increase in customer satisfaction, reflecting dedication to delivering exceptional products and services that exceed customer expectations Secured strong cash balance at year-end, strengthening financial stability and future growth opportunities Made significant progress with respect to certain IT initiatives Demonstrated exceptional leadership by effectively implementing a restructuring and integration plan, ensuring a smooth transition, and maximizing the benefits of the changes | | James M. Thorburn | 96% | Facilitated revenue and gross margin growth by developing leading indicators to ensure achievement of financial targets Successfully developed critical internal processes, including building an internal SOX and audit team to ensure compliance, enhance internal controls, and strengthen the overall governance framework Sizeable progress made in strengthening financial operations and ensuring compliance by hiring a new Chief Accounting Officer, Corporate Controller, and building out internal audit capabilities | | William Banyai, Ph.D. | 95% | Progressed production of synthesizers, chips and other hardware systems to support ongoing business as well as DNA data storage-specific needs Developed business management and marketing through identified product and customer development workstreams |

  32. Annual Incentive Bonus Plan

    | Name | Total Individual Performance Payout | Reasoning | | Patrick Finn, Ph.D. | 101% | Transitioned synbio product line from SSF to the Factory of the Future and achieved a significant reduction in manufacturing turnaround time for clonal genes in preparation for launching Express Genes Scaled the organization's capabilities by investing in strategic planning, talent acquisition and development, resource allocation, process optimization, and technology adoption to enable growth | | Paula Green | 100% | Fostered inter-departmental coordination and teamwork, ensuring that common goals were consistently applied across functions to enhance efficiency, promote alignment, and drive overall organizational success Successfully recruited and onboarded key strategic executives with a proven track record in driving business growth Ensured labor was not a constraint to growing the business by developing and delivering projects related to career track, talent assessment, and compensation |

  33. Annual Incentive Bonus Plan

    Total Bonus Payout After considering the executive team’s actual achievement of performance measures, our compensation committee objectively determined that incentive plan bonuses for 2023 performance were earned at 79.8 to 81.6% of target. In addition, in recognition of each NEO’s outstanding efforts to conserve cash resulting in a significantly higher cash balance of $336.4 million at September 30, 2023, compared to the target balance of $300 million, as well as providing exceptional leadership in executing the restructuring plan during fiscal year 2023 and achieving individual performance goals, the compensation committee, in consultation with its independent compensation consultant, approved a one-time performance bonus for our NEOs equal to 8% to 8.7% of each NEO’s target plan bonus opportunity. Accordingly, Dr. Leproust, Mr. Thorburn, Drs. Banyai and Finn, and Ms. Green received cash bonuses of $554,850, $222,846, $242,194, $253,800 and $157,500, respectively, as summarized on the table below.

  34. Annual Incentive Bonus Plan

    | Name | 2023 Target Plan Incentive (% of Base Salary) | 2023 Target Plan Incentive ($) | Total Achievement (% of Target) | Incentive Plan Bonus Payout | Performance Bonus (% of Total Opportunity) | Performance Bonus Payout | | Emily M. Leproust, Ph.D. | 90% | $616,500 | 81.3% | $501,054 | 8.7% | $53,796 | | James M. Thorburn | 55% | $253,000 | 80.1% | $202,587 | 8% | $20,259 | | William Banyai, Ph.D. | 60% | $276,000 | 79.8% | $220,176 | 8% | $22,018 | | Patrick Finn, Ph.D. | 60% | $282,000 | 81.6% | $230,039 | 8.4% | $23,761 | | Paula Green | 50% | $175,000 | 81.3% | $142,230 | 8.7% | $15,271 |

  35. Equity Incentive Program

    Equity Incentive Program The majority of the target total direct compensation of our executive officers, including our NEOs, is provided through equity awards, providing an effective vehicle for long-term compensation. By having a significant percentage of our executive officers’ target total direct compensation payable in the form of equity that vests over a number of years and, thus, subject to higher risk and long-term vesting than cash compensation, our executive officers are motivated to remain employed with Twist and take actions that will benefit Twist and its stockholders over the long term. Fiscal Year 2023 Long-Term Equity Program In December 2022 and September 2023, after carefully considering the performance of the Company and the executive team, the compensation committee granted RSU awards to the NEOs, with a portion of each NEO’s target value in PRSUs and a portion of each NEO’s target value in time-based RSUs in connection with the fiscal year 2023 annual equity grant cycle (the “Fiscal Year 2023 Equity Program”). This approach of granting both time and long-term performance-based equity awards to our executives, which we first instituted with respect to our fiscal year 2022 annual equity grant cycle, reflects the compensation committee’s philosophy of pay-for-performance and continues to be a regular part of our executive compensation program. The compensation committee again determined it would grant PRSUs to the executive officers in lieu of stock options (which had been granted in years prior to fiscal year 2022) as PRSUs better align executives’ long-term incentives with the long-term interests of stockholders. PRSUs drive long-term Company performance and are more properly aligned with the pay-for-performance philosophy underlying our executive compensation program. In addition, PRSUs are intended to enhance retention of executives through multi-year vesting cycles, and to provide executive officers with a long-term incentive to manage the Company from the perspective of an owner and align our executive team’s interests in growing the business. PRSUs support the objectives of linking realized value to the achievement of critical financial and operational objectives and delivering superior long-term stockholder returns. The material features of our Fiscal Year 2023 Equity Program are summarized in the table below.

  36. Equity Incentive Program

    | Fiscal Year 2023 Long-Term Equity Program | | | | Philosophy | | PRSU awards | •Pay for Performance: Establish appropriate long-term performance conditions that the compensation committee believes will drive our long-term future growth and profitability •Reward Achievement: Provide meaningful and appropriate short-term and long-term incentives for achieving Company annual financial goals that the compensation committee believes are important for our short- and long-term success •Attract and Retain Executives: Promote retention of our executives through requiring service through the performance period and date that the compensation committee certifies the performance results | | Time-based RSU awards | •Attract and Retain Executives: Promote retention of our executives through four-year service vesting period •Align Interests with Stockholders: The value of RSU awards is correlated to our stock price |

  37. Equity Incentive Program

    | H1 Fiscal Year 2023 PRSU Awards | | | Grant Amount Considerations | Vesting Provisions | | •Factors used to determine the size of grants included: (i) the responsibilities, past performance, and anticipated future contributions of the NEO; (ii) the competitiveness of NEO’s overall compensation package with reference to peer group practices; (iii) the NEO’s existing equity holdings; (iv) the extent to which these holdings are vested; and (v) the recommendations of our CEO (other than with respect to her own compensation) •In addition, because we apply our compensation philosophy to both the executive and non-executive level of our organization, executive equity awards were more conservatively set at the beginning of fiscal year 2023 relative to the awards in fiscal year 2022. Due to our lower share price in December 2022 relative to December 2021, a greater number of shares were required to provide adequate equity incentives to provide pay for performance, reward achievement, promote retention and attract talent at non-executive employee levels, which are crucial to the Company’s growth and success | •PRSUs granted in December 2022 generally have an opportunity to vest up to 40% approximately two years after grant and up to 60% approximately three years after grant. •Specifically, PRSUs granted in December 2022 become eligible to vest based on achievement of fiscal year 2024 revenue growth (80% weight) and adjusted gross profit (20% weight) goals, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. After determination of the number of vesting eligible PRSUs based on performance results, 40% of the vesting eligible PRSUs vest on October 1, 2024 (approximately two years after grant) and 60% of the vesting eligible PRSUs vest on October 1, 2025 (approximately three years after grant), subject to the NEO’s continuous service through the vesting date. See below for more information about the vesting provisions of our PRSU awards granted in December 2022 |

  38. Equity Incentive Program

    | H1 Fiscal Year 2023 Time-Based RSU Awards | | | Grant Amount Considerations | Vesting Provisions | | •Same factors used to determine size of H1 Fiscal Year 2023 PRSUs •Ensure sufficient equity awards available to meet equity incentive needs for non-executive employees | •Awards granted in December 2022 vest over four years, with 1/16th vesting on each quarterly anniversary of December 19, 2022 (or October 22, 2022 for Dr. Finn), subject to the NEO’s continuous service on each applicable vesting date |

  39. Equity Incentive Program

    | H2 Fiscal Year 2023 PRSU Awards | | | Grant Amount Considerations | Vesting Provisions | | •Factors used to determine the size of grants included: (i) the responsibilities, past performance, and anticipated future contributions of the NEO; (ii) the competitiveness of NEO’s overall compensation package with reference to peer group practices; (iii) the NEO’s existing equity holdings; (iv) the extent to which these holdings are vested; and (v) the recommendations of our CEO (other than with respect to her own compensation) •In addition, after confirming sufficient equity awards were available for grant at non-executive levels for fiscal year 2023, the September 2023 grants to executives were appropriate in light of the conservatively low H1 Fiscal Year 2023 equity grants; successful conservation of cash; and the added effort and requirements of the executives following the restructuring plan, and to ensure executives would be compensated at levels consistent with peer practices | •PRSUs granted in September 2023 become eligible to vest based on fiscal year 2024 ending cash balance, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. After determination of the number of vesting eligible PRSUs based on performance results, 40% of the vesting eligible PRSUs vest on October 1, 2024 and 60% of the vesting eligible PRSUs vest on October 1, 2025, subject to the NEO’s continuous service through the vesting date. See below for more information about the vesting provisions of our PRSU awards granted in September 2023 |

  40. Equity Incentive Program

    | H2 Fiscal Year 2023 Time-Based RSU Awards | | | Grant Amount Considerations | Vesting Provisions | | •Same factors used to determine size of H2 Fiscal Year 2023 PRSUs •Help manage dilution to existing investors | •Awards granted in September 2023 vest over four years, with 1/16th vesting on each quarterly anniversary of September 5, 2023, subject to the NEO’s continuous service on each applicable vesting date |

  41. Equity Incentive Program

    H1 Fiscal Year 2023 Equity Awards In December 2022, in respect of the first half of fiscal year 2023, our NEOs received time-based RSUs, which vest as to 1/16th of the total number of time-based RSUs on each quarterly anniversary of December 19, 2022 (or October 22, 2022 for Dr. Finn), for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. The compensation committee believes that to incentivize our executives and our employees, these ‘refresh’ grants do not contain a one-year cliff provision but augment compensation. Each of our NEOs also received PRSUs that become eligible to vest based on achievement of fiscal year 2024 revenue growth and adjusted gross profit goals, in each case determined based on a good faith application of GAAP consistent with past practices and excluding the impact of acquisitions (except for the impact of the Abveris acquisition and excluding government programs). 80% of the PRSUs will become eligible to vest based on the achievement of the fiscal year 2024 revenue growth goals and 20% of the PRSUs will become eligible to vest based on the achievement of the adjusted gross profit goals. The vesting eligible percentage with respect to FY2024 revenue and FY2024 adjusted gross profit, as applicable, ranges from 50% to 150%, and is determined by linear interpolation for performance between the fiscal year 2024 revenue and fiscal year 2024 adjusted gross profit goals, as applicable. A threshold level of performance must be achieved to vest in the minimum number of shares under the PRSUs and the NEO must be employed through the date that the compensation committee certifies the performance results. As soon as practical after October 1, 2024, the compensation committee will certify the performance results based on achievement against specified performance metrics to determine the number of shares subject to the PRSUs that will be eligible to vest. Once the compensation committee certifies the number of PRSUs that become eligible to vest based on achievement of fiscal year 2024 revenue growth and adjusted gross profit performance goals, 40% of such vesting eligible PRSUs will vest on October 1, 2024 (approximately two years following the grant of the PRSUs) and 60% of such vesting eligible PRSUs will vest on October 1, 2025 (approximately three years following the grant of the PRSUs), subject to the NEO’s continuous service through the vesting date. The target value of each NEO’s award and the total number of PRSU and RSU awards that such NEO received in connection with the first half of fiscal year 2023, which were granted in December 2022, are set forth in the table below.

  42. Equity Incentive Program

    | Name | Target Value at Grant | Number of PRSU Awards(1) Granted | Number of RSU Awards Granted(2) | | Emily M. Leproust, Ph.D. | $2,843,286 | 59,758 | 59,758 | | James M. Thorburn | $786,212 | 16,524 | 16,524 | | William Banyai, Ph.D. | $933,567 | 19,621 | 19,621 | | Patrick Finn, Ph.D. | $1,688,329 | 35,484 | 35,484 | | Paula Green | $463,144 | 9,734 | 9,734 |

  43. Equity Incentive Program

    __________________ (1)PRSUs become eligible to vest based on fiscal year 2024 revenue and adjusted gross profit goals, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. After determination of the number of vesting eligible PRSUs based on achievement against the performance goals, 40% of such vesting eligible PRSUs will vest on October 1, 2024 (approximately two years following the grant of the PRSUs) and 60% of such vesting eligible PRSUs will vest on October 1, 2025 (approximately three years following the grant of the PRSUs), subject to the NEO’s continuous service through the vesting date. (2)1/16th of the total number of time-based RSUs vest on each quarterly anniversary of December 19, 2022 (or October 22, 2022 for Dr. Finn, for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. Finn Equity Grant Corrections Pursuant to Dr. Finn’s amended and restated employment agreement with the Company, the Company agreed to grant Dr. Finn PRSUs and RSUs with a total grant date value of $4,400,000, calculated by dividing the total grant date value by the average price per share of the Company’s common stock for the 20 trading days ending on the grant date. The PRSUs and RSUs granted to Dr. Finn in December 2022 were intended to satisfy this obligation under Dr. Finn’s amended and restated employment agreement, but consistent with the grants made to the other NEOs at the time, the grant was converted into a number of shares based on an assumed per share value of $62, which was a higher per share value as compared to the per share value agreed upon in Dr. Finn’s amended and restated employment agreement. To correct the inconsistency with the terms of Dr. Finn’s amended and restated employment agreement, in February 2023, the compensation committee granted Dr. Finn an additional award of 30,626 PRSUs and 30,626 RSUs based on a price per share of $33.28. The $33.28 price per share was mutually agreed between the Company and Dr. Finn and reflects the average price per share of the Company’s common stock for the 20 trading days ending on October 21, 2022, which is a higher dollar amount (and less shares) as compared to using the 20 trading days ending on December 19, 2022 as required by Dr. Finn’s amended and restated employment agreement. In addition, the compensation committee approved the amendment of the RSUs granted to Dr. Finn in December 2022, such that 1/16th of the total number of RSUs will vest on each quarterly anniversary of October 22, 2022 (rather than December 19, 2022). The PRSUs and RSUs granted to Dr. Finn in February 2023 are subject to the same vesting terms as those applicable to the PRSUs and RSUs granted to Dr. Finn in December 2022, as amended. H2 Fiscal Year 2023 Equity Awards Because we apply our compensation philosophy to both the executive and non-executive level of our organization, executive equity awards were set conservatively low at the beginning of fiscal year 2023 relative to the awards in fiscal year 2022. Given that the Twist stock price was significantly depressed compared to prior years, the compensation committee aimed to ensure that sufficient equity awards remained available to provide pay for performance, reward achievement, promote retention and attract talent at non-executive employee levels, which are crucial to the Company’s growth and success. In September 2023, after determining that there were sufficient equity awards available to meet equity incentive needs at non-executive employee levels, the compensation committee determined that additional incentive grants to executives were appropriate in light of the conservatively low H1 Fiscal Year 2023 equity grants made to executives in December 2022; successful conservation of cash; and the added effort and requirements of the executives following the restructuring plan, and in order to provide long term compensation for the executives at total annual levels competitive with peer practices. Specifically, our NEOs (other than Mr. Thorburn and Dr. Finn) received time-based RSUs, which vest as to 1/16th of the total number of time-based RSUs on each quarterly anniversary of September 5, 2023, for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. Each of our NEOs also received PRSUs that become eligible to vest based on achievement of a fiscal year 2024 ending cash balance goal. The vesting eligible percentage with respect to FY2024 ending cash balance ranges from 50% to 100%, and is determined by linear interpolation for performance between the fiscal year 2024 ending cash balance goals. A threshold level of performance must be achieved to vest in the minimum number of shares under the PRSUs and the NEO must be employed through the date that the compensation committee certifies the performance results. As soon as practical after October 1, 2024, the compensation committee will certify the performance results based on achievement against specified performance metrics to determine the number of shares subject to the PRSUs that will be eligible to vest. Once the compensation committee certifies the number of PRSUs that become eligible to vest based on achievement of fiscal year 2024 ending cash balance, 40% of such vesting eligible PRSUs will vest on October 1, 2024 (approximately two years following the beginning of fiscal year 2023) and 60% of such vesting eligible PRSUs will vest on October 1, 2025 (approximately three years following the beginning of fiscal year 2023), subject to the NEO’s continuous service through the vesting date. The target value of each NEO’s award and the total number of PRSU and RSU awards that such NEO received in connection with the second half of fiscal year 2023, which were granted in September 2023, are set forth in the table below.

  44. Equity Incentive Program

    | Name | Target Value at Grant | Number of PRSU Awards(1) Granted | Number of RSU Awards Granted(2) | | Emily M. Leproust, Ph.D. | $3,788,865 | 80,855 | 80,855 | | James M. Thorburn | $234,300 | 10,000 | — | | William Banyai, Ph.D. | $1,171,500 | 25,000 | 25,000 | | Patrick Finn, Ph.D. | $702,900 | 30,000 | — | | Paula Green | $1,405,800 | 30,000 | 30,000 |

  45. Equity Incentive Program

    (1)PRSUs vest based on fiscal year 2024 ending cash balance goals, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. After determination of the number of vesting eligible PRSUs based on achievement against the performance goals, 40% of such vesting eligible PRSUs will vest on October 1, 2024 (approximately two years following the beginning of fiscal year 2023) and 60% of such vesting eligible PRSUs will vest on October 1, 2025 (approximately three years following the beginning of fiscal year 2023), subject to the NEO’s continuous service through the vesting date. (2)1/16th of the total number of time-based RSUs vest on each quarterly anniversary of September 5, 2023, for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. Results of Fiscal Year 2022 Long-Term PRSUs In December 2021, our NEOs received long-term PRSUs that become eligible to vest based on achievement of fiscal year 2023 revenue growth and adjusted gross profit goals, in each case determined based on a good faith application of GAAP consistent with past practices and excluding the impact of acquisitions. Once the number of PRSUs that become eligible to vest based on achievement of fiscal year 2023 performance goals is certified by the compensation committee, 40% of such vesting eligible PRSUs vest on October 1, 2023 (approximately two years following the grant of the PRSUs) and 60% of such vesting eligible PRSUs will vest on October 1, 2024 (approximately three years following the grant of the PRSUs), subject to the NEO’s continuous service through the vesting date. Determination of the vesting eligible PRSUs was based on achievement against two metrics: (1) 80% of the vesting eligible shares subject to the PRSUs was determined based on achievement against certain revenue growth goals and (2) 20% of the vesting eligible shares subject to the PRSUs was determined based on achievement against certain adjusted gross profit goal, in each case, as set forth in the table below. The eligible vesting percentage with respect to fiscal year 2023 revenue growth and fiscal year 2023 adjusted gross profit, as applicable, ranged from 50% to 150%.

  46. Equity Incentive Program

    | Financial Performance Goal | Threshold (50% Eligible to Vest) | Target (100% Eligible to Vest) | Maximum (150% Eligible to Vest) | | Revenue | $200M | $235M | $254M | | Adjusted Gross Profit (1) | $85M | $107M | $115M |

  47. Equity Incentive Program

    (1)Adjusted gross profit is a non-GAAP financial measure defined for purposes of the fiscal year 2022 PRSU grants as gross profit excluding the impact of a certain transaction not anticipated when the fiscal year 2022 PRSU grants were awarded. In November 2023, the compensation committee certified that the Company had achieved revenue growth of $245 million and adjusted gross profit of $90 million for fiscal year 2023, resulting in achievement of the fiscal year 2023 revenue growth and adjusted gross profit performance goals at 127% and 61% of target, respectively. As a result, the compensation committee certified that the PRSUs would become eligible to vest at 113% of the target number of PRSUs. 40% of the vesting eligible PRSUs vested effective as of October 1, 2023 (approximately two years following the grant of the PRSUs) and 60% of the vesting eligible PRSUs will vest on October 1, 2024 (approximately three years following the grant of the PRSUs), subject to the NEO’s continuous service through the vesting date. The table below sets forth the target number and target grant value of PRSUs granted to each NEO and the number of PRSUs that became vesting eligible upon the compensation committee’s certification.

  48. Equity Incentive Program

    | Name | Target Value at Grant | Number of PRSU Awards Granted | Number of Vesting Eligible PRSU Awards (1) | | Emily M. Leproust, Ph.D. | $3,434,500 | 39,479 | 44,788 | | James M. Thorburn | $1,522,000 | 17,495 | 19,848 | | William Banyai, Ph.D. | $1,520,000 | 17,472 | 19,822 | | Patrick Finn, Ph.D. | $1,520,000 | 17,472 | 19,822 | | Paula Green | $803,500 | 9,236 | 10,478 |

  49. Equity Incentive Program

    (1)40% of the vesting eligible PRSUs became vested on October 1, 2023 (approximately two years following the grant of the PRSUs) and 60% of such vesting eligible PRSUs will vest on October 1, 2024 (approximately three years following the grant of the PRSUs), subject to the NEO’s continuous service through the vesting date. Severance and Change of Control Benefits The following table provides information regarding the severance benefits that are provided for in the employment agreements that we have with our NEOs.

  50. Equity Incentive Program

    | Termination and Change of Control Protections | | | | Philosophy | Considerations | Terms | | •Attract and Retain Executives: •Intended to ease an NEO’s transition due to an unexpected employment termination, or retirement •Retain and encourage our NEOs to remain focused on our business and the interests of our stockholders when considering strategic alternatives •Align Interests with Stockholders: Mitigate any potential employer liability and avoid future disputes or litigation | •The employment of our NEOs is “at will”, meaning we can terminate them at any time, and they can terminate their employment with us at any time •Arrangements should be designed to: (i) provide reasonable compensation to executive officers who leave our Company under certain circumstances to facilitate their transition to new employment and (ii) require a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits •“Double-trigger” provisions preserve morale and productivity, and encourage executive retention in the event of a change of control •These provisions are considered a typical component of a competitive executive compensation program for executives among our fiscal year 2023 peer group | Agreements with Certain NEOs: •Provide for certain cash payments, and/or the vesting of certain equity awards and COBRA benefits, in the event there is a separation of employment under various circumstances, subject to the execution of a release of claims •Provide for accelerated vesting of equity awards upon a change of control if the recipient is terminated by the acquiring entity in connection with the change of control under specified circumstances, subject to the execution of a release of claims |

  51. Our Compensation-Setting Process

    Our Compensation-Setting Process Role of the Compensation Committee The compensation committee works closely with its independent consultant and meets regularly, including in executive session without members of management present, to make decisions on our executive compensation program and on the compensation of our CEO and other executives. The compensation committee reviews a variety of market data and information, including company, compensation peers, and technology industry compensation information, and considers the recommendations of its independent consultant when making compensation decisions. The compensation committee Chair reports the actions of the compensation committee to our Board at each regular meeting. The compensation committee’s responsibilities include, among other things, reviewing and approving (or making recommendations to the Board, as applicable, regarding): •overall compensation strategy; •amounts and form of executive compensation, including base salary, incentive compensation and equity-based compensation; •goals and objectives to be considered in determining the compensation of the CEO and other executive officers; •annual and long-term incentive plans and benefit plans; •Board compensation; •assess whether such compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company; •annual proxy and CD&A disclosure; and •compensation peer group. Role of the Independent Compensation Consultant The compensation committee generally retains an independent compensation consultant to help understand competitive compensation levels and incentive designs. The independent compensation consultant is solely hired by, and reports directly to, the compensation committee. The compensation committee has sole authority to retain and terminate the independent compensation consultant. At the compensation committee’s discretion, the independent compensation consultant: •provides independent advice to the compensation committee on current trends and best practices in compensation design; •advises on plans or practices that may improve the effectiveness of our compensation program; •attends compensation committee meetings; •assists the compensation committee in determining peer companies and evaluating compensation proposals; and •conducts compensation-related research. In making fiscal year 2023 compensation decisions, the compensation committee retained Meridian Compensation Partners, LLC (“Meridian”) to help in the selection of an appropriate peer group for executive compensation benchmarking purposes, review our executive compensation programs, assist the compensation committee in designing our executive compensation program and provide the compensation committee an understanding in executive compensation trends. Meridian advised the compensation committee on current trends and best practices in compensation design and on the design of the fiscal year 2023 equity compensation program. The compensation committee has analyzed and determined that the work of Meridian as a compensation consultant is free of any conflicts of interest and that Meridian is independent under the applicable listing rules. Role of Management Our CEO and our other executive officers do not set their own compensation nor are they present when the compensation committee sets their specific individual compensation. Our CEO provides her evaluation of each executive officer’s performance to the compensation committee, and makes recommendations with respect to base salary and target incentives, incentive awards and equity awards for each executive officer other than herself. This recommendation is considered by the compensation committee, which makes its own ultimate determinations. The human resources department provides additional analysis and guidance as requested by the compensation committee related to NEO compensation, including the following: •developing, summarizing and presenting information and analyses to enable the compensation committee to execute its responsibilities, as well as addressing specific requests for information from the compensation committee; •attending compensation committee meetings, as requested, to provide information, respond to questions and otherwise assist the compensation committee; and •assisting the CEO in making preliminary recommendations of base salary structure, annual and long-term incentive awards. Peer Group Each year, the Compensation Committee reviews and approves a peer group of companies for which to reference competitive pay levels and practices. The peer group may vary in its composition year-to-year based upon the criteria for selection and market conditions. The peer group companies were chosen based on, among other things, (i) industry, (ii) revenue, (iii) revenue growth, (iv) market cap and (v) market cap as a multiple of revenue. For the first half of fiscal year 2023, the primary peer group used to inform our compensation committee of pay decisions and practices included:

  52. Our Compensation-Setting Process

    | 2023 Peer Group | | | | 10x Genomics | Invitae | Repligen | | AbCellera Biologics Inc.* | NanoString Technologies | Sangamo Therapeutics | | Adaptive Biotechnologies | Natera | Ultragenyx Pharmaceutical | | CareDx | NeoGenomics | Veracyte | | Halozyme | Pacific Biosciences of California | | | Insmed | Quanterix | |

  53. Our Compensation-Setting Process

    *Replaced Acceleron Pharma, which was acquired At the time the primary peer group was reviewed, it had a median peer revenue of $325 million over the last 12 months, one-year revenue growth of 58%, a market cap of $1.3 billion and market cap as a multiple of revenue of 6.7x. In contrast, Twist at the time had a revenue of $204 million over the last 12 months, one-year revenue growth of 47%, a market cap of $2.1 billion and market cap as a multiple of revenue of 10.5x. In the second half of fiscal year 2023, the compensation committee conducted their annual review of the peer group and decided to revise the group given market conditions and the Company’s size positioning. The primary peer group was revised to remove Halozyme, Invitae, Natera, Repligen and Sangamo, and add BioLife Solutions, Cytek, Guardant, REGENXBIO, and Schrodinger. The revised peer group positioned Twist closer to median revenue and was used to guide the executive equity awards in the second half of fiscal year 2023, as well as fiscal year 2024 pay decisions. At the time the revised primary peer group was reviewed, it had a median peer revenue of $191 million over the last 12 months, one-year revenue growth of 14%, a market cap of $2.0 billion, and market cap as a multiple of revenue of 7.9x. In contrast, Twist at the time had a revenue of $228 million over the last 12 months, one-year revenue growth of 54%, a market cap of $1.0 billion, and market cap as a multiple of revenue of 4.4x.

  54. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding fiscal years 2021, 2022, and 2023 compensation for our NEOs, except fiscal years 2021 and 2022 for Ms. Green are not provided because she was not an NEO in those years.

  55. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus (1) ($) | Stock Awards(2) ($) | Non- Equity Incentive Plan Compensation(3) ($) | All Other Compensation ($) | Total ($) | | Emily M. Leproust, Ph.D. Chief Executive Officer and Chair of the Board | 2023 | 685,000 | 53,796 | 6,632,151 | 501,054 | 126,636(5) | 7,998,637 | | | 2022 | 665,000 | — | 4,521,127 | 596,106 | 135,430 | 5,917,663 | | | 2021 | 590,083 | — | — | 615,974 | 75,536 | 1,281,593 | | James M. Thorburn Chief Financial Officer | 2023 | 460,000 | 20,259 | 1,020,512 | 202,587 | 110,249(6) | 1,813,607 | | | 2022 | 450,000 | — | 1,890,519 | 243,540 | 121,624 | 2,705,683 | | | 2021 | 427,000 | — | — | 240,668 | 104,043 | 771,711 | | William Banyai, Ph.D. Senior Vice President of Advanced Development and General Manager of Data Storage | 2023 | 460,000 | 22,018 | 2,105,067 | 220,176 | 9,141(7) | 2,816,402 | | | 2022 | 455,000 | — | 1,888,673 | 271,908 | 18,737 | 2,634,318 | | | 2021 | 400,000 | — | — | 225,450 | 2,667 | 628,117 | | Patrick Finn, Ph.D. President and Chief Operating Officer | 2023 | 470,000 | 123,761(4) | 4,283,916 | 230,039 | 120,142(8) | 5,227,858 | | | 2022 | 456,000 | — | 1,888,673 | 272,506 | 73,273 | 2,690,452 | | | 2021 | 427,000 | — | — | 240,668 | 58,683 | 726,351 | | Paula Green Senior Vice President of Human Resources | 2023 | 356,291 | 15,271 | 1,868,944 | 142,230 | 104,684(9) | 2,487,420 |

  56. Summary Compensation Table

    __________________ (1)The amounts shown in this column for 2023 represent a discretionary bonus equal to 8.7%, 8%, 8%, 8.4% and 8.7% of the fiscal 2023 target bonus opportunity for Dr. Leproust, Mr. Thorburn, Drs. Banyai and Finn, and Ms. Green, respectively, in consideration of each NEO’s outstanding achievement of significantly exceeding a key objective outside of the original bonus plan, ending fiscal year 2023 with a cash balance 12% higher than target. (2)The amounts reported in this column reflect the aggregate grant date fair value for financial statement reporting purposes of PRSUs and RSUs granted in the applicable fiscal year as determined in accordance with FASB ASC Topic 718. These amounts reflect our accounting expense for these stock awards and do not represent the actual economic value that may be realized by each NEO. There can be no assurance that these amounts will ever be realized. For information on the assumptions used in valuing these awards, refer to Note 10 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. The table below sets forth the grant date fair value for the PRSUs awarded during the fiscal year ended September 30, 2023 based upon (i) the probable outcome of the performance conditions used for financial reporting purposes in accordance with ASC 718 as of the grant date, and (ii) the maximum outcome of performance conditions under the performance-related component at the level of 150% as of the grant date.

  57. Summary Compensation Table

    | Name | Year | Probable Outcome of Performance Conditions Grant Date Fair Value | Maximum Outcome of Performance Conditions Grant Date Fair Value | | Emily M. Leproust, Ph.D. | 2023 | $3,316,075 | $4,026,897 | | James M. Thorburn | 2023 | $627,406 | $823,959 | | William Banyai, Ph.D. | 2023 | $1,052,534 | $1,285,925 | | Patrick Finn, Ph.D. | 2023 | $2,493,408 | $3,388,662 | | Paula Green | 2023 | $934,472 | $1,050,258 |

  58. Summary Compensation Table

    (3)Represents annual bonuses earned with respect to the applicable fiscal year by each named executive officer under our annual cash incentive plan for executive officers. (4)In addition to the discretionary bonus, includes a retention bonus of $100,000. (5)Represents $120,000 for corporate housing stipend, $5,484 for employer 401(k) plan contributions and $1,152 for life insurance premiums paid during the fiscal year ended September 30, 2023. (6)Represents $102,000 for corporate housing stipend, $4,058 for employer 401(k) plan contributions and $4,191 for life insurance premiums paid during the fiscal year ended September 30, 2023. (7)Represents $4,950 for employer 401(k) plan contributions and $4,191 for life insurance premiums paid during the fiscal year ended September 30, 2023. (8)Represents $115,000 for corporate housing stipend, $3,900 for employer 401(k) plan contributions and $1,242 for life insurance premiums paid during the fiscal year ended September 30, 2023. (9)Represents $99,000 for corporate housing stipend, $3,362 for employer 401(k) plan contributions and $2,322 for life insurance premiums paid during the fiscal year ended September 30, 2023.

  59. Grants of Plan-Based Awards in Fiscal 2023

    Grants of Plan-Based Awards in Fiscal 2023 The following table sets forth information regarding fiscal 2023 annual incentive bonus awards and equity awards granted to our NEOs in fiscal 2023.

  60. Grants of Plan-Based Awards in Fiscal 2023

    | | | | Potential Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Potential Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares or Stock Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | Name | Award Type | Grant Date(1) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Emily M. Leproust, Ph.D. | Annual Incentive(4) | | 308,250 | 616,500 | 1,233,000 | | | | | | | | RSUs(5) | 12/19/2022 | | | | | | | 59,758 | 1,421,643 | | | PRSUs(6) | 12/19/2022 | | | | 29,879 | 59,758 | 89,637 | | 1,421,643 | | | RSUs(7) | 09/05/2023 | | | | | | | 80,855 | 1,894,433 | | | PRSUs(8) | 09/05/2023 | | | | 40,428 | 80,855 | 80,855 | | 1,894,433 | | James M. Thorburn | Annual Incentive(4) | | 126,500 | 253,000 | 506,000 | | | | | | | | RSUs(5) | 12/19/2022 | | | | | | | 16,524 | 393,106 | | | PRSUs(6) | 12/19/2022 | | | | 8,262 | 16,524 | 24,786 | | 393,106 | | | PRSUs(8) | 09/05/2023 | | | | 5,000 | 10,000 | 10,000 | | 234,300 | | William Banyai, Ph.D. | Annual Incentive(4) | | 138,000 | 276,000 | 552,000 | | | | | | | | RSUs(5) | 12/19/2022 | | | | | | | 19,621 | 466,784 | | | PRSUs(6) | 12/19/2022 | | | | 9,811 | 19,621 | 29,432 | | 466,784 | | | RSUs(7) | 09/05/2023 | | | | | | | 25,000 | 585,750 | | | PRSUs(8) | 09/05/2023 | | | | 12,500 | 25,000 | 25,000 | | 585,750 | | Patrick Finn, Ph.D. | Annual Incentive(4) | | 141,000 | 282,000 | 564,000 | | | | | | | | RSUs(5) | 12/19/2022 | | | | | | | 35,484 | 844,164 | | | PRSUs(6) | 12/19/2022 | | | | 17,742 | 35,484 | 53,226 | | 844,164 | | | RSUs(5) | 02/02/2023 | | | | | | | 30,626 | 946,343 | | | PRSUs(6) | 02/02/2023 | | | | 15,313 | 30,626 | 45,939 | | 946,343 | | | PRSUs(8) | 09/05/2023 | | | | 15,000 | 30,000 | 30,000 | | 702,900 | | Paula Green | Annual Incentive(4) | | 87,500 | 175,000 | 350,000 | | | | | | | | RSUs(5) | 12/19/2022 | | | | | | | 9,734 | 231,572 | | | PRSUs(6) | 12/19/2022 | | | | 4,867 | 9,734 | 14,601 | | 231,572 | | | RSUs(7) | 09/05/2023 | | | | | | | 30,000 | 702,900 | | | PRSUs(8) | 09/05/2023 | | | | 15,000 | 30,000 | 30,000 | | 702,900 |

  61. Grants of Plan-Based Awards in Fiscal 2023

    __________________ (1)Annual equity awards granted in fiscal year 2023 were approved by the compensation committee. (2)These amounts reflect the potential threshold, target, and maximum annual incentive bonus awards payable to our NEOs as annual incentive bonuses for fiscal 2023 under our annual incentive bonus plan. Amounts shown are calculated as a percentage of fiscal 2023 year-end base salary. Threshold bonus amounts assume achievement of the objective performance goals, tied to revenue and adjusted gross profit, at 50% of target and an individual performance factor payout of 50% of target. Target bonus amounts assume achievement of the objective performance goals, tied to revenue and adjusted gross profit, at the target amount and an individual performance factor payout of 100% of target. Maximum bonus amounts assume achievement of the objective goals at the maximum for a payout of 200% of target and an individual performance factor payout of 200% of target. The NEOs received actual bonuses for fiscal 2023 in the amounts shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. See the discussion and analysis regarding annual incentive bonuses in the CD&A section titled “Annual Incentive Bonus Plan” for further information. (3)The grant date fair value is computed in accordance with FASB ASC Topic 718 for PRSUs and time-based RSUs granted during the applicable fiscal year. For more information on, and assumptions used for the grant date fair value of the PRSUs and time-based RSUs, see the Company’s Form 10-K (Note 10: Stock-based compensation expense) for the fiscal year ended September 30, 2023. (4)Represents awards under the annual incentive bonus plan payable in cash. (5)1/16th of the total number of time-based RSU awards vest on each quarterly anniversary of December 19, 2022 (or October 22, 2022 for Dr. Finn), for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. (6)The amount shown in these rows reflect the share amount, specifically the threshold, the target and the maximum potential awards of PRSUs granted in 2023. These amounts are based on achievement of pre-approved revenue and adjusted gross profit goals. The vesting percentage for the PRSUs with respect to FY2024 revenue and FY2024 adjusted gross profit, as applicable, ranges from 50% to 150%, and is determined by linear interpolation for performance between the FY2024 revenue and FY2024 adjusted gross profit goals. The amounts shown in the table assume 50% achievement for the threshold award, 100% achievement for the target award, and 150% achievement for the maximum award. See the discussion and analysis regarding PRSU awards in the CD&A section titled “Equity Incentive Program” for further information. The material terms of the PRSUs, which are completely at risk are further described in the CD&A. (7)1/16th of the total number of time-based RSU awards vest on each quarterly anniversary of September 5, 2023, for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. (8) The amount shown in these rows reflect the share amount, specifically the threshold, the target and the maximum potential awards of PRSUs granted in 2023. These amounts are based on achievement of pre-approved ending cash balance goals. The vesting percentage for the PRSUs with respect to FY2024 ending cash balance goals ranges from 50% to 100%, and is determined by linear interpolation for performance between the FY2024 ending cash balance goals. The amounts shown in the table assume 50% achievement for the threshold award, 100% achievement for the target award, and 100% achievement for the maximum award. See the discussion and analysis regarding PRSU awards in the CD&A section titled “Equity Incentive Program” for further information. The material terms of the PRSUs, which are completely at risk are further described in the CD&A.

  62. Outstanding equity awards as of September 30, 2023

    Outstanding equity awards as of September 30, 2023 The following table provides information regarding the outstanding equity awards held by each of our named executive officers as of September 30, 2023:

  63. Outstanding equity awards as of September 30, 2023

    | | Option Awards(1) | | | | | | Stock Awards(1) | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested (3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units of Stock, or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units of Stock, or Other Rights That Have Not Vested(5) ($) | | Emily M. Leproust, Ph.D. | 9/29/2017(7) | 150,879 | — | — | 8.82 | 9/28/2027 | — | — | — | — | | | 11/19/2018(8) | 257,653 | 8,886 | — | 26.66 | 11/18/2028 | — | — | — | — | | | 11/19/2018(9) | — | — | — | — | — | 5,712 | 115,725 | — | — | | | 10/24/2019(10) | 128,554 | 2,736 | — | 23.33 | 10/23/2029 | — | — | — | — | | | 10/24/2019(11) | — | — | — | — | — | 1,915 | 38,798 | — | — | | | 9/1/2020(12) | 64,950 | — | — | 67.85 | 8/31/2030 | — | — | — | — | | | 9/1/2020(13) | — | — | — | — | — | 5,414 | 109,688 | — | — | | | 12/27/2021(14) | — | — | — | — | — | — | — | 44,788 | 907,402 | | | 12/27/2021(15) | — | — | — | — | — | 8,424 | 170,670 | — | — | | | 12/19/2022(16) | — | — | — | — | — | 48,555 | 983,724 | | | | | 12/19/2022(17) | — | — | — | — | — | — | — | 29,879 | 605,349 | | | 9/5/2023(18) | — | — | — | — | — | 80,855 | 1,638,122 | | | | | 9/5/2023(19) | — | — | — | — | — | — | — | 80,855 | 1,638,122 | | James M. Thorburn | 11/19/2018(8) | 34,313 | 3,034 | — | 26.66 | 11/18/2028 | — | — | — | — | | | 11/19/2018(9) | — | — | — | — | — | 1,951 | 39,527 | — | — | | | 10/24/2019(10) | 21,803 | 745 | — | 23.33 | 10/23/2029 | — | — | — | — | | | 10/24/2019(11) | — | — | — | — | — | 522 | 10,576 | — | — | | | 9/1/2020(12) | 23,355 | — | — | 67.85 | 8/31/2030 | — | — | — | — |

  64. Outstanding equity awards as of September 30, 2023

    | | Option Awards(1) | | | | | | Stock Awards(1) | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested (3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units of Stock, or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units of Stock, or Other Rights That Have Not Vested(5) ($) | | | 9/1/2020(13) | — | — | — | — | — | 1,948 | 39,466 | — | — | | | 12/27/2021(14) | — | — | — | — | — | — | — | 19,848 | 402,112 | | | 12/27/2021(15) | — | — | | | | 3,032 | 61,428 | — | — | | | 12/19/2022(16) | — | — | — | — | — | 13,428 | 272,051 | | | | | 12/19/2022(17) | — | — | — | — | — | — | — | 8,262 | 167,388 | | | 9/5/2023(19) | — | — | — | — | — | — | — | 10,000 | 202,600 | | William Banyai, Ph.D. | 9/29/2015(6) | 84,166 | — | — | 5.95 | 9/28/2025 | — | — | — | — | | | 9/29/2017(7) | 141,161 | — | — | 8.82 | 9/28/2027 | — | — | — | — | | | 11/19/2018(8) | 87,970 | 3,034 | — | 26.66 | 11/18/2028 | — | — | — | — | | | 11/19/2018(9) | | | — | — | — | 1,951 | 39,527 | — | — | | | 10/24/2019(10) | 38,882 | 828 | — | 23.33 | 10/23/2029 | — | — | — | — |

  65. Outstanding equity awards as of September 30, 2023

    | | Option Awards(1) | | | | | | Stock Awards(1) | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested (3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units of Stock, or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units of Stock, or Other Rights That Have Not Vested(5) ($) | | | 10/24/2019(11) | — | — | — | — | — | 580 | 11,751 | — | — | | | 9/1/2020(12) | 23,355 | — | — | 67.85 | 8/31/2030 | — | — | — | — | | | 9/1/2020(13) | — | — | — | — | — | 1,948 | 39,466 | — | — | | | 12/27/2021(14) | — | — | — | — | — | — | — | 19,822 | 401,584 | | | 12/27/2021(15) | — | — | — | — | — | 3,032 | 61,428 | — | — | | | 12/19/2022(16) | — | — | — | — | — | 15,943 | 323,005 | — | — | | | 12/19/2022(17) | — | — | — | — | — | — | — | 9,811 | 198,771 | | | 9/5/2023(18) | — | — | — | — | — | 25,000 | 506,500 | — | — | | | 9/5/2023(19) | — | — | — | — | — | — | — | 25,000 | 506,500 | | Patrick Finn, Ph.D. | 9/29/2017(7) | 3,279 | — | — | 8.82 | 9/28/2027 | — | — | — | — | | | 11/19/2018(8) | 31,478 | 3,034 | — | 26.66 | 11/18/2028 | — | — | — | — | | | 11/19/2018(9) | — | — | — | — | — | 1,951 | 39,527 | — | — | | | 10/24/2019(10) | 18,877 | 828 | — | 23.33 | 10/23/2029 | — | — | — | — | | | 10/24/2019(11) | — | — | — | — | — | 580 | 11,751 | — | — | | | 9/1/2020(12) | 23,355 | — | — | 67.85 | 8/31/2030 | | | — | — | | | 9/1/2020(13) | — | — | — | — | — | 1,948 | 39,466 | — | — | | | 12/27/2021(14) | — | — | — | — | — | — | — | 19,822 | 401,584 | | | 12/27/2021(15) | — | — | — | — | — | 3,032 | 61,428 | — | — | | | 12/19/2022(16) | — | — | — | — | — | 28,833 | 584,157 | — | — | | | 12/19/2022(17) | — | — | — | — | — | — | — | 17,742 | 359,453 | | | 2/2/2023(16) | — | — | — | — | — | 24,884 | 504,150 | — | — | | | 2/2/2023(17) | — | — | — | — | — | — | — | 15,313 | 310,241 | | | 9/5/2023(19) | — | — | — | — | — | — | — | 30,000 | 607,800 | | Paula Green | 9/29/2017(7) | 1,046 | — | — | 8.82 | 9/29/2027 | — | — | — | — | | | 11/19/2018(8) | 30,788 | 1,168 | — | 26.66 | 47,075.00 | — | — | — | — | | | 11/19/2018(9) | — | — | — | — | — | 751 | 15,215 | — | — | | | 10/24/2019(10) | 25,557 | 580 | — | 23.33 | 47,414.00 | — | — | — | — | | | 10/24/2019(11) | — | — | — | — | — | 406 | 8,226 | — | — | | | 9/1/2020(12) | 17,880 | — | — | 67.85 | 8/31/2030 | — | — | — | — | | | 9/1/2020(13) | — | — | — | — | — | 1,492 | 30,228 | — | — | | | 12/27/2021(15) | — | — | — | — | — | 2,320 | 47,003 | — | — | | | 12/27/2021(14) | — | — | — | — | — | — | — | 10,478 | 212,284 | | | 12/19/2022(16) | — | — | — | — | — | 7,910 | 160,257 | — | — | | | 12/19/2022(17) | — | — | — | — | — | — | — | 4,867 | 98,605 | | | 9/5/2023(18) | — | — | — | — | — | 30,000 | 607,800 | — | — | | | 9/5/2023(19) | — | — | — | — | — | — | — | 30,000 | 607,800 |

  66. Outstanding equity awards as of September 30, 2023

    (1)Prior to our IPO, all awards were granted under our 2013 Stock Plan. Following our IPO, all awards were granted under our 2018 Equity Incentive Plan. (2)The units in this column represent RSUs granted pursuant to an RSU award agreement that remained unvested as of September 30, 2023. (3)Each RSU represents the right to receive a share of our common stock. The market value of our common stock is based on the per share price of $20.26, which was the closing stock price of the Company’s common stock on September 29, 2023, the last trading day of the fiscal year 2023. (4)The units in this column represent PRSUs granted pursuant to a PRSU award agreement, all of which remained unvested as of September 30, 2023. (5)The market value is calculated by multiplying the number of PRSUs that may be earned upon achievement of PRSU performance goals by the closing market price of our stock ($20.26) as of September 29, 2023, the last trading day of fiscal year 2023. (6)The option grant was subject to a four-year vesting schedule, requiring continuous service through each applicable vesting date. One-quarter of the shares vested on September 1, 2016 and 1/48th of the shares vested on each month thereafter. (7)The option grant was subject to a four-year vesting schedule, with 10% of the shares vesting on September 28, 2017, 15% of the shares vesting on September 28, 2018 and 1/48th of the shares vesting monthly thereafter, subject to continuous service through each applicable vesting date. (8)The option grant is subject a five-year vesting schedule, with 20% of the shares vesting on October 31, 2019 and 1/60th of the shares vesting monthly thereafter, subject to continuous service through each applicable vesting date. (9)The RSU grant is subject a five-year vesting schedule, with 20% of the units vesting on November 20, 2019 and 1/20th of the units vesting quarterly thereafter, subject to continuous service through each applicable vesting date. (10)The option grant is subject to a four-year vesting schedule, with 25% of the shares vesting on October 24, 2020 and 1/48th of the shares vesting monthly thereafter, subject to continuous service through each applicable vesting date. (11)The RSU grant is subject to a four-year vesting schedule, with 25% of the units vesting on October 24, 2020 and 1/16th of the units vesting quarterly thereafter, subject to continuous service through each applicable vesting date. (12)The number of underlying unexercised options unearned listed in this column reflects the maximum outcome of the performance conditions as of the grant date for the performance-based stock options. The performance-based stock options granted vest subject to the option vesting if the Company’s fiscal year 2022 revenue are at least a threshold level and up to 150% of the shares subject to the option vesting if the Company’s fiscal year 2022 revenues exceed the highest performance threshold, with the exact vesting percentage determined by linear interpolation for performance within such range, subject to the named executive officer’s continuous service through the vesting date. In December 2022, the compensation committee certified that the specified performance metrics were achieved in excess of the highest performance threshold, resulting in the performance-based stock options vesting at 150% of target. (13)The RSU grant is subject to a four-year vesting schedule, with 1/16th of the shares subject to the RSU awards vesting on the quarterly anniversary of October 1, 2020, subject to the named executive officer’s continuous service through each vesting date. (14)PRSUs vest based on fiscal year 2023 revenue and adjusted gross profit goals, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. On November 2, 2023, the compensation committee certified that the specified performance metrics at 113%. As a result, 113% of the shares subject to the PRSUs became eligible to vest. So long as the executive is in continuous service, the vesting eligible PRSUs shall vest and be settled as follows: (x) 40% of the vesting eligible shares will vest effective as of October 1, 2023 and (y) 60% of the vesting eligible shares will vest on October 1, 2024. (15)1/16th of the total number of time-based RSU awards vest on each quarterly anniversary of October 1, 2021, for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. (16)1/16th of the total number of time-based RSU awards vest on each quarterly anniversary of December 19, 2022 (or October 22, 2022 for Dr. Finn), for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. (17)The number of PRSUs listed in this column reflects the threshold outcome of the performance conditions, as performance was tracking below threshold achievement as of September 30, 2023. PRSUs become eligible to vest based on fiscal year 2024 revenue and adjusted gross profit goals, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. As soon as practical after October 1, 2024, the compensation committee will certify the performance results based on achievement against specified performance metrics to determine the number of shares subject to the PRSUs that will be eligible to vest. So long as the executive is in continuous service, the vesting eligible PRSUs shall vest and be settled as follows: (x) 40% of the vesting eligible shares effective as of October 1, 2024 and (y) 60% of the vesting eligible shares on October 1, 2025. Determination of the vesting eligible shares will be based on achievement against two metrics: (x) 80% of the shares subject to the PRSUs will be determined based on achievement against the revenue goal and (y) 20% of the shares subject to the executive PRSUs will be determined based on achievement against the adjusted gross profit goal. The vesting percentage with respect to FY2024 revenue and FY2024 adjusted gross profit, as applicable, ranges from 50% to 150%, and is determined by linear interpolation for performance between the FY2024 revenue and FY2024 adjusted gross profit goals, as applicable. (18)1/16th of the total number of time-based RSU awards vest on each quarterly anniversary of September 5, 2023, for a total vesting period of 48 months, subject to the NEO’s continuous service through each vesting date. (19)The number of PRSUs listed in this column reflects the target outcome of the performance conditions, as performance was tracking above threshold achievement as of September 30, 2023. PRSUs become eligible to vest based on fiscal year 2024 ending cash balance, subject to the NEO’s continuous service through the date that the compensation committee certifies the performance results. As soon as practical after each of October 1, 2024 and October 1, 2025, the compensation committee will certify the performance results based on achievement against specified performance metrics to determine the number of shares subject to the PRSUs that will be eligible to vest. So long as the executive is in continuous service, the vesting eligible PRSUs shall vest and be settled as follows: (x) 40% of the vesting eligible shares effective as of October 1, 2024 and (y) 60% of the vesting eligible shares on October 1, 2025. The vesting percentage with respect to FY2024 ending cash balance ranges from 50% to 100%, and is determined by linear interpolation for performance between the FY2024 ending cash balance goals.

  67. Option Exercises and Stock Vested in Fiscal Year 2023

    Option Exercises and Stock Vested in Fiscal Year 2023 The following table sets forth the number of shares acquired and the value realized upon exercises of stock options and vesting of RSU awards and restricted stock awards during the fiscal year ended September 30, 2023 by each of our named executive officers.

  68. Option Exercises and Stock Vested in Fiscal Year 2023

    | | | Option Awards | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) ($) | | Emily M. Leproust, Ph.D. | 24,360 | 153,712 | 51,335 | 1,780,601 | | James M. Thorburn | 13,324 | 55,351 | 16,444 | 591,454 | | William Banyai, Ph.D. | — | — | 17,260 | 610,759 | | Patrick Finn, Ph.D. | — | — | 25,975 | 858,914 | | Paula Green | — | — | 9,102 | 361,434 |

  69. Option Exercises and Stock Vested in Fiscal Year 2023

    __________________ (1)The value realized upon vesting of stock options is calculated by multiplying the number of shares underlying the stock options vested by difference between (a) the closing price of our common stock on the vesting date and (b) the exercise price of the stock option and does not necessarily reflect actual proceeds received. If such amount is a negative number, the value realized is presumed to be zero. (2)The value realized upon vesting of RSU awards is calculated by multiplying the number of RSU awards vested by the closing price of our common stock on the vesting date and does not necessarily reflect actual proceeds received.

  70. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control

  71. Pay Ratio Disclosure

    Pay Ratio Disclosure Pursuant to SEC rules adopted according to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to disclose the ratio of the annual total compensation of our principal executive officer to our median employee’s annual total compensation. Our current principal executive officer is Dr. Leproust, our CEO. As of September 30, 2023, the ratio of our current CEO’s Total Compensation to the median employee’s Total Compensation is as follows:

  72. Pay Ratio Disclosure

    | Median Employee Total Compensation | $123,646 | | CEO’s Total Compensation | $7,998,637 | | Ratio of CEO to Median Employee Compensation | 64.7 to 1 |

  73. Pay Ratio Disclosure

    To identify our median employee for CEO Pay Ratio purposes, we used the following methodology: •We determined our median employee based on our employee population as of September 30, 2023. •We used a consistently applied compensation measure that included the sum of each employee’s base salary, bonuses and commissions earned in fiscal 2023 and the grant date fair value of all equity granted in fiscal 2023. •We annualized the base salaries for employees who were employed by us for less than the entire calendar year. •Compensation paid in foreign currencies was converted to U.S. dollars based on the exchange rates as of September 30, 2023. Using this approach, we identified our median employee and then calculated the annual total compensation of this employee for 2023 in accordance with the requirements of the Summary Compensation Table. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  74. Pay Versus Performance

    Pay Versus Performance This section provides disclosure about the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and non-PEO NEOs and certain financial performance measures of the Company for the fiscal years listed below. This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934 (the “Pay Versus Performance Rules”) and does not necessarily reflect how the Compensation Committee evaluates compensation decisions.

  75. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based On:(5) | | | | | Year (1) (a) | Summary Compensation Table Total for PEO (b) | Compensation Actually Paid to PEO (2)(3) (c) | Average Summary Compensation Table Total for Non-PEO NEOs (d) | Average Compensation Actually Paid to Non-PEO NEOs(2)(4) (e) | Total Shareholder Return (f) | Peer Group Total Shareholder Return (g) | Net Income (in millions) (h) | Revenue (in millions)(6) (i) | | 2023 | $7,998,637 | $3,219,824 | $3,086,321 | $1,648,641 | $26.67 | $95.05 | $(204.6) | $245.1 | | 2022 | $5,917,663 | $(15,039,602) | $2,484,123 | $(3,534,350) | $46.39 | $89.85 | $(217.9) | $203.6 | | 2021 | $1,281,593 | $18,054,219 | $728,146 | $6,408,876 | $140.81 | $120.21 | $(152.1) | $132.3 |

  76. Pay Versus Performance

    (1)The following table lists the PEO and non-PEO NEOs for each of the fiscal years 2021, 2022 and 2023

  77. Pay Versus Performance

    | | PEO | Non-PEO NEOs | | 2023 | Emily M. Leproust, Ph.D. | James M. Thorburn, William Banyai, Ph.D., Patrick Finn, Ph.D., and Paula Green | | 2022 | Emily M. Leproust, Ph.D. | James M. Thorburn, William Banyai, Ph.D., Patrick Finn, Ph.D., Dennis Cho, and Patrick Weiss | | 2021 | Emily M. Leproust, Ph.D. | James M. Thorburn, William Banyai, Ph.D., Patrick Finn, Ph.D., and Patrick Weiss |

  78. Pay Versus Performance

    (2)The dollar amounts reported represent the amount of “compensation actually paid,” as calculated in accordance with the Pay Versus Performance Rules. These dollar amounts do not reflect the actual amounts of compensation earned by or paid to our NEOs during the applicable year. For purposes of calculating “compensation actually paid,” the fair value of equity awards is calculated in accordance with ASC Topic 718 using the same assumption methodologies used to calculate the grant date fair value of awards for purposes of the Summary Compensation Table (refer to “Executive Compensation – Summary Compensation Table” for additional information). (3)The following table shows the amounts deducted from and added to the Summary Compensation Table total to calculate “compensation actually paid” to Dr. Leproust in accordance with the Pay Versus Performance Rules:

  79. Pay Versus Performance

    | | Equity Award Adjustments | | | | | | | | | | | Summary Compensation Table Total for PEO | Stock Awards | Year End Fair Value of Equity Awards Granted in the Year and Unvested at Year End | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value | Compensation Actually Paid to PEO | | 2023 | $7,998,637 | $(6,632,151) | $4,259,928 | $(1,518,003) | $208,413 | $(1,097,000) | $— | $— | $3,219,824 | | 2022 | $5,917,663 | $(4,521,127) | $2,416,154 | $(11,693,150) | $138,996 | $(7,298,138) | $— | $— | $(15,039,602) | | 2021 | $1,281,593 | $— | $— | $9,403,372 | $— | $7,369,254 | $— | $— | $18,054,219 |

  80. Pay Versus Performance

    (4)The following table shows the amounts deducted from and added to the average Summary Compensation Table total compensation to calculate the average “compensation actually paid” to our non-PEO NEOs in accordance with the Pay Versus Performance Rules:

  81. Pay Versus Performance

    | | Equity Award Adjustments | | | | | | | | | | | Average Summary Compensation Table Total for Non-PEO NEOs | Stock Awards | Year End Fair Value of Equity Awards Granted in the Year and Unvested at Year End | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $3,086,321 | $(2,319,610) | $1,220,625 | $(554,184) | $97,636 | $117,853 | $— | $— | $1,648,641 | | 2022 | $2,484,123 | $(1,795,866) | $975,053 | $(3,248,755) | $49,025 | $(1,997,930) | $— | $— | $(3,534,350) | | 2021 | $728,146 | $— | $— | $3,217,733 | $— | $2,462,997 | $— | $— | $6,408,876 |

  82. Pay Versus Performance

    (5)In accordance with the Pay Versus Performance Rules, the Company and the Company’s peer group total shareholder return (the “Peer Group TSR”) is determined based on the value of an initial fixed investment of $100 on September 30, 2020, through the end of the listed fiscal year. The Peer Group TSR set forth in this table was determined using the Nasdaq Biotechnology Index, which we also use in preparing the stock performance graph required by Item 201(e) of Regulation S-K for our Annual Report for the fiscal year ended September 30, 2023. (6)We have determined that Revenue, as calculated in accordance with GAAP, is the financial performance measure that, in the Company’s assessment, represents the most important financial performance measure used to link “compensation actually paid” to our NEOs, for fiscal year 2023, to Company performance (the “Company Selected Measure” as defined in the Pay Versus Performance Rules).