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MYRIAD GENETICS, INC.
October 10, 2018
Dear Stockholders,
You
‘‘At our core we are cordially inviteda genetics and information company. Our goal is to attendempower patients, as consumers, and their physicians and our payer partners with the 2018 Annual Meeting of Stockholders ofdata to help guide treatment decisions, improve clinical outcomes and lower healthcare costs. As we look forward, we are confident we can deliver on our mission to be a trusted advisor, and the opportunity to transform our business, and strategically position Myriad Genetics Inc. (the “Annual Meeting”) to be held at 8:00 a.m. MST on Novemberfor sustainable growth and profitability.’’
Paul J. Diaz, President and Chief Executive Officer, Myriad Genetics
April 15, 2021
Dear Stakeholders,
From its beginning 29 2018, at our offices at 320 Wakara Way, Salt Lake City, Utah. Details regarding the meeting,years ago, Myriad Genetics has been in the business of improving and saving lives by unlocking the power of genetics and precision medicine. We empower patients with the information they need to be conducted,take control of their own health and information aboutwellness, and healthcare professionals with data-driven genetic insights to better diagnose, treat and prevent disease. Our purpose is clear and our mission has never been more relevant than it is today. This ability to proactively impact patients, and accelerate the transition to a healthcare system that is patient-centered, and focused on prevention and early detection is what compelled me to join Myriad Genetics. It is a passion shared by my 2,700 Myriad teammates around the world.
Market trends
The challenges of and pressures on our current healthcare system reinforce the opportunity for Myriad Genetics Inc.to play a meaningful role in transforming healthcare and precision medicine, building on our long-standing record of innovation and leadership in women’s health, oncology and neuroscience.
These trends include:
–Accelerating shifts in consumer engagement, early detection, home-based care models, telemedicine and virtual care.
–Dramatic changes and disruption in the way outpatient care is delivered in the wake of the COVID-19 pandemic, coupled with broadened awareness of the vital role of diagnostic testing.
–Expanding access to clinical-grade, genetic solutions for underserved populations with increased focus on disparities in healthcare outcomes and access for challenged communities.
–Growth in personalized medicine and the interest in new partnership models to advance companion diagnostics and serve patients with specific treatments based on their own genetic makeup and biology.
Business Opportunity
These market trends create new opportunities to position Myriad Genetics, and our products and services, for growth and commercial success through enhanced customer service levels and a stronger alignment of our value proposition with physicians and payers. Patient safety, quality, and service excellence are paramount. We are committed to creating a superior end-to-end experience in everything we do, making it easier for patients, physicians, and our payer partners to do business with us. We also believe that by leveraging our R&D and technology capabilities and commercial platform, we can improve our go-to-market strategies and more quickly adapt to evolving customer preferences and market dynamics.
There are also meaningful ways for Myriad Genetics to improve its financial position, by reducing complexity and cost, and extending our commercial reach. We will embrace a growth mindset as we drive efficiency and productivity, and focus our efforts on markets and products where we can lead. Finally, we are committed to developing a more disciplined approach to allocating our human and financial capital to drive growth and improve our investors’ return on invested capital.
Altogether, we have a powerful thesis for transformation and growth. The development of a comprehensive plan to improve our commercial capabilities and reset our base is underway, incorporating a range of external perspectives, industry best practices and internal learnings. Our initial focus will span sales, marketing, pricing, reimbursement and related areas. I look forward to sharing our future strategic vision as plans progress.
Business Highlights and Proposed Enhancements to Corporate Governance
The six-month transition period ended December 31, 2020 was one of significant change and transition for Myriad Genetics, its Board of Directors, its business, and the world at large. Before the COVID-19 pandemic hit the United States, the Company already was facing headwinds to its business operations and was starting to overcome these challenges. The pandemic created new hurdles beginning in the spring of 2020, including a worldwide economic contraction and severe disruption to the molecular diagnostics industry.
But the Company is emerging from these setbacks, and I am excited to share with you should consider when you vote your sharesa few examples of steps we have taken to improve our operations and governance as we accelerate growth:
–Leadership Changes: Louise Phanstiel, our Board Chair, took on her role in March of 2020 and I began as CEO in August of 2020. Over the last eight months, I have been impressed by the dedication of our leadership team and employees who are describeddeeply committed to our mission, open to change, and willing to challenge the way we do things as we undergo our strategic transformation.
–Board Composition: Myriad’s Board of Directors has undergone significant change in this proxy statement.the last two years under a board refreshment process most recently led by our Chair Louise Phanstiel. In that time span, the Company added six new directors, changed the Board Chair, changed one critical committee chair, expanded the responsibility of one committee, and completely redefined another. As of December 4, 2020, two thirds of the Board members were new directors, introducing new perspectives and skills while retaining the experience and continuity of longer-tenured directors. At the Annual Meeting, two persons will be elected tosame time, we have improved the diversity of our Board in a meaningful way.
–Corporate Governance: We engaged actively with our stockholders, heard their feedback and addressed many of Directors. We also will seektheir concerns. The resulting actions included changing from plurality to majority voting for directors, instituting a retirement age for directors, and changing to a calendar fiscal year to better align with industry standards.
–Executive Compensation: To help spur our recovery from COVID-19 and other headwinds, we have refocused our executive compensation on financial metrics that better align management incentives with stockholder approval (i) of our proposal to increaseinterests. For example, equity granted as long-term incentive compensation now comprises 50% performance shares, with the Company’s performance on adjusted earnings per share and relative total stockholder return driving the number of shares authorized underultimately awarded to each executive. In addition, the short-term incentive bonus plan is now more heavily weighted to financial goals, including operating revenue (40%) and adjusted operating income (30%), with the balance tied to specific goals aligned with our 2017 Employee, Directortransformation plan.
–Business Highlights: The six month transition period ended December 31, 2020 was challenging due to the impact of the COVID-19 pandemic on physician office visits and Consultant Equity Incentive Plan;elective procedure trends in the United States. Based on our response and (ii)implementation of cost saving measures, we were able to askmitigate some of the impact on our financial results and during this period we began to see a significant recovery in overall business trends which was partially spurred by innovative solutions such as direct-to-patient kit shipment initiatives and virtual selling. Below are some of the key highlights:
◦Saw 48% growth in test volume and a 66% increase in revenue from the June to the December 2020 quarter.
◦Received new American College of Obstetricians and Gynecologists guidelines supporting use of non-invasive prenatal screening in average risk women.
◦Announced three major business unit divestitures to improve operational execution and focus in Oncology, Women's Health, and Mental Health.
◦Announced $40 million in annualized cost savings to be offset by $20 million in strategic investments supporting future growth.
◦Signed in-network agreement with the majority of Anthem Blue Cross Blue Shield health plans, the second largest commercial payer in the United States, returning all Myriad products to in-network status.
As we move beyond the COVID-19 pandemic, given recent catalysts and future opportunities, we believe we are well positioned to return to growth and profitability.
Annual Meeting of Stockholders
I sincerely hope you will participate in the Annual Meeting of Stockholders. The following actions will be proposed to stockholders of the Company for their vote to:
1.Elect three Class I directors to the Board of Directors to serve until the 2024 Annual Meeting of Stockholders;
2.Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
3.Approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement; and
4.To transact such other business that is properly presented at the Annual Meeting and any adjournments or postponements thereof.
The Board of Directors recommends the approval of all of these proposals. The stockholders will also act on any other business as may be properly presented at the Annual Meeting.
Myriad Genetics is a purpose-driven organization committed to its mission to improve and save lives by unlocking the power of genetics while delivering value to all of its stakeholders. This mission is even more meaningful and relevant today than it was at the founding of our Company 29 years ago. On behalf of the entire Myriad team, thank you for your continued support. We look forward to working diligently over the next year to reward that support with superior Company performance.
Sincerely,
Paul J. Diaz
President and Chief Executive Officer
MYRIAD GENETICS, INC.
320 Wakara Way
Salt Lake City, Utah 84108
NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
TIME: 8:00 a.m. MDT
DATE: Thursday, June 3, 2021
PLACE: This year’s Annual Meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting the following URL: www.virtualshareholdermeeting.com/MYGN2021 and entering the 16-digit control number included in the Notice of Internet Availability or proxy card that you receive. For further information about the virtual annual meeting, please call our investor relations department at (801) 584-1143.
PURPOSES:
1. To elect three Class I directors to the Board of Directors to serveuntil the 2024 Annual Meeting of Stockholders;
2.To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2019. In addition, we will seek stockholder approval,December 31, 2021;
3. To approve, on an advisory basis, of the compensation of our namedexecutive officers, as disclosed in this proxy statement. The Board of Directors recommendsstatement; and
4. To transact such other business that is properly presented at the approval of all of these proposals. Other business will be transacted that may be properly addressed during the Annual Meeting.Under Securities and Exchange Commission rules that allow companies to furnish proxy materials to stockholders over the Internet, we have elected to deliver our proxy materials to the majority of our stockholders in this manner. We believe this process will facilitate the accelerated delivery of proxy materials, save costs and reduce the environmental impact of our Annual Meeting. On or about October 10, 2018, we began sending our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy statement for our 2018
Annual Meeting of Stockholders and our 2018 annual report on Form10-K to stockholders. The Notice also provides instructions on how to vote onlineany adjournments or by telephone and how to receive a paper copy of the proxy materials by mail.We hope you will be able to attend the Annual Meeting. Whether you plan to attend the meeting or not, it is important that you cast your vote. You may vote over the Internet as well as by telephone. In addition, if you requested printed proxy materials, you may vote by completing, signing, dating and returning your proxy card by mail. You are urged to vote promptly in accordance with the instructions provided in the Notice of Internet Availability of Proxy Materials or on your proxy card. We encourage you to vote by proxy so that your shares will be represented and voted at the meeting, whether or not you attend.
postponements thereof. |
Sincerely, |
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Mark C. Capone |
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President and Chief Executive Officer |
Your vote is important. Please vote as soon as possible by using the Internet or by telephone or, if you received a paper copy of the proxy card by mail, by completing, signing, dating, and returning the enclosed proxy card. Instructions for your voting options are described on the Notice of Internet Availability of Proxy Materials or proxy card.
MYRIAD GENETICS, INC.
320 Wakara Way
Salt Lake City, Utah 84108
NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS
TIME: 8:00 a.m. MST
DATE: November 29, 2018
PLACE: The offices of Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108
PURPOSES:
1. | To elect two Class I directors to the Board of Directors to serve three-year terms expiring in 2021;
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2. | To approve the proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan;
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3. | To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2019;
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4. | To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement;
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5. | To transact such other business that is properly presented at the Annual Meeting and any adjournments or postponements thereof.
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You may vote if you were an owner of record of Myriad Genetics, Inc. common stock at the close of business on
October 2, 2018.April 8, 2021. A list of stockholders of record will be available
atfor inspection online during the Annual Meeting
at the following URL: www.virtualshareholdermeeting.com/MYGN2021 and, during the 10 days prior to the meeting, at the office of the Secretary at
the above address.Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.
All stockholders are cordially invited to attend the Annual Meeting. Whether you plan to attend the meeting or not, please vote by following the instructions on the Notice of Internet Availability of Proxy Materials that you have previously received,
or will shortly receive, which we refer to as the Notice, or in the section of this proxy statement entitled
“Important‘‘Important Information About the Annual Meeting and Voting — How Do I Vote?
”’’ or, if you requested printed proxy materials, your proxy card. You may change or revoke your proxy at any time before it is voted.
On or about
October 10, 2018,April 15, 2021, we began sending the Notice of Internet Availability of Proxy Materials to all stockholders entitled to vote at the annual meeting.
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BY ORDER OF THE BOARD OF DIRECTORS |
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Richard M. Marsh |
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Secretary |
October 10, 2018
BY ORDER OF THE BOARD OF DIRECTORS
Paul J. Diaz
President and Chief Executive Officer
April 15, 2021
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE
STOCKHOLDER MEETING TO BE HELD ON NOVEMBER 29, 2018
JUNE 3, 2021
This proxy statement and our annualtransition report on Form10-K to stockholders for the fiscal yeartransition period ended June 30, 2018December 31, 2020 are available for viewing, printing, and downloading atwww.proxyvote.com. To view these materials, please have available your12-digit 16-digit control number(s) that appears on your Notice or proxy card. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to stockholders by electronic delivery.
Additionally, you may find a copy of our annualtransition report on Form10-K, which includes our financial statements for the fiscal yeartransition period ended June 30, 2018,December 31, 2020, on the website of the Securities and Exchange Commission atwww.sec.gov, or in the “Financial‘‘Financial Reporting/SEC Filings”Filings’’ section of the “Investors”‘‘Investors’’ section of our website atwww.myriad.com. You also may obtain a printed copy of our annualtransition report on Form10-K, as amended, including our financial statements from us, free of charge, by sending a written request to: Secretary, Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108. Exhibits will be provided upon written request and payment of an appropriate processing fee.
TABLE OF CONTENTS
SALT LAKE CITY, UTAH 84108
(801) 584-3600
PROXY STATEMENT FOR THE MYRIAD GENETICS, INC.
2018
2021 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
NOVEMBER 29, 2018JUNE 3, 2021
This proxy statement, along with the accompanying Notice of
20182021 Annual Meeting of Stockholders, contains information about the
20182021 Annual Meeting of Stockholders of Myriad Genetics, Inc., including any adjournments or postponements of the annual meeting, which we refer to as the Annual Meeting.
To attend the Annual Meeting please visit the following URL: www.virtualshareholdermeeting.com/MYGN2021. In this proxy statement, we refer to Myriad Genetics, Inc. as
“Myriad,” “the‘‘Myriad,’’ ‘‘the Company,
” “we”’’ ‘‘we’’ and
“us.”‘‘us.’’
This proxy statement relates to the solicitation of proxies by our Board of Directors for use at the Annual Meeting. On or about
October 10, 2018,April 15, 2021, we began sending the Notice of Internet Availability of Proxy Materials, which we refer to throughout this proxy statement as the Notice, to all stockholders entitled to vote at the Annual Meeting.
IMPORTANT INFORMATION ABOUT THE
ANNUAL MEETING AND VOTING
Why is the Company Soliciting My Proxy?
The Board of Directors of Myriad Genetics, Inc. is soliciting your proxy to vote at the Annual Meeting to be held
at our offices, 320 Wakara Way, Salt Lake City, Utah,via webcast on
November 29, 2018,Thursday, June 3, 2021, at 8:00 a.m.
MSTMDT and any adjournments of the Annual Meeting. The proxy statement, along with the accompanying Notice of
20182021 Annual Meeting of Stockholders, summarizes the purposes of the Annual Meeting and the information you need to know to vote at the meeting.
We have sent you the Notice and made this proxy statement, the Notice of
20182021 Annual Meeting of Stockholders, and our
annualtransition report on Form
10-K to stockholders for the
fiscal yeartransition period ended
June 30, 2018December 31, 2020 available to you on the Internet because you owned shares of Myriad Genetics, Inc. common stock on the record date. We also have delivered printed versions of these materials to certain stockholders by mail. The Company commenced distribution of the Notice and the proxy materials to stockholders on or about
October 10, 2018.April 15, 2021.
Why Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?
As permitted by the rules of the U.S. Securities and Exchange Commission, or the SEC, we may furnish our proxy materials to our stockholders by providing access to such documents on the Internet, rather than mailing printed copies of these materials to each stockholder. Most stockholders will not receive printed copies of the proxy materials unless they request them. We believe that this process should expedite stockholders’ receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. If you received a Notice by mail or electronically, you will not receive a printed or email copy of the proxy materials, unless you request one by following the instructions included in the Notice. Instead, the Notice will provide instructions on how you may access and review all of the proxy materials and submit your proxy on the Internet or by telephone. If you requested a paper copy of the proxy materials, you may authorize the voting of your shares by following the instructions on the enclosed proxy card, in addition to the other methods of voting described in this proxy statement.
Why Are You Holding a Virtual Annual Meeting?
Due to the public health impact of COVID-19 and to support the health and well-being of our stockholders, this year’s Annual Meeting will be held in a virtual meeting format only. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and communication. For example, the virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meeting so they can ask questions of our Board of Directors or management, as time permits. We intend to return to holding an in-person annual meeting in 2022.
What Happens If There Are Technical Difficulties During the Annual Meeting?
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting, voting at the Annual Meeting or submitting questions at the Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call 1-(800) 586-1548 or international 1-(303) 562-9288.
Only stockholders who owned Myriad Genetics, Inc. common stock at the close of business on
October 2, 2018April 8, 2021 are entitled to vote at the Annual Meeting. On this record date, there were
74,715,67177,000,430 shares of our common stock outstanding and entitled to vote. Common stock is our only class of voting stock.
You do not need to attend the Annual Meeting to vote your shares. Shares represented by valid proxies, received in time for the Annual Meeting and not revoked prior to the meeting, will be voted at the meeting. For instructions on how to change or revoke your proxy, see
“May‘‘May I Change or Revoke My Proxy?
”’’ below.
How Many Votes Do I Have?
Each share of Myriad Genetics, Inc. common stock that you owned at the close of business on the record date,
October 2, 2018,April 8, 2021, entitles you to one vote.
Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy.
To attend the Annual Meeting, stockholders need to go to the following URL: www.virtualshareholdermeeting.com/MYGN2021 and enter their control number. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via Internet or telephone. You may specify whether your shares should be voted for,
against or
withheld forabstain with respect to each nominee for director, and whether your shares should be voted for, against or abstain with respect to each of the other proposals. If you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with the
board’sBoard’s recommendations as noted below. Voting by proxy will not affect your right to attend the Annual Meeting. If your shares are registered directly in your name through our stock transfer agent, American Stock Transfer and Trust Company, or you have stock certificates registered in your name, you may vote:
By Internet or by telephone. Follow the instructions included in the Notice or, if you received printed materials, in the proxy card, to vote by Internet or telephone.
By mail. If you received your proxy materials by mail, you can vote by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with the board’s recommendations as noted below.
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| By Internet or by telephone |
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| To vote by Internet or telephone in advance of the meeting, follow the instructions included in the Notice or, if you received printed materials, in the proxy card, to vote by Internet or telephone. |
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| By mail |
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| If you received your proxy materials by mail, you can vote by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with the Board’s recommendations as noted below. |
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| At the meeting |
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| To vote by Internet directly during the webcast of the Annual Meeting, you will need to visit the following URL: www.virtualshareholdermeeting.com/MYGN2021 and enter your control number. To vote during the Annual Meeting when the polls open use the ‘‘vote’’ button on the interface. |
In person at the meeting. If you attend the Annual Meeting, you may deliver a completed proxy card in person or you may vote by completing a ballot that will be available at the Annual Meeting.
Telephone and Internet voting facilities for stockholders of record will be available24-hours-a-day and will close at 11:59 p.m. EST on November 28, 2018.
June 2, 2021.
If your shares are held in
“street name”‘‘street name’’ (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares
in person at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card
and bring it tobefore the meeting in order to vote.
To vote you must be a stockholder of record as of April 8, 2021 and during the online annual meeting use the ‘‘vote’’ button to vote your shares.
How Does the Board of Directors Recommend That I Vote on the Proposals?
The Board of Directors recommends that you vote as follows:
Proposal 1: ‘‘FOR’’ the election of the twothree Class I directors for director;
“FOR”to the approvalBoard of Directors to serve until the amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan;
2024 Annual Meeting ofStockholders;Proposal 2:‘‘FOR”’’ the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for ourthe fiscal year ending June 30, 2019;December 31, 2021; and
Proposal 3: ‘‘FOR’’ the approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this proxystatement.
If any other matter is presented, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his or her best judgment. At the time this proxy statement was first madeavailable, we knew of no matters that needed to be acted on at the Annual Meeting, other than those described in this proxy statement.
May I Change or Revoke My Proxy?
If you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any of the following ways:
•Byre-voting by Internet or by telephone as instructed above;
•If you received printed proxy materials, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above;
•By notifying our Secretary in writing before the Annual Meeting that you have revoked your proxy; or
•By attending the Annual Meeting and voting by Internet during the Annual Meeting in person.accordance with the instructions provided. Attending the Annual Meeting in person will not in and of itself revoke a previously submitted proxy unless you specifically request it.
re-vote during the Annual Meeting.
Your most current vote, whether by telephone, Internet or proxy card, is the one that will be counted.
What if I Receive More Than One Notice or Proxy Card?
You may receive more than one Notice or proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described under
“How‘‘How Do I Vote?
”’’ for each account to ensure that all of your shares are voted.
3
Will My Shares Be Voted if I Do Not Vote?
If your shares are registered in your name, they will not be voted if you do not vote as described above under
“How‘‘How Do I Vote?
”’’ If your shares are held in street name and you do not provide voting instructions to the bank, broker or other holder of record of your shares as described above, the holder of record has the authority to vote your unvoted shares only on Proposal
32 if it does not receive instructions from you and does not have the ability to vote your uninstructed shares on any other proposal. Therefore, we encourage you to provide voting instructions. This ensures that your shares will be voted at the Annual Meeting and in the manner you desire. When your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority or because your broker chooses not to vote on a matter for which it does have discretionary voting authority, it is referred to as a
“broker‘‘broker non-vote.”’’ Thus, if you hold your shares in
a street name and do not instruct your bank, broker or other nominee how to vote, no votes will be cast on any proposal on your behalf other than the ratification of
the selection of theour independent registered public accounting firm.
What Vote is Required to Approve Each Proposal and How are Votes Counted?
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Proposal 1: Elect Directors | | The nomineesaffirmative vote of a majority of the shares voted affirmatively or negatively is required for each nominee for director who receive the most votes (also known as a “plurality” of the votes) willto be elected. Abstentions are not counted for purposeswill have no effect on the results of electing directors. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of the nominees. Votes that are withheld will not be included in the vote tally for the election of directors.this vote. Brokerage firms do not have the authority to vote customers’ unvoted shares held by the firms in a street name on this proposal; therefore,proposal. As a result, any shares not voted by a customer will be treated as a brokernon-vote. Such brokernon-votes will have no effect on the results of this vote. |
| Recommendation: FOR the election of the three Class I directors |
Proposal 2: Approve the amendment to Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive Plan | | The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to approve the amendment to Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive Plan. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal; therefore, any shares not voted by a customer will be treated as a brokernon-vote. Such brokernon-votes will have no effect on the results of this vote. |
| |
Proposal 3:
Ratify the Selection of our Registered Independent Public Accounting Firm | | The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in a street name on this proposal. If a broker does not exercise this authority, such brokernon-votes will have no effect on the results of this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2019, ourDecember 31, 2021, the Audit and Finance Committee of ourthe Board of Directors will reconsider its selection. |
4
| | Recommendation: FOR |
Proposal 4: 3: Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers | | The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement. Abstentions will have no effect on the result of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by suchthe firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a brokernon-vote. Such brokernon-votes will have no effect on the results of this vote. Although the advisory vote isnon-binding, the Compensation and Human Capital Committee and the Board of Directors will review the voting results and take them into consideration when making future decisions regarding the compensation of our named executive officers. | Recommendation: FOR |
We will keep all the proxies, ballots and voting tabulations private. We only let our Inspector of Elections and our transfer agent, American Stock Transfer and Trust, examine these documents. Management, other than the Inspector of Elections, Richard Marsh, General Counsel and Secretary, will not know how you voted on aspecific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make on the proxy card or elsewhere.
Where Can I Find the Voting Results of the Annual Meeting?
The preliminary voting results will be announced at the Annual Meeting, and we will publish preliminary
results, or final results if available, in a Current Report on Form
8-K within four business days of the Annual Meeting. If final results are unavailable at the time the Form
8-K is filed, we will file an amended report on Form
8-K to disclose the final voting results within four business days after the final results are known.
What Are the Costs of Soliciting these Proxies?
We will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and directors no additional compensation for these services. We may ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to deliver proxies. We will then reimburse them for their expenses.
What Constitutes a Quorum for the Annual Meeting?
The presence, in person
(by means of remote communication as authorized by the Board) or by proxy, of the holders of a majority of the voting power of the outstanding shares of our common stock is necessary to constitute a quorum at the Annual Meeting. Votes of stockholders of record who are present
virtually at the meeting
in person or by proxy, abstentions, and broker
non-votes are counted for purposes of determining whether a quorum exists.
5
Attending the Annual Meeting
The Annual Meeting will be held at 8:00 a.m. MSTMDT on Thursday, November 29, 2018June 3, 2021 via Internet webcast. This year, our Annual Meeting will be held in a virtual meeting format only.
To attend the virtual Annual Meeting, go to the following URL: www.virtualshareholdermeeting.com/MYGN2021 shortly before the meeting time, and follow the instructions for downloading the webcast.
If you miss the Annual Meeting, you can view a replay of the webcast at the
offices of Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108. When you arrive at our offices, our personnel will direct you tofollowing URL: www.virtualshareholdermeeting.com/MYGN2021 for one year following the
appropriate meeting room.Annual Meeting. You need not attend the Annual Meeting
in order to vote.
Householding of Annual Disclosure Documents
SEC rules concerning the delivery of annual disclosure documents allow us or your broker to send a single Notice or, if applicable, a single set of our proxy materials to any household at which two or more of our stockholders reside, if we or your broker believe that the stockholders are members of the same family. This practice, referred to as
“householding,”‘‘householding,’’ benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our Notices, annual reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your address will be
“householded,”‘‘householded,’’ the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.
If your household received a single Notice or, if applicable, set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge by calling their toll freetoll-free number1-800-542-1061. 1-866-540-7095. If you do not wish to participate in “householding”‘‘householding’’ and would like to receive your own Notice or, if applicable, a set of proxy materials in future years, follow the instructions described below.
Conversely, if you share an address with another Myriad Genetics, Inc. stockholder and together both of you would like to receive only a single Notice or, if applicable, set of proxy materials, follow these instructions:
•If your Myriad Genetics, Inc. shares are registered in your own name, please contact Broadridge and inform them of your request by calling them at1-866-540-7095 or writing them at Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717.
•If a broker or other nominee holds your Myriad Genetics, Inc. shares, please contact the broker or other nominee directly and inform them of your request. Be sure to include your name, the name of your brokerage firm and your account number.
Electronic Delivery of Company Stockholder Communications
Most stockholders can elect to receive notices of the availability of future proxy materials by email instead of receiving a paper copy in the mail. You can choose this option and save the cost of producing and mailing these documents by following the instructions provided on your Notice or proxy card or following the instructions provided when you vote over the Internet atwww.proxyvote.com.6
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of September 1, 2018April 8, 2021 for (a) each stockholder that we know to be the beneficial owner of more than 5% of our common stock, (b) each of our executive officers named in the Summary Compensation Table of this proxy statement (the “Named‘‘Named Executive Officers”Officers’’ or “NEOs”‘‘NEOs’’), (c) each of our directors and director nominees, and (d) all of our current directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of September 1, 2018April 8, 2021 pursuant to the exercise of options and the vesting of restricted stock unit awards to be outstanding for the purpose of computing the percentage ownership of an individual or group, but such shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 74,124,31777,000,430 shares of common stock outstanding on September 1, 2018. | | | | | | | | |
| | | Shares Beneficially Owned | |
Name and Address** | | Number | | | Percent | |
5% or More Stockholders | | | | | | | | |
BlackRock, Inc (1) | | | 10,066,753 | | | | 13.6 | % |
55 East 52nd Street | | | | | | | | |
New York, NY 10055 | | | | | | | | |
Baillie Gifford & Co. (2) | | | 9,625,846 | | | | 13.0 | % |
Calton Square — 1 Greenside Row | | | | | | | | |
Edinburgh, Scotland EH13AN | | | | | | | | |
The Vanguard Group (3) | | | 7,224,302 | | | | 9.7 | % |
100 Vanguard Blvd. | | | | | | | | |
Malvern, PA 19355 | | | | | | | | |
D.E. Shaw & Co, L.P. (4) | | | 4,763,936 | | | | 6.4 | % |
1166 Avenue of the Americas, 9th Floor | | | | | | | | |
New York, NY 10036 | | | | | | | | |
| | |
Named Executive Officers | | | | | | | | |
Mark C. Capone (5) | | | 1,232,658 | | | | 1.6 | % |
R. Bryan Riggsbee (6) | | | 63,368 | | | | * | |
Alexander Ford (7) | | | 149,950 | | | | * | |
Jerry S. Lanchbury, Ph.D. (8) | | | 722,595 | | | | 1.0 | % |
Richard M. Marsh (9) | | | 776,905 | | | | 1.0 | % |
| | |
Directors and Director Nominees | | | | | | | | |
John T. Henderson, M.D. (10) | | | 192,824 | | | | * | |
Walter Gilbert, Ph.D. (11) | | | 80,024 | | | | * | |
Lawrence C. Best (12) | | | 182,524 | | | | * | |
Heiner Dreismann, Ph.D. | | | 26,524 | | | | * | |
Dennis H. Langer, M.D., J.D. (13) | | | 92,524 | | | | * | |
S. Louise Phanstiel (14) | | | 178,524 | | | | * | |
All current executive officers and directors as a group (16 persons) (15) | | | 4,503,441 | | | | 5.8 | % |
* | Represents beneficial ownership of less than 1% of our outstanding shares of common stock.
|
** | Unless otherwise indicated, the address for each beneficial owner is c/o Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.
|
April 8, 2021.
| | | | | | | | |
| | Shares Beneficially Owned |
| Name and Address** | Number | Percent |
| Beneficial Owners of More Than 5% of Our Common Stock | | |
| BlackRock, Inc (1) | | |
| 55 East 52nd Street | | |
| New York, NY 10055 | 12,501,920 | 16.2% |
| The Vanguard Group (2) | | |
| 100 Vanguard Blvd. | | |
| Malvern, PA 19355 | 8,296,864 | 10.8% |
| Earnest Partners, LLC (3) | | |
| 1180 Peachtree Street NE, Suite 2300 | | |
| Atlanta, GA 30309 | 6,731,429 | 8.7% |
| Camber Capital Management (4) | | |
| 101 Huntington Ave. | | |
| Boston, MA 02199 | 5,000,000 | 6.5% |
| State Street Corporation (5) | | |
| 1 Lincoln St. | | |
| Boston, MA 02111 | 3,715,530 | 4.8% |
| Named Executive Officers | | |
| Paul J. Diaz | — | * |
| Jerry S. Lanchbury, Ph.D. (6) | 634,811 | * |
| Nicole Lambert | 17,864 | * |
| R. Bryan Riggsbee | 95,910 | * |
| Mark Verratti | 42,964 | * |
| Directors and Director Nominees | | |
| S. Louise Phanstiel (7) | 161,790 | * |
| Heiner Dreismann, Ph.D. | 54,790 | * |
| Rashmi Kumar | — | * |
| Dennis H. Langer, M.D., J.D. (8) | 120,790 | * |
| Lee N. Newcomer M.D. | 11,687 | * |
| Colleen F. Reitan | 11,687 | * |
| Daniel M. Skovronsky M.D., Ph.D. | — | * |
| Daniel K. Spiegelman (9) | 20,562 | * |
| All current executive officers and directors as a group (18 persons) (10) | 1,343,897 | 1.70% |
*Represents beneficial ownership of less than 1% of our outstanding shares of common stock.
** Unless otherwise indicated, the address for each beneficial owner is c/o Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.
(1)This information is based on a Schedule 13G filed with the SEC on January 25, 2021 with respect to Myriad Genetics common stock. BlackRock, Inc. beneficially owns these shares and has sole dispositive power for all of these shares and sole voting power for 12,343,848 of these shares.
(2)This information is based on a Schedule 13G/A filed with the SEC on February 10, 2021 with respect to Myriad Genetics common stock. The Vanguard Group beneficially owns these shares and has sole dispositive power for 8,165,627 of these shares and sole voting power for 0 of these shares.
(3)This information is based on a Schedule 13G filed with the SEC on February 16, 2021 with respect to Myriad Genetics common stock. Earnest Partners, LLC beneficially owns these shares and has sole dispositive power for all of these shares and sole voting power for 4,698,715 of these shares.
(4)This information is based on a Schedule 13G filed with the SEC on February 16, 2021 with respect to Myriad Genetics common stock. Camber Capital Management LP beneficially owns these shares and has sole dispositive power and sole voting power for 0 of these shares.
(5)This information is based on a Schedule 13G filed with the SEC on February 16, 2021 with respect to Myriad Genetics common stock. State Street Corporation beneficially owns these shares and has sole dispositive power and sole voting power for 0 of these shares.
(6)Includes 500,000 shares of common stock subject to currently exercisable options as of April 8, 2021.
(7)Includes 90,000 shares of common stock subject to to currently exercisable options, 50,790 shares of common stock held by The Howard G. and S. Louise Phanstiel JTWROS, and 21,000 shares of common stock held by The Phanstiel Trust as of April 8, 2021.
(8)Includes 60,000 shares of common stock subject to currently exercisable options as of April 8, 2021.
(9)Includes 20,562 shares of common stock subject to restricted stock unit awards which vest within 60 days as of April 8, 2021.
(10)See Notes 6-9 above. Also includes 147,725 shares of common stock subject to currently exercisable options as of April 8, 2021 held by other current executive officers.
Delinquent Section 16(a) Reports
Pursuant to Section 16 of the Securities Exchange Act of 1934, executive officers, directors, and holders of more than 10% of our common stock are required to file reports of their transactions in Company equity securities with the SEC. Based solely on a review of the copies of such reports received by the Company, or written representations from certain reporting persons, the Company believes that all filings required to be made by its reporting persons complied with all applicable Section 16 filing requirements during the 2020 transition period except the following individuals did not timely report the grant of restricted stock units on August 12, 2020: (a) Mr. Riggsbee, our Chief Financial Officer (13,787 restricted stock units), (b) Mr. Alexander Ford, our former Chief Operating Officer (11,525 restricted stock units), (c) Dr. Lanchbury, our Chief Scientific Officer (10,068 restricted stock units), (d) Ms. Lambert, our Group President of Myriad Women's Health, Oncology and International (7,646 restricted stock units), (e) Mr. Verratti, our Group President of Myriad Neuroscience and Autoimmune (7,467 restricted stock units), (f) Mr. Jackson, our former Executive Vice President, General Counsel and Secretary (6,541 restricted stock units). A Form 4 for these transactions was filed on August 17, 2020.
(1) | This information is based on a Schedule 13G filed with the SEC on January 19, 2018 with respect to Myriad Genetics common stock. BlackRock, Inc. beneficially owns these shares and has sole dispositive power for these shares and sole voting power for 9,902,536 of these shares.
|
(2) | This information is based on a Schedule 13G/A filed with the SEC on January 26, 2018 with respect to Myriad Genetics common stock. Baillie Gifford and Co beneficially owns these shares and has sole dispositive power for these shares and has sole voting power for 8,453,504 shares.
|
(3) | This information is based on a Schedule 13G/A filed with the SEC on January 10, 2018 with respect to Myriad Genetics common stock. The Vanguard Group beneficially owns these shares and has sole dispositive power for 7,146,602 of these shares and sole voting power for 74,469 of these shares.
|
(4) | This information is based on a Schedule 13G filed with the SEC on February 14, 2018 with respect to Myriad Genetics common stock. D.E. Shaw & Co, L.P. beneficially owns these shares and has sole dispositive power and sole voting power for 0 of these shares.
|
(5) | Includes 1,146,285 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2018.
|
(6) | Includes 49,425 shares of common stock subject to restricted stock unit awards which vest within 60 days of September 1, 2018.
|
(7) | Includes 146,801 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2018.
|
(8) | Includes 681,987 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2018.
|
(9) | Includes 757,005 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2018.
|
(10) | Includes shares held directly by Dr. Henderson and his wife, as well as 150,000 shares of common stock subject to currently exercisable options as of September 1, 2018.
|
(11) | Includes 60,000 shares of common stock subject to currently exercisable options as of September 1, 2018.
|
(12) | Includes 150,000 shares of common stock subject to currently exercisable options as of September 1, 2018.
|
(13) | Includes 60,000 shares of common stock subject to currently exercisable options as of September 1, 2018.
|
(14) | Includes 150,000 shares of common stock subject to currently exercisable options as of September 1, 2018.
|
(15) | See Notes5-14 above. Also includes 594,327 shares of common stock subject to currently exercisable options and options exercisable and restricted stock unit awards which vest within 60 days of September 1, 2018 held by other current executive officers.
|
8
MANAGEMENT AND CORPORATE GOVERNANCE
Our Restated Certificate of Incorporation, as amended, and Restated
By-Laws provide that our business is to be managed by or under the direction of our Board of Directors. Our Board of Directors is divided into three classes for purposes of election. One class is elected at each annual meeting of stockholders to serve for a
three-year term.term to expire at the third succeeding annual meeting after their election. The Board of Directors currently consists of
sevennine members, classified into three classes as follows:
John T. Henderson, M.D. and S. Louise Phanstiel
(Chair), Daniel M. Skovronsky M.D., Ph.D., and Daniel K. Spiegelman constitute a class with a term ending at the
20182021 Annual Meeting (the
“Class‘‘Class I
Directors”Directors’’);
Mark C. Capone andPaul J. Diaz, Heiner Dreismann, Ph.D.
, and Colleen F. Reitan constitute a class with a term ending at the
20192022 Annual Meeting (the
“Class‘‘Class II
Directors”Directors’’); and
Walter Gilbert, Ph.D.,Rashmi Kumar, Dennis H. Langer, M.D., J.D., and
Lawrence C. BestLee N. Newcomer, M.D. constitute a class with a term ending at the
20202023 Annual Meeting (the
“Class‘‘Class III
Directors”Directors’’).
Board Composition and Refreshment
Annually, the Nominating and Governance Committee of the Board of Directors considers the size, structure and needs of the Board, reviews and considers potential changes to the size and composition of the Board, and recommends director nominees to the Board for approval.
In its review of directors, and its director nominees, the Board considers its composition, including its diversity, and the capabilities, areas of expertise, and experience of the Board, as well as the current and future business strategies and challenges and opportunities for the Company. These considerations have resulted in a change in Board leadership, the addition of five new independent directors over the past two years, and the appointment of a new Chief Executive Officer (also a director) last year.
On
September 20, 2018, ourFebruary 18, 2021, the Board of Directors accepted the recommendation of the Nominating and Governance Committee and
votedunanimously resolved to nominate
John T. Henderson, M.D. and S. Louise Phanstiel,
Daniel M. Skovronsky M.D., Ph.D., and Daniel K. Spiegelman for election at the Annual Meeting for a term
of three yearsto serve until the
20212024 Annual Meeting,
of stockholders, and until their
respective successors have been elected and qualified, or until their earlier death, resignation, retirement or removal.
Set forth below
in the table and biographies are the names of the persons nominated as directors and
the directors whose terms do not expire this year
and who will continue to serve as directors following the Annual Meeting, their ages as of
September 1, 2018,April 15, 2021, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which such persons currently hold directorships or have held directorships in the past five years. Additionally, information about the specific experience, qualifications, attributes or skills that led to the Board’s conclusion at the time of the filing of this proxy statement that each person listed below should serve as a director is set forth below for each individual director.
| | | | | | | | | | | | | | | | | |
NAME
Name and Position | Age | AGEAudit and Finance Committee | Compensation and Human Capital Committee | Nominating and Governance Committee | POSITION WITH MYRIAD
Research and Product Innovation Committee |
John T. Henderson, M.D. (2) (3) (4)
| | | 74 | | | Chairman
S. Louise Phanstiel Chair of the Board of Directors | 62 | | | | |
Walter Gilbert,
Paul J. Diaz President, Chief Executive Officer, Director | 59 | | | | |
Heiner Dreismann, Ph.D. (2) Director | 67 | | 86C  | | |
Rashmi Kumar Director | Vice Chairman51
| | | | |
Dennis H. Langer, M.D., J.D. Director | 69 | | | C  | |
Lee N. Newcomer Director | 69 | | | | C  |
Colleen F. Reitan Director | 61 | | | | |
Daniel M. Skovronsky M.D., Ph.D. Director | 47 | | | | |
Daniel K. Spiegelman Director | 62 | C  | | | |
| | | | | |
| Audit and Finance Committee |
| |
| Compensation and Human Capital Committee |
| |
| Nominating and Governance Committee |
| |
| Research and Product Innovation Committee |
| |
| C | Committee Chair |
The following is a brief biography of each of the persons nominated as directors and the directors whose terms do not expire this year and who will continue to serve as directors following the Annual Meeting.
| | | | | | | | | | | | | | |
| S. Louise Phanstiel |
| Experience: |
| | | |
S. Louise Phanstiel, Chair of the Board of Directors, has been a director of Myriad since September 2009, held several executive positions at Anthem, Inc., formerly WellPoint, Inc. from 1996 to 2007. She was President, Specialty Products which included behavioral health services; Senior Vice President, Chief of Staff and Corporate Planning in the Office of the Chairman; and Chief Accounting Officer, Controller and Chief Financial Officer for all WellPoint, Inc. subsidiaries. Previously, Ms. Phanstiel was a partner at the international services firm PricewaterhouseCoopers, LLP, formerly Coopers & Lybrand, LLP where she specialized in insurance. Ms. Phanstiel's life science experience includes having previously served on the Board of Directors and Chair of the Audit Committees at publicly traded companies, Inveresk Research Group, Inc. and Verastem, Inc. Ms. Phanstiel is currently a member of the Board of Directors of Butterfly Network, Inc.
The Board of Directors has determined that Ms. Phanstiel should serve on the Board for the following reasons: She provides the Board with important expertise in the healthcare industry based on her extensive experience in several senior positions at WellPoint, Inc. This expertise is critical as we rely on healthcare third-party reimbursement for our molecular diagnostic testing services. Ms. Phanstiel also provides the Board with financial accounting, internal control and public company reporting expertise from her work at Coopers & Lybrand, LLP and as a Certified Public Accountant. In addition, she provides the Board with business, financial and investment expertise, as well as management expertise, resulting from managing and service as a director of publicly traded companies. |
Mark C. Capone
|
|
Age: 62 |
Director Since: 2009 |
| Committees: |
|
|
|
|
| | | 56 |
| | | |
| | | | |
| | | | | | | | | | | | | | |
| Paul J. Diaz |
| Experience: |
| | | |
Paul J. Diaz was appointed as the President and Chief Executive Officer, Directoror CEO, of Myriad Genetics, Inc., and a member of the Board of Directors, effective August 13, 2020. Mr. Diaz was most recently a partner at Cressey & Company (2016-2020), a private investment firm headquartered in Chicago, Illinois, which currently manages over $3.0 billion in committed capital. Cressey & Company is a healthcare focused middle-market private equity firm with over 30 years of success investing in and helping to build high quality healthcare businesses. Mr. Diaz is the former president and CEO and vice chairman of Kindred Healthcare, Inc. (2002-2016) a Fortune 500 Company and one of the largest providers of healthcare services in the United States. At the time, Kindred had revenues of $7.2 billion, rehabilitation hospitals, sub-acute units, home health and hospice agencies and contract rehabilitation locations. For six years in a row, during his tenure as CEO, Kindred was ranked one of the Most Admired healthcare companies in the U.S. by Fortune magazine. Mr. Diaz currently serves on the board of directors of DaVita (NYSE: DVA), the board of trustees of Johns Hopkins Medicine (where he serves as chair of Johns Hopkins Healthcare), and the board of visitors of the Georgetown University Law Center. He was formerly on the board of directors of PharMerica Corporation (NYSE: PMC), and previously served on the board of the Federation of American Hospitals, and the Bloomberg School of Public Health at Johns Hopkins University. While CEO of Kindred, Mr. Diaz was a member of the Business Roundtable and the Wall Street Journal CEO Council. Modern Healthcare magazine named Mr. Diaz one of the 100 Most Influential People in Healthcare and named him one of the top 25 Minority Executives in Healthcare for numerous years. In addition, Hispanic magazine named Mr. Diaz one of the 25 Best Latinos in business in multiple years. Mr. Diaz earned a bachelor’s degree in Finance and Accounting from American University’s Kogod School of Business and a law degree from Georgetown University Law Center in Washington, D.C.
The Board of Directors has determined that Mr. Diaz should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his 15 years at Kindred Healthcare, including specific expertise in managing healthcare service companies and business transformation. Furthermore, Mr. Diaz has extensive experience in private equity with healthcare companies, including businesses in the personalized medicine space. Furthermore, his background in finance and accounting and law provide unique insights to our business. Mr. Diaz also has a background serving on both public and private healthcare boards. |
Lawrence C. Best (1) (4)
| | | 69 | | | Director
|
Age: 59 |
Director Since: 2020 |
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| | | | |
Paul J. Diaz
| | | | | | | | | | | | | | |
Heiner Dreismann, Ph.D. (2) (4) | | | 65 | | | Director
|
| Experience: |
| | | |
Heiner Dreismann, Ph.D., joined as a Director of Myriad in June 2010, had a successful career at the Roche Group from 1985 to 2006 where he held several senior positions, including President and CEO of Roche Molecular Systems, Head of Global Business Development for Roche Diagnostics and member of Roche’s Global Diagnostic Executive Committee. During the past five years, Dr. Dreismann served on the Board of Directors of Med BioGene, Inc., Genenews Limited, Interpace Diagnostics and Ignyta, Inc.. He earned a M.S. degree in biology and his Ph.D. in microbiology/molecular biology (summa cum laude) from Westfaelische Wilhelms University (The University of Münster) in Germany.
The Board of Directors has determined that Dr. Dreismann should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his more than 20 years at Roche, including specific expertise in developing and commercially launching diagnostic products. Furthermore, Dr. Dreismann has extensive experience in international markets, specifically in Europe, while he was CEO of Roche Molecular Systems, the international leader in molecular diagnostics, which is important as we seek to expand internationally. His scientific background and expertise also enable him to provide the Board with technical advice on product research and development. Dr. Dreismann has a diversified background in managing and serving as a director of several companies in the healthcare industry. |
|
|
Age: 67 |
Director Since: 2010 |
| Committees: |
|
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| | | | |
| | | | |
| | | | |
| | | | | | | | | | | | | | |
| Rashmi Kumar |
| Experience: |
| | | |
Rashmi Kumar has been a Director of the Company since September 2020. Currently, Ms. Kumar serves as Senior Vice President and Chief Information Officer – Global IT with Hewlett Packard Enterprise in Houston. She is a seasoned technology leader with wide ranging experience in IT Leadership, healthcare, consulting services, electric utilities, financial services, information technology, media & entertainment and steel industries. With more than 25 years of experience, Ms. Kumar’s primary areas of focus include Digital Transformation, AI/ML, Data & Analytics, strategic planning, Enterprise Architecture, and large-scale business process transformations. Rashmi Kumar’s joined HPE in 2018 as VP Global IT to focus on Applications Operations, and Support, NGIT Program Build and Deployment, and technology leadership to enable HPE business to achieve transformation goals. Ms. Kumar has served as CIO and CTO for many Fortune 50 companies like, McKesson, Southern California Edison, Toyota, HPE, and Tata Steel. Rashmi Kumar earned a bachelor’s degree in Metallurgical Engineering from the Bihar Institute of Technology in Sindri, India. She also holds an MBA from the University of California, Irvine; Paul Merage School of Business. She is very passionate about the topic of equality and is executive sponsor for various ERG’s and sits on Diversity & Inclusion Steering committees.
The Board of Directors has determined that Ms. Kumar should serve on the Board for the following reasons: She provides the Board with important expertise in the healthcare industry based on her extensive experience at McKesson Corp. Ms. Kumar also has extensive experience in information technology management at leading companies across a diverse range of industries. This skill set is especially important as Myriad looks to upgrade its information technology systems relating to its customer interfaces. Ms. Kumar also has a strong scientific and engineering background providing expertise from a scientific and product development standpoint. |
|
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Age: 51 |
Director Since: 2020 |
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Dennis H. Langer, M.D., J.D. (1) (3) | | | 66 | | | Director |
S. Louise Phanstiel (1) (3)
| Experience: |
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Dennis H. Langer, M.D., J.D., has been a Director of Myriad since May 2004. Dr. Langer has served as a Director of several public and private health care companies, and served in leadership roles in several pharmaceutical, biotechnology and diagnostic companies, including Chairman and Chief Executive Officer of AdvanDx, Inc. (2013-2014), Managing Partner of Phoenix IP Ventures, LLC (2005-2010), President, North America for Dr. Reddy’s Laboratories, Inc. (2004-2005), a Senior Vice President, R&D at GlaxoSmithKline and SmithKline Beecham (1994-2004), and Chief Executive Officer, Neose Technologies, Inc. (1991-1994). Previously, Dr. Langer held R&D and marketing positions at Lilly, Abbott and Searle. Dr. Langer is a Clinical Professor, Department of Psychiatry, Georgetown University School of Medicine. During the past 5 years, Dr. Langer served on the Boards of Dicerna Pharmaceuticals, Inc. and Pernix Therapeutics Holdings, Inc., also public companies. Dr. Langer received a J.D. from Harvard Law School, an M.D. from Georgetown University School of Medicine, and a B.A. in Biology from Columbia University.
The Board of Directors has determined that Dr. Langer should serve on the Board for the following reasons: He provides the Board with important expertise in developing predictive, personalized and prognostic testing products, as well as experience in research and development which is critical to our development of molecular diagnostic testing services. As a board-certified psychiatrist with extensive experience in neuropsychiatric drug development, Dr. Langer provides the Board with expertise in developing and commercializing diagnostics for patients suffering from neuropsychiatric and other related conditions. Additionally, he provides management expertise from serving on several public company boards in the healthcare industry. |
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Age: 69 |
Director Since: 2004 |
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| Lee Newcomer, M.D. |
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Lee Newcomer, M.D., was appointed as a member of the Audit Committee.Board of Directors in September 2019. Dr. Newcomer currently manages his own consulting business, Lee N. Newcomer Consulting, LLC, and previously held senior executive roles at United Healthcare including Senior Vice President for Oncology and Genetics, Chief Medical Officer and Senior Vice President of Health Policy and Strategy for UnitedHealth Group. Dr. Newcomer also worked for Vivius, Inc., a consumer directed health plan, holding the position of Executive Vice President and Chief Medical Officer. Dr. Newcomer received a Master’s Degree in Healthcare Administration & Management from the University of Wisconsin, Madison, an M.D. from the University of Nebraska, Omaha, and a B.S. from Nebraska Wesleyan University. Dr. Newcomer currently serves on the Board of Cellworks Group Inc., a private precision medicine company and Intervention Insights, a genomic test decision support company. He also served on the Board of Directors of Park Nicollet Health Systems, a hospital health care system with approximately 1,000 physicians and 400 beds, for 10 years including two years as Chairman.
The Board of Directors has determined that Dr. Newcomer should serve on the Board for the following reasons: His extensive reimbursement and managed care experience will aid the Company in its efforts to expand reimbursement for its new innovative precision medicine tests. He provides the Board with expertise on the medical insurance industry based on his extensive experience in several senior positions at UnitedHealth Group, Inc. and CIGNA Corporation. Additionally, Dr. Newcomer’s medical background provides the Board with expertise in developing predictive, personalized and prognostic testing products. Furthermore, Dr. Newcomer brings extensive business management experience from his 28 years of work in the managed care and pharmaceutical industries. |
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Age: 69 |
Director Since: 2019 |
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(2) | Member
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| Colleen F. Reitan |
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Colleen F. Reitan was appointed as a member of the Compensation Committee.Board of Directors in September of 2019. Ms. Reitan previously held numerous senior leadership positions at Health Care Services Corporation (HCSC) including most recently as the Executive Vice President and President of Plan Operations and as the Chief Operating Officer. Prior to working at HCSC, Ms. Reitan held numerous senior management positions at Blue Cross and Blue Shield of Minnesota including Chief Operating Officer. In aggregate, Ms. Reitan has over 35 years of experience in the managed care industry. Ms. Reitan holds a B.A. from Minnesota State University at Mankato and a M.S. in Health Care Administration from the University of Minnesota-Twin Cities. She currently serves on the board of Alnylam Pharmaceuticals, Inc.
The Board of Directors has determined that Ms. Reitan should serve on the Board for the following reasons: Her extensive reimbursement and managed care experience will aid the Company in its efforts to expand reimbursement for its new innovative precision medicine tests. Furthermore, she provides the Board with important expertise on the medical insurance industry based on her extensive experience in several senior positions at Health Care Services Corporation and Blue Cross and Blue Shield of Minnesota. In addition, she provides the Board with management expertise, resulting from managing private companies and serving as a director of a publicly-traded company. |
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Age: 61 |
Director Since: 2019 |
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| Daniel M. Skovronsky, M.D., Ph.D. |
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Daniel M. Skovronsky, M.D., Ph.D., joined the Company as a Director in July 2020. Currently, he serves as Chief Science Officer and President of Lilly Research Laboratories at Eli Lilly and Company. Previously, he was Chief Executive Officer of Avid Radiopharmaceuticals Inc., a company he founded in 2004. Dr. Skovronsky earned his M.D. from the Perelman School of Medicine, University of Pennsylvania, his Ph.D. in neuroscience from University of Pennsylvania and a B.S. in molecular biophysics and biochemistry from Yale University.
The Board of Directors has determined that Dr. Skovronsky should serve on the Board for the following reasons: His medical and scientific background provides the Board with expertise in developing predictive, personalized, and prognostic testing products. Dr. Skovronsky provides the Board with business and management expertise from several senior positions at a major pharmaceutical company, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. Dr. Skovronsky's background as a neuropathologist with extensive experience in neuroscience provides the Board with expertise in developing and commercializing diagnostics for patients suffering from neuropsychiatric and other medical conditions. |
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Age: 47 |
Director Since: 2020 |
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| Daniel K. Spiegelman |
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Daniel K. Spiegelman has been a Director of the NominatingCompany since May 2020. Most recently, he served as Executive Vice President and Governance Committee. |
(4) | MemberChief Financial Officer at BioMarin Pharmaceuticals, Inc. Prior to that, he held several roles, including Senior Vice President and Chief Financial Officer of CV Therapeutics and Treasurer at Genentech, Inc. He is currently a member of the Strategic Committee
Board of Directors of Jiya Acquisition Corp., a public biopharmaceutical special purpose acquisition company, Opthea Limited, a public biotechnology company, and Spruce Biosciences, Inc., a public biopharmaceutical company. Mr. Spiegelman also serves on the Board of Directors of Tizona Therapeutics, Inc., a private pharmaceutical company, and Maze Therapeutics, a private biotechnology company. He previously served on the Board of Directors of Cascadian Therapeutics, Inc., Rapidscan Pharma Solutions and Relypsa, Inc. Mr. Spiegelman received a B.A. degree from Stanford University and a M.B.A. from the Stanford Graduate School of Business.
The Board of Directors has determined that Mr. Spiegelman should serve on the Board for the following reasons: He provides the Board with important expertise in the healthcare industry based on his extensive experience in several senior positions at major pharmaceutical companies. Mr. Spiegelman also provides the Board with financial accounting, internal control and public company reporting expertise from his work as Chief Financial Officer of multiple public companies. In addition, he provides the Board with business, financial and investment expertise, as well as management expertise, resulting from managing and service as a director of a private pharmaceutical company. |
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Age: 62 |
Director Since: 2020 |
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The following is a brief summary
Board of Director Qualifications, Expertise, and Attributes
Below are charts showing board diversity, the
backgroundage range of our directors, director independence, and
business experience of eachthe average tenure of our directors.
John T. Henderson, M.D., Chairman
Director Capability Definitions
Board Diversity – Representation of gender, ethnic, cultural, or other perspectives that expand the Board’s understanding of the Boardneeds and viewpoints of Directors, has been a directorour patients, physician partners, employees, governments, and other stakeholders.
Financial – Experience leading or managing the financial function of
Myriad since May 2004 and Chairman of the Board since April 2005. Since December 2000, Dr. Henderson has served as a consultant to the pharmaceutical industry as President of Futurepharm LLC. Dr. Henderson currently serves on the Board of Directors of Cytokinetics, Inc. Until his retirementan enterprise, resulting in
December 2000, he was with Pfizer for over 25 years, most recently as a Vice9
Presidentproficiency in the Pfizer Pharmaceuticals Group. Dr. Henderson previously held vice presidential level positions with Pfizer in Research and Development in Europe and later in Japan. He also was Vice President, Medical for the Europe, U.S. and International Pharmaceuticals groups at Pfizer. He earned his bachelor’s and medical degrees from the University of Edinburgh and is a Fellow of the Royal College of Physicians (Ed.).
The Board of Directors has determined that Dr. Henderson should serve on the Board for the following reasons: His medical background provides the Board with expertise in developing predictive, personalized and prognostic testing services. Dr. Henderson provides the Board with business andcomplex financial management, expertise from his senior positions at Pfizer for over 25 years, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. He brings to the Board international experience as the Company implements strategies for international expansion.
Walter Gilbert, Ph.D., Vice Chairman of the Board of Directors, joined Myriad as a founding scientist and director in March 1992. Dr. Gilbert won the Nobel Prize in Chemistry in 1980 for his contributions to the development of DNA sequencing technology. He was a founder of Biogen, Inc. and its Chairman of the Board and Chief Executive Officer from 1981 to 1985. Dr. Gilbert has held professorships at Harvard University in the departments of Physics, Biophysics, Biology, Biochemistry and Molecular Biology, and Molecular and Cellular Biology. He is a Carl M. Loeb University Professor Emeritus at Harvard University. Dr. Gilbert founded and served on the Board of Directors of both Memory Pharmaceuticals Corp. and Paratek Pharmaceuticals, Inc. He also currently serves on the board of Amylyx Pharmaceuticals and is a General Partner of BioVentures Investors, an investment fund.
The Board of Directors has determined that Dr. Gilbert should serve on the Board for the following reasons: He provides the Board with a unique and extensive scientific background and expertise important to us in developing and commercializing molecular diagnostic products, and understanding technological developments in the industry. Dr. Gilbert provides the Board with business, managerialcapital allocation, and financial expertise based on having founded, managed, and directed several companies in the healthcare industry.
Mark C. Capone, was appointed as the President and Chief Executive Officer,reporting. Experience or CEO, of Myriad Genetics, Inc., and a member of the Board of Directors, effective July 1, 2015. Previously, he served as the President of Myriad Genetic Laboratories, Inc., a wholly owned subsidiary of Myriad. Mr. Capone joined the Company in October 2002, initially as Vice President of Sales until being named Chief Operating Officer in February 2006, a position he held until his promotion to President of Myriad Genetic Laboratories, Inc. in March 2010. Prior to joining Myriad, he served 17 years with Eli Lilly and Company, where he held positions as Product Development Manager, Manufacturing Plant Manager, and Area Sales Director. Mr. Capone received his B.S. degree in Chemical Engineering from Penn State University, graduating with highest distinction, his M.S. degree in Chemical Engineering from the Massachusetts Institute of Technology, and his M.S. in Management from the Massachusetts Institute of Technology.
The Board of Directors has determined that Mr. Capone should serve on the Board for the following reasons: He provides the Board with business and management expertise at a molecular diagnostic company from his 14 years of service as President, Chief Operating Officer and Vice President of Sales at Myriad Genetic Laboratories. Mr. Capone brings to the Board additional experience in operations management, product development, finance, sales, and other operational areas from his experience at Eli Lilly and Company. He also provides us with important expertise in investor relations based on his past interactions with our investor base. Additionally, Mr. Capone’s scientific, engineering and business management background and education provide important insights for the Board.
Lawrence C. Best, a director of Myriad since September 2009, is the Chairman and Founder of OXO Capital LLC, an investment firm focused on life sciences and therapeutic medical device companies, since 2007. He joined Boston Scientific Corporation in 1992 and served for 15 years as the Executive Vice President-Finance & Administration and Chief Financial Officer. Prior to joining Boston Scientific, Mr. Best was a partner in the accounting firm of Ernst & Young, where he specialized in serving multinational companies in the high technology and life sciences fields. He served atwo-year fellowship at the SEC from 1979 to 1981 and aone-year term as a White House-
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appointed Presidential Exchange Executive in Washington, D.C. He is a founding director of the President’s Council at Massachusetts General Hospital. Within the past five years Mr. Best also has served on the Board of Directors of Haemonetics Corp, Biogen, Inc. and as Executive Chairman of Cardiovalve Ltd., a privately held medical device company based in Tel Aviv, Israel. He received a B.B.A. degree from Kent State University.
The Board of Directors has determined that Mr. Best should serve on the Board for the following reasons: He provides the Board with broad financial accounting and reporting processes or the financial management of a major organization.
Leadership – Experience leading a significant enterprise, resulting in a practical understanding of organizations, processes, strategic planning, and risk management. Demonstrated strengths in developing talent, planning succession, and driving change and long-term growth.
Healthcare Industry – Experience with and understanding of complex issues within the health care industry.
Research and Development – Experience and expertise in
the technology and life sciences fields. Mr. Best provides extensive financial, business, management and investment expertise from his 15 years of service as the Chief Financial Officer at Boston Scientific. He also provides the Board with substantial experience in the event of potential mergers, acquisitions and licensing opportunities.Heiner Dreismann, Ph.D., a director of Myriad since June 2010, had a successful career at the Roche Group from 1985contributing to 2006 where he held several senior positions, including President and CEO of Roche Molecular Systems, Head of Global Business Development for Roche Diagnostics and member of Roche’s Global Diagnostic Executive Committee. From 2006 to 2009, Dr. Dreismann served as the CEO of Vectrant Technologies, Inc., and until 2013 was the Interim CEO for GeneNews Limited. During the past five years, Dr. Dreismann served on the Board of Directors of Med BioGene, Inc., Genenews Limited, Interpace Diagnostics and Ignyta, Inc.. He earned a M.S. degree in biology and his Ph.D. in microbiology/molecular biology (summa cum laude) from Westfaelische Wilhelms University (The University of Münster) in Germany.
The Board of Directors has determined that Dr. Dreismann should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his more than 20 years at Roche, including specific expertise in developing and commercially launching diagnostic products. Furthermore, Dr. Dreismann has extensive experience in international markets, specifically in Europe, while he was CEO of Roche Molecular Systems, the international leader in molecular diagnostics, which is important as we seek to expand internationally. His scientific background and expertise also enable him to provide the Board with technical advice on product research and development. Dr. Dreismann has a diversified background in managing and serving as a director of several companies in the healthcare industry.
Dennis H. Langer, M.D., J.D., has been a director of Myriad since May 2004. From January 2013 to July 2014 he served as Chairman and Chief Executive Officer of AdvanDx, Inc. From August 2005 to May 2010, Dr. Langer served as Managing Partner of Phoenix IP Ventures, LLC. From January 2004 to July 2005, he was President, North America for Dr. Reddy’s Laboratories, Inc. From September 1994 until January 2004, Dr. Langer held several high-level positions at GlaxoSmithKline, and its predecessor, SmithKline Beecham, including most recently as a Senior Vice President of Research and Development. He has a broad base of experience in innovative R&D companies such as Eli Lilly, Abbott and Searle. He is also a clinical professor at the Department of Psychiatry, Georgetown University School of Medicine. Dr. Langer received a J.D. from Harvard Law School, an M.D. from Georgetown University School of Medicine, and a B.A. in Biology from Columbia University. He currently serves on the Board of Directors of Dicerna Pharmaceuticals, Inc. and Pernix Therapeutics Holdings, Inc. During the past five years, Dr. Langer served on the Board of Delcath Systems, Inc.
The Board of Directors has determined that Dr. Langer should serve on the Board for the following reasons: His medical background provides the Board with expertise in developing predictive, personalized, and prognostic testing products. Dr. Langer provides the Board with business and management expertise from senior positions at several major pharmaceutical companies, including expertise in research and development which is criticalprojects aimed at introducing innovative products and services that satisfy unmet medical needs and contribute to ourthe Company’s profits. Expertise in assessing the medical and/or commercial implications for improving health and cost outcome.
Research and Development – Experience and expertise in new product development and life cycle management, resulting in the successful introduction of molecular diagnostic testing services. He brings internationalinnovative products and services that satisfy unmet medical needs and contribute to the Company’s profits. Expertise in designing and implementing clinical trials and in research methods used to evaluate and demonstrate improvements in health and cost outcomes.
Technology – A significant background working in technology, resulting in knowledge of how to anticipate technological trends including digital solutions, generate disruptive innovation and extend or create new business models. Significant expertise and experience as we implement strategies for global expansion. Dr. Langer’s backgroundin leading technology functions of an enterprise.
Public Company Governance – Experience as a board certified psychiatrist and a clinical professormember of psychiatryother publicly traded companies.
Diagnostics Industry – Experience with
extensive experience in neuropsychiatric drugcomplex issues involving the development and
personalized medicine provides the Board with expertise indistribution of diagnostic tests, providing test results and interpretation, providing clinical laboratory services, and developing and
commercializingsupplying molecular diagnostics,
to help physicians determine the right medications for patients suffering from neuropsychiatricinstrumentation equipment, and
other medical conditions. Dr. Langer also has a diversified background in managing and serving as a director of several companies in the healthcare industry.11
consumable materials.
S. Louise Phanstiel, a director of Myriad since September 2009, held several important positions at WellPoint, Inc. from 1996 to 2007, including as President, Specialty Products (2003 to 2007), Senior Vice President, Chief of Staff and Corporate Planning in the Office of the Chairman (2000 to 2003), and Senior Vice President, Chief Accounting Officer, Controller, and Chief Financial Officer for all WellPoint, Inc. subsidiaries, including Blue Cross of California (1996 to 2000). Previously, Ms. Phanstiel was a partner at the international services firm of Coopers & Lybrand where she served clients in life and property/casualty insurance, high technology, and higher education. She currently serves on the Board of Directors of Verastem, Inc. and the Stony Brook Foundation. Ms. Phanstiel received a B.A. degree in Accounting from Golden Gate University and is a Certified Public Accountant.
The Board of Directors has determined that Ms. Phanstiel should serve on the Board for the following reasons: She provides the Board with important expertise on the medical insurance industry based on her extensive experience in several senior positions at WellPoint and Blue Cross of California. This expertise is critical as we rely on third-party reimbursement for our molecular diagnostic services. Ms. Phanstiel also provides the Board with financial accounting and reporting expertise from her work at Coopers & Lybrand and as a Certified Public Accountant. In addition, she provides the Board with financial and investment expertise, as well as management expertise, resulting from managing and serving as a director of publicly-traded companies.
DIRECTOR CAPABILITY MATRIX
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| Board
Diversity | Financial | Leadership | Healthcare Industry | Diagnostic
Industry | Research and
Development | Technology | Public
Company
Governance |
| S. Louise Phanstiel | ✓ | ✓ | ✓ | ✓ | | | | ✓ |
| Chair of the Board | | | |
Paul J. Diaz CEO | ✓ | ✓ | ✓ | ✓ | | | | ✓ |
| Heiner Dreismann Ph.D. | | | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Director | | |
Rashmi Kumar Director | ✓ | | ✓ | ✓ | |
| ✓ | |
| Dennis Langer M.D., J.D. | | ✓ | ✓ | ✓ | ✓ | ✓ | | ✓ |
| Director | | |
| Lee N. Newcomer M.D. | | | ✓ | ✓ | ✓ | ✓ | | |
| Director | | | | |
Colleen F. Reitan Director | ✓ | ✓ | ✓ | ✓ | | | ✓ | ✓ |
| Dan Skovronsky, M.D. Ph.D. | | | ✓ | ✓ | ✓ | ✓ | | |
| Director | | | | |
| Daniel K. Spiegelman | | ✓ | ✓ | ✓ | | | | ✓ |
| Director | | | | |
Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with Myriad, either directly or indirectly. Based on this review, the Board has determined that the following members of the Board are
“independent directors”‘‘independent directors’’ as defined by The
NASDAQNasdaq Stock Market
LLC: Mr. Best,LLC (‘‘Nasdaq’’): Dr. Dreismann,
Dr. Gilbert, Dr. Henderson,Ms. Kumar, Dr. Langer,
Dr. Newcomer, Ms. Phanstiel, Ms. Reitan, Dr. Skovronsky, and
Ms. Phanstiel.Mr. Spiegelman.
Leadership Structure of the Board
The Board does not have a policy regarding the separation of the roles of ChairmanChair of the Board and Chief Executive Officer because the Board believes that it is in our best interests to make that determination based on the position and direction of the Company and the membership of the Board. However, at this time, and since our inception, the Board has determined that having an independent director serve as ChairmanChair of the Board is in the best interests of our stockholders. Thus, the roles of ChairmanChair of the Board and Chief Executive Officer are separated. This structure enables a greater role for the independent directors in the oversight of the Company and their active participation in setting agendas and establishing Board policies, priorities and procedures. This structure also allows the Chief Executive Officer to focus on the management of our day-to-day operations.
Board’s Role in the Oversight of Risk Management
The Board has an active role, directly and through its committees, in the oversight of our risk management efforts. The Board carries out this oversight role through several levels of review. It regularly reviews and discusses with members of management information regarding the management of risks inherent in the operations of our businesses and the implementation of our strategic plan, including our risk mitigation efforts.
Each of the Board’s committees also oversees the management of risks that are under each committee’s areas of responsibility. For example, the Audit and Finance Committee oversees management of accounting, auditing, external reporting, internal controls, and cash investment risks. risks, and our compliance policies.
The Nominating and Governance Committee oversees
our compliance policies,the Company’s Code of Conduct, conflicts of interest, director independence and corporate governance policies. The Compensation
and Human Capital Committee oversees risks arising from compensation practices and policies. While each committee has specific responsibilities for oversight of risk, the Board is regularly informed by each committee about such risks. In this manner the Board is able to coordinate its risk oversight.
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Board’s Consideration of Diversity
The Board and Nominating and Governance Committee do not have a formal policy with respect to the consideration of diversity in identifying nominees for director positions. However, the Board and Nominating and Governance Committee strive to nominate individuals with a variety of diverse backgrounds, skills, qualifications, attributes and experience such that the Board, as a group, will possess the appropriate expertise, talent and skills to fulfill its responsibilities to manage the Company in the long-term interests of the stockholders.
Board’s Disclosure of
Third PartyThird-Party Director and Nominee Compensation
No member of the Board of Directors has any agreement or arrangement with any person or entity other than the Company relating to compensation or other payment in connection with the
Director’sdirector’s service as a
Directordirector of the Company.
Committees of the Board of Directors and Meetings
Meeting Attendance.During the fiscal yeartransition period ended June 30, 2018,December 31, 2020, or fiscal 2018,the "2020 transition period," there were six16 meetings of the Board of Directors, and the various committees of the Board met a total of 11 times.Directors. No director attended fewer than 75 percent of the total number of meetings of the Board and of committeeseach committee of the Board on which he or she served during fiscal 2018.the 2020 transition period. The Board has adopted a policy under which each member is encouraged, but not required to attend each Annual Meetingannual meeting of Stockholders. At the time of our 2017 Annual Meeting, allstockholders. All members of the Board of Directors were in attendance.at the time of our 2020 Annual Meeting of Stockholders attended the meeting.
Audit and Finance Committee.Our Audit and Finance Committee (or "AFC") met fivefour times during fiscal 2018.the 2020 transition period. This committee currently has three fivemembers: Mr. Spiegelman (chair), Ms. Kumar, Dr. Langer, Ms. Phanstiel, (chair), Mr. Best, and Dr. Langer.Ms. Reitan. The Audit Committee’sAFC’s roles and responsibilities are set forth in its written charter and include the authority to retain and terminate the services of our independent registered public accounting firm. In addition, the Audit CommitteeAFC reviews annual financial statements; considers matters relating to accounting policy and internal controls; reviews the scope of annual audits; and monitors our processes for complyingcompliance with laws, regulations and our Code of Conduct. Our Board of Directors has determined that all members of the Audit CommitteeAFC satisfy the current independence standards promulgated by the SEC and by The NASDAQ Stock Market LLC,Nasdaq, as such standards apply specifically to members of audit committees. The Board has determined that Mr. Spiegelman and Ms. Phanstiel isare each an “audit‘‘audit committee financial expert,”’’ as the SEC has defined that term in Item 407 of RegulationS-K under the Securities Act of 1933, as amended, or the Securities Act. A copy of the Audit Committee’sAFC’s written charter is publicly available on the Investors—Investor Information – FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
Please also see the report of the Audit
and Finance Committee set forth elsewhere in this proxy statement.
Compensation and Human Capital Committee.Our Compensation and Human Capital Committee (or "CHCC") met twothree times during fiscal 2018.the 2020 transition period. This committee currently has threefour members:Dr. Dreismann (chair), Dr. Gilbert,Newcomer, Ms. Phanstiel, and Dr. Henderson.Skovronsky. The Compensation Committee’sCHCC’s role and responsibilities are set forth in its written charter and include reviewing, approving and making recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of the Board of Directors are carried out and that such policies, practices and procedures contribute to our success. The Compensation CommitteeCHCC also is responsible for evaluating and determining the compensation of our President and Chief Executive Officer andconducts its decision makingdecision-making process with respect to that issue without the President and Chief Executive Officer present. The Board has determined that all members of the Compensation CommitteeCHCC qualify as independent under the definition promulgated by Nasdaq.
The NASDAQ Stock Market LLC.13
The Compensation CommitteeCHCC is charged with establishing a compensation policy for our executivesexecutive officers and directors that is designed to attract and retain qualified executive talent, to motivate them to achieve corporate objectives, and reward them for superior performance. Our Compensation CommitteeCHCC is also responsible for establishing and administering our executive compensation policies and equity compensation plans. The Compensation CommitteeCHCC meets at least two times per year and more often as necessary to review and make decisions with regard to executive compensation matters. As part of its review of these matters, the Compensation CommitteeCHCC may delegate any of the powers given to it to a subcommittee. A copy of the Compensation Committee’sCHCC’s written charter is publicly available on the Investors—Investor Information — FAQs—Understanding Myriad/Corporate Governance section of our website at
www.myriad.com.
Further discussion of the process and procedures for considering and determining executive compensation, including the role that our executive officers play in determining compensation for other executive officers is included below in the section entitled
“Executive Compensation — ‘‘Executive Compensation—Compensation Discussion and Analysis.
”’’ The
Compensation CommitteeCHCC has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its duties. For purposes of
fiscal 20182020 transition period executive compensation determinations, the
Compensation CommitteeCHCC retained Mercer (US), Inc.
(“Mercer”(‘‘Mercer’’) to update our peer group of companies and provide competitive market data on the salaries and short-term and long-term incentive compensation of executive officers at comparable companies within our industry. Mercer also was engaged to provide the
Compensation CommitteeCHCC an analysis of, and recommendations for, annual salary compensation, short-term incentive compensation, and long-term incentive compensation for
the President and CEOour Chief Executive Officer and other executive officers. Mercer performs services solely on behalf of the
Compensation CommitteeCHCC and has no relationship with Myriad or its management except as may relate to performing such services. The
Compensation CommitteeCHCC has assessed the independence of Mercer pursuant to SEC rules and the corporate governance rules of
The NASDAQ Stock Market LLCNasdaq and concluded that no conflict of interest exists that would prevent Mercer from independently representing the
Compensation Committee.CHCC.
Please also see the report of the
Compensation CommitteeCHCC set forth elsewhere in this proxy statement.
Compensation and Human Capital Committee Interlocks and Insider Participation. No member of our Compensation CommitteeCHCC has at any time been anemployee of the Company. None of our executive officers is a member of the Compensation Committee,CHCC, nor do any of our executive officers serve as a member of the Boardboard of Directorsdirectors or Compensation Committeecompensation committee of any entity that has one or more executive officers serving as a member of our Board of directorsDirectors or Compensation Committee.CHCC.
Nominating and Governance Committee.Our Nominating and Governance Committee (or "NGC") met twofive times during fiscal 2018.the 2020 transition period. This committeecurrently has threefour members: Dr. Langer (chair), Dr. Henderson,Ms. Kumar, Ms. Phanstiel, and Ms. Phanstiel.Reitan. This committee’s role and responsibilities are set forth in the Nominating and Governance Committee’sNGC’s written charter and include evaluating and making recommendations to the full Board as to the size and composition of the Board and its committees, identifying and evaluating potential candidates and recommending the director nominees for election, developing and recommending corporate governance guidelines applicable to us,the Board, and reviewing and approving potential or actual conflicts of interest between our executive officers or members of the Board. The committeeNGC also oversees the annual Board performance evaluations, which may be submitted anonymously at the discretion of the director concerned,concerned. In adding new directors to the Board, the NGC may engage a nationally recognized search firm to identify and help evaluate candidates. This process helps attract qualified and independent directors, as well as our policy onshown in the recent additions to the Board.
In October 2020, the NGC recommended to the Board, and the Board unanimously approved, an amendment to the Company’s Restated By-Laws and the Committee’s charter to change from plurality voting to majority voting for director elections,directors in non-contested elections. This change, which became effective for the Class III directors who stood for election at the annual meeting on December 4, 2020, is described in “Proposal 1 — more detail in ‘‘Proposal 1—Election of Directors”Directors’’ of this proxy statement. The Board of Directors has determined that all members of the Nominating and Governance CommitteeNGC qualify as independent under the definition promulgated by Nasdaq.
Also in October 2020, the NGC recommended to the Board, and the Board unanimously approved, an amendment to the Company’s Corporate Governance Principles (available on our website) to institute a retirement age for directors. Specifically, when a director reaches 75 years of age, the director must tender his or her resignation before the next annual meeting at which the director is scheduled to stand for re-election. The
NASDAQ Stock Market LLC.NGC and the Board may then accept the resignation or not. If the resignation is not accepted, and the director wishes to continue service, then the director must again tender his or her resignation before each following annual meeting at which the director is scheduled to stand for re-election.
Finally in October 2020, the NGC recommended to the Board, and the Board unanimously approved, that the Company change from a fiscal year running from July 1 to June 30, to a calendar year fiscal year effective January 1, 2021. We believe this improves investor and analyst visibility into the Company’s financial performance by making comparison to our peer companies easier.
If a stockholder wishes to nominate a candidate for director who is not included in our proxy statement, the stockholder must follow the procedures described in our Restated
By-Laws and in
“Stockholder‘‘Stockholder Proposals and Nominations for
Director”Director’’ at the end of this proxy statement.
In addition, under our current corporate governance policies, the
Nominating and Governance CommitteeNGC may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third-party search firms or other appropriate sources. For all potential candidates, the
Nominating and Governance CommitteeNGC may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment; business and professional skills and experience;
independence,independence; knowledge of the industry in which we
operate,operate; possible
14
conflicts of interest,interest; the extent to which the candidate would fill a present need on the Board; and concern for the long-term interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to propose a candidate for consideration by the Nominating and Governance CommitteeNGC under our corporate governance policies, for each annual meeting, the Committee will consider only one recommended nominee from any stockholder or group of affiliated stockholders, and such recommending stockholder or group must have held at least 5 percent of common stock for at least one year. All stockholder recommendations for proposed director nominees must be made in writing to the Nominating and Governance Committee,NGC, care of Myriad’s Secretary at 320 Wakara Way, Salt Lake City, Utah 84108, and must be received no later than 120 days prior to the first anniversary of the date of the proxy statement for the previous year’s Annual Meeting. The recommendation must be accompanied by the following information concerning the recommending stockholder:
•The name, address and telephone number of the recommending stockholder;
•The number of shares of our common stock owned by the recommending stockholder and the time period for which such shares have been held;
•If the recommending stockholder is not a stockholder of record, a statement from the record holder verifying the holdings of the recommending stockholder and a statement from the recommending stockholder of the length of time such shares have been held (alternatively, the recommending stockholder may furnish a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the SEC, together with a statement of the length of time that the shares have been held); and
•A statement from the recommending stockholder as to the good faith intention to continue to hold such shares through the date of the next annual meeting.
The recommendation must also be accompanied by the following information concerning the proposed nominee:
•The information required by Items 401, 403 and 404 of RegulationS-K under the Securities Act;
•A description of all relationships between the proposed nominee and the recommending stockholder, including any agreements or understandings regarding the nomination;
•A description of all relationships between the proposed nominee and any of our competitors, customers, suppliers, labor unions or other persons with special interests regarding the Company; and
•The contact information for the proposed nominee.
The recommending stockholder must also furnish a statement supporting a view that the proposed nominee possesses the minimum qualifications as set forth below for director nominees and describing the contributions that the proposed nominee would be expected to make to the Board and to the governance of Myriad and must state whether, in the stockholder’s view, the proposed nominee, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of Myriad. The recommendation must also be accompanied by the written consent of the proposed nominee (i) to be considered by the
Nominating and Governance CommitteeNGC and interviewed if the
Nominating and Governance CommitteeNGC chooses to do so in its discretion, and (ii) if nominated and elected, to serve as a director.
For all potential candidates, the
Nominating and Governance CommitteeNGC may consider all factors it deems relevant, including the following threshold criteria:
•Candidates should possess the highest personal and professional standards of integrity and ethical values;
•Candidates must be committed to promoting and enhancing the long-term value of Myriad for its stockholders;
15
•Candidates must be able to represent fairly and equally all stockholders without favoring or advancing any particular stockholder or other constituency of Myriad;
•Candidates must have demonstrated achievements in one or more fields of business, professional, governmental, community, scientific or educational endeavor, and possess mature and objective business judgment and expertise;
•Candidates are expected to have sound judgment, derived from management or policy making experience that demonstrates an ability to function effectively in an oversight role;
•Candidates must have a general appreciation regarding major issues facing public companies of a size and operational scope similar to Myriad, including governance concerns, regulatory obligations, strategic business planning, competition and basic concepts of accounting and finance; and
•Candidates must have, and be prepared to devote, adequate time to the Board of Directors and its committees.
In addition, the
Nominating and Governance CommitteeNGC will take into account the extent to which the candidate would fill a present need on the Board, including the extent to which a candidate meets the independence and experience standards promulgated by the SEC and by
The NASDAQ Stock Market LLC.Nasdaq.
A copy of the Nominating and Governance Committee’sNGC’s written charter is publicly available on the Investors—Investor Information — FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
The descriptions of our corporate governance policies contained in this proxy statement are qualified in their entirety and subject to the terms of such policies as modified by the Board of Directors from time to time. The following corporate governance documents are publicly available on the Investors—Investor Information — FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com: •Policy on Annual Shareholder Meeting Attendance by Directors;
•Policy on Security Holder Communications with Directors;
•Policy on Security Holder Recommendation of Candidates for Election as Directors;
•Procedures for Security Holders Submitting Nominating Recommendations;
•Policy Regarding Qualifications of Directors;
•Policy For Handling Complaints Regarding Accounting and Auditing Matters and Code of Conduct Matters;
Policy on Plurality Vote for Director Elections;
•Policy on Limiting Service on Public Company Boards;
•Policy on New Director Orientation;
•Policy on Continuing Education for the Board;
•Policy on Related Person Transactions;
•Director and Executive Officer Stock Ownership Guidelines;
Equity Award Holding Requirements for Named Executive Officers;
•Policy on Incentive Compensation Repayment;
•Corporate Governance Principles;
•Corporate Code of Conduct and Ethics and Whistleblower Policy;
•Policy on Incentive Compensation Repayment;
•Nominating and Governance Committee Charter;
•Audit and Finance Committee Charter;
•Compensation and Human Capital Committee Charter; and
•Research and Product Innovation Committee Charter.
16
Strategic
Research and Product Innovation Committee.Our StrategicResearch and ProductInnovation Committee (or "RPIC") met twofour times during fiscal 2018.Thisin the 2020 transition period. This committee currently has threefour members: Dr. HendersonNewcomer (chair), Dr. Dreismann, Dr. Skovronsky, and Mr. Best and Dr. Dreismann.Spiegelman. The committee’s roles and responsibilities are set forth in the Strategic Committee’sRPIC’s written charter and include advising and consulting with senior management on a broad range of strategic and product development initiatives and making recommendations to the Board regarding such opportunities. A copy of the Strategic Committee’sRPIC’s written charter is publicly available on the Investors—Investor Information — FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
Stockholder Communications to the Board
Generally, stockholders who have questions or concerns should contact our Investor Relations department at (801)
584-1143. However, any stockholder who wishes to address questions regarding our business directly with the Board of Directors, or any individual director, should send his or her questions in writing to the
ChairmanChair of the
BoardorBoard or a designated member of the Board at 320 Wakara Way, Salt Lake City, Utah 84108. Communications will be distributed to the Board, to the Nominating and Governance Committee, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:
•Junk mail and mass mailings;
•Resumes and other forms of job inquiry;
•Surveys; and
•Solicitations or advertisements.
In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is excluded will be made available to any outside director upon request.
The following table sets forth the name, age (as of
September 1, 2018)April 15, 2021) and position of each of our current executive officers. Unless indicated otherwise, general references to
“executive officers”‘‘executive officers’’ throughout this proxy
statement refer to the following officers:
| | | | | | | | |
Name | | Age | | | Position |
Mark C. Capone
Paul J. Diaz | | | 56 | | 59 | President and Chief Executive Officer and Director |
Alexander Ford
| | Margaret Ancona | 51 | | | Senior Vice President, Myriad Women’s HealthEnterprise Transformation and Program Management Office |
Gary A. King
Kevin R. Haas | 35 | | 62 | | | Executive Vice President, International OperationsChief Technology Officer |
Jayne B. Hart | 60 | Chief People Officer |
| Nicole Lambert | 47 | Group President of Myriad Women's Health, Oncology, and International |
| Jerry S. Lanchbury, Ph.D. | | | 59 | | 61 | Chief Scientific Officer |
Richard M. Marsh, Esq.
Paul C. Parkinson | | | 60 | | 54 | Executive Vice President General Counsel and Secretaryfor Reimbursement Strategy |
Ralph L. McDade, Ph.D.
| | | 63 | | | President, Myriad RBM |
R. Bryan Riggsbee | | | 47 | | 50 | Chief Financial Officer and Treasurer |
W. Lloyd Sanders
Eric Santa | 43 | Chief Growth Officer |
| Mark Verratti | 5852 | Group President of Myriad Neuroscience and Autoimmune |
| | | | | | | | | | | | | | |
| Paul J. Diaz |
|
| President Myriad Oncologyand Chief Executive Officer |
Bernard F. Tobin
Paul J. Diaz. Please see biography above under ‘‘Management and Corporate Governance—The Board of Directors.’’ |
|
|
|
|
|
Age: 59 |
| | | 56 | |
| | | | | | | | | | | | | | |
| Margaret Ancona |
|
| Senior Vice President, Enterprise Transformation and Program Management Office |
Maggie Ancona joined Myriad in January 2021. Previously, she led Global Transformation and Program Management at Hewlett Packard (HP) and Dell Technologies where she oversaw business transformation strategy, executed large-scale programs and cost management efforts, while retooling digital infrastructure for the future. Mrs. Ancona received a bachelor’s degree in English from the University of San Francisco. |
|
|
|
|
|
Age: 51 |
| | | | |
| | | | | | | | | | | | | | |
| Kevin R. Haas |
|
| Chief Technology Officer |
Kevin R. Haas joined Myriad in May 2013. Previously, he was vice president of Bioinformatics. Dr. Haas also serves on the Board of Directors and is vice president for USA Triathlon, the non-profit national governing body for the sport. Dr. Haas received a B.S. from University of Wisconsin-Madison and a Ph.D. in Chemical Engineering from University of California-Berkeley, where he worked on molecular simulation and machine learning to study protein dynamics from single molecule fluoresce. He has co-authored 16 peer reviewed publications and eight patent applications. |
|
|
|
|
|
Age: 35 |
| | | | |
| | | | | | | | | | | | | | |
| Jayne B. Hart |
|
| Chief People Officer |
Jayne B. Hart joined Myriad in May 2011. She has more than twenty years of professional experience in the human resources field. Prior to joining Myriad, Ms. Hart served as vice president of human resources at LANDesk Software, a global software company. Before that, she was vice president of human resources for 360networks, a wholesale telecommunications company, and at AT&T Wireless, a global telecommunications company, where she began her career. |
|
|
|
|
|
Age: 60 |
| | | | |
| | | | | | | | | | | | | | |
| Nicole Lambert |
|
| Group President of Myriad Women’s Health, Oncology and International |
Nicole Lambert has served in her current role since April 1, 2019. Ms. Lambert joined the Company in June 2001. Prior to her current position, she served as General Manager for the Oncology and Urology business units and Vice President of Dermatology. Prior to joining Myriad, she was a genetic councilor at LabCorp. Ms. Lambert received her Bachelor’s degree in Biology and Sociology from Boston College and her Master’s degree in Genetic Counseling from Mt. Sinai School of Medicine at New York University. |
|
|
|
|
|
Age: 47 |
| | | | |
| | | | | | | | | | | | | | |
| Jerry S. Lanchbury, Ph.D. |
|
| Chief Scientific Officer |
Jerry S. Lanchbury, Ph.D. joined the Company in September 2002 as Senior Vice President of Research. In July 2005 he was appointed Executive Vice President of Research, a position he held until he was named to his current position in February 2010. Dr. Lanchbury came to us from GKT School of Medicine, King’s College where he had served as Reader in Molecular Immunogenetics and Head of Molecular Immunogenetics Unit since 1997. Dr. Lanchbury earned his Ph.D. from the University of Newcastle upon Tyne and 1st Class Honours, B.Sc. ‘‘Biology of Man & his Environment’’ degree from the University of Aston. |
|
|
|
|
|
Age: 61 |
| | | | |
| | | | | | | | | | | | | | |
| Paul C. Parkinson |
|
| Executive Vice President for Reimbursement Strategy |
Paul ‘‘Chip’’ Parkinson joined the Company in 2016. Previously, he was president of OmedaRx and chief pharmacy officer of Regence Blue Cross Blue Shield health plans. In this role, Mr. Parkinson was responsible for managing $1.7 billion in annual pharmacy spending for the Regence Blue Cross Blue Shield health plans in Utah, Washington, Oregon and Idaho, which have more than two million members. Prior to that, he was vice president, Managed Markets and general manager, Urology at Myriad. During his tenure, Prolaris was included in the NCCN Guidelines for prostate cancer and received Medicare reimbursement. Before joining Myriad, he served in management and managed care leadership roles at Pfizer Inc. Mr. Parkinson received his B.S. degree in Communications from Weber State University. |
|
|
|
|
|
Age: 54 |
| | | | |
| | | | | | | | | | | | | | |
| R. Bryan Riggsbee |
|
| Chief Financial Officer and Treasurer |
R. Bryan Riggsbee, who also served as Interim President and Chief Executive Officer from February 6 to August 12, 2020, joined us in October 2014. He previously served for 10 years with Laboratory Corporation of America (LabCorp) where his most recent position was as Senior Vice President of Corporate Finance with responsibility for the financial planning and analysis and treasury functions. Prior to LabCorp, Mr. Riggsbee served in various finance roles with General Electric and began his career in the audit division of KPMG. He received a B.A. in Accounting from North Carolina State University, a B.A. in political science from the University of North Carolina at Chapel Hill and an M.B.A. from Northwestern University. Mr. Riggsbee is a Certified Public Accountant licensed in the State of North Carolina. |
|
|
|
|
|
Age: 50 |
| | | | |
| | | | | | | | | | | | | | |
| Eric Santa |
|
| Chief Growth Officer |
Eric Santa joined Myriad as Chief Growth Officer in April 2021. Mr. Santa previously served as Chief Revenue Officer of Rally Health, Inc., a division of Optum within UnitedHealth Group, where he spearheaded consumer digital health strategies and led key business functions including sales for payer, provider, and employer markets. Prior to his leadership role at Rally, he held several other strategy and leadership positions at Optum, The Boston Consulting Group, and The Blue Cross and Blue Shield Association. Mr. Santa earned a Bachelor’s degree in Economics from Purdue University and a Master’s degree in Business Administration from The Kellogg School at Northwestern University. |
|
|
|
|
|
Age: 43 |
| | | | |
| | | | | | | | | | | | | | |
| Mark Verratti |
|
| Group President of Myriad Neuroscience and Myriad Autoimmune |
Mark Verratti and has served in his current role since August 1, 2017. He previously served as SVP, Chief Sales and Business Development officer at Assurex since January 2016.
Mr. Verratti also held senior leadership positions with Cyberonics (now known as LivaNova) from 2005-2016, and earlier with Forest Pharmaceuticals where he led commercial teams with revenues approaching $500 million dollars. He received a B.S. in Life Sciences with a minor in Physiology from The Pennsylvania State University. |
|
|
|
|
|
Age: 52 |
| | | 50 | | | President, Myriad Neuroscience
|
17
Mark C. Capone. Please see biography above under “Management and Corporate Governance — The Board of Directors.”
Alexander Ford, President of Myriad Women’s Health, Inc., a wholly owned subsidiary of Myriad, and our Myriad Women’s Health business unit, has served in his current role since August 1, 2018. Mr. Ford joined Myriad in June 2010. Before being named to his current position, he served as President of Myriad Genetic Laboratories Inc. (“MGL”) from 2015 to 2018, as the MGL Chief Commerical Officer from 2013 to 2015, as the MGL General Manager of Preventive Care from 2011 to 2013 and as the MGL VP of Sales from 2010 to 2011. Prior to joining Myriad, Mr. Ford held leadership positions at Novartis, Sanofi-Aventis, Nektar Therapeutics and Pfizer in the areas of Marketing Research, Product Marketing, Managed Care, Sales and Business Development. He has more than 25 years of experience in the pharmaceutical and biotechnology industries. Mr. Ford received his B.A. degree in Communications from the University of North Carolina, Wilmington and his M.A. degree from New York University.
Gary A. King, Executive Vice President, International Operations, joined us in July 2010. Mr. King has been employed in the life sciences industry for more than 25 years. From June 2008 to June 2010, he was the Chief Executive Officer of AverDx Incorporated, an international biotechnology company that develops novel biomarker diagnostics for critical diseases. From June 2002 to February 2008, he served as Vice President, International Operations at Biosite Incorporated, a developer of diagnostic products and antibody development technologies where he spent six years building and leading all of the company’s commercial activities outside the United States. Mr. King received his B.A. degree in Zoology from Pomona College and a M.B.A. degree from Stanford University.
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer, joined the Company in September 2002 as Senior Vice President of Research. In July 2005 he was appointed Executive Vice President of Research, a position he held until he was named to his current position in February 2010. Dr. Lanchbury came to us from GKT School of Medicine, King’s College where he had served as Reader in Molecular Immunogenetics and Head of Molecular Immunogenetics Unit since 1997. Dr. Lanchbury earned his Ph.D. from the University of Newcastle upon Tyne and 1st Class Honours, B.Sc. “Biology of Man & his Environment” degree from the University of Aston.
Richard M. Marsh, Esq.,ExecutiveVice President, General Counsel and Secretary, joined Myriad in November 2002. He previously served as Director of Intellectual Property (2001-2002), Acting General Counsel and Secretary (2000-2001), and Director of Commercial Legal Affairs (1998-2000) for Iomega Corporation. Mr. Marsh served as a partner with the law firm of Parsons, Behle & Latimer in Salt Lake City from 1989 to 1998. He received an LL.M. degree in Taxation from Georgetown University Law Center, a J.D. degree, magna cum laude, from Thomas M. Cooley Law School, and a B.S. degree in accounting from Brigham Young University, and was formerly a Certified Public Accountant.
Ralph L. McDade, Ph.D., President of Myriad RBM, Inc., a wholly owned subsidiary of Myriad, and our Myriad RMB business unit, has served in his current role since January 2014. Previously, he served as Chief Operating Officer of Myriad RBM. Dr. McDade was formerly Strategic Development Officer for Myriad RBM and was in that position since the company’s inception in 2002. Prior to joining Myriad RBM, he was Chief Scientific Officer for Luminex Corporation from 1996 to 2002, where he was closely involved with the development of xMAP technology. Dr. McDade received his Ph.D. in Microbiology from the University of Texas Southwestern Medical School in 1980. Following postdoctoral training at The University of Connecticut Medical Center in Farmington, he held faculty positions at the Rockefeller University in New York and at Louisiana State University School of Medicine in New Orleans.
R. Bryan Riggsbee, Chief Financial Officer and Treasurer, joined us in October 2014. He previously served 10 years with Laboratory Corporation of America (LabCorp) where his most recent position was as Senior Vice President of Corporate Finance with responsibility for the financial planning and analysis and treasury functions. Prior to LabCorp, Mr. Riggsbee served in various finance roles with General Electric and began his career in the audit division of KPMG. He received a B.A. in Accounting from North Carolina State University, a B.A. in political science from the University of North Carolina at Chapel Hill and an M.B.A. from Northwestern University. Mr. Riggsbee is a Certified Public Accountant licensed in the State of North Carolina.
18
W. Lloyd Sanders, President of Myriad Genetic Laboratories, Inc, a wholly owned subsidiary of Myriad, and our Myriad Oncology business unit, has served in his current role since August 1, 2018. Mr. Sanders, joined the Company in December 2011. Prior to his current position, he served as the MGL General Manager of Oncology from 2011 to 2018. Prior to joining Myriad, Mr. Sanders was chief operating officer at Dey Pharma. He also held key senior leadership positions in the commercial organizations of Pharmacia (now Pfizer), Sanofi-Aventis and Genta Incorporated. Mr. Sanders received his Bachelor’s of Business Administration degree in Marketing from the University of Memphis.
Bernard F. Tobin, President of Crescendo Bioscience, Inc., a wholly owned subsidiary of Myriad, and our Myriad Autoimmune business unit, has served in that role since January 2015. He previously held several senior positions at Amgen over the course of 8 years, including Executive Director of National Accounts, General Manager of both the Netherlands and Brazil, and Global Head of Commercial Excellence. In addition, he led the global integration of business development acquisition in more than 100 countries. Prior to that, Mr. Tobin held a variety of leadership roles in the commercial organization at Eli Lilly and Co. over the course of 16 years. He received his B.S. degree in public service and administration from Iowa State University and his M.B.A from the Fuqua School of Business, Duke University.
Mark Verratti,President of Assurex Health, Inc., a wholly owned subsidiary of Myriad, and our Myriad Neuroscience business unit, has served in his current role since August 1, 2017. He previously served as SVP, Chief Sales and Business Development officer at Assurex since January 2016. Mr. Verratti also held senior leadership positions with Cyberonics (now known as LivaNova) from 2005-2016, and earlier with Forest Pharmaceuticals where he led commercial teams with revenues approaching $500 million dollars. He received a B.S. in Life Sciences with a minor in Physiology from The Pennsylvania State University.
We have entered into our standard employment agreements with each of ourthe above executive officers. The employment agreements forFor each ofsuch officer, we have also entered into our named executive officersstandard Severance and Change in Control Agreements, which are described elsewhere in the proxy statement under the caption “Executive Compensation — ‘‘Executive Compensation—Narrative Disclosure to Summary Compensation Table and 2018 Fiscal Year2020 Transition Period Grants of Plan-Based Awards Table.”19
’’
Compensation Discussion and Analysis
We are a leading
molecular diagnosticgenetic testing and personalized medicine company, with the goal of providing physicians and their patients with critical information to guide healthcare management. Our goal is to manage our business to maximize the value we provide through our services, making the Company more successful and valuable, and
hence maximizing our long-term stockholder value. Our compensation programs are designed to support these goals, with the primary objectives of attracting and retaining executive talent, motivating our executive officers through
pay-for-performance metrics to enhance our growth and profitability, and increasing long-term stockholder value.
The four
Effective January 1, 2021, the Company changed to a calendar year fiscal year rather than a fiscal year from July 1 to June 30. This change resulted in a six-month transition period in the second half of calendar year 2020, which is referred to herein as the “2020 transition period”. This proxy statement reports on compensation paid during the 2020 transition period and certain elements of compensation to be paid under our fiscal year 2021 program. Our named executive officers for the 2020 transition period are:
| | | | | |
| Name | Title |
| Paul J. Diaz | President and Chief Executive Officer (1) |
| R. Bryan Riggsbee | Chief Financial Officer and Treasurer (2) |
| Jerry S. Lanchbury, Ph.D. | Chief Scientific Officer |
| Nicole Lambert | Group President of Myriad Women's Health, Oncology, and International |
| Mark Verratti | Group President of Myriad Neuroscience and Autoimmune |
(1) Mr. Diaz was appointed as our President and Chief Executive Officer on August 13, 2020.
(2) Mr. Riggsbee served as our Interim President and Chief Executive Officer from February 6, 2020 to August 12, 2020.
Beginning with the 2020 transition period and continuing into fiscal year 2021, the three principal components of our compensation program for executive officers are:
•Annual base salary;
•Short-term incentive compensation in the form of an annual cash incentive bonus; and
•Long-term incentive compensation in the form of a three-year cash incentive bonus; and
Long-term incentive compensation in the form of(a) restricted stock units or RSUs,(RSUs) subject to time-based vesting with aand (b) performance-based factor applicablerestricted stock units (PSUs) subject to our NEOs.
financial metrics followed by time-based vesting.
We believe that these compensation components provide the appropriate balance of short-term and long-term compensation and incentives to our
executivesexecutive officers to drive our performance, success and long-term growth. As indicated in the charts below, our
target pay mix
for the 2020 transition period for our NEOs (other than our Chief Executive Officer, who received initial equity awards upon the commencement of his employment with the Company) largely
followsfollowed that of our peers, with the majority of our compensation in the form of long-term incentive compensation.
Peer Pay Mix data is a composite of our peer group data and published survey data.
Our compensation program seeks to align compensation with Company performance and hence reward our executive officers for their contribution to our growth, profitability and increased stockholder value through the recognition of individual leadership, initiatives, achievements and other contributions. Each yearFor short-term cash bonuses for our Compensation Committee approves Management Business Objectivesexecutive officers for the 2020 transition period, our CHCC approved Company performance and financial goal metrics as well as individual management business objectives (“MBOs”) for each executive officer that, which consist of individual objectivesgoals tailored to each executive. For some executive officers theofficer. The short-term cash bonus component of our executive officer's compensation was balanced between financial performance metrics and individual MBOs, also includepre-establishedwith greater weight given to the financial performance targetsmetrics. Financial performance metrics for the Company such2020 transition period represented 70% of an executive officer's total score and individual MBOs accounted for the remaining 30%, as revenuenoted in the following illustration.
Long-term incentives were also based in part on the Company’s performance as measured by certain financial performance metrics set by the CHCC, as shown in the following illustration. For the 2020 transition period, our executive officers' equity grants consisted of 50% RSUs and 50% PSUs, with performance relative to adjusted operating income. The Compensation Committee reviewsearnings per share and relative total stockholder return metrics determining the achievementultimate number of these MBOs in determining compensation to be paidPSUs awarded. For the fiscal year 2021, equity awards granted to our executive officers.officers will continue to be comprised of 50% RSUs and 50% PSUs.
| | | | | | | | |
| 50% of Equity Grant | | 50% of Equity Grant |
| | |
| Restricted Stock Units (RSUs) | | Performance Stock Units (PSUs) |
| | |
•Number of RSUs granted is fixed at the grant date by the CHCC •Time-based vesting over four years (25% each year) | | •Target number of PSUs is set at the grant date by the CHCC •Actual number of units granted is subject to Company performance based on adjusted EPS and total stockholder return targets during one-year measurement period •Vests over four years (25% each year) |
This compensation structure for the 2020 transition period and fiscal year 2021 differs from previous years primarily in that (a) no new three-year long-term incentive cash bonus awards will be granted, starting in the 2020 transition period; and (b) short-term cash incentives and long-term equity incentives will generally be weighted more heavily toward Company financial performance than individual objectives. The
Compensation CommitteeCHCC believes
that the MBOs are based onthis new structure represents an appropriate mix of individual objectives and
where applicable financial performance targets,
that provide appropriatepay-for-performance metrics towhich incentivize executive officers to increase our profitability
success and long-term stockholder value.
20
Fiscal Year 2018
2020 Transition Period Performance
For
fiscal year 2018the 2020 transition period, our revenues
were up slightly year-over-yeardeclined 21% from the six months ended December 31, 2019 to
$773$299.8 million and we
achievedhad GAAP earnings per share of
$1.82($0.71) and
non-GAAP earnings per share of
$1.20. During fiscal year 2018,($0.27) which declined relative to the six months ended December 31, 2019. Myriad’s business continues to be impacted by the global COVID-19 pandemic which has resulted in a decline in elective testing by physicians during the 2020 transition period as compared to the six months ended December 31, 2019. Despite these challenges, during the 2020 transition period, we made significant progress with our transformation plan and other strategic objectives that we believe
we accomplished many of our strategic objectives thatwill position the Company for
long-term growth. We made substantial progress on our five strategic critical success factors to: i) build upon a solid hereditary cancer foundation, ii) grow new product volume, iii) expand reimbursement coverage for new products, iv) increase RNA kit revenue internationally,future growth and
v) improve profitability with our Elevate 2020 Program.We continued generating strong cash flows from operations and in fiscal year 2018 we generated over $130 million inprofitability.
non-GAAP
free cash flow.
We ended the
year2020 transition period with
$211approximately $171.7 million in cash, cash equivalents, and marketable investment securities, and
we plan to continue to exercise a balanced approach to capital deployment, including investing for future growth, paying down debt,
associated with recent acquisitions,and engaging in business development
activities and share repurchases.activities.
An explanation of the adjustments to our GAAP financial measures used in this proxy
statement and a reconciliation of the adjusted financial measures to the comparable GAAP financial measures are included in Appendix A to this proxy statement.
During fiscal year 2018 we did not repurchase any shares as we continued to focus on reducing the balance on our credit facility associated with the Assurex acquisition. Since fiscal year 2010, we have purchased over 47 million shares of our common stock under our stock repurchase program for $1.24 billion at a weighted average price of $26.02 per share.
Focusing on our longer-term growth, over the past five years, our revenue has
been relatively flat. In fiscal year 2014, we believe we received approximately $55 million in benefit to revenue from aone-time celebrity publicity impact. Not including this impact, our revenue grewdeclined at a compound annual
growth rate
in excess of
one percent5% since fiscal year
2014 and has grown at a compound annual growth rate2016 if you annualize revenue from the six month transition period. Much of
two percent sincethe decline in fiscal year
2015. This lower growth trajectory2020 and the six month transition period is
primarily dueattributable to
declinesthe global pandemic but the decline is also attributable to reductions in hereditary cancer revenue as a result of competition following the loss of our patents related to hereditary cancer
testing, being offset by new product growth.testing. In
fiscal year 2018, 70 percentthe 2020 transition period, 72% of our test volume and
36 percent47% of our revenue was derived from new
(non-hereditary (non-hereditary cancer) products. Going forward, we believe the Company is positioned to return to
higher revenue growth
rates given increasing stability in hereditary cancer revenues and continued growth from new products.
21
The following table shows the Company's total revenue for fiscal years 2016 through 2020 and for the six month transition period ended December 31, 2020.
Over the past five
and a half years, we experienced a
7 percent-9% annual stockholder return on our stock price versus a
17 percent19% return for the
NASDAQNasdaq composite index and a
16%7% return for the
NASDAQNasdaq Healthcare Providers Stock Index reflecting the increased competition we faced after the loss of key hereditary cancer patents in fiscal year 2013.
Additionally, we ended the first quarter of our fiscal year 2019 with a stock price of $46.00, which represents a 23% increase in our stock price over our fiscal year 2018year-end price. Taking into account our first quarter of fiscal year 2019, for the twelve month period ending September 30, 2018, we experienced a 27% return on our stock price versus 24% for the NASDAQ composite index and 16% for the NASDAQ Healthcare Providers Stock Index over the same period. We included the
NASDAQNasdaq Healthcare Providers Stock Index in our Stock Performance Chart
asbecause the
NASDAQNasdaq Healthcare Providers Stock Index is comprised of companies which also operate in the healthcare industry. We caution that historical stock price performance, including the stock price performance shown in the chart below, is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock.
22
In addition to our financial results during
fiscal year 2018,the 2020 transition period, we also achieved the following progress
onin our
five critical success factors:Build Upon a Solidbusiness units:
Women’s Health
•Myriad myRisk® Hereditary Cancer Foundation Returned hereditary cancer
•myRisk® Hereditary Cancer volumes for the Women’s Health business increased sequentially by 17% compared to year-over-year volume growth, exceeding our three percent volume growth goalthe six months ended June 30, 2020.
•Myriad Foresight® Carrier Screen
•Technological enhancements to Myriad’s Foresight® carrier screen test in everythe December quarter increased the detection rate for alpha thalassemia inherited blood conditions from 90% to >99% in high-risk ethnicities such as Hispanic patients where the risk of fiscal year 2018.alpha thalassemia can be 200 times greater than the risk of cystic fibrosis. These changes reduced the risk of a false negative by 10 times and improved the accuracy of the Foresight® test for ethnic minority populations.
Signed long term contracts with
•Evidence Street, the technology assessment organization for the Blue Cross Blue Shield Association issued a favorable medical policy decision on expanded carrier screening that may lead to improved coverage for ethnic minorities.
•Myriad Prequel® Prenatal Screen
•The scientific journal Genetics in Medicine published a study demonstrating that Myriad’s proprietary AMPLIFY® technology increases the accuracy of the Prequel prenatal screen for five common microdeletions by an average of 9 times. For these microdeletions the Prequel test demonstrated 97.2% sensitivity and 99.8% specificity.
•The American College of Obstetricians and Gynecologist issued new guidelines recommending prenatal testing for average risk patients. The new guidelines support expanded access to these services for more women as well as test coverage by insurance providers. To date, these guidelines have led to new medical policy guidelines from payers maintaining 86 percentnow covering average risk testing and expanding reimbursement opportunities for 40 million covered lives.
•Launched new AMPLIFY™ technology further increasing the accuracy of revenuethe Prequel noninvasive prenatal screening (NIPS) test which detects fetal aneuploidies such as Down syndrome. This proprietary Myriad technology allows more women to receive highly accurate test results and avoid invasive procedures regardless of body mass index (BMI), race, or ethnicity.
Oncology
•myRisk® Hereditary Cancer
•myRisk® Hereditary Cancer test volumes for our hereditary cancerthe Oncology business providing pricing visibility into fiscal yearincreased sequentially by 24% compared to the six months ended June 30, 2020.
•Myriad Prolaris® Prostate Cancer
•Received a new strategically important differentiator inlocal coverage determination (LCD) for the hereditaryProlaris® prostate cancer markettest from Palmetto GBA and CGS Administrators, LLC, two of the administrative contractors for the Centers for Medicare & Medicaid Services, which led to double-digit volume growth intook effect on December 6, 2020. The new LCD expands benefit entitlements for patients with less extensive family histories.unfavorable intermediate and high-risk prostate cancer.
•Received acceptance for a new study publication in The Prostate demonstrating high accuracy for Prolaris in predicting metastases and disease specific mortality in men following radical prostatectomy.
•A new study in Genitourinary Cancer demonstrated that the Prolaris test can accurately predict which patients will benefit from multi-modality therapy. Using the newly established threshold, 27% of men with newly diagnosed high-risk disease and 73% with unfavorable intermediate-risk disease could avoid multimodality therapy.
•Myriad BRACAnalysis® CDx
•Saw significant increases in BRACAnalysis CDx and myChoice CDx test volume in Japan with total revenue from the country increasing sequentially by 127% compared to the six months ended June 30, 2020.
•Received Japanese regulatory approval for BRACAnalysis CDx as a companion diagnostic for metastatic breast cancerthe PARP inhibitor olaparib for use in pancreatic and prostate cancer.
•Myriad myChoice® CDx
•Announced a strategic collaboration with Illumina, Inc. for Illumina to create a kit-based version of the myChoice® companion diagnostic (CDx) test for select international markets.
•Received new reimbursement for the myChoice® diagnostic system in Japan effective January 1, 2021.
•Myriad EndoPredict®
•Received new public reimbursement for EndoPredict in Germany which will take effect between March and June 2021.
•The German Federal Joint Committee (G-BA) completed the method evaluation assessment for EndoPredict®, extending availability of this second-generation biomarker test to all patients with statutory health insurance in Germany. Receipt of payment on EndoPredict claims in Germany is anticipated to begin in 2021.
Mental Health
•GeneSight
◦A new publication in Psychiatry Research demonstrated that the GeneSight combinatorial test was superior to single gene testing using the Clinical Pharmacogenetics Implementation Consortium (CPIC) guidelines. In a sub-analysis utilizing the GUIDED study data, only the GeneSight combinatorial approach was able to accurately predict variations in outcomes for patients with depression and statistically significantly predicted remission, response, and symptom improvement.
◦Published a GeneSight meta-analysis covering four major clinical studies and 1,556 patients. Across the patient populations, patients who received guided care with GeneSight saw a 43% improvement in symptoms relative to treatment as usual, a 40% improvement in response rates, and a 49% improvement in remission rates, all of which were highly statistically significant.
◦Received a final LCD for pharmacogenomic (PGx) testing by Palmetto GBA and CGS Administrators, LLC that expands coverage to tests ordered by all healthcare providers licensed and qualified to diagnose associated conditions and prescribe relevant medications (either independently or in an arrangement).
◦Broadened access to the GeneSight test among front-line providers of mental health treatment, including primary care physicians and nurse practitioners who treat the majority of depression and anxiety patients, through the expansion of sales and digital marketing capabilities.
Autoimmune
•Vectra®
◦Launched a new enhancement to the Vectra test report providing an individualized estimate of a patient’s one-year risk of rapid radiographic progression (RP). The RP result in every report is personalized based on the patient’s age, gender and body mass. The new data will help physicians more accurately assess risk for disease progression.
◦Shared new data at the American College of Rheumatology annual meeting further demonstrating that Vectra® testing and three additional biomarkers, combined with traditional risk factors, can predict the risk of cardiovascular events in patients with rheumatoid arthritis. The study, which evaluated over 44,000 patients, found that a one-point increase in the Vectra score was associated with being approximately four times greater risk of having a cardiovascular event.
•Other
◦Announced the decision to pursue strategic alternatives for the Myriad RBM, Myriad Autoimmune, and Dermatology business units as part of the Company’s transformation and growth plan.
◦Further expanding the addressable breast cancer marketcoverage for its genetic tests in the United States, by over 40,000 patients per year.
Provided clinical dataMyriad recently signed a contract with the majority of the affiliated commercial health plans of Anthem Blue Cross Blue Shield, the second largest commercial payer in the country. The contract returns all Myriad products to significantly expandin-network status, including hereditary cancer guidelines adding over 120,000 patients to the addressable market opportunity with key guideline expansions in prostate, pancreatic, and colorectal cancer.
testing.Grow New Product Volume
Named Executive Officer Pay at a double-digit growth rateGlance
To ensure that the interests of our NEOs are aligned with those of our stockholders, the CHCC has designed our executive compensation program to include a substantial majority of pay that is at-risk. At-risk pay may be cash-based, equity-based, or both. The charts below show that the target compensation opportunities for our NEOs are heavily weighted towards variable at-risk pay elements that are only earned based on achievement of performance goals or through continued employment with the Company.
* This chart reflects the 2020 transition period target compensation of Mr. Diaz, our Chief Executive Officer, which compensation includes time-based and performance-based restricted stock unit awards and stock option awards granted to Mr. Diaz in fiscal year 2018 relative to fiscal year 2017.connection with the commencement of his employment with the Company on August 13, 2020. Percentages shown are approximate.
Performed approximately 750,000 diagnostic tests representing a 33 percent compound annual growth rate
** This chart reflects the aggregate 2020 transition period target compensation of Mr. Riggsbee (solely in test volume overhis capacity as Chief Financial Officer), Dr. Lanchbury, Ms. Lambert and Mr. Verratti. The percentage for each category is calculated by dividing (i) the last five years.
Doubled the number of GeneSight ordering doctors in less than two years since the closesum of the acquisition leading to 15,000 ordering physicians in the fiscal fourth quarter.
23
Achieved profitability in our Urology and Autoimmune business units in fiscal year 2018.
Set a record for new product revenue with $212 million in revenue coming from GeneSight, Vectra DA, Prolaris, and EndoPredict.
Completed landmark research in rheumatoid arthritis demonstrating Vectra DA was more than three times better at predicting radiographic progression than other disease activity measures.
Signed a definitive agreement to acquire Counsyl, Inc. bringing two new high volume reproductive health tests to our Myriad Women’s Health franchise.
Expand Reimbursement Coverage for New Products
Expanded the reimbursed addressable market for our new products to over $1.6 billion in fiscal year 2018.
Completed the GUIDED study which is the largest pharmacogenomics study ever completed in depression. GeneSight became the first pharmacogenomics technology to demonstrate a statistically significant change in response and remission rates versus an active drug arm.
| • | | Announced first commercial coverage decision for GeneSight with CareFirst, the 15th largest commercial insurer in the U.S.
|
Saw significant expansions in coverage for Prolaris with Medicare coverage for favorable intermediate patients and eight new commercial payer decisions encompassing over 20 million lives. Overall coverage for Prolaris expanded from 30 percent to 55 percent of patients.
Received favorable Medicare local coverage determination for EndoPredict increasing total coverage2020 transition period target compensation for the test to over 90 percent of breast cancer patients.
Announced coverage decisionfour executive officers for Vectra DA from Kroger,such category by (ii) the fourth largest employer in the U.S. Received GeneSight coverage decision from a major employer with over 30,000 total employees.
Increase RNA Kit Revenue Internationally
Grew EndoPredict revenue by 16 percent year-over-year.
Received favorable reimbursement recommendation from the National Institute of Health and Care Excellence in the United Kingdom for EndoPredict.
Received BRACAnalysis CDx approval from the Japanese Ministry of Health Welfare and Labour for metastatic breast cancer patients. Allows access to new market representing over 15,000 patients per year.
Announced international restructuring with consolidation of testing facilities to the United States leading to possible increased future profitability.
Improve Profitability With Elevateaggregate 2020
Implemented Elevate 2020 program to reduce costs and increase operating profit. Outperformed expectations in fiscal year 2018 ending the year with a $15 million decrease in total adjusted operating expenses relative to fiscal year 2017 despite double-digit, year-over-year volume growth. Led to a 3.8 percent improvement in operating margins year-over-year in the fiscal fourth quarter.
Announced movement transition period target compensation of the Vectra DA laboratory and customer service groups to Salt Lake City to reduce overall cost.
24
Performance Payfour executive officers for Fiscal Year 2018
To reflect our pay for performance philosophy, based on the Company’s performance for fiscal year 2018, our Compensation Committee:
all categories. Percentages shown are approximate.awarded fiscal year 2018 annual cash incentive bonuses to our NEOs at 95 to 99 percent of target based on each NEO’s MBOs score reflecting the degree to which individual objectives were achieved;
awarded no compensation under our fiscal year 2016-2018 three-year, long term cash incentive plan because target thresholds were not achieved;
Say-on-Pay Resultsincreased executive officer salaries on average at a 3.5 percent rate consistent with the average pay increases for our employees as a whole; and
awarded long-term equity incentive compensation in the form of restricted stock units of Company stock which vest over a greater than four year period and which have an additional performance based vesting feature for our NEOs.
Say-on-Pay Results
At our last annual meeting of stockholders in November 2017,December 2020, we held a stockholder advisory vote on the fiscal year 2017 compensation of our NEOs.NEOs as disclosed in our 2020 proxy statement. This is generally referred to as a“Say-on-Pay” ‘‘Say-on-Pay’’ vote. ISS and Glass Lewis recommended for the approval of ourSay-on-Pay vote and ourOur stockholders approved the compensation of our NEOs with 96 percent85% of stockholderthe votes cast in favor of ourSay-on-Pay resolution for fiscal year 2017.at the Company's Annual Meeting of Stockholders on December 4, 2020. Notwithstanding this high approval percentage, we continued our outreach to our stockholders to identify and understand feedback that they may have about our executive compensation with the goal of sustaining a high level of approval. Our stockholders consistently made the following comments:
| • | | Continued support for switching from granting stock options to restricted stock units and the stated goal to target compensation at the 50th to 75th percentile of our compensation benchmarks;
|
| • | | Support for CEO and CFO total compensation to be within the 50th to 75th percentile of our compensation benchmarks; and
|
Recommendation to continue the alignment of performance metrics for our three-year long term cash incentive plan to our disclosed strategic goals.
Additionally, the Committee discussed the comments raised in the ISS, and Glass Lewis, reports, as well as previous actions we undertookand stockholder feedback was considered in prior years to address ISSdevising the compensation structure for the 2020 transition period and Glass Lewis concerns.
Our Pay Practicesthe CHCC’s decisions for fiscal year 2021 compensation. The CHCC will monitor further stakeholder feedback, Company performance, and Philosophy
In responsemarket developments for potential further improvements to the Company’s compensation structure for executive officers. The chart below outlines feedback expressed by ourwe have received from stockholders as well as ISS and Glass Lewis,changes we have made the following changes over the last severalin our compensation practices in response to that stockholder feedback.
| | | | | |
| What we heard from stockholders | Changes in response to stockholder feedback |
| Annual cash bonus plan gave CHCC significant discretion to determine award levels | Streamlined short-term incentive plan to focus primarily on corporate financial metrics (70% weighting) and less on MBOs (30%) |
| Annual cash bonus plan metrics were not sufficiently rigorous | Established more challenging performance metrics, including revenue and adjusted operating income targets for annual incentive plan |
| Performance conditions for the annual cash bonus plan and long-term incentive plan overlap | Diversified metrics in annual cash bonus plan and long-term incentive plan for 2020 transition period and going forward –Annual cash bonus performance is based on revenue and adjusted operating income –PSUs are measured against adjusted earnings per share and relative total stockholder return |
| Reduce focus on long-term cash awards | Eliminated long-term cash incentive program in September 2020 (although payouts will still be made under awards granted in previous years to the extent that required metrics are achieved) |
| Increase emphasis on performance-based equity | PSUs (weighted 50%) are subject to objective financial performance metrics |
| No relative metrics under long-term incentive plan | Added a relative total stockholder return performance metric for PSUs |
| No cap on PSU awards where absolute total stockholder return is negative | Introduced a cap on PSU award payouts for PSUs granted in the 2020 transition period and thereafter if absolute total stockholder return is negative over the performance period |
| RSUs should have long-term vesting requirements | Provided for full vesting of RSUs only after four or more years |
| Lack of transparency with respect to incentive-based compensation | Enhanced disclosure to include threshold, target and maximum goals and actual performance for annual and long-term incentive plans |
| Single-trigger change of control provisions provide payments without termination | Replaced single-trigger accelerated vesting in a change in control with double-trigger vesting (i.e., change in control and termination now required for accelerated vesting and cash severance benefits) |
| Align severance benefits awarded upon change in control with market practice | •Reduced change in control severance payments from 3X salary and bonus to 1X salary and bonus •Reduced benefit (COBRA) payments from 36 months to 12 months •Introduced severance payments (1X salary and bonus) and equity acceleration (two years of vesting) upon a termination without Cause or for Good Reason not in connection with a change in control |
Pay Practices
In evaluating, designing and implementing our executive compensation
program:We amendedprogram, the CHCC considers the latest industry trends and compensation best practices. As a result of our Claw Back Policy to now require anreview of our executive officer to repay to us the amount of any cash and equity incentive compensation that an executive officer receives to the extent that:
| ○ | | the amount of such payment was based on the achievement of certain financial results that were subsequently the subject of a restatement that occurred within 12 months of such payment;
|
| ○ | | the executive officer had engaged in theft, dishonesty or intentional falsification of documents or records that resulted in the obligation to restate our financial results; and
|
| ○ | | a lower cash or equity incentive compensation payment would have been made to the executive officer based upon the restated financial results.
|
We adopted our 2017 Employee, Director and Consultant Equity Incentive Plan (the “2017 Plan”) which provides:
| ○ | | any stock right awarded under the 2017 Plan must be in the form of a restricted stock unit or a restricted stock grant;
|
| ○ | | incentive stock options andnon-qualified options are not permitted under the 2017 Plan;
|
| ○ | | all stock rights awarded must have a minimum vesting period of at least one year (we have historically provided for a four year vesting period for our equity incentive awards, and intend to continue that practice);
|
| ○ | | the vesting of any stock right awarded under the 2017 Plan cannot be accelerated from the original grant vesting schedule except in connection with death, disability or a change in control; and
|
| ○ | | no dividend payment may be made on any stock right which is not fully vested.
|
25
| • | | Based on the 2018 Mercer Executive Compensation Review for fiscal year 2018, total compensation for our President and CEO was below the 75th percentile of our compensation data, and the total compensation for our other executive officers was within, or below, the 50th and 75th percentiles of our compensation data;
|
The performance target metrics for our 3 year cash incentive plan for fiscal years 2018-2020 have performance metrics which align with our strategic goals based on revenue growth, adjusted operating margin, and diversification fromnon-hereditary cancer revenue; and
With our change to granting restricted stock units, we have reduced our equity dilution from 3% down to 1%.
Pay Practices
Additionally,program, we have adopted othera number of best practices that reflect the high standards our Compensation CommitteeCHCC seeks to attain for our compensation philosophy and pay practices, such as:
The period required for full vesting of restricted stock units shall be greater than four years;
All restricted stock units awarded to our NEOs are granted subject to a predetermined, objective, formula-based, financial performance metric;
Stock ownership guidelines for our directors (three times annual cash retainer) and executive officers (for President and CEO, three times annual base salary, and for other executive officers, two times annual base salary);
Annual cash incentive bonus an executive officer may receive is capped at a percent of his or her target bonus percentage amount;
Prohibiting any taxgross-up payments byincluding the Company with respect to compensation paid to any employee or director;
following:Prohibiting hedging the economic risk of holding our stock, including trading in our stock on a short-term basis, short sales of our stock and similar transactions, for which waivers are not granted;
Prohibiting the pledge or use of our stock to secure a margin or other loan, for which waivers are not granted;
| | | | | |
| What we do: | What we do not do: |
•Grant 50% of executive officers' equity in the form of PSUs that are subject to objective financial performance metrics | •No repricing of stock options and other awards without stockholder approval |
•Establish challenging performance metrics, including revenue and adjusted operating income targets | •No single-trigger change of control vesting for equity awards |
•Require directors and executive officers to meet robust stock ownership guidelines | •No guaranteed bonuses |
•Provide full vesting of RSUs only after at least four years | •No granting of in-the-money stock options |
•Evaluate officer compensation levels against a peer group of similarly situated companies | •No excessive perquisites |
•Retain independent compensation consultant | •No repurchases of underwater stock options |
•Prohibit hedging transactions and trading in our common stock on a short-term basis (no waivers granted) | |
•Prohibit tax gross-up payments by the Company with respect to compensation paid to any employee or director | |
•Prohibit short sales, put and call options and other speculative transactions | |
•Prohibit pledging or the use of common stock to secure a margin or other loan (no waivers granted) | |
•Hold an annual advisory vote on executive compensation | |
•Subject incentive compensation to recoupment under our clawback policy | |
•Cap PSUs granted in the 2020 transition period and thereafter if absolute total stockholder return is negative over the performance period | |
Prohibiting the Company’s repurchase of underwater stock options;
Prohibiting the repricing of stock options and other awards without stockholder approval;
Prohibiting the grant ofin-the-money stock options; and
Employing each executive officer on an “at will” basis without any guarantee as to employment term, salary, or bonus.
In connection with the annual review of our executive compensation program and compensation pay components, we will continue our general approach of establishing MBOs for our executive officers. These MBOs assist the Compensation Committee in evaluating the performance of our executive officers and to then reward them through short- and long-term incentive compensation for the value they deliver to our stockholders as demonstrated by the enhanced growth and profitability of the Company.
26
CEO Pay Ratio
Following is a reasonable estimate prepared under the Securities and Exchange Commission (SEC) rules, of the ratio of the annual total compensation of our President and Chief Executive Officer to the median of the annual total compensation of our other employees. We determined that as of April 24, 2018 our employee population consisted of approximately 1,978 U.S. employees. All international employees were excluded in the 5% De Minimis Exemption adjustment as permitted by SEC rules. We then selected our median employee based on theW-2 calculated income of our U.S. employees as of December 31, 2017. For employees hired on or after January 1, 2018, we used theirW-2 income earned as of April 30, 2018.
For Fiscal Year 2018:
The annual total compensation of the employee identified at median of the Company (excluding the CEO) was $77,814;
As disclosed in the summary compensation table on page 42 the annual total compensation of our President and CEO for purposes of determining the CEO Pay Ratio was $7,054,950; and
based on this information, for FY2018, the ratio of the annual total compensation of our President and CEO, to the median of the annual total compensation of all other U.S. employees was estimated to be 91 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodologies prescribed by the SEC. The SEC 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. Using consistently applied measures, we did not make any assumptions, adjustments or estimates with respect to base pay and we did not annualize compensation for any employee not employed for the entire year.
Due to the flexibility afforded by the rules of the SEC in calculating the pay ratio amount, the ratio calculated may not be comparable to the CEO pay ratio presented by other companies.
Fiscal Year 20182020 Transition Period Named Executive Officer Compensation
Elements of our Compensation Program
The
In recent years leading up to the 2020 transition period, the compensation program for our executive officers consistsconsisted principally of a base salary, an annual cash incentive bonus, long-term compensation in the form of a three-year cash incentive bonus award, and equity incentive compensation in the form of restricted stock units with a performance-based factor applicable to those executive officers expected to be our NEOs. We believe that these elementsAs discussed elsewhere in this proxy statement, the CHCC has made significant changes to the compensation program for our executive officers. While the components of our compensation strike an appropriate balance to incentivize and reward our executive officers for ongoing, short- and long-term performance.program are discussed in detail in the following pages, below is a brief introduction:
Base Salary: An annual base salary provides the foundation of our compensation program and ensures that the executive officer is being paid ongoing compensation, which allows us to attract and retain high-quality talent.
Annual Cash Bonus: The annual cash incentive bonus forms an important part of our compensation strategy by providing an incentive to reward short-term performance as measured by Company performance and accomplishment of Individualindividual MBOs. The long-term cash incentive bonus awards and equity
Equity: Equity incentive compensation also formforms an important part of our compensation strategy. These incentive bonusstrategy and we have increased our emphasis on performance-based equity awards and equitygoing forward. Equity grants reward our executive officers for the long-term performance of Myriad,the Company and help to ensure that our executive officers have a stake in our long-term success by providing an incentive to improve our overall growth and value. For example, under our long-term cash incentive awards,refocused equity grants, financial and share price performance metrics are measured by achieving three-year financial performance targets reflecting growth of revenue, diversifying revenues and improving operating margins. These performance metricsincluded that align with our strategic goals and objectives and thus alignsalign the executive officers’ interests with stockholders’ long-term interests.27
Long-Term Cash Bonus: The Compensation Committee,long-term cash incentive bonus award has been phased out starting in the 2020 transition period as the CHCC emphasizes equity for long-term incentive compensation going forward. For awards granted in September 2018 and 2019, payments will continue to be made to the extent required metrics are achieved, but no new awards will be instituted starting in September 2020. As noted herein, required metrics were not achieved and no payment was made under the awards granted in September 2017, and which were potentially payable in September 2020.
The CHCC, in collaboration with management, attempts to develop an overall compensation program that incentivizes the executive officers to achieve their objectives without encouraging them to take excessive risks to the business. We believe
that this
objective is accomplished
through the balance ofby appropriately balancing the various elements of our compensation
program, including the establishment of annual MBOs for each of the executive officers to appropriately guide their performance objectives, establishment of preset annual and three-year growth financial performance targets, and preset limits on cash incentive compensation.program.
Formulating and Setting Executive Compensation
The
Compensation CommitteeCHCC is responsible for formulating, evaluating and approving the compensation, including the award of equity compensation, for our executive officers, including our
President and CEO.Chief Executive Officer. The
Compensation CommitteeCHCC also assists the full board in establishing appropriate incentive compensation and equity-based plans generally for all employees and is responsible for administering these plans.
For fiscal year
2018,2020 and the
Compensation Committee2020 transition period, the CHCC retained Mercer
(US) Inc. (“Mercer”) for the purpose of updatingto update our peer group of companies and to provide competitive market data on the salary, short-term incentive compensation and long-term incentive compensation of executive officers at comparable companies within our industry. The
Compensation CommitteeCHCC uses this competitive market data on compensation in determining annual salary compensation, short-term (annual) incentive compensation and long-term
equity incentive compensation
(both cash and equity incentive compensation) for the
President and CEOChief Executive Officer and other executive officers of the Company (the
“2018‘‘2020 Mercer Executive Compensation
Review”Review’’).
As a basis for the source market data for the 20182020 Mercer Executive Compensation Review, Mercer utilized compensation data from the following group of 1512 peer companies. Mercer recommended that we retain nine companies from the fiscal year 2019 peer group and add three new companies. We believe that the compensation information obtained from the 2020 Mercer Executive Compensation Review provides us appropriate compensation data and benchmarks, because it is derived from companies that are in our industry, share similar corporate structures, and have similar factors such as number of employees, market value, revenues, net income, product pipeline and gross margins. Through Mercer, we kept sixhave selected those companies from last year’s peer group and added nine new companies. that we believe represent the various factors of our business as outlined above.
We believe the selected peer group of companies reflects our industry and
generally aligns with the ISS and Glass Lewis selected peer group for Myriad. Presently,
9eight of the
1512 companies in our peer group are companies which were selected by ISS as part of ISS’s compensation pay review from last year, and
9six of the
1512 companies in our peer group of companies are companies selected by Glass Lewis as part of Glass Lewis’ compensation pay review from last year. Only three of the
1512 companies in our peer group were not in either the ISS or Glass Lewis peer group from last year.
| | | | |
ABIOMED, Inc. | | Acorda Therapeutics, Inc. | | Alexion Pharmaceuticals, Inc. |
| Alkermes plc | | BioMarin Pharmaceutical Inc. | | Genomic Health, Inc.Bio-Techne Corp. |
| Exact Sciences Corporation | Exelixis Inc. | Jazz Pharmaceuticals plc | | lllumina, Inc. | |
| lncyte Corporation |
| lonis Pharmaceuticals, Inc | Neogenomics, Inc. |
| Neurocrine Biosciences Inc. | | NuVasive,Seagen Inc. | | (formerly Seattle Genetics, Inc. |
Tesaro, Inc. | | The Medicines Company | ) | United Therapeutics Corporation |
In addition, Mercer gathered competitive market data from published survey data in the biotech industry for similarly sized entities as reflected in the
20172019 Mercer US Global Premium Executive Remuneration Suite and the
20182020 Radford Global Life Sciences Survey. To determine competitive market compensation, where possible, composite survey data were equally blended with the proxy data from our peer group set forth above. Compensation data for the peer group were collected from available proxy-disclosed data. This information was gathered and analyzed for the 25th, 50th and 75th percentiles for annual salary, short-term incentive pay elements and long-term incentive pay elements. Where possible, our executive officers were matched to appropriate proxy and survey positions based on job content and level of responsibility. Proxy-based and survey-based salaries were aged to
20182020 at an annual rate of
33.5 percent, the average
2017/20182019/2020 salary increase for executives in the U.S. Restricted stock units were valued at fair market value (the closing price of our common stock) on the date of grant.
We believe that the compensation information obtained from the 2018 Mercer Executive Compensation Review provides us appropriate compensation data and benchmarks, because it is derived from companies that are in our industry, share similar corporate structures, and have similar factors such as number of employees, market value, revenues, net income, product pipeline and gross margins. Through Mercer, we have selected those companies that we believe represent the various factors of our business as outlined above.
Utilizing
Using the composite peer group data provided to us in the 20182020 Mercer Executive Compensation Review, the Compensation CommitteeCHCC analyzed among other criteria, the averagefollowing:
•Average salary, short-term incentive bonus compensation and long-term equity incentive bonus compensation (both cash and equity compensation) for each of our executive officers at the 25th,50th25th, 50th and 75th75th percentile ranges. In addition, for long-term incentive equity compensation, the Compensation Committee analyzed, among other criteria, the averageranges;
•Average equity compensation for each of our executive officers at the 25th,50th25th, 50th and 75th75th percentile range from the Mercer composite compensation data. The Compensation Committee also analyzed ourdata;
•Our equity burn rate, issued equity overhang, total equity overhang and stockholder value transfer. Finally, the Compensation Committee considered the numbertransfer;
•Number of restricted stock units awarded to executive officers as a group, as compared to all restricted stock units awarded. In so doing, the Compensation Committee
The CHCC noted that
it anticipates that thisthe ratio
will continueof RSUs awarded to
beexecutive officers compared to all RSUs awarded has become increasingly weighted
toward the executive officer group as we transition away from our historical practicetowards overall employees based upon recent initiatives to increase equity ownership among a broader set of
granting equity incentive compensation to allMyriad employees. For example,
newin the 2020 transition period, all Company employees
below the director level are now compensated under our profit sharing plan, rather throughwith management roles received stock-based compensation and all employees ranked as top-25 percent employees in annual merit reviews received an equity
compensation.28
grant.
The
Compensation CommitteeCHCC has approved a
pay-for-performance philosophy for the compensation of our executive officers that is intended, in general, to provide base salary, bonus and total compensation within the
50th50th to
75th75th percentile of comparable companies in our
industry.industry taking into account the financial performance of the Company. However, we may award compensation above the
75th75th percentile when deemed appropriate to further promote and achieve the primary objectives of our compensation programs. The comparable group of companies on which we rely to corroborate our determinations are those represented by the peer groups utilized in the Mercer Executive Compensation Review and those that participated in the industry survey reports used by Mercer.
Within the scope ofConsistent with this
pay-for-performance philosophy, we have determined the
various components of each
executive’sexecutive officer’s compensation package based on various factors, including: the
executive’sexecutive officer’s particular background, training and relevant work experience; the
executive’sexecutive officer’s role and responsibilities and the compensation paid to similar persons in comparable companies represented in the compensation
data that we utilized; thedata; demand for individuals with the
executive’sexecutive officer’s specific talents and expertise and our ability to attract and retain comparable talent;
Individualindividual MBOs;
the other expectations of the executive
officer for the position; and
the comparison to other
executivesexecutive officers within our Company having similar skills and experience levels and responsibilities.
Incident to the change from a July to June fiscal year to a calendar year fiscal year, the CHCC approved goals for all forms of variable compensation for the 2020 transition period.
Each year, we evaluate base salaries as part of our management performance program, and establish each
executive’sexecutive officer’s base salary for the ensuing year. In establishing base salaries, we assess the executive officer’s performance in each of the areas
in whichof their individual MBOs,
were established, the financial performance of the Company in the areas of responsibility of the executive officer,
the overall financial performance of the Company, the experience of the executive
officer, the
executive’sexecutive officer’s role and responsibilities and particular background, and other significant accomplishments and contributions of the executive officer. An executive’s base salary is also evaluated together with other components of the executive’s compensation.
As part of our Elevate
For the 2020
Plan and our goal of increasing our operating profitability fortransition period, there were no base salary increases from fiscal year
2018,2020 for our
Chief Executive Officer, our Chief Financial Officer or our other named executive officers
recommended, whichdue in part to the
Compensation Committee accepted,impact on our business of COVID-19 and the need to
not increase their base salariesmanage expenses as we navigated the ongoing pandemic. Salaries for
fiscal year 2018. For fiscal year 2019, the base salary of our President and CEO and CFO and Treasurer and our named executive officers were
reduced by 30 percent for three months during the pay periods of April 15, 2020 through July 15, 2020 to reduce expenses during the peak impact period from the COVID-19 pandemic to date. The reduction from July 1, 2020 through July 15, 2020 led to lower aggregate base salary payments to our named executive officers during the 2020 transition period. For fiscal year 2021, the CHCC increased
the base salaries of our named executive officers (other than our Chief Executive Officer) by an average of
4.4%6.9%. Following the increases, the fiscal year 2021 base salaries of Mr. Riggsbee and
all wereMr. Lanchbury are between the
50 to 75 percent range50th and 75th percentiles of our peer
group. | | | | | | | | | | | | |
Name and Position | | Fiscal 2019
Base Salary ($) | | | Fiscal 2018
Base Salary ($) | | | %
Increase | |
Mark C. Capone
President and Chief Executive Officer | | | 887,000 | | | | 852,000 | | | | 4 | % |
Alexander Ford
President, Myriad Women’s Health, Inc. | | | 519,168 | | | | 499,200 | | | | 4 | % |
R. Bryan Riggsbee
Chief Financial Officer and Treasurer | | | 466,650 | | | | 432,000 | | | | 8 | % |
Jerry S. Lanchbury, Ph.D.
Chief Scientific Officer | | | 508,595 | | | | 493,782 | | | | 3 | % |
Richard M. Marsh
Executive Vice President, General Counsel and Secretary | | | 508,595 | | | | 493,782 | | | | 3 | % |
We believe that increasinggroup and the fiscal year 2021 base salaries of Ms. Lambert and Mr. Verratti are below the 50th percentile of our executive officers’peer group.
| | | | | | | | | | | | | | |
|
Base Salary as of January 1, 2021 ($) | Base Salary During the 2020 Transition Period ($)(1) | % Base Salary
Increase From 2020 Transition Period |
Paul J. Diaz President and Chief Executive Officer (2) | 1,000,000 | 1,000,000 | - % |
R. Bryan Riggsbee Interim President and Chief Executive Officer, Chief Financial Officer and Treasurer (3) | 527,000 | 483,000 | 9.1% |
Jerry S. Lanchbury, Ph.D.
Chief Scientific Officer | 544,410 | 526,000 | 3.5% |
Nicole Lambert Group President Myriad Women’s Health, Oncology, and International | 475,250 | 425,250 | 11.8% |
Mark Verratti Group President of Myriad Neuroscience and Myriad Autoimmune | 434,489 | 419,796 | 3.5% |
(1)2020 transition period base salary for FY 2019 reflectsfigures do not reflect the commitment and contributiontemporary salary reductions from July 1, 2020 to July 15, 2020 as a result of the executive officers to our goalglobal COVID-19 pandemic. The base salary figures reflect each NEO's annualized base salary during the 2020 transition period.
(2)Mr. Diaz was appointed President and Chief Executive Officer on August 13, 2020.
(3)Mr. Riggsbee’s 2020 transition period salary reflects his salary as Chief Financial Officer and Treasurer and does not reflect his salary of increasing our operating profitability,$723,000 while being set at a level that appropriately attractshe served as interim President and retains key talent necessary to support the continued growth of the Company.29
Chief Executive Officer.
Annual Cash Incentive Bonus
The annual cash incentive bonus amount is determined as part of our management performance program.
As a part of this review, we assessThe CHCC assesses (a) the Company’s performance against specific, objective financial metrics and (b) the executive officer’s performance
inagainst each of
the areas in which Individual MBOs were established, our financial performance in the areas of responsibility of the executive officer, our overall financial performance and other significant accomplishments and contributions of the executive officer.their individual MBOs.
For fiscal year 2018, for purposes of determining2020 and the annual cash incentive bonuses paid to our executive officers, other than our President and CEO,2020 transition period, the Compensation CommitteeCHCC used a formulaic approach to determine the cash incentive bonus for executive officers. The formula was based on a target incentive bonus as a percentage of base salary, determined in early fiscal year 2018, Company performance, and the achievement of Individualindividual MBOs. The targetHowever, for the 2020 transition period, the CHCC made two important changes to the components for determining the cash incentive bonus for executive officers, as follows:
•Company performance is based on two weighted metrics: revenue (40% weighting) and adjusted operating income (30% weighting), with adjusted operating income defined as total operating income excluding acquisition-related amortization, stock-based compensation and non-recurring items.
•The two financial performance metrics combined are weighted at 70%, which is more heavily weighted than individual MBOs (30% weighting) to better align cash incentive bonuses with Company performance.
The chart below summarizes the metrics and performance levels established by the CHCC for the 2020 transition period.
| | | | | | | | | | | | | | |
| Performance Metrics | Weighting | Threshold Performance Level | Target Performance Level | Maximum Performance Level |
| Revenue | 40% | $257.0 million Payout %: 20% | $286.0 million Payout %: 40% | $301.0 million Payout %: 60% |
| Adjusted Operating Income | 30% | $(50.0) million Payout %: 15% | $(35.0) million Payout %: 30% | $(25.0) million Payout %: 45% |
| Individual MBOs | 30% | The payout percentage for individual MBOs is determined by the CHCC in its sole and absolute discretion after considering the performance of each NEO in achieving his or her individual MBOs. |
After the level of performance is determined by the CHCC, the payout percentage of each individual metric is added together to calculate the total payout percentage for each NEO. The final payout percentage is then multiplied by the NEO’s annualized base salary and by the NEO's target bonus opportunity (which is a percentage of the NEO's annualized base salarysalary). The CHCC also applied a 50% reduction to account for the 2020 transition period being only half a year. The general formula for calculating bonus amounts for the 2020 transition period is as follows:
[Base Salary] * [NEO Target Bonus (% of base salary)] * [Payout Percentage] * [50%] = Actual Bonus Earned
In October 2020, after considering the Company’s performance, the performance of the NEOs and the general industry and market conditions, the CHCC determined that the target bonus opportunity for our NEOs for the 2020 transition period cash incentive bonus should be as reflected in the following table. With the exception of the increase for Ms. Lambert, the 2020 transition period targets are unchanged from the targets for each executive officer (other than our President and CEO) ranged from 45 to 60 percent, depending onposition that were established for fiscal year 2020.
| | | | | | | | |
| Named Executive Officer | 2020 Transition Period
Target Bonus Opportunity
(% of Base Salary) | 2020 Fiscal Year
Target Bonus Opportunity
(% of Base Salary) |
| Paul J. Diaz, President and Chief Executive Officer | 100% | N/A |
| R. Bryan Riggsbee, Chief Financial Officer and Treasurer | 60% | 60% |
| R. Bryan Riggsbee, Interim President and Chief Executive Officer | 100% | 100% |
| Jerry S. Lanchbury, Ph.D., Chief Scientific Officer | 50% | 50% |
| Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International | 60% | 50% |
| Mark Verratti, Group President of Myriad Neuroscience and Autoimmune | 50% | 50% |
In February 2021, the responsibilities and experience ofCHCC determined the executive officer, and waspayout percentage for each performance metric based on the target incentive bonus percentage from our peer groupactual level of performance achieved in the 2020 transition period for each of the individual executive officers.performance metrics. The annualCHCC reviewed and discussed data relating to the Company’s performance as compared to the established 2020 transition period targets for each quantitative performance metric described above.
As shown below, the CHCC calculated the payout percentage for the quantitative performance metrics to be 103.4% by applying the actual results for each quantitative performance metric for the 2020 transition period to the targets approved by the CHCC during 2020. The following chart shows the CHCC’s determination with respect to the 2020 transition period cash incentive bonus amount for each executive officerperformance measures:
| | | | | | | | | | | | | | | | | |
| Metric | Threshold | Target | Maximum | Actual Result | Payout Percentage |
| Revenue | $257.0 | $286.0 | $301 | $299.8 | 58.4% |
| Adjusted Operating Income (Loss) | $(50.0) | $(35.0) | $(25.0) | $(23.5) | 45.0% |
| Total | | 103.4% |
Each NEO was then determined based on the following formula: annual base salary of the executive officer times (a) the executive officer’s applicable target incentive bonus percentage, times (b) the executive officer’s performance goals score (based on degree of accomplishment of individual MBOs as determined by the Compensation Committee), and times (c) a Company multiplier based on the Company’s accomplishment of apre-determined financial goal. The annual cash bonus amount is capped by the Company multiplier, and, as a percentage, can never exceed 130 percent of the executive officer’s applicable target incentive bonus percentage.For fiscal year 2018, ourpre-established financial performance target (our Company multiplier) was based on our adjusted operating income. We achieved adjusted operating income of $110.4 million which exceeded the pre-determined target. Based on these financial results, the Compensation Committee determined that the company multiplier applicable to each executive officer had been achieved at the 100 percent level. Each executive officer was thenalso scored on his or her individual MBOs, as discussed below for our NEOs under “
Named Executive Officer Performance for Fiscal 2018”the 2020 Transition Period”. The MBO Performance Goals Scoreperformance goals score and payout percentage for the executive officer group ranged from 95 to 99 percent.For our President and CEO, the Compensation Committee approvedpre-determined, objective, formula-based financial performance metrics, along with the achievement of Individual MBOs which cannot increase but may only reduce his cash incentive bonus. The annual cash incentive bonus for our President and CEO was granted under our 2013 Executive Incentive Plan (the “Section 162(m) Incentive Plan”), whicheach NEO is a plan structured to permit qualifying executive compensation to be deducted for federal income tax purposes under Section 162(m). Based on the responsibilities and experience of our President and CEO, and based on the target incentive bonus percentages from our peer group, the Compensation Committee set the target incentive bonus as a percentage of base salary at 100% for our President and CEO. Accordingly, our President and CEO’s cash incentive bonus for fiscal year 2018 was determined based on the following formula:
Base Salary × Target Incentive Bonus Percentage (100%) × Total Performance Factor.
The Total Performance Factor was based on fiscal year 2018 Company revenues and adjusted operating income and is calculated as follows:
(the Revenue Performance Factor × 0.50) + (the Adjusted Operating Income Performance Factor × 0.50).
The Revenue Performance Factor equals the quotient of fiscal year 2018 total revenues divided by the designated total revenue target for fiscal year 2018. Fiscal year 2018 total revenues must exceed a threshold or the Revenue Performance Factor will be deemed zero. The Adjusted Operating Income Performance Factor equals the quotient of fiscal year 2018 adjusted operating income divided by the designated adjusted operating income target for fiscal year 2018. Fiscal year 2018 adjusted operating income must exceed a threshold or the Adjusted Operating Income Performance Factor will be deemed zero. As set forthoutlined in the Section 162(m) Incentive Plan in no event may the Total Performance Factor exceed 130% and so there is a separate cap on the total amount that can be paid. chart below.
| | | | | | | | |
| Name | MBO Score (%) Achieved | MBO Payout Percentage |
| Paul J. Diaz, President and Chief Executive Officer | 110% | 33.0% |
| R. Bryan Riggsbee, Chief Financial Officer and Treasurer | 100% | 30.0% |
| R. Bryan Riggsbee, Interim President and Chief Executive Officer | 100% | 30.0% |
| Jerry S. Lanchbury, Ph.D., Chief Scientific Officer | 87% | 26.1% |
| Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International | 110% | 33.0% |
| Mark Verratti, Group President of Myriad Neuroscience and Autoimmune | 95% | 28.5% |
The
Compensation Committee has the discretion to reduce the amount payable based on the accomplishment of the Individual MBOs or for any other reason in the discretion of the Compensation Committee but it may not increase the amount of the award.Based on our financial results for fiscal year 2018, and the degree of achievement of Mr. Capone’s Individual MBOs, the Compensation Committee determined a Total Performance Factor of 96 percent. Accordingly, the Compensation Committee awarded an annual cash incentive bonus for Mr. Capone for fiscal year 2018 in the amount of $817,920.
30
The Compensation CommitteeCHCC then determined the annual cash incentive bonuses for our NEOs for fiscal year 2018the 2020 transition period as set forth in the chart below.
| | | | | | | | | | | | | | | | |
Name and Position | | Target Incentive
Bonus (as a % of
Fiscal 2018 Base
Salary) | | | MBO
Performance
Goals Score
(as a %) | | | Company
Multiplier
(as a %) | | | Fiscal 2018
Bonus
Payment
($) | |
Mark C. Capone
President and Chief Executive Officer | | | 100 | | | | 96 | | | | NA | | | | 817,920 | |
Alexander Ford
President, Myriad Women’s Health, Inc. | | | 60 | | | | 99 | | | | 100 | | | | 296,525 | |
R. Bryan Riggsbee
Chief Financial Officer and Treasurer | | | 60 | | | | 98 | | | | 100 | | | | 254,016 | |
Jerry S. Lanchbury, Ph.D.
Chief Scientific Officer | | | 50 | | | | 99 | | | | 100 | | | | 244,422 | |
Richard M. Marsh, Esq.
EVP, General Counsel and Secretary | | | 50 | | | | 95 | | | | 100 | | | | 234,546 | |
We believe that this
| | | | | | | | | | | | | | | | | |
| Name and Position | Base Salary | Target Incentive Bonus (as a % of Base Salary) | Payout Percentage (as a %) | 50% Multiplier (as a %) (1) | 2020 Transition Period Bonus Payment ($) |
Paul J. Diaz President and Chief Executive Officer | $1,000,000 | 100% | 136.4% | 50% | $682,000 |
R. Bryan Riggsbee Chief Financial Officer and Treasurer | $527,000 | 60% | 133.4% | 50% | $161,618 (2) |
| Interim President and Chief Executive Officer | $767,000 | 100% | 133.4% | 50% | $119,556 (2) |
Jerry S. Lanchbury, Ph.D. Chief Scientific Officer | $544,410 | 50% | 129.5% | 50% | $176,253 |
Nicole Lambert Group President of Myriad Women’s Health, Oncology, and International | $475,250 | 60% | 136.4% | 50% | $194,472 |
Mark Verratti Group President of Myriad Neuroscience and Myriad Autoimmune | $434,489 | 50% | 131.9% | 50% | $143,273 |
(1)Transition bonus payments were reduced by 50% to account for the 2020 transition period being a half year.
(2)Mr. Riggsbee’s 2020 transition period cash incentive bonus compensation is appropriatewas pro-rated based on the performancenumber of days he served as Interim President and Chief Executive Officer and as Chief Financial Officer and Treasurer, respectively, during the executive officer group for fiscal year 2018. 2020 transition period.
The
Compensation Committee believedCHCC did not change the
financial performance targets set for our annual cash incentive bonuses for our NEOs to be challenging, without any guarantee that the performance targets could be accomplished.For fiscal year 2019, the Compensation Committee has decided to utilize a comparable formulaic approach for determining the annual cash incentive bonus for executive officers as used for fiscal year 2018. The Compensation Committee established the followingNEO's target incentive bonus percentages for our NEOs whichthat will be used in determiningto determine annual cash incentive bonus amounts for the fiscal year 2019 performance. These are unchanged from2021 performance period.
Sign-On Bonus
Mr. Diaz’s employment agreement provides for a $1,000,000 signing bonus, of which half was paid following the targets established for fiscal year 2018. Due to changes incommencement of his employment and the tax laws,remaining half will be paid following the one-year anniversary of his employment with the Company. During the 2020 transition period, Mr. Capone’s fiscal year 2019 annual cash incentiveDiaz received $500,000 of this sign-on bonus is based on the predetermined financial performance metrics set by our Compensation Committee, but is not granted under our 2013 Executive Incentive Plan. | | | | |
Executive Officer
| | Target Incentive Bonus
(% of base salary for
Fiscal Year 2019) | |
Mark C. Capone
President and Chief Executive Officer
| | | 100 | |
Alexander Ford
President, Myriad Genetic Laboratories, Inc.
| | | 60 | |
R. Bryan Riggsbee
Chief Financial Officer and Treasurer
| | | 60 | |
Jerry S. Lanchbury
Chief Scientific Officer
| | | 50 | |
Richard M. Marsh, Esq.
Executive Vice President, General Counsel and Secretary
| | | 50 | |
commencement of his employment on August 13, 2020.
Long-Term Incentive Awards
To incentivize
Beginning with the 2020 transition period and reward long-term performance by our executives, we currently provide two forms ofcontinuing into fiscal year 2021, long-term incentive compensation:compensation is granted in the form of 50% RSUs subject to time-based vesting and 50% PSUs subject to financial metrics followed by time-based vesting. Historically, we provided a three-year cash incentive bonus and annual equity awards. Beginning with the award2020 transition period, we eliminated the cash incentive bonus in response to stockholder feedback and to better align the interests of restricted stock units. These cash and equity-based incentive awards help ensure that our executive officers have a stake in our long-term success by providing an incentive to improve the overall growth and value of Myriad. We believe that this fosters an executive culture that aligns our officers’ interests with the long-term intereststhose of our stockholders. The Compensation Committee determinesstockholders (although payouts will still be made under awards granted in previous years to the terms of all equity incentive awards for our NEOs, including our President and CEO. Beginning in fiscal year 2015, we granted our employees, executive officers and Boardextent that required metrics are achieved), as noted below.
Time-based restricted stock units rather than stock options in order to reduce the dilutive effect of our equity compensation program. 31
Three-Year Cash Incentive Bonus(RSUs)
. In December 2012, the Compensation Committee established a long-term cash incentive bonus program for our executive officers based on predetermined, objective financial formula-based performance targets to be accomplished at the end of the third ensuing fiscal year. For any amount to be paid, the minimum predetermined financial metric thresholds must be surpassed; otherwise, no bonus amount will be paid. As reflected in the following table, the financial metrics for these payouts are reviewed and determined when each three-year award is established. The three-year incentive bonus award amount is based on a target bonus amount as a percentage of base salary of 20 percent for our President and CEO and 15 percent for our other executive officers. For all executive officers, the target bonus percentage and bonus amount is capped. Based on the Company’s financial performance, we have only made a payout under our long-term cash incentive bonus program for the three-year performance period ending with FY2015. For the other three-year performance periods ending in FY2016, FY2017, and FY2018, none of the target thresholds were achieved, so no payouts were made.The following table summarizes each of the three-year cash incentive awards established for our executive officers.
| | | | | | |
Date of
Award
| | Three-Year
Performance
Period | | Performance Criteria
| | Payout Under Plan
|
December 2012 | | FY 2013-2015 | | Revenue (50%), EBITDA (25%) and EPS (25%) | | Payout at 47.55% of Target Award |
September 2013 | | FY2014-2016 | | Revenue (50%) and EBITDA (50%) | | No Payout |
September 2014 | | FY 2015-2017 | | Revenue (50%) and Net Income (50%) | | No Payout |
September 2015 | | FY 2016-2018 | | Revenue (50%) and EBITDA (50%) | | No Payout |
September 2016 | | FY 2017-2019 | | Revenue (50%), Adjusted Operating Margin (25%)
and Diversification of Product Revenue (25%) | | TBD |
September 2017 | | FY 2018-2020 | | Revenue (50%), Adjusted Operating Margin (25%)
and Diversification of Product Revenue (25%) | | TBD |
September 2018 | | FY 2019-2021 | | Revenue (50%), Adjusted Operating Margin (25%)
and Diversification of Product Revenue (25%) | | TBD |
We believe that the three-year cash incentive bonus adds an additional long-term incentive metric to motivate our executives to achieve financial metrics and operational goals, which will benefit long-term shareholder value. In particular, the recent performance objectives tied to adjusted operating margin and diversification of our product revenues are aligned with our announced strategic, long-term goals. The Compensation Committee believes the financial performance targets to be challenging, without any guarantee that the performance targets could be accomplished, in light of growing operational, reimbursement and competitive factors which may adversely affect the Company’s financial performance. Thus, the performance targets are set at a level that, if obtained, the Company would have accomplished strong financial performance. The three-year cash incentive bonus awards made to our NEOs, in fiscal year 2018, and the maximum amount payable under these awards, are reported in the table for 2018 Fiscal Year Grants of Plan Based Awards.
Initial Equity Awards. Executives who join us, who are granted equity, are granted restricted stock unit awards. The amount of the initial restricted stock unit award is determined based on the executive’s position and analysis of the competitive practices of the companies similar in size as represented in the compensation data that we review with the goal of creating a total compensation package for new executives that is competitive with other similar companies and that will enable us to attract high quality management personnel.One-fourth of each initial equity award will vest on an annual basis over four-plus years.
32
Annual Equity Incentive Awards. In response to continued comments from our stockholders, we will continue to issue long-term equity incentive compensation grants in restricted stock units withthe form of RSUs. For these time-based RSUs, one-fourth of the units granted vestinggrants vest on an annual basis over four-plusa period of four years. Additionally, forThe number of RSUs granted during the 2020 transition period are set forth in the chart below.
| | | | | | | | |
| Named Executive Officer | 2020 Transition Period RSUs Granted (1) | 2020 Transition Period Grant Date Fair Value of RSUs Granted ($) (2) |
| Paul J. Diaz, President and Chief Executive Officer | 298,954 | 4,000,005 |
| R. Bryan Riggsbee, Chief Financial Officer and Treasurer | 44,954 | 603,732 |
| Jerry S. Lanchbury, Ph.D., Chief Scientific Officer | 39,196 | 526,402 |
| Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International | 44,211 | 593,754 |
| Mark Verratti, Group President of Myriad Neuroscience and Autoimmune | 31,258 | 419,795 |
(1)The amounts represent the number of time-based RSUs granted to our NEOs during the 2020 transition period. The RSUs awarded to Mr. Riggsbee, Dr. Lanchbury, Ms. Lambert and Mr. Verratti were granted on October 8, 2020 and vest 25% on October 9, 2021, 25% on October 9, 2022, 25% on October 9, 2023 and 25% on October 9, 2024. The RSUs awarded to Mr. Diaz were granted on August 13, 2020 and vest 50% on August 13, 2021, 16.66% on August 13, 2022, 16.66% on August 13, 2023 and 16.68% on August 13, 2024.
(2)The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 and, (a) in the case of RSUs granted on October 8, 2020, are based on the closing price of our common stock on the Nasdaq Global Select Market on October 8, 2020 of $13.43, and (b) in the case of RSUs granted on August 13, 2020, are based on the closing price of our common stock on the Nasdaq Global Select Market on August 13, 2020 of $13.38.
Performance-based restricted stock units (PSUs). For our NEOs, all PSUs awarded are subject to achievement of a predetermined, formula-based, financial target that must be achieved in order for the award to commence vesting. Thus, for our NEOs, thevest. The actual number of restricted stock units earned will beis determined based on the percentage achievement of the predetermined financial target with no award being earned if the minimum threshold is not achieved; thereafter, and only if the minimum threshold has beenwas achieved, vesting of the award is based on the NEO’s continued employment with us. Once the final number of units to be awarded is determined, the PSUs awarded remain subject to time-based vesting and vest in four equal annual installments, beginning on the first anniversary of the grant date.
The performance metrics for PSUs are weighted 50% for adjusted earnings per share and 50% for relative total stockholder return. Total stockholder return is measured against the Nasdaq Healthcare Provider Index (IXHC) using the 20-trading day average at the beginning and end of the measurement period. The CHCC selected the Nasdaq Healthcare Provider Index (IXHC) as the appropriate benchmark because it includes a broad swath of healthcare growth companies and the CHCC believes that it best represents the Company from both a market and size perspective. In addition, the CHCC capped the number of PSUs earned at target performance level if absolute total stockholder return is negative over the performance period. The chart below summarizes the metrics and performance levels established by the CHCC for the PSUs granted during the 2020 transition period.
| | | | | | | | | | | | | | |
| Performance Metrics | Weighting | Threshold Performance Level | Target Performance Level | Maximum Performance Level |
| Adjusted Earnings Per Share | 50% | $(0.60) Payout %: 25% | $(0.49) Payout %: 50% | $(0.20) Payout %: 75% |
| Total Stockholder Return | 50% | 25th Percentile of the Index Payout %: 25% | 50th Percentile of the Index Payout %: 50% | 75th Percentile of the Index Payout %: 75% |
In determining the amount of equity compensation to be awarded, the
Compensation Committee will considerCHCC considers various factors, including our financial and operating performance for the applicable period; the executive officer’s contribution to our performance; the anticipated contribution of the executive officer to our future performance; the accomplishments of the executive officer as measured by achievement of MBOs; a review of compensation for comparable positions in our peer group from our benchmarking studies; and the total compensation of the executive officer and the anticipated retentive effect of the grant of additional equity compensation. We also
take into considerationconsider the total number of
our outstanding shares of our common stock,
the relative dilution to stockholders, as well as our gross equity burn rate, issued equity overhang and total equity overhang. The size of the restricted stock unit award generally increases as the rank and responsibilities of the executive officer increases.
Restricted stock unit awards are
generally made once a year at our
Compensation CommitteeCHCC meeting held in connection with the Board
of Director meetings
generallythat were historically held in September. The Board customarily determines the dates of its meetings for the ensuing year at a meeting of the Board in the preceding year. Thus, the dates on which equity compensation is granted are set well in advance.
However, given the Company’s transition to a calendar fiscal year, the CHCC anticipates granting restricted stock unit awards in February or March going forward. The
Compensation CommitteeCHCC does not time the grant of equity compensation with respect to the release of material nonpublic information, whether or not that information may favorably or unfavorably impact the price of our common stock.
Restricted stock unitEquity awards for the executive officers, including our
President and CEO,Chief Executive Officer, are approved by the
Compensation Committee. Based onCHCC. The number of PSUs granted during the 2018 Mercer Executive Compensation Review, which calculated market annual guidelines at the 50th and 75th percentile, the long-term incentive value of the annual restricted stock unit awards made on September 13, 2017, based on fiscal year 2017 performance, to our executive officers were generally between the 50th and 75th percentile, with the long-term incentive value of the annual restricted stock unit awards to our President and CEO falling just below the 50th percentile. For our NEOs, it was determined that, based on our revenues for fiscal year 2018, that the financial performance metric for fiscal year 2018 associated with the grant of these restricted stock units was met; hence, there was no reduction2020 transition period are set forth in the chart below.
| | | | | | | | |
| Named Executive Officer | 2020 Transition Period PSUs Granted (1) | 2020 Transition Period Grant Date Fair Value of PSUs Granted ($) (2) |
| Paul J. Diaz, President and Chief Executive Officer | 298,954 | 4,394,624 |
| R. Bryan Riggsbee, Chief Financial Officer and Treasurer | 44,953 | 660,809 |
| Jerry S. Lanchbury, Ph.D., Chief Scientific Officer | 39,195 | 576,167 |
| Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International | 44,210 | 649,887 |
| Mark Verratti, Group President of Myriad Neuroscience and Autoimmune | 31,258 | 459,493 |
(1)Represents the target number of restricted stock units originally awarded. The long-term incentive value of the annual restricted stock unit awards madePSUs awarded to our NEOs on October 8, 2020. The measurement period for these PSUs is July 1, 2020 through June 30, 2021 and performance is based on earnings per share targets and relative total stockholder return measured against the Nasdaq Healthcare Provider Index (IXHC) using the 20-trading day averages at the beginning and end of the measurement period. To the extent the PSUs are determined to have been earned based on the performance metrics, 25% will vest on the first anniversary of the grant date, and the remaining 75% will vest in fiscal year 2018 is reported inthree equal installments on the table for 2018 Fiscal Year Grantsfollowing three anniversaries of Plan Based Awards and was determined at theirthe grant date.
(2)The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 based on achieving 100%718. 50% of the award.We felt the RSU award levels were appropriateshares have a performance condition which are valued based on the comparative long-term peer group compensation data from the 2018 Mercer Executive Compensation Review, given the Company’s performance relative to its peers, the individual accomplishmentsclosing price of our NEOs during fiscal year 2017, includingcommon stock on the Nasdaq Global Select Market on October 8, 2020 of $13.43. The other 50% of the shares have a market condition and are valued using a Monte Carlo valuation model which resulted in a value of $15.97.
Stock Options. In connection with the appointment of Mr. Diaz as our President and CEO, relativeChief Executive Officer and as an inducement to their MBOsbecoming our President and Chief Executive Officer and to properly align Mr. Diaz's incentives with those of our stockholders, on August 13, 2020, the CHCC granted to Mr. Diaz time-based non-qualified stock options for the purchase of 342,040 shares of our common stock and performance-based non-qualified stock options for the purchase of 339,088 shares of our common stock. The time-based options vest in four equal installments on each of the first four anniversaries of Mr. Diaz’s commencement date. The performance-based options vest in five equal installments based on achievement (as measured in the option agreement) of predetermined stock price increases of our common stock, provided that no portion of the performance-based options may vest earlier than the first anniversary of Mr. Diaz’s commencement date.
Initial Equity Awards. Executive officers who join us are often granted equity in the form of restricted stock unit awards. The amount of the initial restricted stock unit award is determined based on the executive officer’s position and analysis of the competitive practices of the companies similar in size as represented in the compensation data that we review with the goal of continuingcreating a total compensation package for new executive officers that is competitive with other similar companies and that will enable us to placeattract high quality management personnel. One-fourth of each initial equity award vests on an increased weightingannual basis over at least four years. In connection with the commencement of compensationhis employment at the Company on long term equity compensation. We also believe these equityAugust 13, 2020, Mr. Diaz received 298,954 RSUs on August 13, 2020 and 298,954 PSUs on October 8, 2020.
Three-Year Cash Incentive Bonus. In December 2012, the CHCC established a long-term cash incentive bonus program for our executive officers based on predetermined, objective financial formula-based performance targets to be accomplished at the end of the third ensuing fiscal year. In September 2020, the CHCC discontinued this program, such that no further awards are consistent with our goalwill be granted under this program. However, payouts over the next two fiscal years, under awards granted in September 2018 and 2019, may still be made under the terms of placing our president and CEO and CFOeach such award as described below.
For any amount to be paid under the three-year cash bonus awards, the minimum predetermined financial metric thresholds must be surpassed; otherwise, no bonus amount is paid. As reflected in the 50th-75th percentile,following table, the financial metrics for these payouts are reviewed and are appropriatedetermined when each three-year award is established. The three-year incentive bonus award amount is based uponon a target bonus amount as a percentage of base salary of 20% for our Chief Executive Officer and 15% for our other executive officers. For all executive officers, the bonus amount is capped at 150% of the target bonus. Based on the Company’s financial performance, Thus, these equity awards appropriately rewardwe have only made a payout under our executiveslong-term cash incentive bonus program for their consistentthe three-year performance periods ending with fiscal years 2015 and 2019. For the other three-year performance periods ending in fiscal years 2016, 2017, 2018, and 2020, none of the target thresholds were achieved, so no payouts were made.
The following table summarizes the results or current status of the past
performance, and incentivizeeight grants of the three-year cash incentive awarded to our
executives to work hard to continue to deliver similar performance and to remain employed at the Company.executive officers.
| | | | | | | | | | | |
Date of Award | Three-Year
Performance
Period | Performance Criteria and Weighting (as of %) | Payout Under Award |
| December 2012 | FY 2013-2015 | Revenue (50%), EBITDA (25%) and EPS (25%) | Payout at 47.55% of Target Award |
| September 2013 | FY 2014-2016 | Revenue (50%) and EBITDA (50%) | No Payout |
| September 2014 | FY 2015-2017 | Revenue (50%) and Net Income (50%) | No Payout |
| September 2015 | FY 2016-2018 | Revenue (50%) and EBITDA (50%) | No Payout |
| September 2016 | FY 2017-2019 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | Payout at 34% of Target Award |
| September 2017 | FY 2018-2020 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | No Payout |
| September 2018 | FY 2019-2021 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | TBD |
| September 2019 | FY 2020-2022 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | TBD |
The primary objectives of our
Compensation CommitteeCHCC in establishing and maintaining our executive compensation programs are to:
•Attract and retain the best possible executive talent;
•Motivate our executive officers to enhance our growth and profitability;
•Increase long-term stockholder value; and
•Reward the executive officers for their contribution to our growth, profitability and increased stockholder value through the recognition of individual leadership, initiatives, achievements and other contributions.
33
The specific directives of the
Compensation CommitteeCHCC are to provide appropriate short and long-term compensation and incentives, in the form of cash and equity, that motivate and reward the accomplishment of individual and corporate objectives and that align executive officer compensation with the creation of stockholder value.
To achieve these objectives,Though the
Compensation Committeegreater weight in determining executive compensation will be given to objective financial metrics and Company performance, such as revenue, adjusted operating income, adjusted earnings per share and relative total stockholder return, the CHCC has adopted and implemented a compensation plan
that baseswhere our executive officers’
compensationshort-term cash bonus is based in part on a variety of factors set forth in MBOs.
Establishment and Use of Management Business Objectives
The
Compensation CommitteeCHCC has implemented an annual management performance program for the purpose of establishing annual performance objectives for our executive officers to align their performance with the overall goals and objectives for the Company. This process
typically commences in the fourth quarter of each fiscal year as each executive officer meets with our
President and CEOChief Executive Officer to establish annual MBOs for the ensuing fiscal year. After review and discussion, the
President and CEOChief Executive Officer finalizes the executive officer’s MBOs for the ensuing fiscal year. Similarly, our
President and CEOChief Executive Officer meets with the
Compensation CommitteeCHCC at the end of each fiscal year to establish his MBOs for the ensuing fiscal year which, after review and discussion, are finalized by the
Compensation Committee.CHCC. On
September 20, 2018,October 8, 2020, the
Compensation CommitteeCHCC approved all
fiscal year 2019 MBOs for our executive
officers. Duringofficers for the
2020 transition period. In March 2021, MBOs for fiscal year
additional MBOs may be2021 were established and assigned to
aneach executive officer, including our
President and CEO.Chief Executive Officer.
At the end of
the ensuingeach fiscal year
and the 2020 transition period, each executive officer’s performance for the
fiscal yearrelevant period is reviewed, including an assessment by management and the
Compensation CommitteeCHCC of the achievement of each executive officer’s respective MBOs. At this time, the
President and CEOChief Executive Officer calculates and recommends to the
Compensation CommitteeCHCC an annual cash incentive bonus amount and salary adjustment for the executive officers, other than himself. The
Compensation Committee,CHCC, after further review and discussion with our
President and CEO,Chief Executive Officer, then determines the annual cash incentive bonus for the concluding fiscal year
or period and base salary amount for the ensuing fiscal year for the executive officers, other than the
President and CEO.Chief Executive Officer. As noted above, no salary increases were made for the 2020 transition period given COVID-19 related considerations.
In the case of our
President and CEO,Chief Executive Officer, the
Compensation CommitteeCHCC makes its review and determinations for the
President and CEO’sChief Executive Officer's salary and annual cash incentive compensation without any recommendations from
our President and CEO, whohim. Our Chief Executive Officer is not present in any portions of the meetings of the
Compensation CommitteeCHCC where his compensation is calculated, discussed
andor approved. At the end of
theeach fiscal year
and the
Compensation Committee2020 transition period, the CHCC determines the annual salary amount of our
President and CEOChief Executive Officer for the ensuing fiscal
year.year, which determination may be delayed in exceptional circumstances such as the COVID-19 pandemic. The annual cash incentive bonus for our
President and CEOChief Executive Officer is based on the
Company’s accomplishment of its financial goals and the Chief Executive Officer’s accomplishment of his performance metrics as previously determined by our
Compensation Committee as measured against our final, audited financial statements for the fiscal year. In determining the annual cash incentive bonus amount, the Compensation Committee also reviews and discusses the accomplishment of the President and CEO’s MBOs for the fiscal year in determining whether any reductions of the annual incentive bonus amount is appropriate.CHCC. The annual cash incentive bonus amount, salary adjustments, and long-term incentive compensation for our
President and CEOChief Executive Officer are reported to the independent members of the Board of Directors.
The MBOs for each executive officer for
each fiscal yearthe 2020 transition period consist of individual objectives tailored to each executive.
As applicable, each executive officer may also be given one or morepre-established financial performance targets.The MBOs for our NEOs for fiscal year 2018the 2020 transition period were as follows:
Mark C. Capone,
Paul J. Diaz, President and CEOChief Executive Officer — manage the Companyengage employees in culture change on customer experience by reducing organizational complexity as determined by current turnover, engagement net promoter score and diversity equity and inclusion initiatives; deliver on detailed plan for prioritization of product innovation and research efforts; improve capital structure, transparency with investors and refinance our bank credit facility; and complete strategic operating reviews and develop comprehensive transformation plan to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2018; achieve designated financial targets forimprove our commercial capabilities.
non-hereditary
product revenues; achieve financial targets for increased revenue potential resulting from new reimbursement coverage decisions; achieve designated milestones to advance the Company’s product pipeline; and implement Elevate 2020 cost reduction or revenue enhancement initiatives to deliver increased operating income.Alexander Ford, President Myriad Women’s Health, Inc. — achieve designated financial targets for Myriad Genetic Laboratories; achieve designated targets for managed care contract coverage for designated products; achieve designated financial targets for new products in specified indications; create strategy to further differentiate in hereditary cancer; and implement Elevate 2020 cost reduction or revenue enhancement initiatives to deliver increased operating income.
R. Bryan Riggsbee, Interim President and Chief Executive Officer, Chief Financial Officer and Treasurer— oversee Elevate 2020improve capital structure, transparency with investors and refinance our bank credit facility; upgrade our reimbursement, billing and revenue cycle capabilities; and successfully execute on the 2021 budget, including the cost reduction or revenue enhancement initiatives to deliver increased operating income and achieve designated financial target for cost savings; improve Company productivity to achieve designated financial cost savings target; and continued management of Enterprise Risk Management function.34
plan.
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer— develop and validate new technologiesimportant upgrades in testing content and platforms; and formulate a five-year plan to enhance current key diagnostic products and introduce select products to augment and enrich the Company’s neuroscience, women’s health and oncology businesses.
Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International — achieve revenue and operating incometargets for operations; complete designated clinical studies;the Myriad women’s health, oncology, and international business units; optimize operating expenses for the Company’s international business; accelerate product growth in Asia; launch project to increase digital lead conversion; and complete developmenta project to explore a tumor product in the oncology business.
Mark Verratti, Group President of designated new products.Richard M. Marsh, Executive Vice President, General CounselMyriad Neuroscience and SecretaryAutoimmune
— successful managementachieve revenue and operating income targets for the Myriadneuroscience and autoimmune business units; improve the GeneSight value proposition in areas including but not limited to clinical utility messaging; pivot the GeneSight commercial channels to drive greater digital and end-user adoption; and increase the percentage of litigation matters; continue to developrevenue-producing GeneSight and implement Company’s intellectual property strategy; oversee compliance plansVectra tests by certain targeted amounts.
For the 2020 transition period, as discussed above, MBOs constituted a proportion of each executive officer’s scoring for
affiliated group, including international activities;cash bonuses that is weighted less than the financial metrics of revenue and
implement Elevate 2020 cost reduction or revenue enhancement initiatives to deliver increasedadjusted operating income.
Named Executive Officer Performance for
Fiscal 2018the 2020 Transition Period
President and CEO:Chief Executive Officer: Based on our financial and operating results for fiscal year 2018,the 2020 transition period, and the degree of accomplishment of Individualthe financial metrics and individual MBOs, the Compensation CommitteeCHCC determined that Mr. CaponeDiaz achieved a Total Performance Factor110% performance score on his individual MBOs, resulting in an MBO payout percentage of 96%33% for determining his annual cash incentive bonus.bonus for the 2020 transition period. As part of this determination, the Compensation CommitteeCHCC noted revenues generated fromnon-hereditary cancer products, the additional reimbursement coverage for new products, regulatory approvals for our companion diagnostics, advancementssuccessful achievement of certain financial metrics, the progress achieved in ourdeveloping and implementing a comprehensive transformation plan to improve the Company’s commercial capabilities, the improvements in the Company’s organizational effectiveness and focus on customer experience and the progress achieved in prioritizing product pipeline, and increased operating income attributableinnovation research efforts while working to implementation of Elevate 2020 initiatives.divest certain non-strategic businesses. Additionally, the Compensation CommitteeCHCC noted under Mr. Capone’s supervision, the accomplishments of the Company, as discussed above under the caption: “Fiscal Year 20182020 Transition Period Performance.”
Other Named Executive Officers.Officers: The Compensation CommitteeCHCC determined that the other NEOs had substantially accomplished their respective Individualindividual MBOs based, in part, on the accomplishments of the Company as discussed above under the caption: “Fiscal Year 20182020 Transition Period Performance.”
Role of Management in Our Compensation Program
Our management, including our
President and CEO,Chief Executive Officer, supports the
Compensation Committee,CHCC, attends portions of its meetings upon request, and performs various administrative functions at its request. Our
President and CEOChief Executive Officer provides input to the
Compensation CommitteeCHCC on the effectiveness of our compensation program and makes specific recommendations as to the base salary amounts, annual cash incentive bonus amounts,
long-term cash incentive bonus awards and equity incentive awards for the executive officers, other than for himself. At the end of each fiscal year
and including the 2020 transition period, our
President and CEOChief Executive Officer evaluates the annual performance of each of our executive officers, including an assessment of the accomplishment of each executive officer’s MBOs, and submits his calculations and recommendations to the
Compensation CommitteeCHCC which then determines an annual cash incentive bonus amount for the concluding fiscal year, the base salary amount for the ensuing fiscal year and long term equity incentive compensation for each of the executive officers. Except for our
President and CEO,Chief Executive Officer, no executive officer is present when the
Compensation CommitteeCHCC discusses and determines the salary and bonus amounts and equity compensation to be awarded to the executive officers. Our
President and CEOChief Executive Officer is excused from all meetings, and is not present, where matters pertaining to his compensation are determined and approved by the
Compensation Committee.CHCC.
We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance
and a 401(k)
plan, and a discretionary December holiday bonus.plan. Additionally, we may provide other benefits to new executive officers such as a relocation package or other related compensation as determined on a
case-by-case basis.
During the 2020 transition period, Mr. Diaz received relocation benefits of $11,612, a housing allowance of $14,000 and paid travel expenses of $8,794. We may also provide certain compensation benefits in connection with the retirement of our executive officers based on their accomplishments and tenure of employment with us.
Termination and Change-in-Control-Based Compensation
Change-of-Control-Based
CompensationWe recognize that, as is the case with many publicly-held corporations,
To address the possibility of a change in control of the Company, existsor an abrupt termination for business necessity, and the potential that such possibility, and the uncertainty and questions which itsuch possibility may raise among key personnel maycould result in the departure or distraction of key personnel to the detriment of us and our stockholders. Therefore,stockholders, in October 2020 we have entered into a retention agreementnew Severance and Change in Control Agreement with each of our executive officers, other than our Chief Executive Officer whose arrangements with respect to reinforceseverance and encourage the continued employment and dedication of our executive officers without distraction from the possibility of a change in control of the Company are addressed in his employment agreement with us. This new Severance and related eventsChange in Control Agreement differs from past retention agreements with these executive officers, and circumstances. brings the new agreement into line with the market, by:
•Increasing the ownership threshold required for a change in control to 50%;
•Replacing single-trigger accelerated vesting in a change in control with double-trigger vesting (i.e., change in control and termination now required for accelerated vesting and cash severance benefits);
•Reducing change in control severance payments from 3X salary and bonus to 1X salary and bonus;
•Reducing benefit (COBRA) payments from 36 months to 12 months; and
•Introducing severance payments (1X salary and bonus) and equity acceleration (two years of vesting) upon a termination without Cause or for Good Reason not in connection with a change in control.
We believe that the terms of our
retention agreementnew Severance and Change in Control Agreement are
35
consistent with those historically maintained by others in our industry and therefore are important for attracting and retaining key employeesexecutive officers who are critical to our long-term success. The potential benefits provided under the retention agreementSeverance and Change in Control Agreement are in addition to the current compensation arrangements we have with our executive officers. In September 2015 in response to shareholder concerns, we entered into amendment to these retention agreement with our executive officers in order to eliminate the tax
gross-up
set forth therein that allowed for payments to be made by the Company to the executive officers to offset any excise taxes incurred by the executive officer in the event that any change of control payments are subject to excise tax under Section 4999 of the Internal Revenue Code.For the payments each of our NEOs is entitled to receive upon
termination, including termination incident to a
change-in-control change in control, see “Executive
Compensation — Compensation—Potential Payments Upon Termination or
Change-in-Control” later in this proxy statement.
Relationship of Elements of Compensation
As noted above, our compensation structure is primarily comprised of a base salary, an annual cash incentive bonus,
and long-term incentive compensation in the form of
a three-year cash incentive bonus award and equity incentive awards. In setting executive compensation, the
Compensation CommitteeCHCC considers the aggregate compensation payable to an executive officer and the form of the compensation. The
Compensation CommitteeCHCC seeks to achieve an appropriate balance between immediate cash rewards and long-term financial incentives.
We
utilizeuse long-term equity incentive compensation in the form of
restricted stock unitsa mix of RSUs and PSUs as a substantial component of
compensation (prior to fiscal year 2015 we utilized stock options).compensation. The
Compensation CommitteeCHCC views the award of
restricted stock unitsRSUs and PSUs as a primary long-term retention benefit by tying the earning of these awards to a vesting schedule that will be over a period
greater thanof at least four years for full vesting of restricted stock units. If an employee leaves the Company before the completion of the vesting period,
then that employee will not be entitled to any benefit from the
non-vested portion of the award.
Additionally, for our NEOs, the restricted stock unit awardIn addition to time-based vesting, PSUs also
has ahave performance
metricmetrics that, if not met, would require
the NEO to forfeitforfeiture of a portion
up toor potentially the entire
restricted stock unitPSU award regardless of the additional requirement of vesting. We believe that
thisthe time-based vesting feature
of RSUs and PSUs makes it more attractive to remain as our employee and this arrangement does not require substantial cash payments by the Company.
Similarly, our three-year cash incentive bonus awards promote long-term performance by establishing significant growth performance targets that must be met over a three-year period. This long-term cash incentive bonus also promotes retention of our executives as no payment is made under our three-year cash incentive bonus awards if the executive officer is not employed on the last day of the three-year performance period.
The
Compensation CommitteeCHCC reviews from time to time the mix of the compensation elements for executive officers against comparable companies in our industry as represented in the compensation data we utilize. The size and mix of each element in a compensation package is based on the impact of the position on the Company, market practice and overall corporate and individual performance relative to stated corporate goals. The level of incentive compensation typically increases in relation to an executive officer’s responsibilities and ability to meet individual and corporate goals. The
Compensation CommitteeCHCC believes that making a significant portion of an executive officer’s compensation contingent on corporate performance more closely aligns the executive officer’s interests with those of our stockholders.
Conclusion
Our compensation policies are designed
Risk Assessment and
are continually being developed to retain and motivate our executive officers and to ultimately reward them for outstanding individual and corporate performance.Summary Compensation Table
The following table shows the total compensation paid or accrued during the fiscal years indicated to (1) our President and Chief Executive Officer, (2) our Chief Financial Officer, and (3) our three next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended June 30, 2018 and were serving as executive officers as of June 30, 2018.
36
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Fiscal
Year | | | Salary
($) | | | Bonus
($) | | | Stock
Awards ($)
(1) | | | Non-Equity
Incentive Plan
Compensation
($) (2) | | | All Other
Compensation
($) (3) | | | Total ($) | |
Mark C. Capone | | | 2018 | | | | 852,000 | | | | — | | | | 5,374,050 | | | | 817,920 | | | | 10,980 | | | | 7,054,950 | |
President and Chief Executive Officer* | | | 2017 | | | | 852,000 | | | | 307 | | | | 3,613,500 | | | | 741,240 | | | | 10,848 | | | | 5,217,895 | |
| | | 2016 | | | | 800,000 | | | | 512 | | | | 3,361,875 | | | | 727,200 | | | | 11,048 | | | | 4,900,635 | |
| | | | | | | |
Alexander Ford | | | 2018 | | | | 499,200 | | | | — | | | | 1,954,200 | | | | 296,525 | | | | 11,020 | | | | 2,760,945 | |
President, Myriad Womens Health, Inc. | | | 2017 | | | | 499,200 | | | | 307 | | | | 1,314,000 | | | | 245,606 | | | | 10,848 | | | | 2,069,961 | |
| | | | | | | |
R. Bryan Riggsbee (4) | | | 2018 | | | | 432,000 | | | | — | | | | 1,954,200 | | | | 254,016 | | | | 5,366 | | | | 2,645,582 | |
Chief Financial Officer | | | 2017 | | | | 432,000 | | | | 307 | | | | 1,314,000 | | | | 230,688 | | | | 8,175 | | | | 1,985,170 | |
| | | 2016 | | | | 400,000 | | | | 512 | | | | 2,037,500 | | | | 180,000 | | | | 10,016 | | | | 2,628,028 | |
| | | | | | | |
Jerry S. Lanchbury, Ph.D. | | | 2018 | | | | 493,782 | | | | — | | | | 1,628,500 | | | | 244,422 | | | | 10,972 | | | | 2,377,676 | |
Chief Scientific Officer | | | 2017 | | | | 493,782 | | | | 307 | | | | 1,095,000 | | | | 214,795 | | | | 10,960 | | | | 1,814,844 | |
| | | 2016 | | | | 479,400 | | | | 512 | | | | 1,986,563 | | | | 215,730 | | | | 11,297 | | | | 2,693,502 | |
| | | | | | | |
Richard M. Marsh, Esq. | | | 2018 | | | | 493,782 | | | | — | | | | 1,628,500 | | | | 234,546 | | | | 10,973 | | | | 2,367,801 | |
Executive VP, General Counsel & Secretary | | | 2017 | | | | 493,782 | | | | 307 | | | | 1,095,000 | | | | 222,202 | | | | 10,921 | | | | 1,822,212 | |
| | | 2016 | | | | 479,400 | | | | 512 | | | | 1,925,438 | | | | 218,127 | | | | 10,830 | | | | 2,634,306 | |
(1) | Amounts shown reflect the aggregate grant date fair value of restricted stock unit awards granted in each year presented calculated in accordance with FASB ASC Topic 718. Amounts reflect the maximum potential value of each award assuming the highest level of performance associated with the award and are based on the closing price of our common stock on the NASDAQ Global Market on the date of grant of the award. For fiscal year 2018, based on our achievement of the applicable performance criteria established on the grant date for these restricted stock unit awards, the number of shares underlying these restricted stock units were not reduced.
|
(2) | For Mr. Capone, for fiscal years 2016-2018, the amounts reported in this column reflect the actual cash awards paid under our 2013 Executive Incentive Plan to Mr. Capone pursuant to his annual cash incentive bonus award, calculated based on measurement against plan metrics and performance results for fiscal years 2016-2018. For all other NEOs, for fiscal years 2016-2018, the amounts reported in this column reflect the actual annual cash incentive awards paid. No payment was made under our long-term, three-year cash incentive bonus plan which concluded in fiscal years 2016-2018 as our performance goals for that plan were not achieved.
|
(3) | All amounts shown for fiscal year 2018 consist of an average of $175.15 per year of premiums paid by us with respect to term life insurance for the benefit of each NEO for their respective periods served and the balance of the amount shown for matching contributions made under our 401(k) plan on behalf of each NEO.
|
37
2018 Fiscal Year Grants of Plan-Based Awards
The following tables show information regarding grants ofMitigation
non-equity
and equity awards that we made during the fiscal year ended June 30, 2018to each of the executive officers named in the Summary Compensation Table. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards ($) (1) | | | Estimated Future
Payouts Under Equity
Incentive Plan
Awards (#)(2) | | | Grant Date
Fair Value
of Stock
and Option
Awards
($)(3) | |
Name | | Grant Date | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | |
Mark C. Capone | | 9/13/2017 | | | | | | | | | | | | | | | 115,500 | | | | 165,000 | | | | 5,374,050 | |
| | FY20 3-YR Award | | | 127,800 | | | | 170,400 | | | | 255,600 | | | | | | | | | | | | | |
Alexander Ford | | 9/13/2017 | | | | | | | | | | | | | | | 42,000 | | | | 60,000 | | | | 1,954,200 | |
| | FY203-YR Award | | | 56,160 | | | | 74,880 | | | | 112,320 | | | | | | | | | | | | | |
R. Bryan Riggsbee | | 9/13/2017 | | | | | | | | | | | | | | | 42,000 | | | | 60,000 | | | | 1,954,200 | |
| | FY203-YR Award | | | 48,600 | | | | 64,800 | | | | 97,200 | | | | | | | | | | | | | |
Jerry S. Lanchbury | | 9/13/2017 | | | | | | | | | | | | | | | 35,000 | | | | 50,000 | | | | 1,628,500 | |
| | FY203-YR Award | | | 55,550 | | | | 74,067 | | | | 111,101 | | | | | | | | | | | | | |
Richard M. Marsh | | 9/13/2017 | | | | | | | | | | | | | | | 35,000 | | | | 50,000 | | | | 1,628,500 | |
| | FY203-YR Award | | | 55,550 | | | | 74,067 | | | | 111,101 | | | | | | | | | | | | | |
(1) | The amounts represent the threshold, target, and maximum amounts awarded to our NEOs under our Three-Year Cash Incentive Bonus Plan for fiscal years 2018-2020. The metrics against which performance is to be measured are discussed in the Compensation Discussion and Analysis under the heading “Fiscal Year 2018 Named Executive Officer Compensation- Long Term Incentive Awards Three Year Cash Incentive Bonus Plan.”
|
(2) | The amounts represent the threshold and target (which is the maximum) number of our shares that may be awarded with respect to the restricted stock unit awards made to our NEOs on September 13, 2017. Based on our achievement of the revenue performance criteria established on the grant date for these awards, the number of shares underlying these restricted stock units was not reduced. These shares vestone-fourth per year beginning September 25, 2018.
|
(3) | The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 and are based on the closing price of our common stock on the NASDAQ Global Market on September 13, 2017 of $32.57.
|
Narrative Disclosure to Summary Compensation Table and 2018 Fiscal Year Grants of Plan-Based Awards Table
We have entered into standard form employment agreements with no defined term with each of our NEOs. Pursuant to these agreements, either party may terminate employment without cause at any time upon a specified period of written notice to the other party or immediately with cause upon written notice to the other party. Each employment agreement also provides that the employee will not disclose confidential information of ours during and after employment and will not compete with us during the term of employment. Since the dates of these agreements entered into with our NEOs, the compensation paid to each NEO has been increased and equity awards have been granted, the most recent of which are as discussed below.
38
Previously, we have entered into an Executive Retention Agreement with each of our NEOs under which they are entitled to certain benefits upon achange-in-control, as discussed below under “Executive Compensation — Potential Payments Upon Termination orChange-in-Control.”
Mr. Capone was appointed to the position of President and CEO of the Company beginning July 1, 2015. He had previously entered into the Company’s standard form of employment agreement when he was initially hired by the Company in October 2002 as the Vice President of Sales for MGL. Thereafter, in September 2005, he was appointed to the position of Senior Vice President of Sales for MGL.
In February
2006, he was appointed to2021, the
position of Chief Operating Officer for MGL, and then in March 2010 he was appointed President of MGL. As determined by our Compensation Committee, he received an annual salary of $852,000 for the fiscal year ended June 30, 2018. Mr. Capone will be paid an annual base salary of $887,000 as our President and CEO for the fiscal year ending June 30, 2019. His annual cash incentive bonus for fiscal 2018 was $817,920 as approved by our Compensation Committee based on the level of achievement ofpre-established performance goals. Additionally, in September 2017, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Capone will be entitled to receive up to $255,600 as of the end of fiscal 2020 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2018 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.”On September 13, 2017, Mr. Capone was granted a restricted stock unit award of 165,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2018, the restricted stock unit award was not reduced. On September 19, 2018, he was granted a restricted stock unit award of 150,000 shares of the Company, subject to time-based and performance-based vesting requirements.Mr. Ford was appointed President of Myriad Women’s Health, Inc. beginning August 1, 2018. He had previously entered into the Company’s standard form of employment agreement when he was initially hired by the Company in June 2010 as the Vice President of Sales for MGL. Thereafter, in July 2011, he was appointed to the position of GM Preventative Care, and thereafter as MGL’s Chief Commercial Officer in January 2013. Thereafter he was appointed as President of MGL until 2018. As determined by our Compensation Committee, Mr. Ford received an annual salary of $499,200 for the fiscal year ended June 30, 2018, and will be paid an annual base salary of $519,168 for the fiscal year ending June 30, 2019. His annual cash incentive bonus for fiscal 2018 was $296,525 as determined by our Compensation Committee. Additionally, in September 2017, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Ford will be entitled to receive up to $112,320 as of the end of fiscal 2020 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2018 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 13, 2017, he was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2018, the restricted stock unit award was not reduced. On September 19, 2018, Mr. Ford was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements.
Mr. Riggsbee was appointed to the position of Chief Financial Officer and Treasurer in October, 2014, and entered into the Company’s standard form of employment agreement at that time. As determined by our Compensation Committee, he received an annual salary of $432,000 for the fiscal year ended June 30, 2018. Mr. Riggsbee will be paid an annual base salary of $466,650 for the fiscal year ending June 30, 2019. His annual cash incentive bonus for fiscal 2018 was $254,016 as determined by our Compensation Committee. Additionally, in September 2017, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Riggsbee will be entitled to receive up to $97,200 as of the end of fiscal 2020 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2018 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 13, 2017, he was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2018, the restricted stock unit award was not reduced. On September 19, 2018, Mr. Riggsbee was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements.
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Dr. Lanchbury was appointed to the position of Senior Vice President, Research in November 2002 and entered into the Company’s standard form of employment agreement at that time. In September 2005, he was promoted to Executive Vice President, Research. In February 2010, Dr. Lanchbury was appointed Chief Scientific Officer. As determined by our Compensation Committee, he received an annual salary of $493,782 for the fiscal year ended June 30, 2018. Dr. Lanchbury will be paid an annual base salary of $508,595 for the fiscal year ending June 30, 2019. His annual cash incentive bonus for fiscal 2018 was $244,422 as determined by our Compensation Committee. Additionally, in September 2017, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Dr. Lanchbury will be entitled to receive up to $111,101 as of the end of fiscal 2020 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2018 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.”On September 13, 2017, he was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2018, the restricted stock unit award was not reduced.On September 19, 2018, Dr. Lanchbury was granted a restricted stock unit award of 40,000 shares of the Company, subject to time-based and performance-based vesting requirements.
Mr. Marsh was appointed to the position of Vice President, General Counsel and Secretary in November 2002 and entered into the Company’s standard form of employment agreement at that time. In September 2005, he was promoted to Executive Vice President, General Counsel and Secretary. As determined by our Compensation Committee, Mr. Marsh received an annual salary of $493,782 for the fiscal year ended June 30, 2018, and will be paid an annual base salary of $508,595 for the fiscal year ending June 30, 2019. His annual cash incentive bonus for fiscal 2018 was $234,546 as determined by our Compensation Committee. Additionally, in September 2017, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Marsh will be entitled to receive up to $111,101 as of the end of fiscal 2020 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2018 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.”On September 13, 2017, he was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2018, the restricted stock unit award was not reduced.On September 19, 2018, Mr. Marsh was granted a restricted stock unit award of 40,000 shares of the Company, subject to time-based and performance-based vesting requirements.
All annual restricted stock unit awards granted to our NEOs are subject to a predetermined, formula-based financial performance metric that must be met in order for these awards to vest annually over a four-plus year period.
In September 2018, the Compensation Committee approved a three-year cash incentive award pursuant to which our executive officers and other key management members may be entitled to receive compensation at the end of fiscal year 2021 if certain predetermined performance goals are achieved. Following are the amounts that may be earned for our NEOs for the awards under our three-year cash incentive awards:
| | | | | | | | | | | | | | | | |
| | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards ($) | |
Name | | Award
Period | | | Threshold | | | Target | | | Maximum | |
Mark C. Capone | | | FY19-21 | | | | 133,050 | | | | 177,400 | | | | 266,100 | |
Alexander Ford | | | FY19-21 | | | | 58,406 | | | | 77,875 | | | | 116,813 | |
R. Bryan Riggsbee | | | FY19-21 | | | | 52,498 | | | | 69,998 | | | | 104,996 | |
Jerry S. Lanchbury, Ph.D. | | | FY19-21 | | | | 57,217 | | | | 76,289 | | | | 114,434 | |
Richard M. Marsh, Esq. | | | FY19-21 | | | | 57,217 | | | | 76,289 | | | | 114,434 | |
Outstanding Equity Awards at 2018 Fiscal Year End
The following table shows the grants of stock options and restricted stock units outstanding on the last day of the fiscal year ended June 30, 2018, to each of our NEOs. We have not granted any stock options that are subject to performance conditions. The annual restricted stock units granted to our NEOs are subject to time and performance conditions.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards (1) | | | Stock Awards | |
Name | | Date of
Grant | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | | 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
or Other Rights
that Have not
Vested
(#)(4) | | | Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units
or Other Rights
that Have not
Vested
($)(3) | |
Mark C. Capone | | 02/18/2009 | | | 80,000 | | | | 0 | | | $ | 30.12 | | | | 02/18/2019 | | | | | | | | | | | | | | | | | |
| | 09/15/2009 | | | 62,000 | | | | 0 | | | $ | 30.34 | | | | 09/15/2019 | | | | | | | | | | | | | | | | | |
| | 03/03/2010 | | | 75,000 | | | | 0 | | | $ | 23.11 | | | | 03/03/2020 | | | | | | | | | | | | | | | | | |
| | 09/15/2010 | | | 25,001 | | | | 0 | | | $ | 16.53 | | | | 09/15/2020 | | | | | | | | | | | | | | | | | |
| | 02/23/2011 | | | 31,250 | | | | 0 | | | $ | 18.00 | | | | 02/23/2021 | | | | | | | | | | | | | | | | | |
| | 09/13/2011 | | | 144,000 | | | | 0 | | | $ | 19.47 | | | | 09/13/2022 | | | | | | | | | | | | | | | | | |
| | 03/07/2012 | | | 52,000 | | | | 0 | | | $ | 23.98 | | | | 03/07/2022 | | | | | | | | | | | | | | | | | |
| | 09/12/2012 | | | 300,000 | | | | 0 | | | $ | 27.07 | | | | 09/12/2022 | | | | | | | | | | | | | | | | | |
| | 09/17/2013 | | | 330,000 | | | | 0 | | | $ | 26.49 | | | | 09/17/2021 | | | | | | | | | | | | | | | | | |
| | 09/17/2014 | | | | | | | | | | | | | | | | | | | 24,857 | | | | 928,906 | | | | | | | | | |
| | 09/15/2015 | | | | | | | | | | | | | | | | | | | 39,352 | | | | 1,470,584 | | | | | | | | | |
| | 09/14/2016 | | | | | | | | | | | | | | | | | | | 123,750 | | | | 4,624,538 | | | | | | | | | |
| | 09/13/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 165,000 | | | | 6,166,050 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alexander Ford | | 06/22/2010 | | | 4,000 | | | | 0 | | | $ | 15.98 | | | | 06/22/2020 | | | | | | | | | | | | | | | | | |
| | 09/13/2011 | | | 10,551 | | | | 0 | | | $ | 19.47 | | | | 09/13/2021 | | | | | | | | | | | | | | | | | |
| | 03/07/2012 | | | 4,000 | | | | 0 | | | $ | 23.98 | | | | 03/07/2022 | | | | | | | | | | | | | | | | | |
| | 09/12/2012 | | | 35,000 | | | | 0 | | | $ | 27.07 | | | | 09/12/2022 | | | | | | | | | | | | | | | | | |
| | 09/17/2013 | | | 55,000 | | | | 0 | | | $ | 26.49 | | | | 09/17/2021 | | | | | | | | | | | | | | | | | |
| | 09/17/2014 | | | | | | | | | | | | | | | | | | | 4,125 | | | | 154,151 | | | | | | | | | |
| | 09/15/2015 | | | | | | | | | | | | | | | | | | | 8,250 | | | | 308,303 | | | | | | | | | |
| | 09/14/2016 | | | | | | | | | | | | | | | | | | | 45,000 | | | | 1,681,650 | | | | | | | | | |
| | 09/13/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 60,000 | | | | 2,242,200 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
R. Bryan Riggsbee | | 10/17/2014 | | | | | | | | | | | | | | | | | | | 7,500 | | | | 280,275 | | | | | | | | | |
| | 09/15/2015 | | | | | | | | | | | | | | | | | | | 23,850 | | | | 891,275 | | | | | | | | | |
| | 09/14/2016 | | | | | | | | | | | | | | | | | | | 45,000 | | | | 1,681,650 | | | | | | | | | |
| | 09/13/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 60,000 | | | | 2,242,200 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jerry S. Lanchbury, Ph.D. | | 09/15/2009 | | | 50,000 | | | | 0 | | | $ | 30.34 | | | | 09/15/2019 | | | | | | | | | | | | | | | | | |
| | 03/03/2010 | | | 50,672 | | | | 0 | | | $ | 23.11 | | | | 03/03/2020 | | | | | | | | | | | | | | | | | |
| | 02/23/2011 | | | 80,000 | | | | 0 | | | $ | 18.00 | | | | 02/23/2021 | | | | | | | | | | | | | | | | | |
| | 09/13/2011 | | | 128,000 | | | | 0 | | | $ | 19.47 | | | | 09/13/2021 | | | | | | | | | | | | | | | | | |
| | 03/07/2012 | | | 32,000 | | | | 0 | | | $ | 23.98 | | | | 03/07/2022 | | | | | | | | | | | | | | | | | |
| | 09/12/2012 | | | 160,000 | | | | 0 | | | $ | 27.07 | | | | 09/12/2022 | | | | | | | | | | | | | | | | | |
| | 09/17/2013 | | | 180,000 | | | | 0 | | | $ | 26.49 | | | | 09/17/2021 | | | | | | | | | | | | | | | | | |
| | 09/17/2014 | | | | | | | | | | | | | | | | | | | 14,688 | | | | 548,891 | | | | | | | | | |
| | 09/15/2015 | | | | | | | | | | | | | | | | | | | 23,253 | | | | 868,965 | | | | | | | | | |
| | 09/14/2016 | | | | | | | | | | | | | | | | | | | 37,500 | | | | 1,401,375 | | | | | | | | | |
| | 09/13/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | 1,868,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Richard M. Marsh, Esq. | | 03/03/2010 | | | 70,672 | | | | 0 | | | $ | 23.11 | | | | 03/03/2020 | | | | | | | | | | | | | | | | | |
| | 09/15/2010 | | | 79,999 | | | | 0 | | | $ | 16.53 | | | | 09/15/2020 | | | | | | | | | | | | | | | | | |
| �� | 02/23/2011 | | | 84,445 | | | | 0 | | | $ | 18.00 | | | | 02/23/2021 | | | | | | | | | | | | | | | | | |
| | 09/13/2011 | | | 144,000 | | | | 0 | | | $ | 19.47 | | | | 09/13/2021 | | | | | | | | | | | | | | | | | |
| | 03/07/2012 | | | 31,830 | | | | 0 | | | $ | 23.98 | | | | 03/07/2022 | | | | | | | | | | | | | | | | | |
| | 09/12/2012 | | | 180,000 | | | | 0 | | | $ | 27.07 | | | | 09/12/2022 | | | | | | | | | | | | | | | | | |
| | 09/17/2013 | | | 186,225 | | | | 0 | | | $ | 26.49 | | | | 09/17/2021 | | | | | | | | | | | | | | | | | |
| | 09/17/2014 | | | | | | | | | | | | | | | | | | | 14,615 | | | | 546,144 | | | | | | | | | |
| | 09/15/2015 | | | | | | | | | | | | | | | | | | | 23,081 | | | | 862,537 | | | | | | | | | |
| | 09/14/2016 | | | | | | | | | | | | | | | | | | | 37,500 | | | | 1,401,375 | | | | | | | | | |
| | 09/13/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | 1,868,500 | |
(1) | Stock Option Vesting Schedules:
|
Options granted on and between September 14, 2005 through and including September 15, 2010 were granted pursuant to our 2003 Employee, Director and Consultant Stock Option Plan, as amended (the “2003 Plan”) and vest 25 percent of the shares per year on each anniversary of the date of grant.
Options granted beginning on and after February 23, 2011 were granted pursuant to our 2010 Plan and vest 25 percent of the shares per year on each anniversary date of the grant.
(2) | Restricted stock units vest 1⁄4 per year beginning no earlier that at least the annual anniversary of the grant date on which the restricted stock units were granted. Restricted stock units awarded to Mr. Riggsbee in connection with his commencement of employment vest 1⁄4 per year from the date of grant. The vesting of unvested restricted stock unit awards held by our NEOs will accelerate upon a change of control of Myriad in accordance with the Executive Retention Agreements described below under “Potential Payments Upon Termination orChange-in-Control.”
|
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(3) | The market value of stock awards is determined by multiplying the number of shares by $37.37, the closing price of our common stock on the NASDAQ Global Market on June 30, 2018, the last day of our fiscal year.
|
(4) | On September 19, 2018, based on the degree of accomplishment of the revenue performance criteria for our fiscal year 2018, the number of shares actually earned was at 100% of the award. The restricted stock units will vest 1⁄4 per year beginning on September 25, 2018.
|
2018 Fiscal-Year Option Exercises and Stock Vested
The following table shows information regarding exercises of options to purchase our common stock and vesting of restricted stock unit awards by our NEOs during the fiscal year ended June 30, 2018.
| | | | | | | | | | | | | | | | |
| | | Option Awards | | | Restricted Stock Awards | |
Name | | Number of Shares
Acquired on
Exercise (#) | | | Value Realized on
Exercise ($) (1) | | | Number of Shares
Acquired on
Vesting (#) | | | Value Realized
on Vesting
($)(2) | |
Mark C. Capone | | | 90,000 | | | | 1,356,300 | | | | 85,783 | | | | 3,025,827 | |
Alexander Ford | | | None | | | | — | | | | 23,250 | | | | 828,274 | |
R. Bryan Riggsbee | | | None | | | | — | | | | 34,425 | | | | 1,242,947 | |
Jerry S. Lanchbury, Ph.D. | | | 60,000 | | | | 600,000 | | | | 38,815 | | | | 1,358,353 | |
Richard M. Marsh, Esq. | | | 147,568 | | | | 1,329,845 | | | | 38,005 | | | | 1,330,462 | |
(1) | Amounts shown in this column do not necessarily represent the actual value realized from the sale of the shares acquired upon exercise of the options because the shares may not be sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise.
|
(2) | Amounts shown in this column represent the market value of stock awards upon vesting as determined by multiplying the number of shares by $33.05, the closing price of our common stock on the NASDAQ Global Market on September 17, 2017, for shares which vested on that date, and by $36.18, the closing price of our common stock on the NASDAQ Global Market on September 30, 2017, for shares which vested on that date.
|
Pension Benefits
We do not have any qualified ornon-qualified defined pension benefit plans.
Nonqualified Deferred Compensation
We do not have any nonqualified defined contribution plans or other deferred compensation plans.
Potential Payments Upon Termination orChange-in-Control
On February 17, 2005 (and thereafter for subsequently appointed executive officers), we entered into Executive Retention Agreements, or the Retention Agreements, with our executive officers.
Under the terms of the Retention Agreements, if the employment of an executive officer is terminated without “Cause” or if the executive officer separates from Myriad for “Good Reason” within 24 months of a “Change in Control” (each is defined in the agreement and set forth below), the executive officer will receive: (i) all salary earned through the date of termination, as well as a prorated bonus and any compensation previously deferred; (ii) an amount equal to three times the executive’s highest annual base salary and three times the executive’s highest annual bonus at Myriad during the three-year period prior to the Change in Control; (iii) continued benefits for 36 months after the date of termination; and (iv) outplacement services in an aggregate amount of up to $25,000. If the employment of an executive officer is terminated by the executive officer for no reason, during the90-day period beginning on the first anniversary of the “Change in Control Date” (as defined in the agreement and set forth below), then the termination shall be deemed to be termination for Good Reason for all purposes of the Retention Agreement except that the payment of an amount equal to three times the executive’s highest annual base salary and bonus shall be reduced byone-half. In addition, upon the occurrence of a Change in Control, all of the executive’s unvested equity incentive compensation shall become fully vested, whether or not the executive is terminated.
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On October 12, 2007, the Retention Agreements were amended to provide that all payments under the agreement are to be made in a lump sum, in cash, six months following the date of termination of employment, unless an earlier payment, in whole or in part, following the date of termination of employment is permitted under Section 409A of the Internal Revenue Code.
On September 29, 2015, the Retention Agreements were amended to delete the taxgross-up provision that previously allowed for a payment to be made by the Company to an executive officer in connection with a change in control of the Company to offset any excise taxes or penalties incurred by the executive officer under Section 4999 of the Internal Revenue Code in connection with a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code. No such payment is now permitted under the Retention Agreements and any excise taxes due shall be borne solely by the executive officer.
Unless the terms of the Retention Agreement are either satisfied or expire on a date that is 24 months after a Change in Control, the Retention Agreement will renew annually forone-year terms unless we provide notice ofnon-renewal at least 90 days prior to the end of each term.
As defined in the Retention Agreements:
| • | | “Cause” means (a) the Executive’s willful and continued failure to substantially perform his or her reasonable assigned duties (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Executive gives notice of termination for Good Reason) that is not cured within 30 days after a written demand for substantial performance is received by the Executive from the board of directors, which specifically identifies the manner in which the board believes the Executive has not substantially performed the Executive’s duties; or (b) the Executive’s willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. No act or failure to act by the Executive shall be considered “willful” unless it is done, or omitted, in bad faith and without reasonable belief that the Executive’s action or omission was in the best interests of the Company.
|
| • | | “Good Reason” means the occurrence, without the Executive’s written consent, of any of the following events or circumstances: (a) The assignment to the Executive of duties inconsistent in any material respect with the Executive’s position (including status, offices, titles and reporting requirements), authority or responsibilities in effect immediately prior to the earliest to occur of (i) the Change in Control Date; (ii) the date of the execution by the Company of the initial written agreement or instrument providing for the Change in Control; or (iii) the date of the adoption by the board of directors of a resolution providing for the Change in Control (with the earliest of such dates referred to herein as the “Measurement Date”), or any other action or omission by the Company that results in a material diminution in the Executive’s position, authority or responsibilities. (b) A reduction in the Executive’s annual base salary that was in effect on the Measurement Date. (c) The failure by the Company to (i) continue in effect any material compensation, pension, retirement or benefit plan or program (including without limitation any 401(k), life insurance, medical, health and accident or disability plan and any vacation program or policy) (a “Benefit Plan”) in which the Executive participates or that is applicable to the Executive immediately prior to the Measurement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan or program; (ii) continue the Executive’s participation therein (or in a substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, than the basis that existed immediately prior to the Measurement Date; or (iii) award cash bonuses to the Executive in amounts and in a manner substantially consistent with past practice. (d) A change by the Company in the location at which the Executive performs his or her principal duties for the Company to a new location that is both (i) outside a radius of 50 miles from the Executive’s principal residence immediately prior to the Measurement Date and (ii) more than 50 miles from the location at which the Executive performed his or her principal duties for the Company immediately prior to the Measurement Date; or (iii) a requirement by the Company that the Executive travel on Company business to a substantially greater extent than required immediately prior to the Measurement Date. (e) The failure by the Company to obtain the agreement from any successor to the Company to assume and agree to perform the Retention Agreement.; Or (f) any failure of the Company to pay or provide to the Executive any portion of the Executive’s compensation or benefits due under any Benefit Plan within seven days of the date such compensation or benefits are due, any material breach by the Company of the Retention Agreement, or any employment agreement with the Executive.
|
43
| • | | “Change in Control” means an event or occurrence set forth in any one or more of the following events (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another subsection): (a) The acquisition by an individual, entity or group [within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)] (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, that Person beneficially owns (within the meaning ofRule 13d-3 promulgated under the Exchange Act) 20 percent or more of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”);provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company); (ii) any acquisition by the Company; or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company. Or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the board (or, if applicable, the board of directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the board (i) who was a member of the board on the date of the execution of the Retention Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election;provided,however, that excluded from this clause (ii) is any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the board. (c) The consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a “Business Combination”), unless, immediately following such Business Combination, the following condition is satisfied: all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50 percent of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation that, as a result of the transaction, owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to the Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, or (d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
|
| • | | “Change in Control Date” means the first date during the Term (as defined in the Retention Agreement) on which a Change in Control occurs. Anything in the Retention Agreement to the contrary notwithstanding, if (a) a Change in Control occurs, (b) the Executive’s employment with the Company is terminated prior to the date on which the Change in Control occurs, and (c) it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a Change in Control, then for all purposes of the Retention Agreement the “Change in Control Date” shall mean the date immediately prior to the date of the termination of employment.
|
44
The foregoing summary of the Retention Agreements is qualified in its entirety by the full text of the agreements, which has been filed as an exhibit to our Annual Report on Form10-K, as amended.
In addition, under the terms of the award agreements for options and restricted stock units granted to our NEOs, all of the NEO’s stock options and restricted stock units shall become fully vested upon the occurrence of a Change in Control, as defined in the Retention Agreements, whether or not the executive is terminated.
The following table summarizes the potential payments to each of our NEOs upon either a change in control or termination following a change in control, assuming the occurrence of the different triggers of the Retention Agreement, as of the close of business on June 30, 2018, the last business day of our most recent fiscal year.
| | | | | | | | | | | | | | |
| | | Executive Benefits and Payments Upon Termination | | Change in
Control ($) | | | Change in Control
and Involuntary
Termination Without
Cause or for Good
Reason ($) | | | Change in
Control and
Voluntary
Termination ($) | |
Mark C. Capone | | Base salary | | | — | | | | 2,556,000 | | | | 1,278,000 | |
| | Bonus | | | — | | | | 2,453,760 | | | | 1,226,880 | |
| | RSU acceleration | | | 13,190,078 | | | | 13,190,078 | | | | 13,190,078 | |
| | Cobra benefits | | | — | | | | 65,497 | | | | 65,497 | |
| | Outplacement | | | — | | | | 25,000 | | | | 25,000 | |
| | | | | | | | | | | | | | |
| | Total | | | 13,190,078 | | | | 18,290,335 | | | | 15,785,455 | |
| | | | | | | | | | | | | | |
Alexander Ford | | Base salary | | | — | | | | 1,497,600 | | | | 748,800 | |
| | Bonus | | | — | | | | 889,575 | | | | 444,788 | |
| | RSU acceleration | | | 4,386,304 | | | | 4,386,304 | | | | 4,386,304 | |
| | Cobra benefits | | | — | | | | 65,497 | | | | 65,497 | |
| | Outplacement | | | — | | | | 25,000 | | | | 25,000 | |
| | | | | | | | | | | | | | |
| | Total | | | 4,386,304 | | | | 6,863,976 | | | | 5,670,389 | |
| | | | | | | | | | | | | | |
R. Bryan Riggsbee | | Base salary | | | — | | | | 1,296,000 | | | | 648,000 | |
| | Bonus | | | — | | | | 762,048 | | | | 381,024 | |
| | RSU acceleration | | | 5,095,400 | | | | 5,095,400 | | | | 5,095,400 | |
| | Cobra benefits | | | — | | | | 65,497 | | | | 65,497 | |
| | Outplacement | | | — | | | | 25,000 | | | | 25,000 | |
| | | | | | | | | | | | | | |
| | Total | | | 5,095,400 | | | | 7,243,945 | | | | 6,214,921 | |
| | | | | | | | | | | | | | |
Jerry S. Lanchbury, Ph.D. | | Base salary | | | — | | | | 1,481,346 | | | | 740,673 | |
| | Bonus | | | — | | | | 733,266 | | | | 366,633 | |
| | RSU acceleration | | | 4,687,730 | | | | 4,687,730 | | | | 4,687,730 | |
| | Cobra benefits | | | — | | | | 65,497 | | | | 65,497 | |
| | Outplacement | | | — | | | | 25,000 | | | | 25,000 | |
| | | | | | | | | | | | | | |
| | Total | | | 4,687,730 | | | | 6,992,839 | | | | 5,885,533 | |
| | | | | | | | | | | | | | |
Richard M. Marsh, Esq. | | Base salary | | | — | | | | 1,481,346 | | | | 740,673 | |
| | Bonus | | | — | | | | 703,638 | | | | 351,819 | |
| | RSU acceleration | | | 4,678,556 | | | | 4,678,556 | | | | 4,678,556 | |
| | Cobra benefits | | | — | | | | 65,497 | | | | 65,497 | |
| | Outplacement | | | — | | | | 25,000 | | | | 25,000 | |
| | | | | | | | | | | | | | |
| | Total | | | 4,678,556 | | | | 6,954,037 | | | | 5,861,545 | |
The following is a description of the assumptions that were used in creating the above table.
Vesting Acceleration Calculation — The value of the vesting acceleration was calculated by multiplying the number of unvested restricted stock units by the closing price of our common stock on the NASDAQ Global Market on June 30, 2018 which was $37.37.
45
Director Compensation
The following table shows the total compensation paid or accrued during the fiscal year ended June 30, 2018 to each of our nonemployee directors who served during fiscal year 2018. Directors who are employed by Myriad are not compensated for their service on our board of directors.
| | | | | | | | | | | | |
Name | | Fees Earned or
Paid in Cash ($) | | | Restricted Stock
Unit Awards ($) (1) | | | Total ($) | |
Lawrence C. Best | | | 80,500 | | | | 249,994 | | | | 330,494 | |
Heiner Dreismann, Ph.D. | | | 85,000 | | | | 249,994 | | | | 334,994 | |
Walter Gilbert, Ph.D. | | | 70,000 | | | | 249,994 | | | | 319,994 | |
John T. Henderson, M.D. | | | 182,500 | | | | 249,994 | | | | 432,494 | |
Dennis H. Langer, M.D., J.D. | | | 90,500 | | | | 249,994 | | | | 340,494 | |
S. Louise Phanstiel | | | 97,500 | | | | 249,994 | | | | 347,494 | |
(1) | Amounts shown reflect the aggregate grant date fair value of 7,219 restricted stock units awarded to each nonemployee director who served during fiscal year 2018 calculated in accordance with FASB ASC Topic 718 and are determined by multiplying the number of shares by $34.63, the closing price of our common stock on the NASDAQ Global Market on November 30, 2017, the date of the grant. RSUs awarded to our nonemployee directors vest in full one year from date of grant at the Company’s next annual meeting of shareholders.
|
The following table shows outstanding and vested options and unvested RSUs for each nonemployee director as of June 30, 2018.
| | | | | | | | | | | | |
Name | | Options
Outstanding | | | Vested
Options | | | Unvested
RSUs | |
Lawrence C. Best | | | 150,000 | | | | 150,000 | | | | 7,219 | |
Heiner Dreismann, Ph.D. | | | — | | | | — | | | | 7,219 | |
Walter Gilbert, Ph.D. | | | 60,000 | | | | 60,000 | | | | 7,219 | |
John T. Henderson, M.D. | | | 150,000 | | | | 150,000 | | | | 7,219 | |
Dennis H. Langer, M.D., J.D. | | | 60,000 | | | | 60,000 | | | | 7,219 | |
S. Louise Phanstiel | | | 150,000 | | | | 150,000 | | | | 7,219 | |
The following table shows the grant date fair value for restricted stock unit awards granted to each nonemployee director in our fiscal year ended June 30, 2018.
| | | | | | | | | | | | |
Name | | Granted (#) | | | Grant Date | | | Grant Date
Fair Value ($) | |
Lawrence C. Best | | | 7,219 | | | | 11/30/2017 | | | | 249,994 | |
Heiner Dreismann, Ph.D. | | | 7,219 | | | | 11/30/2017 | | | | 249,994 | |
Walter Gilbert, Ph.D. | | | 7,219 | | | | 11/30/2017 | | | | 249,994 | |
John T. Henderson, M.D. | | | 7,219 | | | | 11/30/2017 | | | | 249,994 | |
Dennis H. Langer, M.D., J.D. | | | 7,219 | | | | 11/30/2017 | | | | 249,994 | |
S. Louise Phanstiel | | | 7,219 | | | | 11/30/2017 | | | | 249,994 | |
46
Director Compensation Policy
Our nonemployee directors are compensated on a role-based model and are paid cash fees based on the annual retainers (25 percent paid following each quarter of service). The following is a description of the standard compensation arrangements under which our nonemployee directors are compensated for their service as directors, including as members of the various board committees:
| | |
Annual retainer
| | |
All members | | $60,000 |
Chairman of the Board | | $100,000 additional |
Chair of the Audit Committee | | $28,000 additional |
Chairman of the Compensation Committee | | $20,000 additional |
Chairman of the Nominating and Governance Committee | | $15,000 additional |
Members of the Audit Committee | | $13,500 additional |
Members of the Compensation Committee | | $10,000 additional |
Members of the Nominating and Governance Committee | | $7,500 additional |
Members of the Strategic Committee | | $5,000 additional |
Attendance
Board Meetings: In addition to the annual retainer amounts, we pay each nonemployee director aper-meeting cash fee of $2,000 for attendance at board meetings in excess of fivein-person meetings and four telephonic meetings per fiscal year.
Committee Meetings other than Strategic Committee: We also pay each nonemployee director aper-meeting cash fee of $2,000 for attendance at committee meetings in excess of four meetings (per each committee), whether in person or telephonic, per fiscal year.
Strategic Committee: No per meeting fee will be paid for meetings of the Strategic Committee.
All directors are also reimbursed for theirout-of-pocket expenses incurred in attending meetings.
Restricted and Unrestricted Stock Grants and Other Stock-Based Awards
Under our 2017 Plan, our nonemployee directors may be awarded restricted and unrestricted stock grants and/or other stock-based awards. Beginning in fiscal year 2017, as recommended and determined by our Compensation Committee, and approved by our Board of Directors, on each date of our annual meeting of stockholders, the Company shall grant to each nonemployee director, other than new nonemployee directors appointed within six months of the annual meeting, a restricted stock unit award equal to $250,000 divided by the closing price of the Company’s common stock on the applicable date of our annual meeting of stockholders.
Based on the review and recommendation of Mercer, in order to maintain director compensation in line with median compensation levels, we have determined to increase the dollar amount of equity compensation for our Directors. Beginning in fiscal year 2019, as recommended and determined by our Compensation Committee, and approved by our Board of Directors, on each date of our annual meeting of stockholders, the Company shall grant to each nonemployee director, other than new nonemployee directors appointed within six months of the annual meeting, a restricted stock unit award equal to $300,000 divided by the closing price of the Company’s common stock on the applicable date of our annual meeting of stockholders. In addition, depending on the proximity to our annual meeting of stockholders, it is our policy to grant a restricted stock unit award for shares of our common stock to each new nonemployee director upon initial appointment to the Board.
Restricted stock units granted to our nonemployee directors vest in full upon completion of one year of service on the Board at the Company’s next annual meeting of shareholders. Options granted to our nonemployee directors are exercisable after the termination of the director’s service on the Board to the extent exercisable on the date of such termination for the remainder of the life of the option.All options or restricted stock units granted to our nonemployee directors will become fully exercisable upon a change of control of Myriad or upon their death as provided for under the forms of award agreement for directors.
47
Risks Related to Compensation Policies and Practices
During the fiscal year ended June 30, 2018, the Compensation CommitteeCHCC conducted a risk assessment of our compensation policies and practices for our employees and concluded that our policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. For this purpose, we considered the compensation structure of the Company for its employees including executive officers, which is based on an annual salary, annual bonus (for bonus-eligible employees), three-year cash incentive bonuses for executive officers, sales commissions and bonuses (for sales staff and managers), and equity incentive compensation in the form of stock option or restricted stock unit grants. We do not believe that we offer any short-term incentives that mightwould reasonably be expected to result in high-risk actions or conduct by our employees. For example, incentive compensation for executive officers in the form of an annual cash bonus or long-term three-year cash incentive bonus isare based on a predetermined formula and management objectives approved by the Compensation CommitteeCHCC and is subject to a cap. In addition, payments under the annual cash bonus is based upon a variety of performance metrics, thereby diversifying the risk associated with any single performance indicator. There is no unique operational division or group of employees who are specially compensated, or who, as a group, are responsible for a material portion of our revenues or profits. We do not believe that the awarding of long-term incentive compensation under our three-year cash incentive bonus or equity incentive compensation in the form of stock options or restricted stock units creates any undue compensation risks to the Company. Our long-term equity compensation awards have performance or vesting periods of four years, which encourages executive officers to focus on the long-term performance of the Company and its stock price. Additionally, we believe that we have appropriate internal controls that support the accurate and timely recognition of Company revenues. Accordingly, we believe that we have a balanced pay and performance program that does not promote undue or excessive risk taking.
Incentive Compensation Recoupment Policy (Clawback Policy). In September 2017, our Board adopted the Myriad Genetics, Inc.'s Policy on Incentive Compensation Repayment, which requires an executive officer to repay the Company the amount of any annual incentive compensation, whether in cash or equity (such as options, stock, restricted stock, or similar equity grants), that an executive officer receives to the extent that:
•the amount of such payment was based on the achievement of certain financial results that were subsequently the subject of a restatement that occurs within 12 months of such cash payment or equity award;
•the executive officer had engaged in theft, dishonesty or intentional falsification of the Company's documents or records that resulted in the obligation to restate the Company's financial results; and
•a lower annual incentive payment or award would have been made to the executive officer based upon the restated financial results.
Policy Regarding Hedging. Our Insider Trading Policy provides that no employee, officer or director may engage in any of the following activities with respect to the Company’s securities:
•Trading in the Company’s securities on a short-term basis. Any shares of common stock purchased in the open market must be held for a minimum of six months and ideally longer. This rule does not apply to sales made following the exercise of options that were granted by the Company or to sales of shares purchased through the Company’s qualified Employee Stock Purchase Plan;
•Short sales of the Company’s securities;
•Use of the Company’s securities to secure a margin or other loan;
•Transactions in straddles, collars, or other similar risk reduction devices;
•Transactions in publicly traded options relating to the Company’s securities (i.e., options that are not granted by the Company); and
•Buying or selling puts or calls.
Stock Ownership Guidelines. In February 2021, the Board adopted revised stock ownership guidelines for directors and executive officers, including our NEOs. The Board determined that the stock ownership requirements for each non-employee director should be increased from three to five times the amount of the annual cash retainer paid by the Company to the director. The details of the stock ownership guidelines applicable to our directors and executive officers (including our NEOs) are outlined below.
| | | | | |
| Feature | Guidelines |
| Ownership Multiple | Director = 5x annual cash retainer CEO = 3x annual base salary Other Executive Officers = 2x annual base salary |
| Years to Meet Requirement | Five years from the date of election or appointment |
| Shares That Count Towards Requirement | Shares owned directly or indirectly, including restricted stock, stock owned by a spouse or minor child, and stock held beneficially in a trust |
| Restrictions on the Transfer of Shares Prior to Meeting Requirements | Individual may not transfer more than 50% of his or her shares (excluding shares sold to fund tax liabilities associated with the receipt or vesting of an award) until the required ownership multiple is met.
If the required ownership multiple is not met by the five-year phase-in period, the individual will be prohibited from selling any shares until the required ownership multiple is met and maintained. |
2021 Incentive Compensation Program for Named Executive Officers
The discussion below describes certain compensation actions recently taken by the CHCC with respect to our 2021 compensation program applicable to our named executive officers. Consistent with Item 402 of Regulation S-K, our 2021 compensation program will be discussed more fully in our proxy statement for the 2022 Annual Meeting of Stockholders.
2021 Annual Cash Incentive Bonus. In March 2021, the CHCC adopted the same quantitative performance metrics for the 2021 annual cash incentive bonus as those used in the 2020 transition period cash incentive bonus program, except that the CHCC added an engagement score as a quantitative metric to support the Company's efforts to retain employees and improve employee engagement. The target engagement score is based on a 10% improvement over the Company's 2020 engagement survey results. In addition, the CHCC determined that the relative weighting of the quantitative metrics and MBOs should generally remain the same as those used in the 2020 transition period cash incentive program, except that, for certain NEOs, the weighting for the quantitative metrics would be 80% (40% revenue, 30% adjusted operating income and 10% engagement score) and the weighting of the MBOs would be 20%.
2021 Long-Term Incentive Awards. In March 2021, the CHCC granted long-term incentive awards to each of our NEOs. One-half of the awards were RSUs that vest in four equal annual installments beginning on the first anniversary of the grant date, and the other half of the awards were PSUs. The PSUs will vest based on adjusted earnings per share targets (50% weighting) and relative total stockholder return (50% weighting) measured against the Nasdaq Healthcare Provider Index (IXHC) using the 20-trading day averages at the beginning and end of the measurement period. The measurement period for the PSUs is January 1, 2021 through December 31, 2021. The threshold, target and maximum payout percentages for each metric remain the same as for the PSUs granted during the 2020 transition period (i.e., 25% for threshold, 50% for target and 75% for maximum). Threshold performance must be achieved before any payout occurs, and maximum payout is capped at 150% of the target number of PSUs granted. However, if the Company's absolute total stockholder return over the performance period is negative, the vesting level may not exceed the target level (i.e., 100% of the target number of PSUs granted).
Summary Compensation Table
The following table shows the total compensation paid or accrued during the 2020 transition period and the last three completed fiscal years, as indicated, to each person who served as our Chief Executive Officer or our Chief Financial Officer during the six months ended December 31, 2020, and to our three next most highly compensated executive officers during the six months ended December 31, 2020 who were serving as executive officers as of December 31, 2020.
| | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Fiscal Year | Salary
($) | Stock
Awards
($) (1) | Option Awards ($) (2) | Non-Equity
Incentive Plan
Compensation
($) (3) (4) | All Other
Compensation
($) (5) | Total ($) |
| Paul J. Diaz President and Chief Executive Officer | 2020 Transition Period | 382,663 | 8,394,628 | 5,500,006 | 682,000 | 541,524 | 15,500,821 |
| R. Bryan Riggsbee Chief Financial Officer and Treasurer; Interim President and Chief Executive Officer | 2020 Transition Period | 265,454 | 1,264,541 | | 281,174 | 5,237 | 1,816,406 |
| 2020 | 552,796 | 3,461,500 | | 180,209 | 8,836 | 4,203,341 |
| 2019 | 466,650 | 2,392,500 | | 260,671 | 19,162 | 3,138,983 |
| 2018 | 432,000 | 1,954,200 | | 254,016 | 5,366 | 2,645,582 |
Jerry S. Lanchbury, Ph.D.
Chief Scientific Officer | 2020 Transition Period | 256,618 | 1,102,569 | | 176,253 | 5,827 | 1,541,267 |
| 2020 | 493,496 | 1,197,200 | | 131,599 | 6,943 | 1,829,238 |
| 2019 | 508,595 | 1,914,000 | | 250,228 | 12,927 | 2,685,750 |
| 2018 | 493,782 | 1,628,500 | | 244,422 | 10,972 | 2,377,676 |
Nicole Lambert
Group President of Myriad
Women’s Health, Oncology, and International | 2020 Transition Period | 217,726 | 1,243,641 | | 194,472 | 5,542 | 1,661,381 |
| 2020 | 386,859 | 1,197,200 | | 99,934 | 20,713 | 1,704,706 |
| | | | | | |
| Mark Verratti Group President of Myriad Neuroscience and Autoimmune | 2020 Transition Period | 204,651 | 879,288 | | 143,273 | 8,123 | 1,235,335 |
(1)Amounts shown reflect the aggregate grant date fair value of restricted stock unit awards granted in the 2020 transition period and each fiscal year presented, in each case calculated in accordance with FASB ASC Topic 718. All stock awards, other than PSUs with market conditions, are based on the closing price of our common stock on the Nasdaq Global Select Market on the grant date of the award. The PSUs with market conditions are based on a Monte Carlo valuation. For the 2020 transition period, amounts reflect the potential value of the restricted stock unit awards assuming the target level of performance associated with the award. For the 2020 transition period, the potential value of the restricted stock unit awards assuming maximum level of performance is as follows: Mr. Diaz: $10,591,940, Mr. Riggsbee: $1,594,946, Ms. Lambert: $1,568,584, Dr. Lanchbury: $1,390,652, and Mr. Verratti: $1,109,034. For the fiscal years 2018 to 2020, amounts reflect the maximum potential value of each award assuming the highest level of performance associated with the award.
(2)Amount shown reflects the aggregate grant date fair value of the stock options granted calculated in accordance with FASB ASC Topic 718 and, in the case of time-based non-qualified stock options granted on August 13, 2020, are based on a value per option of $8.04, and in the case of performance-based non-qualified stock options granted on August 13, 2020, are based on a weighted value per option of $8.11.
(3)For fiscal years 2018, 2019 and 2020 and the 2020 transition period, the amounts reported in this column reflect the actual cash incentive awards paid. No payment was made under the long-term, three-year cash incentive bonus awards that concluded in fiscal years 2018 and 2020 as our performance goals for those awards were not achieved. For fiscal year 2019, cash payments under the long-term, three-year cash incentive bonus awards were paid out at 34 percent of the target award.
(4)For fiscal year 2020, the non-equity incentive plan compensation to Mr. Riggsbee, Dr. Lanchbury, and Ms. Lambert was paid out as a restricted stock unit grant with two-year vesting in order to preserve cash given the impact of the global COVID-19 pandemic on the Company's business.
(5)Mr. Diaz received a $500,000 sign-on bonus upon commencement of his employment with us on August 13, 2020. Mr. Diaz also received relocation benefits of $11,612, a housing allowance of $14,000 and paid travel expenses of $8,794. Amounts shown for the 2020 transition period for each NEO include short-term and long-term disability insurance premium payments and the balance reflects matching contributions made under our 401(k) plan on behalf of each NEO.
2020 Transition Period Grants of Plan-Based Awards
The following tables show information regarding grants of non-equity and equity awards that we made during the six month transition period ended December 31, 2020 to each of the executive officers named in the Summary Compensation Table.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other
Stock Awards:
Number of Shares of Stock or
Units
(# of units) | All Other
Option Awards:
Number of Securities
Underlying Options
(# of shares) | Exercise
or Base Price of
Option
Awards ($/share) | Grant Date Fair Value of Stock and Option Awards ($) (7) |
| Name | Grant Type | Grant Date | Threshold ($) | Target
($) | Maximum ($) | Threshold
(# of shares) | Target
(# of shares) | Maximum (# of shares) |
| Paul J. Diaz | Short-term Cash Incentive Bonus | | 191,576 | 383,152 | 574,728 | | | | | | | |
| Time-Based RSUs | 8/13/2020 | | | | | | | | 298,954 (3) | | | 4,000,005 |
| PSUs | 10/8/2020 | | | | 149,477 | 298,954 | 448,431 | | | | 4,394,624 |
| Time-Based Options | 8/13/2020 | | | | | | | | | 342,040 (5) | 13.38 | 2,750,002 |
| Performance-Based Options | 8/13/2020 | | | | | 339,088 (6) | | | | 13.38 | 2,750,004 |
| R. Bryan Riggsbee | Short-term Cash Incentive Bonus | | 105,388 | 210,775 | 316,163 | | | | | | | |
| Time-Based RSUs | 8/12/2020 | | | | | | | | 13,787 (4) | | | 180,196 |
| PSUs | 10/8/2020 | | | | 22,477 | 44,953 | 67,430 | | | | 660,809 |
| Time-Based RSUs | 10/8/2020 | | | | | | | 44,954 (3) | | | 603,732 |
| Jerry S. Lanchbury | Short-term Cash Incentive Bonus | | 68,051 | 136,103 | 204,154 | | | | | | | |
| Time-Based RSUs | 8/12/2020 | | | | | | | | 10,068 (4) | | | 131,589 |
| PSUs | 10/8/2020 | | | | 19,598 | 39,195 | 58,793 | | | | 576,167 |
| Time-Based RSUs | 10/8/2020 | | | | | | | | 39,196 (3) | | | 526,402 |
| Nicole Lambert | Short-term Cash Incentive Bonus | | 71,288 | 142,575 | 213,863 | | | | | | | |
| Time-Based RSUs | 8/12/2020 | | | | | | | | 7,646 (4) | | | 99,933 |
| PSUs | 10/8/2020 | | | | 22,105 | 44,210 | 66,315 | | | | 649,887 |
| Time-Based RSUs | 10/8/2020 | | | | | | | 44,211 (3) | | | 593,754 |
| Mark Verratti | Short-term Cash Incentive Bonus | | 54,311 | 108,622 | 162,933 | | | | | | | |
| Time-Based RSUs | 8/12/2020 | | | | | | | | 7,467 (4) | | | 97,594 |
| PSUs | 10/8/2020 | | | | 15,629 | 31,258 | 46,887 | | | | 459,493 |
| Time-Based RSUs | 10/8/2020 | | | | | | | | 31,258 (3) | | | 419,795 |
(1)The amounts represent the threshold, target, and maximum estimated payouts for awards granted under our 2020 transition period short-term cash incentive program. The actual value of the bonuses paid to our NEOs for the 2020 transition period can be found above in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For additional information regarding the 2020 transition period short-term cash incentive bonus, please see the section above entitled “2020 Transition Period Named Executive Officer Compensation—Annual Cash Incentive Bonus”.
(2)The amounts represent the threshold, target and maximum number of our shares that may be awarded with respect to the PSUs awarded to certain of our NEOs on October 8, 2020. The PSUs awarded to Mr. Diaz were granted in connection with the commencement of his employment at the Company on August 13, 2020. The measurement period for these PSUs is July 1, 2020 through June 30, 2021 and performance is based on adjusted earnings per share targets and relative total stockholder return measured against the Nasdaq Healthcare Provider Index (IXHC) using the 20-trading day averages at the beginning and end of the measurement period. To the extent that the PSUs are determined to have been earned based on the performance metrics, (i) for all NEOs other than Mr. Diaz, 25% will vest on the first anniversary of the grant date, and the remaining 75% will vest in three equal installments on the following three anniversaries of the grant date and (ii) for Mr. Diaz, 25% will vest when they are deemed earned, and and the remaining 75% will vest in three equal installments on the following three anniversaries of Mr. Diaz’s employment commencement date of August 13, 2020.
(3)The amounts represent the number of time-based RSUs granted to our NEOs during the 2020 transition period. The RSUs awarded to Mr. Riggsbee, Dr. Lanchbury, Ms. Lambert and Mr. Verratti vest 25% on October 9, 2021, 25% on October 9, 2022, 25% on October 9, 2023 and 25% on October 9, 2024. The RSUs awarded to Mr. Diaz vest 50% on August 13, 2021, 16.66% on August 13, 2022, 16.66% on August 13, 2023 and 16.68% on August 13, 2024.
(4)The non-equity incentive plan compensation earned by Mr. Riggsbee, Dr. Lanchbury, Ms. Lambert and Mr. Verratti for fiscal year 2020 was paid out on August 12, 2020 as a restricted stock unit grant with two-year vesting in order to preserve cash given the impact of the global COVID-19 pandemic on the Company's business.
(5)Represents time-based non-qualified stock options for the purchase of 342,040 shares of common stock, which options vest in four equal installments on each of the first four anniversaries of Mr. Diaz’s employment commencement date of August 13, 2020.
(6)Represents performance-based non-qualified stock options for the purchase of 339,088 shares of common stock, which options vest in five equal installments based on achievement (as measured in the option agreement) of predetermined stock price increases of our common stock, provided that no portion of the options may vest earlier than the first anniversary of Mr. Diaz’s employment commencement date of August 13, 2020. The target number of shares is also the maximum number of shares.
(7)The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 and, (a) in the case of restricted stock unit awards granted on August 12, 2020, are based on the closing price of our common stock on the Nasdaq Global Select Market on August 12, 2020 of $13.07, (b) in the case of restricted stock unit awards granted on October 8, 2020, are based on the closing price of our common stock on the Nasdaq Global Select Market on October 8, 2020 of $13.43, (c) in the case of restricted stock unit awards that vest based on performance and market conditions that were granted on October 8, 2020, are based on a weighted value per award of $14.70, (d) in the case of restricted stock unit awards granted on August 13, 2020, are based on the closing price of our
common stock on the Nasdaq Global Select Market on August 13, 2020 of $13.38, (e) in the case of time-based non-qualified stock options granted on August 13, 2020, are based on a value per option of $8.04, and (f) in the case of performance-based non-qualified stock options granted on August 13, 2020, are based on a weighted value per option of $8.11.
Narrative Disclosure to Summary Compensation Table and 2020 Transition Period Grants of Plan-Based Awards Table
We have entered into standard form employment agreements with each of our NEOs other than Mr. Diaz, whose employment agreement is discussed below. Pursuant to these standard form employment agreements, which have no defined term, either party may terminate employment without cause at any time upon a specified period of written notice to the other party or immediately with cause upon written notice to the other party. Each employment agreement also provides that the employee will not disclose confidential information of ours during and after employment and includes standard non-competition and non-solicitation provisions. Since the dates of these agreements entered into with our NEOs other than Mr. Diaz, the compensation paid to each NEO has been increased and equity awards have been granted, the most recent of which are as discussed below.
Previously, we entered into an Executive Retention Agreement with each of our NEOs other than Mr. Diaz under which they were entitled to certain benefits upon a change-in-control. During the 2020 transition period, we replaced these Executive Retention Agreements with a Severance and Change in Control Agreement with each NEO other than Mr. Diaz that provides for similar benefits, but significantly lower compensation, upon a change in control, and adds new benefits and compensation upon termination not incident to a change in control. These agreements are discussed below under “Executive Compensation—Potential Payments Upon Termination or Change-in-Control.”
Mr. Diaz was appointed to the position of President and Chief Executive Officer on August 13, 2020, and entered into an employment agreement with the Company at that time. Pursuant to his employment agreement, Mr. Diaz receives an annual salary of $1,000,000. Mr. Diaz’s agreement also provides for a $1,000,000 signing bonus, of which one-half was paid following the commencement of his employment and the remaining one-half will be paid following the one-year anniversary of his employment with the Company. Mr. Diaz is eligible to receive an annual incentive bonus in a target amount equal to 100% of his base salary. Consistent with his employment agreement, the CHCC granted to Mr. Diaz (a) on August 13, 2020 (i) an RSU award for 298,954 shares common stock; (ii) time-based non-qualified stock options for the purchase of 342,040 shares of common stock; and (iii) performance-based non-qualified stock options for the purchase of 339,088 shares of common stock; and (b) on October 8, 2020, a PSU award for 298,954 shares of common stock. Of the RSUs, 50% will vest on the first anniversary of Mr. Diaz’s commencement date, and the remaining 50% will vest in three equal tranches on each of the second, third and fourth anniversaries of his commencement date. The PSUs are subject to the achievement of adjusted earnings per share and relative stockholder return targets. To the extent that the PSUs are determined to have been earned based on milestone achievement, 25% will vest when they are deemed earned, and the remaining 75% will vest in three equal installments on the following three anniversaries of Mr. Diaz’s commencement date. The time-based options vest in four equal installments on each of the first four anniversaries of Mr. Diaz’s commencement date. The performance-based options vest in five equal installments based on achievement (as measured in the option agreement) of predetermined stock price increases of our common stock, provided that no portion of the performance-based options may vest earlier than the first anniversary of Mr. Diaz’s commencement date. Additional detail about Mr. Diaz's employment agreement is provided below.
Mr. Riggsbee was appointed to the position of Chief Financial Officer and Treasurer in October 2014, and entered into the Company’s standard form of employment agreement at that time. He was appointed interim President and Chief Executive Officer on February 6, 2020 following the resignation of former Chief Executive Officer Mr. Mark C. Capone and served in that additional position until August 13, 2020. As determined by our CHCC, he received a salary of $265,454 for the 2020 transition period, which reflected the prorated portions of his salary as Interim President and Chief Executive Officer and as Chief Financial Officer and Treasurer during the 2020 transition period, together with the application of the temporary salary reductions due to the global COVID-19 pandemic. Mr. Riggsbee will be paid an annual base salary of $527,000 for the fiscal year ending December 31, 2021. His incentive bonus for the 2020 transition period was $281,174. On October 8, 2020, Mr. Riggsbee was granted 44,953 PSUs, which are subject to the achievement of adjusted earnings per share and relative total stockholder return targets, followed by time-based vesting requirements, and 44,954 RSUs, which are subject to time-based vesting requirements (25% vesting each year over a 4-year period).
Dr. Lanchbury was appointed to the position of Senior Vice President, Research in November 2002 and entered into the Company’s standard form of employment agreement at that time. In September 2005, he was promoted to Executive Vice President, Research. In February 2010, Dr. Lanchbury was appointed Chief Scientific Officer. As determined by our CHCC, he received a salary of $256,618 for the 2020 transition period. Dr. Lanchbury will be paid an annual base salary of $544,410 for the fiscal year ending December 31, 2021. His incentive bonus for the 2020 transition period was $176,253. On October 8, 2020, Dr. Lanchbury was granted 39,195 PSUs, which are subject to the achievement of adjusted earnings per share and relative total stockholder return targets, followed by time-based vesting requirements, and 39,196 RSUs, which are subject to time-based vesting requirements (25% vesting each year over a 4-year period).
Ms. Lambert was appointed to the position of Group President of Myriad Women’s Health, Oncology, and International during fiscal year 2020 and entered into the Company’s standard form of employment agreementat that time. Prior to this position she served as the President for Myriad Oncology. As determined by our CHCC, she received a salary of $217,726 for the 2020 transition period. Lambert will be paid an annual base salary of $475,250 for the fiscal year ending December 31, 2021. Her incentive bonus for the 2020 transition period was $194,472. On October 8, 2020, Ms. Lambert was granted 44,210 PSUs, which are subject to the achievement of
adjusted earnings per share and relative total stockholder return targets, followed by time-based vesting requirements, and 44,211 RSUs, which are subject to time-based vesting requirements (25% vesting each year over a 4-year period).
Mr. Verratti was appointed to the position of President of Myriad Neuroscience on August 1, 2017 and entered into the Company's standard form of employment agreement at that time. Mr. Verratti was also appointed to the position of President of Myriad Autoimmune on May 1, 2020. As determined by our CHCC, he received a salary of $204,651 for the 2020 transition period. Mr. Verratti will be paid an annual base salary of $434,489 for the fiscal year ending December 31, 2021. His incentive bonus for the 2020 transition period was $143,273. On October 8, 2020, Mr. Verratti was granted 31,258 PSUs, which are subject to the achievement of adjusted earnings per share and relative total stockholder return targets, followed by time-based vesting requirements, and 31,258 RSUs, which are subject to time-based vesting requirements (25% vesting each year over a 4-year period).
In September 2020, the CHCC discontinued the three-year cash incentive award program. Payments may still be made in fiscal years 2021 and 2022 if we achieve performance goals under the awards granted in September 2018 and 2019, respectively, but no new awards will be granted. The required performance goals were not achieved and no payment was made under the awards granted in September 2017 and potentially payable in September 2020. The three-year cash incentive award program is discussed above in the Compensation Discussion and Analysis under the heading "2020 Transition Period Named Executive Officer Compensation--Long-Term Incentive Awards--Three-Year Cash Incentive Bonus."
Mr. Diaz's Employment Agreement
Under the terms of Mr. Diaz’s employment agreement, if his employment is terminated without “Cause” or if he is separated from the Company for “Good Reason” (each as defined in his employment agreement and set forth below), then he will receive: (i) an amount equal to two times his then-current annual base salary and two times his then-current target annual bonus; (ii) a prorated portion of his target annual bonus for the then-current fiscal year; (iii) immediate vesting of RSUs scheduled to vest within two years after termination; (iv) vesting of PSUs for two years following termination to the extent that the relevant performance metrics for the PSU grant are achieved; and (v) payment or reimbursement for continued medical benefits until the earlier of 18 months after the date of termination or the date he begins employment with another employer.
If Mr. Diaz’s employment is terminated without “Cause” or if he separates from the Company for “Good Reason”, within three months before or 24 months after a “Change of Control” (as defined in his employment agreement and set forth below), then he will receive the same benefits described in the preceding paragraph, except that all outstanding and unvested equity grants will immediately vest in full.
As defined in Mr. Diaz’s employment agreement:
•“Cause” means: (i) executive’s gross negligence in the performance of executive’s duties to the Company; (ii) executive’s willful misconduct, embezzlement, misappropriation, fraud, or professional dishonesty; (iii) executive’s material breach of any non-disclosure, invention assignment, non-competition, or similar agreement between executive and the Company; (iv) executive’s commission of a felony or of a crime involving moral turpitude; (v) executive’s willful and material failure to comply with lawful directives of the Board; or (vi) executive’s willful and material breach of a material provision of any employment agreement between executive and the Company or willful and material violation of a material provision of any written Company employment policy applicable to its senior executive officers; provided that (A) the Company provides executive with written notice that the Company intends to terminate executive’s employment hereunder for one of the circumstances set forth above within sixty (60) days of the Board’s knowledge of such circumstance(s) occurring (which notice shall set forth in reasonable detail the circumstance(s) that the Company alleges constitute(s) Cause (as defined below)), (B) in the event that a circumstance described in (iii), (v) or (vi) above is capable of being cured, executive has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) the Company terminates executive’s employment within sixty five (65) days from the date of the notice referred to in clause (A). Conduct shall not be considered “willful” unless done (or omitted to be done) not in good faith and without a reasonable belief that such conduct (or lack thereof) was in the best interest of the Company.
•“Good Reason” means: (i) a material diminution in executive’s duties, authority or responsibilities; (ii) a material diminution in executive’s base salary, other than a reduction of similar magnitude to the base salaries of other Company senior executive officers if there is a reduction of Company senior executive base salaries generally, or a failure by the Company to provide the compensation and benefits provided for in this Agreement; (iii) any change in executive’s position such that he is no longer the Company’s Chief Executive Officer reporting solely to the Board; or (iv) a material breach by the Company of this Agreement or any other agreement between the Company and executive; provided that (A) executive provides the Company with written notice that executive intends to terminate executive’s employment hereunder for one of the circumstances set forth above within sixty (60) days of such circumstance occurring (which notice shall set forth in reasonable detail the circumstance(s) that Executive alleges constitute(s) Good Reason), (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) executive terminates executive’s employment within sixty five (65) days from the date of the notice referred to in clause (A). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of a specific occurrence of Good Reason shall not disqualify executive from asserting Good Reason for any subsequent occurrence of Good Reason.
•“Change of Control” means the occurrence of any of the following events: (A) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, any subsidiary of the Company, or any employee benefit plan of the Company); or (B) 1) a merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such entity, as the case may be, outstanding immediately after such merger or consolidation; or (2) the sale or disposition by the Company of all or substantially all of the Company’s assets; or (C) a change in the Board or its members such that individuals who, as of the commencement date of Mr. Diaz's employment (including executive) or, if later, the date that is one year prior to such change (the later of such two dates referred to herein as the ”Measurement Date”), constitute the Board (the “Incumbent Board”) cease to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Measurement Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, any new members whose election or nomination was so approved, without counting the member and his or her predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.
Outstanding Equity Awards at 2020 Transition Period End
The following table shows the grants of stock options, RSUs and PSUs outstanding as of December 31, 2020, to each of our NEOs.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | | | Stock Awards |
| Name | Date of Grant | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(1) | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | Option Exercise Price ($) | | Option
Expiration
Date | Number of
Shares
or Units of
Stock that
Have not
Vested
(#)(4) | Market
Value of
Shares
or Units of
Stock that
Have not
Vested
($)(5) | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
that Have
not Vested
(#)(6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($)(5) |
| Paul J. Diaz | 08/13/2020 | | 342,040 (2) | $13.38 | | 08/13/2027 | | | | |
| 08/13/2020 | | 339,088 (3) | $13.38 | | 08/13/2027 | | | | |
| 08/13/2020 | | | | | | 298,954 | 5,910,321 | | |
| 10/08/2020 | | | | | | | | 298,954 | 5,910,321 |
| R. Bryan Riggsbee | 09/13/2017 | | | | | | 15,000 | 296,550 | | |
| 09/19/2018 | | | | | | 23,750 | 469,538 | | |
| 09/25/2019 | | | | | | 30,750 | 607,928 | | |
| 02/18/2020 | | | | | | 100,000 | 1,977,000 | | |
| 08/12/2020 | | | | | | 13,787 | 272,569 | | |
| 10/08/2020 | | | | | | 44,954 | 888,741 | | |
| 10/08/2020 | | | | | | | | 44,953 | 888,721 |
| Jerry S. Lanchbury, Ph.D. | 2/23/2011 | 80,000 | | $18.00 | | 2/23/2021 | | | | |
| 09/13/2011 | 128,000 | | $19.47 | | 09/13/2021 | | | | |
| 03/07/2012 | 32,000 | | $23.98 | | 03/07/2022 | | | | |
| 09/12/2012 | 160,000 | | $27.07 | | 09/12/2022 | | | | |
| 09/17/2013 | 180,000 | | $26.49 | | 09/17/2021 | | | | |
| 09/13/2017 | | | | | | 12,500 | 247,125 | | |
| 09/19/2018 | | | | | | 19,000 | 375,630 | | |
| 09/25/2019 | | | | | | 24,600 | 486,342 | | |
| 08/12/2020 | | | | | | 10,068 | 199,044 | | |
| 10/08/2020 | | | | | | 39,196 | 774,905 | | |
| 10/08/2020 | | | | | | | | 39,195 | 774,885 |
| Nicole Lambert | 09/13/2017 | | | | | | 2,137 | 42,248 | | |
| 09/17/2018 | | | | | | 80 | 1,582 | | |
| 09/19/2018 | | | | | | 4,274 | 84,497 | | |
| 09/25/2019 | | | | | | 30,000 | 593,100 | | |
| 08/12/2020 | | | | | | 7,646 | 151,161 | | |
| 10/08/2020 | | | | | | 44,211 | 874,051 | | |
| 10/08/2020 | | | | | | | | 44,210 | 874,032 |
| Mark Verratti | 09/13/2017 | | | | | | 10,000 | 197,700 | | |
| 09/19/2018 | | | | | | 20,000 | 395,400 | | |
| 09/25/2019 | | | | | | 24,600 | 486,342 | | |
| 08/12/2020 | | | | | | 7,467 | 147,623 | | |
| 10/08/2020 | | | | | | 31,258 | 617,971 | | |
| 10/08/2020 | | | | | | | | 31,258 | 617,971 |
(1)Options granted pursuant to our 2010 Plan and vested as to 25 percent of the shares per year on each anniversary date of grant.
(2)Represents time-based non-qualified stock options for the purchase of 342,040 shares of common stock, which options vest in four equal installments on each of the first four anniversaries of Mr. Diaz’s commencement date of August 13, 2020.
(3)Represents performance-based non-qualified stock options for the purchase of 339,088 shares of common stock, which options vest in five equal installments: 20% of the options will vest upon achievement of a stock price that exceeds $20.07, 20% of the options will vest upon achievement of a stock price that exceeds $26.76, 20% of the options will vest upon achievement of a stock price that exceeds $33.45, 20% of the options will vest upon achievement of a stock price that exceeds $40.14 and 20% of the options will vest upon achievement of a stock price that exceeds $46.83, provided in each case that no portion of the options may vest earlier than August 13, 2021, the first anniversary of Mr. Diaz's commencement date. Achievement of each applicable milestone is based on the average of the closing prices of common stock for a period of 20 consecutive trading days exceeding the applicable milestone stock price.
(4)RSUs vest 25% per year beginning no earlier than the first anniversary of the grant date on which the RSUs were granted.
(5)The market value of restricted stock unit awards is determined by multiplying the number of shares by $19.77, the closing price of our common stock on the Nasdaq Global Select Market on December 31, 2020, the last day of the 2020 transition period.
(6)Represents PSUs granted on October 8, 2020 to our NEOs. The performance metrics for the PSUs will be measured against adjusted earnings per share and relative total stockholder return for the period from July 1, 2020 to June 30, 2021. To the extent that the PSUs are determined to have been earned based on the performance metrics, (i) for all NEOs other than Mr. Diaz, 25% will vest on the first anniversary of the grant date, and the remaining 75% will vest in three equal installments on the following three anniversaries of the grant date and (ii) for Mr. Diaz, 25% will vest when they are deemed earned, and the remaining 75% will vest in three equal installments on the following three anniversaries of Mr. Diaz's employment commencement date of August 13, 2020.
2020 Transition Period Option Exercises and Stock Vested
The following table shows information regarding the vesting of restricted stock unit awards held by our NEOs during the six-month transition period ended December 31, 2020. There were no exercises of options to purchase our common stock during the six-month transition period ended December 31, 2020.
| | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) |
| Paul J. Diaz | — | — | | — | — |
| R. Bryan Riggsbee | — | — | | 52,125 | 657,435 |
| Jerry S. Lanchbury, Ph.D. | — | — | | 42,700 | 538,688 |
| Nicole Lambert | — | — | | 16,327 | 204,314 |
| Mark Verratti | — | — | | 30,700 | 383,408 |
(1)Amounts shown in this column represent the market value of restricted stock unit awards upon vesting as determined by multiplying the number of shares by $12.44, the closing price of our common stock on the Nasdaq Global Select Market on September 25, 2020, for shares which vested on that date, by $12.44, the closing price of our common stock on the Nasdaq Global Select Market on the last trading day prior to September 26, 2020, for shares which vested on that date and by $13.04, the closing price of our common stock on the Nasdaq Global Select Market on September 30, 2020, for shares which vested on that date.
Pension Benefits
We do not have any qualified or non-qualified defined pension benefit plans.
Nonqualified Deferred Compensation
We do not have any nonqualified defined contribution plans or other deferred compensation plans.
Potential Payments Upon Termination or Change-in-Control
Beginning October 9, 2020 (and thereafter for subsequently appointed executive officers), we entered into new Severance and Change in Control Agreements (the "Severance and Change in Control Agreements") with our executive officers other than our Chief Executive Officer, Mr. Diaz. Our agreements with Mr. Diaz regarding severance and change in control pursuant to his employment agreement are discussed above under the caption "Narrative Disclosure to Summary Compensation Table and 2020 Transition Period Grants of Plan-Based Awards Table--Mr. Diaz's Employment Agreement."
Under the terms of the Severance and Change in Control Agreements, if the employment of an executive officer is terminated without “Cause” or if the executive officer separates from Myriad for “Good Reason” (each is defined in the agreement and set forth below), then the executive officer will receive:
•(i) an amount equal to the executive’s then-current annual base salary, the executive’s then-current target annual bonus and any compensation previously deferred; (ii) a prorated portion of the executive’s target annual bonus for the then-current fiscal year, based on the portion of the fiscal year worked prior to the separation date; (iii) immediate vesting of RSUs scheduled to vest within two years after termination; (iv) vesting of PSUs for two years following termination to the extent that the relevant performance metrics for the PSU grant are achieved; and (v) reimbursement for continued medical benefits until the earlier of 12 months after the date of termination or the date the executive begins employment with another employer.
If the employment of an executive officer is terminated without “Cause” or if the executive officer separates from Myriad for ‘‘Good Reason’’, within three months before or 24 months after a “Change in Control” (as defined in the agreement and set forth below), then the executive officer will receive the same benefits described in the preceding paragraph, except that all outstanding and unvested equity grants will immediately vest in full.
As defined in the Severance and Change in Control Agreements:
•“Cause” means: (i) employee’s gross negligence in the performance of employee’s duties to the Company; (ii) employee’s willful misconduct, embezzlement, misappropriation, fraud, or professional dishonesty; (iii) employee’s material breach of any non-disclosure, invention assignment, non-competition, or similar agreement between employee and the Company; (iv) employee’s commission of a felony or of a crime involving moral turpitude; (v) employee’s willful and material failure to comply with lawful directives of the Board; or (vi) employee’s willful and material breach of a material provision of any employment agreement between employee and the Company or willful and material violation of a material provision of any written Company employment policy applicable to its senior executive officers; provided that (A) the Company provides employee with written notice that the Company intends to terminate employee’s employment hereunder for one of the foregoing circumstances within sixty (60) days of the Board’s knowledge of such circumstance(s) occurring (which notice shall set forth in reasonable detail the circumstance(s) that the Company alleges constitute(s) Cause), (B) in the event that a circumstance described in subsection (v) or (vi) is capable of being cured, employee has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) the Company terminates employee’s employment within sixty five (65) days from the date of the notice referred to in clause (A). Conduct shall not be considered “willful” unless done (or omitted to be done) not in good faith and without a reasonable belief that such conduct (or lack thereof) was in the best interest of the Company.
•“Good Reason” means: (i) a material diminution in employee’s duties, authority or responsibilities; (ii) a material diminution inemployee’s base salary, other than a reduction of similar magnitude to the base salaries of other Company senior executive officers if there is a reduction of Company senior executive officer base salaries generally, or a failure by the Company to provide the compensation and benefits provided for in this Agreement; or (iii) a material breach by the Company of this Agreement or any other agreement between the Company and employee; provided that (A) employee provides the Company with written notice that employee intends to terminate employee’s employment hereunder for one of the foregoing circumstances within sixty (60) days of such circumstance occurring (which notice shall set forth in reasonable detail the circumstance(s) that employee alleges constitute(s) Good Reason), (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) employee terminates employee’s employment within sixty five (65) days from the date of the notice referred to in clause (A). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of a specific occurrence of Good Reason shall not disqualify employee from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A of the Internal Revenue Code of 1986, as amended, and any successor statute, regulation and guidance thereto.
•“Change in Control” means the occurrence of any of the following events: (A)Ownership: any “Person” (as such term is usedin Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, any subsidiary of the Company, or any employee benefit plan of the Company); or (B) Merger/Sale of Assets: (1) a merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such entity, as the case may be, outstanding immediately after such merger or consolidation; or (2) the sale or disposition by the Company of all or substantially all of the Company’s assets; or (C) BoardChange: a change in the Board or its members such that individuals who, as of the effective date of the Severance and Change in Control Agreement or, if later, the date that is one year prior to such change (the later of such two dates referred to herein as the “Measurement Date”), constitute the Board (the “Incumbent Board”) cease to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Measurement Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, any new members whose election or nomination was so approved, without counting the member and his or her predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.
The following table summarizes the potential payments to each of our NEOs other than Mr. Diaz under the Severance and Change in Control Agreements, and in the case of Mr. Diaz under this employment agreement, in connection with (i) a termination without Cause or a separation for Good Reason following a Change in Control or (ii) a termination without Cause or a separation for Good Reason independent of a Change in Control, in each case assuming such termination or separation occurred as of December 31, 2020.
| | | | | | | | | | | | | | |
| Executive Benefits
and Payments Upon Termination | Change in Control and Involuntary Termination Without Cause or for Good Reason ($) (1) | | Involuntary Termination Without Cause or for Good Reason ($) (1) |
| Paul J. Diaz | Base salary | 2,000,000 | | 2,000,000 |
| Bonus | 3,000,000 | | 3,000,000 |
| Signing Bonus (2) | 500,000 | | 500,000 |
| Stock option, RSU and PSU acceleration (3) | 16,173,049 | | 10,172,680 |
| Cobra benefits | 42,873 | | 42,873 |
| Total | 21,715,922 | | 15,715,553 |
| R. Bryan Riggsbee | Base salary | 483,000 | | 483,000 |
| Bonus | 434,700 | | 434,700 |
| RSU and PSU acceleration (4) | 5,401,045 | | 3,866,109 |
| Cobra benefits | 28,582 | | 28,582 |
| Total | 6,347,327 | | 4,812,391 |
| Jerry S. Lanchbury, Ph.D. | Base salary | 526,000 | | 526,000 |
| Bonus | 394,500 | | 394,500 |
| RSU and PSU acceleration (4) | 2,857,931 | | 2,032,698 |
| Cobra benefits | 28,582 | | 28,582 |
| Total | 3,807,013 | | 2,981,780 |
| Nicole Lambert | Base salary | 425,250 | | 425,250 |
| Bonus | 382,725 | | 382,725 |
| RSU and PSU acceleration (4) | 2,620,662 | | 1,671,182 |
| Cobra benefits | 28,582 | | 28,582 |
| Total | 3,457,219 | | 2,507,739 |
| Mark Verratti | Base salary | 419,796 | | 419,796 |
| Bonus | 314,847 | | 314,847 |
| RSU and PSU acceleration (4) | 2,463,006 | | 1,781,620 |
| Cobra benefits | 28,582 | | 28,582 |
| Total | 3,226,231 | | 2,544,845 |
(1)The value of the vesting acceleration for restricted stock units was calculated by multiplying the number of restricted stock units subject to acceleration as of December 31, 2020 by the closing price of our common stock on the Nasdaq Global Select Market on December 31, 2020 of $19.77. The value of vesting acceleration for stock options was calculated by multiplying the number of in-the-money unvested stock options subject to acceleration as of December 31, 2020 by the difference between (i) the closing price of our common stock on the Nasdaq Global Select Market on December 31, 2020 of $19.77 and (ii) the respective exercise price of such stock options.
(2)The second half of Mr. Diaz's signing bonus of $1,000,000 is to be paid on the first anniversary of Mr. Diaz's commencement date of August 13, 2020 and such payment would be made on August 13, 2021 in each case under the terms of his employment agreement.
(3)Mr. Diaz's PSUs with unsatisfied performance conditions were assumed to vest at target. Each of the stock price milestones for Mr. Diaz's performance-based stock options were assumed to be achieved. In the case of a termination without Cause or a separation for Good Reason independent of a Change in Control, vesting of Mr. Diaz's time-based stock options, RSUs and PSUs was accelerated by two years from December 31, 2020 on a monthly basis.
(4)PSUs for Mr. Riggsbee, Dr. Lanchbury, Ms. Lambert and Mr. Verratti with unsatisfied performance conditions were assumed to vest at target. In the case of a termination without Cause or a separation for Good Reason independent of a Change in Control, vesting of RSUs and PSUs for Mr. Riggsbee, Dr. Lanchbury, Ms. Lambert and Mr. Verratti was accelerated by two years from December 31, 2020 on a monthly basis.
CEO Pay Ratio
The following is a reasonable estimate prepared under the SEC rules, of the ratio of the total compensation of our Chief Executive Officer to the median of the total compensation of our other employees. We determined that as of December 31, 2020, our employee population consisted of 2,683 employees, 2,592 of which are U.S. employees and 91 of which are international employees. Of the 91 international employees, 45 are located in Germany, 8 in Switzerland, 8 in the United Kingdom, 6 in Canada, 6 in France, 5 in Japan, 4 in Italy, 3 in Australia, 2 in Spain, and 1 in each of Austria, Greece, Ireland and the Netherlands. All international employees were excluded in the 5% de minimis exemption adjustment as permitted by SEC rules. We then selected our median employee based on the W-2 calculated income of our U.S. employees for the calendar year ending on December 31, 2020.
The total six month compensation of the employee identified as our median employee (excluding our Chief Executive Officer) was $46,176 for the six month period ended December 31, 2020. The total six month compensation of our Chief Executive Officer for purposes of determining the CEO Pay Ratio was $15,618,158 for the six month period ended December 31, 2020, which has been adjusted from the total of $15,500,821 disclosed in the summary compensation table in order to estimate under SEC rules the additional compensation that Mr. Diaz would have earned had he been serving as our Chief Executive Officer for the entire six month 2020 transition period rather than from August 13, 2020 through December 31, 2020. Approximately 89.6%, or $13.9 million, of the total compensation of our Chief Executive Officer for purposes of determining the CEO Pay Ratio consisted of time-based and performance-based restricted stock units and stock options granted to Mr. Diaz in connection with the commencement of his employment with the Company on August 13, 2020. Based on the foregoing information, for the 2020 transition period, the ratio of the total six month compensation of our Chief Executive Officer to the total six month compensation of our median employee was estimated to be 338 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodologies prescribed by the SEC. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Using consistently applied measures, we did not make any assumptions, adjustments or estimates with respect to base pay in determining the median employee and we did not annualize compensation for any employee not employed for the entire year.
Due to the flexibility afforded by the rules of the SEC in calculating the pay ratio amount, the ratio calculated may not be comparable to the CEO pay ratio presented by other companies.
Director Compensation
The following table shows the total compensation paid or accrued during the transition period ended December 31, 2020 to each of our non-employee directors who served during the 2020 transition period. Directors who are employed by Myriad are not compensated for their service on our Board of Directors.
| | | | | | | | | | | |
| Fees Earned or | Stock | |
| Name | Paid in Cash ($) | Awards ($) | Total ($) |
Lawrence C. Best (1) | 44,450 | — | 44,450 |
| Heiner Dreismann, Ph.D. | 58,750 | 299,984 (2) | 358,734 |
Walter Gilbert, Ph.D. (1) | 47,624 | — | 47,624 |
John T. Henderson, M.D. (1) | 47,064 | — | 47,064 |
| Rashmi Kumar | 20,972 | 299,994 (3) | 320,966 |
| Dennis H. Langer, M.D., J.D. | 60,250 | 299,984 (2) | 360,234 |
| Lee N. Newcomer, M.D. | 61,000 | 299,984 (2) | 360,984 |
| S. Louise Phanstiel | 124,750 | 299,984 (2) | 424,734 |
| Colleen F. Reitan | 56,500 | 299,984 (2) | 356,484 |
| Daniel M. Skovronsky, M.D., Ph.D. | 38,556 | 299,991 (4) | 338,547 |
| Daniel K. Spiegelman | 59,658 | 299,984 (2) | 359,642 |
1.Mr. Best, Dr. Gilbert and Dr. Henderson retired from our Board at our 2020 Annual Meeting of Stockholders held on December 4, 2020.
2.Amounts shown reflect the aggregate grant date fair value of 15,889 RSUs calculated in accordance with FASB ASC Topic 718. The aggregate grant date fair value was determined by multiplying the number of shares by $18.88, the closing price of our common stock on the Nasdaq Global Select Market on December 4, 2020, the date of the grant. These RSUs awarded to certain of our non-employee directors following the 2020 Annual Meeting of Stockholders held on December 4, 2020 vest in full one year from date of grant.
3.Ms. Kumar joined our Board of Directors on September 9, 2020. Ms. Kumar received an initial grant of RSUs equal to $299,994, which is the aggregate grant date fair value of 23,923 RSUs calculated in accordance with FASB ASC Topic 718. The grant date fair value was determined by multiplying the number of RSUs by $12.54, the closing price of our common stock on the Nasdaq Global Select Market on September 17, 2020, the date of the grant. These RSUs awarded to Ms. Kumar vest in full one year from the date of grant. Based on the proximity of Ms. Kumar's appointment to our Board of Directors and her initial grant of RSUs on September 17, 2020 to the 2020 Annual Meeting of Stockholders, Ms. Kumar did not receive an additional RSU award following the 2020 Annual Meeting of Stockholders.
4.Dr. Skovronsky joined our Board of Directors on July 21, 2020. Dr. Skovronsky received an initial grant of RSUs equal to $299,991, which is the aggregate grant date fair value of 25,041 RSUs calculated in accordance with FASB ASC Topic 718. The grant date fair value was determined by multiplying the number of RSUs by $11.98, the closing price of our common stock on the Nasdaq Global Select Market on July 21, 2020, the date of the grant. These RSUs awarded to Dr. Skovronsky vest in full one year from the date of grant. Based on the proximity of Dr. Skovronsky's appointment to our Board of Directors and his initial grant of RSUs on July 21, 2020 to the 2020 Annual Meeting of Stockholders, Dr. Skovronsky did not receive an additional RSU award following the 2020 Annual Meeting of Stockholders.
The following table shows outstanding and vested options and unvested RSUs for each non-employee director as of December 31, 2020.
| | | | | | | | | | | |
| Total Options | Vested | Unvested |
| Name | Outstanding | Options | RSUs |
| Heiner Dreismann, Ph.D. | — | — | 15,889 |
| Rashmi Kumar | — | — | 23,923 |
| Dennis H. Langer, M.D., J.D. | 60,000 | 60,000 | 15,889 |
| Lee N. Newcomer, M.D. | — | — | 15,889 |
| S. Louise Phanstiel | 90,000 | 90,000 | 15,889 |
| Colleen F. Reitan | — | — | 15,889 |
| Daniel M. Skovronsky, M.D., Ph.D. | — | — | 25,041 |
| Daniel K. Spiegelman | — | — | 36,451 |
The following table shows the grant date fair value calculated in accordance with FASB ASC Topic 718 for restricted stock unit awards granted to each non-employee director during the transition period ended December 31, 2020.
| | | | | | | | | | | |
| Name | RSUs Granted (#) | Grant Date | Grant Date Fair Value ($) |
|
| Heiner Dreismann, Ph.D. | 15,889 | 12/04/2020 | 299,984 |
| Rashmi Kumar | 23,923 | 9/17/2020 | 299,994 |
| Dennis H. Langer, M.D., J.D. | 15,889 | 12/04/2020 | 299,984 |
| Lee N. Newcomer, M.D. | 15,889 | 12/04/2020 | 299,984 |
| S. Louise Phanstiel | 15,889 | 12/04/2020 | 299,984 |
| Colleen F. Reitan | 15,889 | 12/04/2020 | 299,984 |
| Daniel M. Skovronsky, M.D., Ph.D. | 25,041 | 7/21/2020 | 299,991 |
| Daniel K. Spiegelman | 15,889 | 12/04/2020 | 299,984 |
Director Compensation Policy
Our non-employee directors are compensated on a role-based model and are paid cash fees based on annual retainers (25% paid following each quarter of service) for their service on our board. Paul J. Diaz, our Chief Executive Officer, is a member of our Board but is employed by us, and, as such, he receives no additional compensation for his service on our Board.
Attracting and retaining qualified non-employee directors is critical to the governance and long-term success of the Company. As a result, the CHCC, in consultation with its outside compensation consultant, regularly reviews our director compensation to ensure that it is competitive with our peer group.
During the 2020 transition period and in February 2021, the CHCC modified the director compensation program in the following manner:
•Increased the annual cash retainer for the Chair of our Board from $60,000 to $120,000 to more closely align with the compensation practices of our peer group and to reflect Ms. Phanstiel’s contributions to the Board and increased workload in her role as Chair of the Board, which increased workload is expected to continue.
•Provided for an annual cash retainer for the Chair of the Research and Product Innovation Committee of $28,000 and increased the annual cash retainer for members of the Research and Product Innovation Committee from $5,000 to $13,500, in each case to reflect the increased workload and responsibilities of the Chair and other members of the Research and Product Innovation Committee to oversee and improve our product development.
•Provided that members of the Research and Product Innovation Committee would receive per-meeting fees on the same basis as other Board committees during the 2020 transition period, but in February 2021, discontinued the practice of paying non-employee directors a per-meeting fee for attending any Board or committee meetings.
•In February 2021, increased the annual equity grant to directors from $300,000 to $350,000 to more closely align our director equity compensation with the compensation practices of our peer group.
The following is a description of the standard compensation arrangements under which our non-employee directors are compensated for their service as directors, including as members of the various Board committees:
Annual retainer
| | | | | |
| All members | $60,000 |
| Chair of the Board | $120,000 additional |
| Chair of the Audit and Finance Committee | $28,000 additional |
| Chair of the Compensation and Human Capital Committee | $20,000 additional |
| Chair of the Nominating and Governance Committee | $15,000 additional |
| Chair of the Research and Product Innovation Committee | $28,000 additional |
Members of the Audit and Finance Committee (1) | $13,500 additional |
Members of the Compensation and Human Capital Committee (1) | $10,000 additional |
Members of the Nominating and Governance Committee (1) | $7,500 additional |
Members of the Research and Product Innovation Committee (1) | $13,500 additional |
Attendance
In addition to the annual retainer amounts described above, during the 2020 transition period we paid each non-employee director a per-meeting cash fee of $2,000 for attendance at board meetings in excess of five in-person meetings and four telephonic meetings. We also paid each non-employee director a per-meeting cash fee of $2,000 for attendance at committee meetings in excess of four meetings (per each committee), whether in person or telephonic, during the 2020 transition period. However, as discussed above, in February 2021, the Board discontinued the practice of paying non-employee directors a per-meeting fee for attending any Board or committee meetings.
All directors are also reimbursed for their out-of-pocket expenses incurred in attending meetings.
Equity Awards
Under our 2017 Plan, our non-employee directors may receive an award of equity in the Company. As recommended and determined by our CHCC, and approved by our Board of Directors, on the date of each annual meeting of stockholders, we may grant to each non-employee director equity awards under the 2017 Plan. In addition, depending on the proximity to our annual meeting of stockholders, we may grant equity awards under the 2017 Plan to each new non-employee director upon his or her initial appointment to the Board; provided, however, that it is our policy that directors should generally not receive more than one equity award per year. The number of shares of restricted stock, restricted stock units and/or other equity awards granted will be determined by dividing $350,000 by the Nasdaq closing trading price of our common stock on the date of the applicable annual meeting of stockholders or the date that such new non-employee director is appointed to our Board, as applicable.
Restricted stock, restricted stock units and other equity awards granted to our non-employee directors may vest, in the discretion of the Board and/or CHCC, (1) in the case of awards granted on the date of our annual meeting of stockholders, upon the earlier of (i) one year of service on the Board following the date of grant or (ii) the date of the next annual meeting of stockholders following such grant and (2) in the case of awards granted on the date that a new non-employee director is appointed to the Board, on the date that is one year following the date of such grant.
Options granted to our non-employee directors in prior years under the 2010 Employee, Director and Consultant Equity Incentive Plan (as amended, the “2010 Plan”) are exercisable after the termination of the director’s service on the Board for the remaining term of the applicable option to the extent that such option was exercisable on the date of such termination. All options or restricted stock units granted to our non-employee directors will become fully exercisable or vested upon a change of control of the Company or upon their death as provided for under the forms of award agreement for directors under our 2010 Plan or 2017 Plan, as applicable.
Tax Deductibility of Compensation
Based on changes to U.S. tax laws, incentive compensation for our executive officers will no longer be determined under a section 162 (m) plan since the exception to the $1 million deduction limitation for qualified performance-based compensation has been eliminated.
Equity Compensation Plan Information
The following table provides certain aggregate information with respect to all of the Company’s equity compensation plans in effect as of
June 30, 2018. | | | | | | | | | | | | |
Plan category | | (a)
Number of
securities
to be issued
upon
exercise of
outstanding
options,
warrants
and rights | | | (b)
Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights | | | (c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) | |
Equity compensation plans approved by security holders (1) | | | 6,339,053 | | | $ | 24.50 | | | | 2,222,095 | (2) |
Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | |
Total | | | 6,339,053 | | | $ | 24.50 | | | | 2,222,095 | (2) |
(1) | These plans consist of our 2003 Employee, Director and Consultant Stock Option Plan, as amended (the “2003 Plan”), our 2010 Employee, Director and Consultant Equity Plan, as amended (the “2010 Plan”), our 2017 Employee, Director and Consultant Equity Incentive Plan (the “2017 Plan”), and our Employee Stock Purchase Plan, as amended.
|
48
December 31, 2020.
| | | | | | | | | | | | | | |
| Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights (3) | (c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| Equity compensation plans approved by security holders (1) | 7,740,093 | $24.71 | 4,823,849 | (4) |
| Equity compensation plans not approved by security holders (2) | 1,279,036 | $13.38 | — | |
| Total | 9,019,129 | $23.24 | 4,823,849 | |
(1)These plans consist of our 2010 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2010 Plan”), our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2017 Plan”), and our Employee Stock Purchase Plan, as amended (the “Employee Stock Purchase Plan”). Column (a) includes 4,565,928 shares of common stock available for issuance upon the exercise of stock options and 3,174,165 shares of common stock available for issuance upon the vesting of time-based and performance-based restricted stock unit awards.
(2)Column (a) includes (a) 342,040 shares of common stock available for issuance upon the exercise of time-based non-qualified stock options, (b) 339,088 shares of common stock available for issuance upon the exercise of performance-based non-qualified stock options, (c) 298,954 shares of common stock available for issuance upon the vesting of RSUs and (d) 298,954 shares of common stock available for issuance upon the vesting of PSUs, in each case granted to Mr. Diaz as an inducement to his employment.
(3)The weighted-average exercise price does not take into account any restricted stock unit awards included in column (a).
(4)Column (c) includes (a) 233,852 shares of common stock available for future issuance under the Employee Stock Purchase Plan and (b) 4,589,997 shares of common stock available for future issuance under the 2017 Plan. No shares are available for issuance under the 2010 Plan.
For additional information about our equity compensation plans, please refer to Note 10 of Notes to Consolidated Financial Statements included in Part II, Item 8 of our Transition Report on Form 10-K for the transition period ended December 31, 2020.
(2) | Column (c) includes 707,809 shares available for future issuance under our Employee Stock Purchase Plan. No shares are available for issuance under the 2003 Plan or the 2010 Plan.
|
COMPENSATION COMMITTEE REPORT
The Compensation
and Human Capital Committee of
ourthe Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation
S-K, which appears elsewhere in this proxy statement, with our management. Based on this review and discussion, the Compensation
and Human Capital Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
MEMBERS OF THE COMPENSATION
AND HUMAN CAPITAL COMMITTEE:
Heiner Dreismann, Ph.D., Chair
Walter Gilbert,
Lee N. Newcomer, M.D.
S. Louise Phanstiel
Daniel M. Skovronsky, M.D., Ph.D.
John T. Henderson, M.D.
AUDIT
AND FINANCE COMMITTEE REPORT
The Audit
and Finance Committee of the Board of Directors, which consists entirely of directors who meet the independence and experience requirements of
the NASDAQThe Nasdaq Stock Market LLC, has furnished the following report:
The Audit and Finance Committee assists the Board in overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in the Audit and Finance Committee Charter adopted by the Board, which is available in the Investors—Investors — FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com. This committee reviews and reassesses the Audit and Finance Committee Charter annually and recommends any changes to the Board for approval. The Audit and Finance Committee is responsible for overseeing our overall financial reporting process and for the appointment, compensation, retention, and oversight of the work of our independent registered public accounting firm.
In fulfilling its responsibilities for the financial statements for the
fiscal yearsix-month transition period ended
June 30, 2018,December 31, 2020, the Audit
and Finance Committee took the following actions:
•Reviewed and discussed the audited financial statements for the fiscal yearsix-month transition period ended June 30, 2018December 31, 2020 with management and Ernst & Young LLP, our independent registered public accounting firm;
| • | | Discussed with Ernst & Young LLP the matters required to be discussed in accordance with Statement on Auditing Standards No. 16,Communications with Audit Committees; and
|
| • | | Received written disclosures and letters from Ernst & Young LLP regarding its independence as required by PCAOB Ethics and Independence Rule 3526,Communication with Audit Committees Concerning Independence,and has discussed with the independent auditors, the independent auditors’ independence; and
|
•Discussed with Ernst & Young LLP the matters required to be discussed in accordance with Statement on Auditing Standards No. 16, Communications with Audit Committees;
•Received written disclosures and letters from Ernst & Young LLP regarding its independence as required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent auditors, the independent auditors’ independence; and
•The Audit and Finance Committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate.
Based on the Audit
and Finance Committee’s review of the audited financial statements and discussions with management and Ernst & Young LLP, the Audit
and Finance Committee recommended to the Board that the audited financial statements be included in our
AnnualTransition Report on Form
10-K for the
fiscal yearsix-month transition period ended
June 30, 2018December 31, 2020 for filing with the SEC.
MEMBERS OF THE AUDIT
AND FINANCE COMMITTEE
S. Louise Phanstiel,
Daniel K. Spiegelman, Chair
Lawrence C. Best
Rashmi Kumar
Dennis H. Langer, M.D., J.D.
49
S. Louise Phanstiel
Colleen F. Reitan
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our records reflect that all reports that were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a timely basis.
An Annual Statement of Beneficial Ownership on Form 5 is not required to be filed if there are no previously unreported transactions or holdings to report. Nevertheless, we are required to disclose the names of directors, officers and 10 percent stockholders who did not file a Form 5 unless we have obtained a written statement that no filing is required or if we otherwise know that no Form 5 is required. We received either a written statement from our directors, officers and 10 percent stockholders or know from other means that no Forms 5 filings were required.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
We were not a party to any transactions with related persons since July 1, 20182019 that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Policy on Approval of Related Person Transactions
We have adopted a Policy on Related Person Transactions (the “Policy”) under which the Audit
and Finance Committee reviews, approves or ratifies all related person transactions. Under our Policy, a related person transaction is one in which Myriad is a participant, and the amount involved exceeds $120,000, and in which any of the following persons have or will have a direct or indirect material interest:
•Executive officers of the Company;
•Members of the Board;
•Beneficial holders of 5 percent or more of Myriad’s securities;
•Immediate family members, as defined by Item 404 of RegulationS-K under the Securities Act, of any of the foregoing persons;
•Any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal.principal, is in a similar position or in which the person has a 5 percent or greater beneficial ownership interest; and
•Any other persons whom the Board determines may be considered to be related persons as defined by Item 404 of RegulationS-K under the Securities Act.
Under the Policy, the Audit
and Finance Committee will approve only those related person transactions that are determined to be in, or not inconsistent with, the best interests of Myriad and its stockholders, taking into account all available facts and circumstances as the Audit
and Finance Committee, determines in good faith to be necessary. These facts and circumstances will typically include, but not be limited to, the benefits of the transaction to Myriad; the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, stockholder or executive officer; the availability of other sources for comparable products or services; the terms of the transaction; and the terms of comparable transactions that would be available to unrelated third parties or to employees generally. No member of the Audit
and Finance Committee shall participate in any review, consideration or approval of any related person transaction with respect to which the member or any of his or her immediate family members is the related person.
In reviewing and approving these transactions, the Audit
and Finance Committee will obtain, or will direct management to obtain on its behalf, all information that the Audit
and Finance Committee believes to be relevant and important to a review of the transaction prior to its approval. Following receipt of the necessary information, a discussion of the relevant factors will be held if it is deemed to be necessary by the Audit
and Finance Committee prior to approval. If a discussion is not deemed to be necessary, approval may be given by written consent of the Audit
and Finance Committee. This approval authority may also be delegated to the Chairperson of the Audit
and Finance Committee in some circumstances. It is contemplated that no related person transaction will be entered into prior to the completion of these procedures; however, where permitted, a related person transaction may be ratified upon completion of these procedures.
50
The Audit and Finance Committee may adopt any further policies and procedures relating to the approval of related person transactions that it deems necessary or advisable from time to time. A copy of our Policy on Related Person Transactions is publicly available in the Investors—Investor Information — FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.51
The Board of Directors currently consists of
sevennine members, classified as follows:
John T. Henderson, M.D. and S. Louise Phanstiel,
Daniel M. Skovronsky M.D., Ph.D., and Daniel K. Spiegelman constitute a class with a term ending at the
20182021 Annual Meeting (the “Class I Directors”);
Mark C. Capone andPaul J. Diaz, Heiner Dreismann, Ph.D.
, and Colleen F. Reitan constitute a class with a term ending at the
20192022 Annual Meeting (the “Class II Directors”); and
Walter Gilbert, Ph.D., Dennis H. Langer, M.D., J.D.
, Lee N. Newcomer, M.D., and
Lawrence C. BestRashmi Kumar constitute a class with a term ending at the
20202023 Annual Meeting (the “Class III Directors”). At each Annual Meeting, directors are elected for a term
of three yearsto expire at the third succeeding Annual Meeting after their election to succeed those directors whose terms are
expiring.expiring at the Annual Meeting.
On September 20, 2018,February 18, 2021, the Board of Directors accepted the recommendation of the Nominating and Governance Committee and votedunanimously resolved to nominate John T. Henderson, M.D. and S. Louise Phanstiel, Daniel M. Skovronsky M.D., Ph.D., and Daniel K. Spiegelman for election at the Annual Meeting for a term of three years to serve until the 20212024 Annual Meeting, and until their successors have been elected and qualified, or until their earlier death, resignation, retirement or removal. Unless a stockholder has indicated otherwise on the authority to vote for any of these nominees is withheld,proxy, the shares represented by a valid proxy will be voted FOR the election of John T. Henderson, M.D. and S. Louise Phanstiel, Daniel M. Skovronsky M.D., Ph.D., and Daniel K. Spiegelman as directors. In the event that any nominee should become unable or unwilling to serve, the shares represented by a valid proxy will be voted for the election of another person who the Board of Directors recommends, unless the Board chooses to reduce the number of directors serving on the Board. We have no reason to believe that any nominee will be unable or unwilling to serve as a director.
An affirmative vote of the
pluralitymajority of the shares voted affirmatively or negatively
on each nominee at the Annual Meeting is required to elect each nominee as a director.
We
haverecently adopted
amendments to our Restated By-Laws to require that, in a
policy on pluralitynon-contested election, each director be elected by a stockholder vote constituting a majority of the votes
forcast with respect to that director’s election. The Restated By-Laws, as amended, provide that if, in an election that is not a contested election, an incumbent director does not receive a majority of the
election of directors. Under this policy, innon-contested elections, if avotes cast, such director
receives a greater number of WITHHOLD votes than FOR votes, the Board will decide, through a process managed bymust submit an irrevocable resignation to the Nominating and Governance
Committee. The Nominating and Governance Committee
and excludingwill make a recommendation to the
nominee in question,Board of Directors as to whether
itto accept or reject the resignation of such incumbent director, or whether other action should
request thatbe taken. The Board of Directors must act on the
director submit his or her resignation,
maintain the director but address whattaking into account the Nominating and Governance
Committee believes isCommittee’s recommendation, and publicly disclose (by filing an appropriate disclosure with the
underlying causeSEC) its decision regarding the resignation within ninety (90) days following certification of the
WITHHOLD votes, or resolve not tore-nominate the directorelection results. The Nominating and Governance Committee in
the future for election. A copy of this policy is publicly available in the Investor Information — Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF JOHN T. HENDERSON, M.D. AND S. LOUISE PHANSTIEL AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
52
PROPOSAL 2:
APPROVAL TO AMEND OUR 2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN
General
As of October 2, 2018, we had 450,089 remaining shares of common stock available for issuance under our 2017 Employee, Directormaking its recommendation and Consultant Equity Incentive Plan (the “2017 Plan”). Accordingly, we are seeking an approval to be able to award up to 1,000,000 additional restricted stock units by increasing the aggregate number of shares of common stock available for the grant of awards under the 2017 Plan by an additional 1,000,000 shares. An approval of an additional 1,000,000 shares will allow us to award up to 1,000,000 additional restricted stock units which we expect will provide us with enough shares to grant restricted stock units to our employees, executive officers and directors pursuant to our fiscal year 2019 compensation programs. Without approval of this amendment to increase the shares authorized under the 2017 Plan, we will not have enough authorized shares under the 2017 Plan to compensate our employees with equity and we will need to substantially revise our compensation programs.
Our 2017 Plan was approved by our Board of Directors and stockholders in 2017. We anticipate the need to continue requesting each year additional shares for authorization under the 2017 Plan to fund our equity compensation programs. As of October 2, 2018, restricted stock units representing 1,187,465 shares of common stock are outstanding under the 2017 plan. As of October 2, 2018, options to purchase 4,784,046 shares of common stock and restricted stock units representing 1,359,260 shares of common stock are outstanding under the 2010 Plan. As of October 2, 2018, options to purchase 893,645 shares of common stock are outstanding under the 2003 Plan. No further shares are available for issuance under the 2003 Plan or the 2010 Plan. Shares may be transferred back into the 2017 Plan from previously issued options and RSUs which are cancelled or expire under the 2003 Plan and the 2010 Plan. By its terms, the 2017 Plan may be amended by the Board of Directors providedin making its decision each may consider any factors and other information that any amendment that the Board determines requires stockholder approval is subject to receiving such approval.
On September 20, 2018, the Board of Directors voted to approve an amendment to the 2017 Plan to allow for the award of up to 1,000,000 additional RSUs by increasing the aggregate number of shares of common stock available for the grant of awards under the 2017 Plan by an additional 1,000,000 shares. This amendment to increase the number of shares available for grant under the 2017 Plan is being submitted for approval at the Annual Meeting in order to ensure that we have an adequate number of shares available for issuance in order to grant equity incentive compensation awards to our employees, executive officersthey consider appropriate and directors pursuant to our compensation programs. Approval by our stockholders of this amendment to the 2017 Plan is also required by the listing rules of The NASDAQ Stock Market LLC.
Our Board, the Compensation Committee and management believe that the effective use of stock-based, long-term incentive compensation is vital to our ability to achieve strong performance in the future. The 2017 Plan maintains and enhances the key policies and practices adopted by our management and Board of Directors to align employee and stockholder interests. In addition, our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining and motivating key personnel. We believe the authorization of an additional 1,000,000 shares for issuance under our 2017 Plan is essential to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and directors. Additionally, in continued response to recommendations from our stockholders, we intend to continue to issue restricted stock unit awards to reduce the dilutive effect on stockholders from our equity incentive compensation program. Accordingly, our Board of Directors believes approval of the amendment to our 2017 Plan is in our best interests and those of the stockholders and recommends a vote “FOR” the approval of the amendment to the 2017 Plan.
The 2017 Plan includes the following provisions:
relevant.
| ○ | | Types of Awards — any stock right awarded under the 2017 Plan must be in the form of a restricted stock unit or a restricted stock grant;
|
| ○ | | No Liberal Share Recycling — shares that are withheld to satisfy any tax withholding obligation related to any award will not again become available for issuance under the 2017 Plan;
|
| ○ | | Cap on the number of shares to be issued per year — no participant may receive awards for more than 500,000 shares of common stock in any fiscal year andnon-employee directors may not receive awards that exceed $500,000 in aggregate grant date fair value in any calendar year (other than pursuant to an election to receive equity in lieu of cash for all or a portion of fees received for service on the Board of Directors or any committee thereof);
|
53
| ○ | | Minimum Vesting Period — all stock rights awarded must have a minimum vesting period of at least one year (we have historically provided for a four year vesting period for our equity incentive awards, and intend to continue that practice);
|
| ○ | | Limited Acceleration of Vesting — the vesting of any stock right awarded under the 2017 Plan cannot be accelerated from the original grant vesting schedule except in connection with death, disability or a change in control;
|
| ○ | | No Dividends— we may not pay dividends or dividend equivalents before the vesting of the underlying award; and
|
| ○ | | Clawback Policy— awards will be subject to recoupment in accordance with the Company’s clawback policy then in effect.
|
A complete copy of the 2017 Plan, as it is proposed to be amended, is attached as Appendix B. The following summary description of the 2017 Plan is qualified in its entirety by reference to Appendix B.
Additional Equity Plan Information for Stock Options Previously Issued
As of October 2, 2018, there were 5,677,691 stock options outstanding with a weighted average exercise price of $24.57 and a weighted average remaining life of 2.97 years. All options granted vested 25 percent per year on the anniversary of the grant date. The following table provides additional information regarding vested stock options outstanding as of that date:
| | | | | | | | | | | | |
| | | Vested Options
Outstanding | | | Weighted Average
Exercise Price | | | Weighted Average
Remaining Years of
Contractual Life | |
Substantiallyin-the-money options outstanding in excess of four years | | | 5,677,691 | | | $ | 24.57 | | | | 2.97 | |
Other options outstanding in excess of four years | | | 0 | | | | 0 | | | | 0 | |
All options outstanding less than four years | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | |
Total vested options outstanding | | | 5,677,691 | | | $ | 24.57 | | | | 2.97 | |
All of the company’s outstanding options are in the money based upon the closing stock price of $44.32 on October 2, 2018. Additional information regarding these options is a follows:
| | | | | | | | | | | | |
Grant Date | | Remaining
Contractual Life
(years) | | | Exercise
Price | | | Vested
Options | |
02/18/09 | | | 0.38 | | | $ | 30.12 | | | | 97,934 | |
04/07/09 | | | 0.51 | | | $ | 30.53 | | | | 300 | |
04/21/09 | | | 0.55 | | | $ | 28.82 | | | | 1,500 | |
06/10/09 | | | 0.69 | | | $ | 26.02 | | | | 1,000 | |
09/15/09 | | | 0.95 | | | $ | 30.34 | | | | 181,538 | |
09/16/09 | | | 0.96 | | | $ | 29.94 | | | | 60,000 | |
11/04/09 | | | 1.09 | | | $ | 24.79 | | | | 20,000 | |
11/05/09 | | | 1.09 | | | $ | 24.40 | | | | 30,000 | |
03/03/2010 | | | 1.42 | | | $ | 23.11 | | | | 217,624 | |
06/22/2010 | | | 1.72 | | | $ | 15.98 | | | | 4,000 | |
08/03/2010 | | | 1.84 | | | $ | 14.88 | | | | 26,880 | |
09/15/2010 | | | 1.95 | | | $ | 16.53 | | | | 162,869 | |
54
| | | | | | | | | | | | |
12/03/2010 | | | 2.17 | | | $ | 21.66 | | | | 90,000 | |
01/04/2011 | | | 2.26 | | | $ | 21.73 | | | | 300 | |
01/15/2011 | | | 2.29 | | | $ | 27.64 | | | | 15,000 | |
02/23/2011 | | | 2.39 | | | $ | 18.00 | | | | 315,301 | |
03/22/2011 | | | 2.47 | | | $ | 19.21 | | | | 1,500 | |
05/25/2011 | | | 2.64 | | | $ | 24.89 | | | | 30,000 | |
06/04/2013 | | | 2.67 | | | $ | 31.46 | | | | 5,000 | |
09/13/2011 | | | 2.95 | | | $ | 19.47 | | | | 854,583 | |
09/17/2013 | | | 2.96 | | | $ | 26.49 | | | | 1,562,404 | |
10/22/2013 | | | 3.05 | | | $ | 24.56 | | | | 2,000 | |
12/02/2011 | | | 3.17 | | | $ | 21.29 | | | | 90,000 | |
12/05/2013 | | | 3.18 | | | $ | 25.39 | | | | 150,000 | |
03/07/2012 | | | 3.43 | | | $ | 23.98 | | | | 239,396 | |
05/20/2014 | | | 3.63 | | | $ | 36.55 | | | | 5,000 | |
06/24/2014 | | | 3.73 | | | $ | 37.13 | | | | 2,000 | |
09/12/2012 | | | 3.95 | | | $ | 27.07 | | | | 1,361,562 | |
12/05/2012 | | | 4.18 | | | $ | 27.61 | | | | 150,000 | |
| | | | | | | | | | | | |
Total substantiallyin-the-money- options outstanding in excess of four years | | | | | | | | | | | 5,677,691 | |
Material Features of the 2017 Plan
Eligibility.The 2017 Plan allows us, under the direction of our Compensation Committee, to make grants of restricted stock units and restricted stock awards, to employees, consultants and directors who, in the opinion of the Compensation Committee, are in a position to make a significant contribution to our long-term success. The purpose of these awards is to attract and retain key individuals, further align employee and stockholder interests and to closely link compensation with Company performance. The 2017 Plan provides an essential component of the total compensation package, reflecting the importance that we place on aligning the interests of key individuals with those of our stockholders. All employees, members of the Board of Directors and consultants of the Company and its affiliates are eligible to participate in the 2017 Plan. As of October 2, 2018 we had approximately 2,681 individuals eligible to participate.
Limitations on Grants.As of October 2, 2018, we had 450,089 remaining shares of Common Stock available for issuance under the 2017 Plan. If this Proposal 2 is approved by our stockholders, the 2017 Plan will provide for the issuance of up to 1,000,000 additional shares. Additionally, up to 893,645 additional shares may be issued under the 2017 Plan if options outstanding under our 2003 Plan are cancelled or expire in the future without the issuance of shares of common stock, and up to 6,143,306 additional shares may be issued under the 2017 Plan if options and RSUs outstanding under our 2010 Plan are cancelled or expire in the future without the issuance of shares of common stock. No additional shares may be issued under our 2003 Plan or 2010 Plan. Under the 2017 Plan, each share of common stock issued as a restricted stock unit, counts against the number of total shares available for issuance under the 2017 Plan as one share. In addition, shares of common stock reserved for awards under the 2017 Plan that lapse or are canceled will be added back to the share reserve available for future awards on aone-to-one basis. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes will not be available again for grant. The 2017 Plan provides that no participant may receive awards for more than 500,000 shares of common stock in any fiscal year. Additionally, fornon-employee directors, the 2017 Plan provides that the aggregate grant date fair value of any stock rights granted in any calendar year cannot exceed $500,000 other than pursuant to an election to receive equity in lieu of cash for all or a portion of fees received for service on the Board of Directors or any committee thereof.
Restricted Stock Units and Restricted Stock. Restricted stock is common stock, and a restricted stock unit is a right to receive common stock, that is subject to restrictions, including a prohibition against transfer and a substantial risk of forfeiture, until the end of a “restricted period” during which the grantee must satisfy certain vesting conditions. If the grantee does not satisfy the vesting conditions by the end of the restricted period, the restricted stock is forfeited.
55
During the restricted period, the holder of restricted stock has the rights and privileges of a regular stockholder, except that the restrictions set forth in the applicable award agreement apply. For example, the holder of restricted stock may vote; but he or she may not sell the shares until the restrictions are lifted. During the restricted period, the holder of a restricted stock unit does not have the rights and privileges of a regular stockholder until all restrictions set forth in the applicable award agreement have lapsed and the RSU is converted into common stock. With respect to any dividends which the Company may pay, no dividend payment will be made with respect to any restricted stock or restricted stock unit until the end of the applicable restricted period when the underlying vesting conditions have been met.
Plan Administration. In accordance with the terms of the 2017 Plan, our Board of Directors has authorized our Compensation Committee to administer the 2017 Plan. The Compensation Committee may delegate part of its authority and powers under the 2017 Plan to one or more of our directors and/or officers, but only the Compensation Committee can make awards to participants who are directors or executive officers of the Company. In accordance with the provisions of the 2017 Plan, our Compensation Committee determines the terms of awards, including:
Which employees, directors and consultants will be granted awards;
The number of shares subject to each award;
The vesting provisions of each award with a minimum one year vesting;
The termination or cancellation provisions applicable to awards; and
All other terms and conditions upon which each award may be granted in accordance with the 2017 Plan.
All equity grants must have a minimum of a one year vesting period. Historically, our equity grants have been granted under a four-year plus vesting schedule. The 2017 Plan specifically prohibits the acceleration of vesting except in the case of death, disability or a change in control.
Stock Dividends and Stock Splits. If our common stock is subdivided or combined into a greater or smaller number of shares or if we issue any shares of common stock as a stock dividend, the number of shares of our common stock deliverable upon issuance of an award will be appropriately increased or decreased proportionately, and adjustments will be made, including in the purchase price per share, if any, to reflect the subdivision, combination or stock dividend.
Corporate Transactions. Upon a merger or other reorganization event, our Board of Directors or an authorized committee, may, in its sole discretion, take any one or more of the following actions pursuant to the 2017 Plan, as to some or all outstanding awards:
Provide that all outstanding awards will be assumed or substituted by the successor corporation, become realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon the merger or reorganization event; and
With respect to stock grants and in lieu of any of the foregoing policy, the Board of Directors or an authorized committee may provide that, upon consummation of the transaction, each outstanding stock grant will be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such transaction to a holder of the number of shares of common stock comprising such award (to the extent the stock grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Board of Directors or an authorized committee, all forfeiture and repurchase rights being waived upon such transaction).
Amendments and Termination. The 2017 Plan may be amended by our stockholders. It may also be amended by our Board of Directors or Compensation Committee, provided that any amendment that is of a scope that requires stockholder approval as required by the rules of The NASDAQ Stock Market LLC, or for any other reason is subject to obtaining such stockholder approval. However, no such action may adversely affect any rights under an outstanding award without the holder’s consent.
Duration of 2017 Stock Plan. The 2017 Plan will expire on September 14, 2027.
New Plan Benefits
Other than grants to our nonemployee directors as described above under “Executive Compensation, Director Compensation, Restricted and Unrestricted Stock Grants,” the amounts of future awards under the 2017 Plan are not determinable and will be granted at the sole discretion of the Board of Directors or authorized committee, including grants to our named executive officers, our current executive officers, our current directors who are not executive
56
officers, associates of directors and executive officers and employees who are not executive officers although we anticipate that most of our grants will be in the form of RSUs and we will use most of the additional 1,000,000 shares proposed to be authorized to make grants in fiscal year 2019.
Existing Plan Benefits
The following is a list of restricted stock unit awards issued as of October 2, 2018 to our executives, directors and employees since the initial approval of the 2017 Plan.
| | | | |
Name and Position, or Group
ü | | Number of Shares
Underlying RSUs | |
Named Executive Officers:
| | | | |
| |
Mark C. Capone, President and CEO*
| | | 150,000 | |
R. Bryan Riggsbee, CFO and Treasurer
| | | 50,000 | |
JerryTHE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF S. Lanchbury, Ph.D.LOUISE PHANSTIEL, DANIEL M. SKOVRONSKY M.D., Chief Scientific Officer*
| | | 40,000 | |
Richard M. Marsh, Executive Vice President, General Counsel and Secretary*
| | | 40,000 | |
Alexander Ford, President, President, Myriad Women’s Health, Inc.
| | | 50,000 | |
| |
All current executive officers as a group
| | | 474,000 | |
| |
All current directors who are not executive officers as a group
| | | 43,314 | |
| |
Nominees for Director:
| | | | |
John T. Henderson M.D.
| | | 7,219 | |
| |
S. Louise Phanstiel
| | | 7,219 | |
| |
Each associate of directors, executive officers, or nominees
| | | — | |
| |
All employees, including all current officers who are not executive officers, as a group
| | | 671,951 | PH.D., AND DANIEL K. SPIEGELMAN. |
* | Mr. Capone has received greater than 5 percent of the total awards granted to date under the 2017 Plan.
|
As of October 2, 2018 the closing price per share of our common stock was $44.32 as reported on the NASDAQ Global Select Market.
Federal Income Tax Considerations
The material Federal income tax consequences of the issuance and vesting of restricted stock and restricted stock units under the 2017 Plan, based on the current provisions of the Code and regulations, are as follows. Changes to these laws could alter the tax consequences described below. This summary assumes that all awards granted under the 2017 Plan are exempt from or comply with, the rules under Section 409A of the Code related to nonqualified deferred compensation.
57
Stock Grants:
| With respect to stock grants involving the issuance of shares that are restricted as to transferability and subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of the shares received at the first time the shares become transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier. A grantee may elect to be taxed at the time of receipt of shares rather than upon lapse of restrictions on transferability or substantial risk of forfeiture, but if the grantee subsequently forfeits the shares, the grantee would not be entitled to any tax deduction, including as a capital loss, for the value of the shares on which he or she previously paid tax. The grantee must file such election with the Internal Revenue Service within 30 days of the receipt of the shares. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee. |
Stock Units:
| The grantee recognizes no income until the issuance of unrestricted shares. At that time, the grantee must generally recognize ordinary income equal to the fair market value of the shares received. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee. |
The affirmative vote of a majority of the shares voted affirmatively or negatively for the proposal at the Annual Meeting is required to approve the amendment of the 2017 Plan.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE AMENDMENT OF THE 2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN. PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE APPROVAL OF THE AMENDMENT OF THE 2017 PLAN UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
58
SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
and Finance Committee has appointed Ernst & Young LLP
(“EY”(‘‘EY’’) as our independent registered public accounting firm, to audit our financial statements for the fiscal year ending
June 30, 2019.December 31, 2021. The Board proposes that the stockholders ratify this selection, although such ratification is not required under Delaware law or our Restated Certificate of Incorporation, as amended, or our Restated
By-Laws. EY has audited our financial statements since our fiscal year ended June 30, 2007. We expect that representatives of EY will be present at the Annual Meeting, will be able to make a statement if they so desire, and will be available to respond to appropriate questions.
In deciding to appoint EY, the Audit
and Finance Committee reviewed auditor independence issues and existing commercial relationships with EY and concluded that EY has no commercial relationship with Myriad that would impair its independence for the fiscal year ending
June 30, 2019.December 31, 2021.
The following table presents fees for professional audit services provided by EY with respect to the
six month transition period ended December 31, 2020 and last two fiscal years:
| | | | | | | | |
Type of Fee | | Fiscal Year Ended
June 30, 2018 | | | Fiscal Year Ended
June 30, 2017 | |
Audit Fees | | $ | 1,336,232 | | | $ | 1,074,795 | |
Audit Related Fees | | | — | | | | 15,000 | |
Tax Fees | | | — | | | | — | |
All Other Fees | | | — | | | | — | |
| | | | | | | | |
Total | | $ | 1,336,232 | | | $ | 1,089,795 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Six Month Transition Period Ended | | Fiscal Year Ended | | Fiscal Year Ended |
| Type of Fee | December 31, 2020 | | June 30, 2020 | | June 30, 2019 |
| Audit Fees | 1,972,590 | | | 1,701,921 | | | 1,605,317 | |
| Audit Related Fees | — | | | — | | | — | |
| Tax Fees | — | | | — | | | — | |
| All Other Fees | 238,415 | | | 197,000 | | | — | |
| Total | 2,211,005 | | | 1,898,921 | | | 1,605,317 | |
Audit Fees —Fees include audits of consolidated financial statements, quarterly reviews, reviews of registration statement filings, andconsents related to SEC filings.
Audit-Related Fees —Fees include services for assurance and related services that are reasonably related to the performance of theaudit or review of our financial statements that are not reported under “audit fees.” Fees include consultations relatedWe did not engage EY to the adoption of ASC 606, Revenue Recognition.perform any audit-related services.
Tax Fees —We did not engage EY to perform any tax related services.
All Other Fees — We did not engageFees include permitted advisory services and subscription to EY to perform any other services other than those listed separately above for the fiscal years indicated.accounting research.
Policy on Audit
and Finance Committee Preapproval of Audit and Permissible
Non-Audit Services of Independent Public Accountant
Consistent with SEC policies regarding auditor independence, the Audit
and Finance Committee has responsibility for appointing, setting compensation and overseeing the work of the independent public accounting firm. In recognition of this responsibility, the Audit
and Finance Committee has established a policy to preapprove all audit and permissible
non-audit services provided by our independent public accounting firm.
Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit
and Finance Committee for approval.
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1.Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.
2.Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.
3.Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.
4.Other Fees are those associated with services not captured in the other categories. The Company generally does not request such services from our independent registered public accounting firm.
Prior to engagement of the independent registered public accounting firm, engagement letters describing the scope of service and the anticipated fees are negotiated and approved by the Audit
and Finance Committee. During the year, circumstances may arise in which it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original preapproval. In those instances, the Audit
and Finance Committee requires specific preapproval before engaging our independent registered public accounting firm. The Audit
and Finance Committee may delegate preapproval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any
pre-approval decisions to the Audit
and Finance Committee at its next scheduled meeting.
The affirmative vote of a majority of the shares voted affirmatively or negatively at the Annual Meeting is required to ratify the selection of our independent registered public accounting firm.
If our stockholders ratify the selection of EY, the Audit
and Finance Committee may still, in its discretion, decide to select a different independent auditor at any time during the fiscal year ending
June 30, 2019,December 31, 2021, if it concludes that such a change would be in the best interests of Myriad and our stockholders. If our stockholders fail to ratify the selection, the Audit
and Finance Committee will reconsider, but not necessarily rescind, the selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH RATIFICATION UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
60
| | | | | |
| ü | THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH RATIFICATION UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY. |
APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS, AS
DISCLOSED IN THIS PROXY STATEMENT
We are seeking your approval, on advisory basis, as required by Section 14A of the Securities Exchange Act of 1934, as amended, of the compensation of our named executive officers, as disclosed in this proxy statement. More specifically, we ask that you support the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis section, the compensation tables and any related material contained in this proxy statement with respect to our executive officers named in the Summary Compensation Table. Because your vote is advisory, it will not be binding on our Compensation
and Human Capital Committee or our Board of Directors. However, the
Compensation CommitteeCHCC and our Board will review the voting results and take them into consideration when making future decisions regarding the compensation of our named executive officers.
Our compensation philosophy is designed to align each
executive’sexecutive officer’s compensation with our short- and long-term performance and to provide the compensation and incentives needed to attract, motivate and retain key
executivesexecutive officers who are crucial to our long-term success. Consistent with this philosophy, a significant portion of the total compensation opportunity for each of our named executive officers is directly related to performance factors that measure our progress against the goals of our strategic and operating plans, as well as our performance against that of our peer companies.
Stockholders are urged to read the Compensation Discussion and Analysis section of this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. The Compensation CommitteeCHCC and the Board of Directors believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals.goals
.
As discussed in the Compensation Discussion and Analysis section, we believe the compensation paid to our President and CEOChief Executive Officer and other named executive officers is appropriate as supported by our accomplishmentsperformance in fiscal 2018. This is evidenced by our financialthe six month transition period ending December 31, 2020. The company saw a significant headwind during this period associated with the global pandemic but the Company successfully navigated the transition period with a significant rebound in business fundamentals. The Company also undertook the formulation and operational performance where, among other accomplishments, delivered our second consecutive yearthe beginning of top line growth in fiscal year 2018 with revenues up $2 million to $773 million despite hereditary cancer headwinds. We have made substantial progress on ourinitiation of a strategic objectivestransformation plan that we believe will position the Company for long-term growth, as well as progress on our five strategic imperatives to: i) build upon a solid hereditary cancer foundation, ii) grow new product volume, iii) expand reimbursement coverage for new products, iv) increase RNA kit revenue internationally, and v) improve profitability with Elevate 2020. For example, we returned our hereditary cancer business to year-over-year volume growth exceeding our three percent growth target every quarter in fiscal year 2018. Additionally, we signed long-term contracts maintaining 86 percent of our hereditary cancer revenue. New product volumes increased on a year-over-year basis and now represent greater than 70 percent of total volume. We saw significant increases in reimbursement coverage for both Prolaris and EndoPredict and laid the foundation for further reimbursement expansion in fiscal year 2019 by completing several key clinical studies.growth. The most importantnotable business achievements in the six month transition period include:
–Saw 50% growth in test volume and a 66% increase in revenue from the June to the December 2020 quarter.
–Received new American College of these studies was our GeneSight guided study which wasObstetricians and Gynecologists guidelines supporting use of non-invasive prenatal screening in average risk women.
–Announced three major business unit divestitures to improve operational execution and focus in Oncology, Women's Health, and Mental Health.
–Announced $40 million in annualized cost savings to be offset by $20 million in strategic investments supporting future growth.
–Signed in-network agreement with the majority of Anthem Blue Cross Blue Shield health plans, the second largest pharmacogenomics study in depression ever completed and demonstrated that GeneSight was the first technology to statistically significantly improve remission and response rates versus an active therapy arm. Based upon the strength of this data we received our first commercial coverage policy from CareFirst, the 15th largest payer in the country. Additionally, we grew EndoPredict kit revenue 16 percent year-over-year and received a positive recommendation from the National Institute of Health and Care Excellence in the United KingdomStates, returning all Myriad products to cover the test. Finally we launched the Elevate 2020 program with and outperformed expectations with significant reductions in total expenses on a year-over-year basis in light of product volume growth. We ended the year with $211 million in cash, cash equivalents, and marketable investment securities and plan to continue to exercise a balanced approach to capital deployment, including investing for future growth, business development activities and returning cash to stockholders.in-network status.
Based on this performance, we believe that the salarysalaries and annual cash incentive bonusbonuses paid to our President and CEOChief Executive Officer and our other named executive officers are in line with our compensation philosophy and goals. Similarly, we believe that the equity compensation awarded to our President and CEO and our other named executive officers is consistent with our multi-year growth in revenue, operating income and stock performance, and provides the appropriate incentives to reward and foster long-term growth and stockholder value.61
As evidence of our pay for performance philosophy, fiscal year 2018 total compensation paid to all of our five NEOs, including our President and CEO, was between the 50th and 75th percentiles of total compensation of our peer group as determined by Mercer under the 2018 Mercer Executive Compensation Review. With respect to the annual cash incentive bonusbonuses paid to our NEOs for fiscal year 2018,the six month transition period, we paid between 95%129.5 percent and 99%,136.4 percent, respectively, of the target awards, based on the level of accomplishment of thepre-determined incentive goals. We made no payoutscash payments under our three-year cashlong-term incentive awards for fiscal year 2018 as the threshold targetsprogram, where target thresholds were not met. For long-term incentive compensation, because theachieved.
pre-established. performance target was met, we awarded 100% of the RSUs granted to our NEOs. We believe these actions are demonstrative of our pay for performance practices.
In accordance with the rules of the SEC, the following resolution, commonly known as a
“Say-on-Pay” “Say-on-Pay” vote, is being submitted for a stockholder vote at the Annual Meeting:
“RESOLVED, that the compensation paid to the named executive officers of Myriad Genetics, Inc., as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby APPROVED.”
The affirmative vote of a majority of the shares voted affirmatively or negatively at the Annual Meeting is required to approve, on an advisory basis, this resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH APPROVAL UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
62
| | | | | |
| ü | THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH APPROVAL UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY. |
CORPORATE CODE OF CONDUCT
AND ETHICS AND WHISTLEBLOWER POLICY
We have adopted a Corporate Code of Conduct and Ethics and Whistleblower Policy that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer, and every member of our Board of Directors. A copy of the Corporate Code of Conduct and Ethics and Whistleblower Policy is publicly available in the Investors—Investor Information – FAQs—Understanding Myriad/Corporate Governance section of our website atwww.myriad.com. Disclosure regarding any amendments to, or waivers from, provisions of our Corporate Code of Conduct and Ethics and Whistleblower Policy that apply to our directors and principal executive and financial officers will be included in a Current Report on Form8-K within four business days following the date of the amendment or waiver, unless website posting or the issuance of a press release of such amendments or waivers is then permitted by the rules of The NASDAQ Stock Market LLC.Nasdaq.
The Board of Directors knows of no other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, proxies will be voted in accordance with the judgment of the persons voting the proxies.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR
To be considered for inclusion in
Any stockholder of the proxy statement relatingCompany who desires to oursubmit a proposal pursuant to Rule 14a-8 of the Exchange Act at the Company's 2022 Annual Meeting of Stockholders being heldand to have the proposal included in 2019 (the “2019 Meeting”), wethe Company's 2022 proxy materials must receive stockholder proposals (other than for director nominations)submit such proposal to the Company at its principal executive officer no later than December 16, 2021, unless the date of the 2022 Annual Meeting of Stockholders is changed by more than 30 days from June 12, 2019. To3, 2022, in which case the proposal must be considered for presentationreceived at the 2019Company's principal executive office a reasonable time before the Company begins to print and mail its 2022 proxy materials. Any such stockholder proposal must meet the requirements set forth in Rule 14a-8.
Any stockholder of the Company who desires to submit a proposal for action, including to nominate a director, at the 2022 Annual Meeting althoughof Stockholders, but does not wish to have such proposal included in the Company's proxy statement, proposals (including director nominations that are not requestedmaterials, must deliver such proposal to be included in our proxy statement) must be receivedthe Company no earlier than August 31, 2019the close of business on March 5, 2022 and no later than Septemberthe close of business on April 4, 2022 unless the date of the 2022 Annual Meeting of Stockholders is more than 30 2019.days before or more than 60 days after June 3, 2022, in which case such proposal or nomination to the Company must be delivered no earlier than the close of business on the 90th day prior to the 2022 Annual Meeting of Stockholders and no later than the close of business on the later of the 60th day prior to the 2022 Annual Meeting of Stockholders or the 10th day following the day on which public announcement of the date of the 2022 Annual Meeting of Stockholders is first made by the Company. Notwithstanding the foregoing, in the event that the number of directors is to be increased at the 20192022 Annual Meeting of Stockholders and we do not issue a public announcement naming the nominees andor specifying the size of the increaseincreased board of directors by September 20, 2019,the 70th day prior to the 2022 Annual Meeting of Stockholders, a stockholder's notice will also be considered timely, but only with respect to nominees for presentation atany new positions created by such increase, if such notice is delivered to the 2019 Meeting, althoughCompany not included in the proxy statement, nominations must be received no later than the tenthclose of business on the 10th day following the day on which such public announcement is made. made by the Company.
Proposals not received in a timely manner will not be voted on at the 2019 Meeting.2022 Annual Meeting of Stockholders. If a proposal is received in a timely manner, the proxies that management solicits for the 20192022 Annual Meeting of Stockholders may still exercise discretionary voting authority on the proposal under circumstances consistent with the proxy rules of the SEC. All stockholder proposals must also comply with our RestatedBy-Laws, a copy of which is available by contacting our Secretary, and the corporate governance policies applicable to recommendations for the nomination of directors, copies of which are available in the Investors—Investor Information —FAQs— Understanding Myriad/Corporate Governance section of our website atwww.myriad.com. All stockholder proposals should be marked for the attention of: Secretary, Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.
WHETHER OR NOT YOU INTEND TO
BE PRESENT ATATTEND THE ANNUAL MEETING, YOU ARE URGED TO VOTE YOUR SHARES AT YOUR EARLIEST CONVENIENCE.
Salt Lake City, Utah
October 10, 2018
April 15, 2021
OUR ANNUALTRANSITION REPORT ON FORM10-K FOR THE FISCAL YEARTRANSITION PERIOD ENDED JUNE 30, 2018, AS AMENDED, (OTHER THAN EXHIBITS THERETO)DECEMBER 31, 2020 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH PROVIDES ADDITIONAL INFORMATION ABOUT US, IS AVAILABLE ON THE INTERNET ATWWW.MYRIAD.COM AND IS AVAILABLE (OTHER THAN THE EXHIBITS THERETO) IN PAPER FORM TO BENEFICIAL OWNERS OF OUR COMMON STOCK WITHOUT CHARGE UPON WRITTEN REQUEST TO: RICHARD M. MARSH, SECRETARY,LEGAL DEPARTMENT, MYRIAD GENETICS, INC., 320 WAKARA WAY, SALT LAKE CITY, UTAH 84108(801-584-3600). EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST AND PAYMENT OF AN APPROPRIATE PROCESSING FEE.63
GAAP to
Non-GAAP Reconciliation
Condensed Consolidated Statements of Income — Operating Basis
(Unaudited data in millions, except per share amount)
| | | | | | | | |
| | | Years ended
June 30, | |
| | | 2018 | | | 2017 | |
GAAP Net Income | | $ | 131.0 | | | $ | 20.5 | |
Acquisition — integration related costs | | | 1.0 | | | | 13.9 | |
Acquisition — amortization of intangible assets | | | 36.9 | | | | 33.0 | |
Non-recurring bad debt reserve | | | 2.5 | | | | — | |
Non-recurring legal expenses | | | 0.5 | | | | 0.6 | |
Elevate 2020 costs | | | 12.0 | | | | 0.3 | |
Potential future consideration related to acquisitions | | | (61.2 | ) | | | (0.8 | ) |
Tax impact related to equity compensation | | | (0.4 | ) | | | 3.0 | |
One-time debt restructuring charges | | | — | | | | 1.3 | |
One-timenon-deductible costs | | | — | | | | 2.7 | |
Tax reform effect | | | (32.0 | ) | | | — | |
Impairment of Raindance Investment | | | — | | | | 2.4 | |
Tax expense associated withnon-GAAP adjustments | | | (4.2 | ) | | | (5.8 | ) |
| | | | | | | | |
Non-GAAP Net Income | | $ | 86.1 | | | $ | 71.1 | |
| | | | | | | | |
| | |
GAAP Diluted EPS | | $ | 1.82 | | | $ | 0.30 | |
| | |
Adjustment to net income | | ($ | 0.62 | ) | | $ | 0.73 | |
| | |
Non-GAAP Diluted EPS | | $ | 1.20 | | | $ | 1.03 | |
1
| | | | | | | | |
| | | Years ended
June 30, | |
| | | 2018 | | | 2017 | |
GAAP Operating Income | | $ | 118.7 | | | $ | 48.7 | |
Acquisition — integration related costs | | | 1.0 | | | | 13.9 | |
Acquisition — amortization of intangible assets | | | 36.9 | | | | 33.0 | |
Non-recurring bad debt reserve | | | 2.5 | | | | — | |
Non-recurring legal expenses | | | 0.5 | | | | 0.6 | |
Elevate 2020 costs | | | 12.0 | | | | 0.3 | |
Potential future consideration related to acquisitions | | | (61.2 | ) | | | (0.8 | ) |
| | | | | | | | |
Non-GAAP Operating Income | | $ | 110.4 | | | $ | 95.7 | |
| | | | | | | | |
| |
| | | Years ended
June 30, | |
| | | 2018 | | | 2017 | |
GAAP Free Cash Flow | | $ | 107.5 | | | $ | 100.1 | |
Acquisition — integration related costs | | | — | | | | 8.7 | |
Elevate 2020 costs | | | 9.7 | | | | 0.3 | |
Cash paid for contingent consideration | | | 22.7 | | | | — | |
Cash paid at closing to Assurex vendors | | | — | | | | 6.8 | |
Accrual for legal expenses | | | — | | | | 0.6 | |
Tax effect associated withnon-GAAP adjustments | | | (9.1 | ) | | | (5.7 | ) |
| | | | | | | | |
Non-GAAP Free Cash Flow | | $ | 130.8 | | | $ | 110.8 | |
| | | | | | | | |
| | | | | | | | |
| Six Months Ended December 31, |
| 2020 | 2019 |
| GAAP Net Loss | $ | (53.1) | | $ | (28.9) | |
| Acquisition — amortization of intangible assets | 30.4 | | 30.4 | |
| Impairment of goodwill and intangibles | — | | 1.3 | |
| Equity compensation | 14.9 | | 15.9 | |
| Transformation initiatives | 10.8 | | 5.6 | |
| Other adjustments | 9.5 | | 2.5 | |
| Non-GAAP tax benefit | (32.4) | | (3.3) | |
| Non-GAAP Net Income (Loss) | $ | (19.9) | | $ | 23.5 | |
| GAAP Diluted Loss Per Share | $ | (0.71) | | $ | (0.39) | |
| Adjustment to net income (loss) | $ | 0.44 | | $ | 0.71 | |
| Non-GAAP Diluted Earnings (Loss) Per Share | $ | (0.27) | | $ | 0.32 | |
| | | | | | | | |
| Six Months Ended December 31, |
| 2020 | 2019 |
| GAAP Operating Loss | $ | (87.8) | | $ | (29.7) | |
| Acquisition — amortization of intangible assets | 30.4 | | 30.4 | |
| Impairment of goodwill and intangible assets | — | | 1.3 | |
| Equity compensation | 14.9 | | 15.9 | |
| Transformation initiatives | 10.8 | | 5.6 | |
| Other adjustments | 8.2 | | 2.5 | |
| Non-GAAP Operating Income (Loss) | $ | (23.5) | | $ | 26.0 | |
| | | | | | | | |
| Six Months Ended December 31, |
| 2020 | 2019 |
| GAAP Cash Flows from Operations | $ | (73.7) | | $ | 13.9 | |
| Capital expenditures | (7.9) | | (4.8) | |
| Free cash flow | $ | (81.6) | | $ | 9.1 | |
| Transformation initiative costs | 10.8 | | 5.6 | |
| Settlement of hereditary cancer Qui Tam complaint | — | | 9.1 | |
| Other adjustments | 8.5 | | 1.9 | |
| Tax effect associated with non-GAAP adjustments | (4.5) | | (2.1) | |
| Non-GAAP Free Cash Flow | $ | (66.8) | | $ | 23.6 | |
Use of
Non-GAAP Financial Measures
We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered
“non-GAAP” ‘‘non-GAAP’’ financial measures under applicable SEC rules. We believe that the disclosure of these
non-GAAP financial measures provides additional insight into the ongoing economics of our business and reflects how we manage our business internally, set operational goals and forms the basis of our management incentive programs. These
non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be viewed in isolation or as a substitute for reported, or GAAP, net income
(loss) and diluted earnings
(loss) per share.
Our
“ ‘‘Non-GAAP Net
Income”Income (Loss)’’ and
“ ‘‘Non-GAAP diluted
EPS”earnings (loss) per share’’ financial measures exclude the following items from GAAP net income
(loss) and diluted earnings
(loss) per share:
1.
Acquisitions — integration related costsCosts related to closing and integration of acquired companies
2. Acquisitions — amortization of intangible assets
Represents recurring amortization charges resulting from the acquisition of intangible assets, including developed technology and database rights.
2
3.
Non-recurring
bad debt reserveChanges in bad debt reserve tied
2. Equity compensation
Non-cash equity-based compensation provided to
prior period adjustments.4.Myriad employees.
Non-recurring
legal expenses3. Transformation initiatives
One-timenon-recurring
legal settlements.5.
Transitory costs related to Myriad's Elevate 2020
costsExpenses tied to the Elevate 2020 program.
6. Potential future consideration for acquisitions
program and transformation initiatives.
Non-cash
4. Other
Other one-time non-recurring expenses including expenses related to
valuation adjustments ofear-out and milestone payments tied to recent acquisitions.7. Tax impactleadership transition, COVID-19 costs, non-recurring legal expenses, potential future consideration related to equity compensation
Changes in effectiveacquisitions, and the non-cash impact of foreign exchange transactions.
5. Non-GAAP tax rate based upon ASUexpense/(benefit) adjustment
2016-09.
8.One-time debt restructuring charges
Charges related to the restructuring of the company’s debt from aone-year term loan to a revolving credit facility.
9.One-timenon-deductible costs
One-timenon-deductible tax items.
10.
Tax
reform effectOne-timenon-cash charges associated with change in value of our deferred tax assetsexpense/(benefit) due to tax reform.
11. Impairment of RainDance investment
One-time impairment charge associated with Myriad’s investment in RainDance Technologies.
12. Accrual of legal expenses
Accruals made associated with aone-time legal settlement
13. Cash paid at closing to Assurex vendors
Cash payments made upon the closing of the Assurex acquisition to Assurex vendors
3
Appendix B
MYRIAD GENETICS, INC.
2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN, AS AMENDED (as proposed to be amended on November 29, 2018)
Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Myriad Genetics, Inc. 2017 Employee, Directornon-GAAP adjustments, ASU 2016-09 employee share-based payment accounting, and Consultant Equity Incentive Plan, as amended, have the following meanings:
Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the term Administrator means the Committee.
Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.
Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan and pertaining to a Stock Right, in such form as the Administrator shall approve.
Board of Directors means the Board of Directors of the Company.
Cause means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance ornon-feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by a Participant of any provision of any employment, consulting, advisory, nondisclosure,non-competition or similar agreement between the Participant and the Company or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however, that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition of Cause for termination and which is in effect at the time of such termination, shall supersede this definition with respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and the Company.
Change of Control means the occurrence of any of the following events:
| (i) | Ownership. Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “Beneficial Owner” (as defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its Affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board of Directors does not approve; or
|
1
| (ii) | Merger/Sale of Assets. (A) A merger or consolidation of the Company whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction requiring stockholder approval; or
|
| (iii) | “Change of Control” shall be interpreted, if applicable, in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences under Section 409A.
|
Code means the United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance thereto.
Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan, the composition of which shall at all times satisfy the provisions of Section 162(m) of the Code.
Common Stock means shares of the Company’s common stock, $.01 par value per share.
Company means Myriad Genetics, Inc., a Delaware corporation.
Consultant means any natural person who is an advisor or consultant that provides bona fide services to the Company or its Affiliates, provided that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.
Disability orDisabled means permanent and total disability as defined in Section 22(e)(3) of the Code.
Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.
Exchange Act means the Securities ExchangeCARES Act of 1934, as amended.
2
legislation.
Fair Market Value of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities exchange or traded in the
over-the-counter
market and sales prices are regularly reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;(2) If the Common Stock is not traded on a national securities exchange but is traded on the
over-the-counter
market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in theover-the-counter market for the trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and(3) If the Common Stock is neither listed on a national securities exchange nor traded in theover-the-counter market, such value as the Administrator, in good faith, shall determine.
Participant means an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan.As used herein, “Participant” shall include “Participant’s Survivors” where the context requires.
Plan means this Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive Plan.
Restricted Stock Grant means a grant by the Company of Shares under the Plan that are subject to a lapsing forfeiture or repurchase right.
Restricted Stock Unit Award means a grant by the Company under the Plan of an unfunded, unsecured commitment by the Company to deliver apre-determined number of Shares to a Participant at a future time in accordance with the terms and conditions of the award agreement and the Plan.
Securities Act means the Securities Act of 1933, as amended.
Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.
Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan — a Restricted Stock Grant or a Restricted Stock Unit Award.
3
Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.
The Plan is intended to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of Restricted Stock Grants and Restricted Stock Unit Awards and shall not allow for the grant of stock options.
3. | SHARES SUBJECT TO THE PLAN.
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(a) Commencing on November 29, 2018, the number of Shares which may be issued from time to time pursuant to this Plan shall not exceed 1,450,0891 Shares of Common Stock, plus (i) any Shares of Common Stock that are represented by options previously granted under the Company’s 2003 Employee, Director and Consultant Stock Option Plan, as amended, and (ii) any Shares of Common Stock that are represented by options or restricted stock units previously granted under the 2010 Employee, Director and Consultant Equity Incentive Plan, as amended, that are forfeited, expire or are cancelled without delivery of Shares of Common Stock, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 18 of this Plan; provided, however, that as of November 29, 2018 no more than 7,036,9512 shares shall be added to the plan pursuant to subsections (i) and (ii).
(b) If any Restricted Stock Unit Award expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued or the Company shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Restricted Stock Grant, the unissued or reacquired Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if the Company or an Affiliate’s tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued.3
1. | Balance consists of 450,089 remaining shares available for issuance under the 2017 Plan as of October 2, 2018 and 1,000,000 additional shares subject to stockholder approval at the annual meeting of stockholders to be held on November 29, 2018.
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2. | This number consists of options to purchase 893,645 shares of common stock that are outstanding under the 2003 Plan, and options to purchase 4,784,046 shares of common stock and unvested restricted stock units representing 1,359,260 shares of common stock under the 2010 Plan.
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3. | As of October 2, 2018, unvested restricted stock units representing 1,187,465 shares of common stock are outstanding under the 2017 Plan.
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4. | ADMINISTRATION OF THE PLAN.
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The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:
(a) Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;
(b) Determine which Employees, directors and Consultants shall be granted Stock Rights;
(c) Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that in no event shall:
(i) Stock Rights with respect to more than 500,000 Shares be granted to any Participant in any fiscal year; and
(ii) the aggregate grant date fair value of Shares to be granted to anynon-employee director under the Plan in any calendar year may not exceed $500,000; provided however that the foregoing limitation shall not apply to Stock Rights made pursuant to an election to receive equity in lieu of cash for all or a portion of fees received for service on the Board of Directors or any Committee thereof.
(d) Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted; provided, however, that except in the case of death, disability or Change of Control, Stock Rights shall not vest, and any right of the Company to restrict or require Shares subject to a Stock Grant shall not lapse, less than one year from the date of grant and no dividends or dividend equivalents shall be paid on any Stock Right prior to the vesting of the underlying Shares;
(e) Amend any term or condition of any outstanding Stock Right, provided that no such change shall impair the rights of a Participant under any grant previously made without such Participant’s consent; provided however, the Administrator is not authorized to accelerate the vesting schedule of an outstanding Stock Right except in the case of death, disability or Change of Control; and
(f) Adopt anysub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate the administration of the Plan, whichsub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right;
provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of potential tax consequences under Section 409A of the Code. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.
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To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing, only the Board of Directors or the Committee shall be authorized to grant a Stock Right to any director of the Company or to any “officer” of the Company (as defined by Rule16a-1 under the Exchange Act).
5. | ELIGIBILITY FOR PARTICIPATION.
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The Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee, director or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.
6. | TERMS AND CONDITIONS OF RESTRICTED STOCK GRANTS.
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Each Restricted Stock Grant to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:
(a) Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Restricted Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by theDelaware General Corporation Law, if any, on the date of grant of the Restricted Stock Grant;
(b) Each Agreement shall state the number of Shares to which the Restricted Stock Grant pertains;
(c) Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Restricted Stock Grant, including the time and events upon which such rights shall accrue and the purchase price therefor, if any within the parameters set forth in the Plan; and
(d) Dividends (other than stock dividends to be issued pursuant to Section 18 of the Plan) may accrue but shall not be paid prior to the time, and only to the extent that, the restrictions or rights to reacquire the Shares subject to the Restricted Stock Grant lapse.
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7. | TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS.
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Each Restricted Stock Unit Award to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company. Each Agreement shall include the terms of any right of the Company including the right to terminate the Restricted Stock Unit Award without the issuance of Shares, the terms of any vesting conditions within the parameters set forth in the Plan, or events upon which Shares shall be issued provided that dividends (other than stock dividends to be issued pursuant to Section 18 of the Plan) or dividend equivalents may accrue but shall not be paid prior to and only to the extent that, the Shares subject to the Restricted Stock Unit Award vest.
The Company intends that the Plan and any Restricted Stock Unit Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Restricted Stock Unit Award (and applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 7.
8. | PAYMENT IN CONNECTION WITH THE ISSUANCE OF RESTRICTED STOCK GRANTS AND ISSUE OF SHARES FOR STOCK RIGHTS.
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Any Restricted Stock Grant requiring payment of a purchase price for the Shares as to which such Restricted Stock Grant is being granted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of payment to the purchase price of the Restricted Stock Grant, or (c) at the discretion of the Administrator, by any combination of (a) and (b) above; or (d) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine.
The Company shall when required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Right was made to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance.
9. | RIGHTS AS A SHAREHOLDER.
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No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right, except after issuance of Shares as set forth in any Agreement and tender of the aggregate purchase price, if any, for the Shares being purchased, and registration of the Shares in the Company’s share register in the name of the Participant.
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10. | ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
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By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement provided that no Stock Right may be transferred by a Participant for value. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above during the Participant’s lifetime, a Stock Right shall only be exercisable by or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.
11. | EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED RESTRICTED STOCK GRANTS AND RESTRICTED STOCK UNIT AWARDS.
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In the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Restricted Stock Grant or a Restricted Stock Unit Award and paid the purchase price, if required, such grant shall terminate.
For purposes of this Paragraph 11 and Paragraph 12 below, a Participant to whom a Stock Right has been issued under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.
In addition, for purposes of this Paragraph 11 and Paragraph 12 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.
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12. | EFFECT ON RESTRICTED STOCK GRANTS AND RESTRICTED STOCK UNIT AWARDS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.
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Except as otherwise provided in a Participant’s Agreement, in the event of a termination of service for any reason (whether as an Employee, director or Consultant), other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 13, 14, and 15, below, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares subject to a Restricted Stock Grant as to which the Company’s forfeiture or repurchase rights have not lapsed or cancel a Restricted Stock Unit Award without the issuance of any additional Shares thereunder.
13. | EFFECT ON RESTRICTED STOCK GRANTS AND RESTRICTED STOCK UNIT AWARDS OF TERMINATION OF SERVICE FOR CAUSE.
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Except as otherwise provided in a Participant’s Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:
(a) All Shares subject to any Restricted Stock Grant that remain subject to forfeiture provisions or as to which the Company shall have a repurchase right and Restricted Stock Unit Awards for which Shares have not been issued shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated for Cause.
(b) Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then all Shares subject to any Restricted Stock Grant that remained subject to forfeiture provisions or as to which the Company had a repurchase right and Restricted Stock Unit Awards for which Shares have not been issued on the date of termination shall be immediately forfeited to the Company.
14. | EFFECT ON RESTRICTED STOCK GRANTS AND RESTRICTED STOCK UNIT AWARDS OF TERMINATION OF SERVICE FOR DISABILITY.
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Except as otherwise provided in a Participant’s Agreement, the following rules apply if a Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of the Participant’s termination due to Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Right through the date of the Participant’s termination due to Disability as would have lapsed had the Participant not been terminated due to Disability. The proration shall be based upon the number of days accrued prior to the date of the Participant’s termination due to Disability.
The Administrator shall make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.
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15. | EFFECT ON RESTRICTED STOCK GRANTS AND RESTRICTED STOCK UNIT AWARDS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
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Except as otherwise provided in a Participant’s Agreement, the following rules apply in the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall lapse in full on the Participant’s date of death.
16. | PURCHASE FOR INVESTMENT.
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Unless the offering and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue the Shares under the Plan unless and until the following conditions have been fulfilled:
(a) The person who receives a Stock Right shall warrant to the Company, prior to the receipt of such Shares, that such person is acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person acquiring such Shares shall be bound by the provisions of the following legend (or a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to such Stock Right:
“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”
(b) At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued in compliance with the Securities Act without registration thereunder.
17. | DISSOLUTION OR LIQUIDATION OF THE COMPANY.
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If the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, all Restricted Stock Grants and Restricted Stock Unit Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate and become null and void and any outstanding Restricted Stock Unit Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.
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Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement.
(a)Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or othernon-cash assets are distributed with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the purchase price per share, to reflect such events. The number of Shares subject to the limitations in Paragraph 3(a) and 4(c)shall also be proportionately adjusted upon the occurrence of such events.
(b)Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a merger, consolidation, or sale of all or substantially all of the Company’s assets other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall:
(i) as to outstanding Restricted Stock Unit Awards, either (a) make appropriate provision for the continuation of such Restricted Stock Unit Awards by substituting on an equitable basis for the Shares then subject to such Restricted Stock Unit Awards either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (b) terminate such Restricted Stock Unit Awards in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock which would have been issued pursuant to such Restricted Stock Unit Award. For purposes of determining the payments to be made in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of Directors.
(ii) as to outstanding Restricted Stock Grants either, (a) make appropriate provision for the continuation of such Restricted Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Restricted Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (b) terminate such Restricted Stock Grants in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock comprising such Restricted Stock Grant; and
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In taking any of the actions permitted under this Paragraph 18(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 18, including, but not limited to the effect of any, Corporate Transaction or Change of Control and, subject to Paragraph 4, its determination shall be conclusive.
(c)Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant shall be entitled to receive after the recapitalization or reorganization for the price paid, if any, the number of replacement securities which would have been received if such Shares had been issued prior to such recapitalization or reorganization.
19. | ISSUANCES OF SECURITIES.
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Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.
No fractional shares shall be issued under the Plan and the Participant shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.
In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer.
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22. | TERMINATION OF THE PLAN.
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The Plan will terminate on September 14, 2027, the date which is ten years from theearlier of the date of its adoption by the Board of Directors and the date of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.
23. | AMENDMENT OF THE PLAN AND AGREEMENTS.
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The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator; provided that any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to the Participant.
24. | EMPLOYMENT OR OTHER RELATIONSHIP.
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Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.
If a Participant is a “specified employee” as defined in Section 409A of the Code (and as applied according to procedures of the Company and its Affiliates) as of his separation from service, to the extent any payment under this Plan or pursuant to the grant of a Restricted Stock Unit Award constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, no payments due under this Plan or pursuant to a Restricted Stock Unit Award may be made until the earlier of: (i) the first day of the seventh month following the Participant’s separation from service, or (ii) the Participant’s date of death; provided, however, that any payments delayed during thissix-month period shall be paid in the aggregate in a lump sum, without interest, on the first day of the seventh month following the Participant’s separation from service.
The Administrator shall administer the Plan with a view toward ensuring that Stock Rights under the Plan that are subject to Section 409A of the Code comply with the requirements thereof, but neither the Administrator nor any member of the Board, nor the Company nor any of its Affiliates, nor any other person acting hereunder on behalf of the Company, the Administrator or the Board shall be liable to a Participant or any Survivor by reason of the acceleration of any income, or the imposition of any additional tax or penalty, with respect to a Stock Right, whether by reason of a failure to satisfy the requirements of Section 409A of the Code or otherwise.
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Neither the Board nor the Administrator, nor any members of either, nor any employees of the Company or any parent, subsidiary, or other Affiliate, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to this Plan, and the Company hereby agrees to indemnify the members of the Board, the members of the Committee, and the employees of the Company and its parent or subsidiaries in respect of any claim, loss, damage, or expense (including reasonable counsel fees) arising from any such act, omission, interpretation, construction or determination to the full extent permitted by law.
Notwithstanding anything to the contrary contained in this Plan, the Company may recover from a Participant any compensation received from any Stock Right (whether or not settled) or cause a Participant to forfeit any Stock Right (whether or not vested) in the event that the Company’s Clawback Policy then in effect is triggered.
This Plan shall be construed and enforced in accordance with the law of the State of Delaware.
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MYRIAD GENETICS, INC. ATTN: CORPORATE SECRETARY 320 WAKARA WAY SALT LAKE CITY, UT 84108 VOTE BY INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on November 28, 2018. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future notices of availability of proxy materials or proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on November 28, 2018. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E51933-P13570 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY MYRIAD GENETICS, INC. For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark “For All Except” and write the The Board of Directors recommends that you number(s) of the nominee(s) on the line below. vote FOR the following: Vote on Directors 1. Election of two Class I Directors (or if any nominee is not available for election, such substitute as the Board of Directors may designate) for a three-year term. Nominees: 01) John T. Henderson, M.D. 02) S. Louise Phanstiel Vote on Proposals The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. To approve a proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan. 3. To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2019. 4. To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting or any adjournments or postponements thereof. This Proxy, when executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. NOTE: Please sign exactly as name(s) appear(s) hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. MYRIAD GENETICS, INC. 320 Wakara Way Salt Lake City, Utah 84108 ANNUAL MEETING OF STOCKHOLDERS NOVEMBER 29, 2018 THIS PROXY IS BEING SOLICITED BY MYRIAD GENETICS, INC.‘S BOARD OF DIRECTORS The undersigned, revoking any previous proxies relating to these shares, hereby acknowledges receipt of the Notice Regarding the Availability of Proxy Materials in connection with the 2018 Annual Meeting of Stockholders to be held at 8:00 a.m., MST, on Thursday, November 29, 2018, at the offices of Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108 and hereby appoints Mark C. Capone and R. Bryan Riggsbee, and each of them (with full power to act alone) the attorneys and proxies of the undersigned, with power of substitution to each, and authorizes each of them to represent the undersigned and to vote all shares of the Common Stock of MYRIAD GENETICS, INC. registered in the name provided herein which the undersigned is/are entitled to vote at the 2018 Annual Meeting of Stockholders, and at any adjournments or postponements thereof, with all the powers the undersigned would have if personally present. Without limiting the general authorization hereby given, said proxies are, and each of them is, instructed to vote or act on the proposals set forth in said Proxy as specified by the undersigned. SEE REVERSE SIDE FOR ALL PROPOSALS. The proxies will vote in accordance with the Board of Directors’ recommendations where a choice is not specified and in their discretion on any other matters as may properly come before the meeting or any adjournments or postponements thereof. Continued and to be signed on reverse side
