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MYRIAD GENETICS, INC.
October 12, 2017
YouStakeholders,
Atattend the Annual Meeting, three persons will be electedvote and submit your questions during the meeting by visiting the following URL: www.virtualshareholdermeeting.com/MYGN2024 and entering the 16-digit control number included in the Notice of Internet Availability of Proxy Materials or proxy card that you receive. For further information about the virtual Annual Meeting, please call our investor relations department at (801) 584-3532.
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 12, 2017, we began sending our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy statement for our 2017
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.
 |
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 2017 ANNUAL MEETING OF STOCKHOLDERS
TIME: 9:00 a.m. MST
DATE: Thursday, November 30, 2017
PLACE: The offices of Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108
PURPOSES:
WHO MAY VOTE:
Myriad Genetics, Inc., 322 North 2200 West, Salt Lake City, Utah 84116.
BY ORDER OF |
 |
October 12, 2017
IMPORTANT NOTICE REGARDING THE AVAILABILITYBOARD OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON NOVEMBER 30, 2017
DIRECTORSPaul J. DiazPresident and Chief Executive OfficerApril 17, 2024Important Notice Regarding the Availability of Proxy Materials forthe Stockholder Meeting to be held on June 6, 2024This proxy statement, and our annual report on Form 10-K to stockholders for the fiscal year ended June 30, 2017December 31, 2023, are available for viewing, printing, and downloading atwww.proxyvote.com. To view these materials, please have available your 12-digit16-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 annual report on Form 10-K, which includes our financial statements for the fiscal year ended June 30, 2017,December 31, 2023, 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”‘‘Investor Relations’’ section of our website atwww.myriad.com.www.myriad.com. You also may obtain a printed copy of our annual report on Form 10-K, as amended, including our financial statements from us, free of charge, by sending a written request to: Corporate Secretary, Myriad Genetics, Inc., 320 Wakara Way,322 North 2200 West, Salt Lake City, Utah 84108.84116. Exhibits will be provided upon written request and payment of an appropriate processing fee.
| Time and Date: | 8:00 a.m. Mountain Daylight Time on Thursday, June 6, 2024 | |||||||||||||
| Place: | The Annual Meeting will be a completely virtual meeting. There will be no physical meeting location and the meeting will only be conducted via live webcast at the following address: www.virtualshareholdermeeting.com/MYGN2024 | |||||||||||||
| Record Date: | Thursday, April 11, 2024 (as of the close of business) | |||||||||||||
| Mailing Date: | This proxy statement was first mailed or made available to stockholders on or about April 17, 2024 | |||||||||||||
| Voting: | Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals | |||||||||||||
| Proposals | Board Vote Recommendation | Page | ||||||||||||
| 1. Elect Two Directors | FOR EACH NOMINEE | P. 67 | ||||||||||||
| 2. Ratification of Ernst & Young LLP as our Independent Registered Public Accounting Firm for 2024 | FOR | P. 68 | ||||||||||||
| 3. Advisory Vote to Approve Executive Compensation | FOR | P. 70 | ||||||||||||
Via the Internet | www.proxyvote.com until 11:59 p.m. Eastern Daylight Time on Wednesday, June 5, 2024. | ||||||||||
| By Telephone | Call the phone number located on your Notice or on the top of your proxy card until 11:59 p.m. Eastern Daylight Time on Wednesday, June 5, 2024. | ||||||||||
| By Mail | Complete, sign, date and return your proxy card or voting instruction card so that it is received before the polls close on Thursday, June 6, 2024. | ||||||||||
| In-Person | Whether you are a stockholder of record or hold your shares in "street name," you may participate in and vote online at the Annual Meeting. You will need to enter your 16-digit control number to vote your shares at the Annual Meeting. Please visit www.virtualshareholdermeeting.com/MYGN2024 for instructions on how to attend the Annual Meeting live over the Internet. To vote during the Annual Meeting when the polls open use the "vote" button on the interface. | ||||||||||
•Eight out of nine directors are independent | •Compensation clawback policy | ||||
•The roles of Board Chair and CEO are separate | •Annual say-on-pay vote | ||||
•Board committees include only independent directors | •Demonstrated commitment to stockholder engagement | ||||
•44% of Board members are women or ethnically diverse | •Anti-hedging and anti-pledging policies | ||||
•Annual Board and committee self-assessments, including one-on-one interviews led by the Board Chair | •Board has significant interaction with senior management and access to other employees | ||||
•Majority voting in uncontested director elections, with resignation policy | •Robust stock ownership guidelines for non-employee directors and executive officers | ||||
•Commitment to Board refreshment: seven new directors appointed in last five years, including a new director in 2022 | •Limits on board member service on other public company boards | ||||
•Mandatory director retirement age | •No stockholder rights or similar plan | ||||
•NESGC regularly assesses the effectiveness of each director | |||||
| What We Do: | What We Don't Do: | ||||
•Grant 50% of executive officers' equity in the form of PSUs that are subject to objective performance metrics | •Reprice stock options and other awards without stockholder approval | ||||
•Cap PSUs earned at target if absolute total stockholder return is negative over the performance period | •Provide single-trigger change of control vesting for equity awards for executive officers | ||||
•Establish challenging performance metrics, including revenue and adjusted operating income targets | •Guarantee bonuses | ||||
•Require directors and executive officers to meet robust stock ownership guidelines | •Grant in-the-money stock options | ||||
•Provide full vesting of time-based restricted stock units under our 2023 long-term incentive plan to executive officers only after three years | •Provide excessive perquisites | ||||
•Evaluate officer compensation levels against a peer group of similarly situated companies | •Repurchase underwater stock options | ||||
•Retain an independent compensation consultant | |||||
•Prohibit hedging transactions (no waivers granted) | |||||
•Utilize employee engagement and customer net promoter score as performance metrics in our 2023 short-term incentive plan | |||||
•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 | |||||
| Name | Principal Occupation | Director Since | Independent | Board Committees | Other Public Company Boards | ||||||||||||
| S. Louise Phanstiel * | ** | Former Senior Executive, Elevance Health, Inc. (formerly WellPoint, Inc.) | 2009 | ☑ | AFC, CHCC, NESGC | BFLY | ||||||||||||
| Paul J. Diaz | President and Chief Executive Officer of Myriad Genetics, Inc. | 2020 | |||||||||||||||
| Paul M. Bisaro + | Former Executive Chairman, Amneal Pharmaceuticals, Inc. and President and Chief Executive Officer, Impax Laboratories, Inc. | 2022 | ☑ | NESGC, RPIC | ZTS, MNKTQ | ||||||||||||
| Heiner Dreismann, Ph.D. | Former Senior Executive, the Roche Group | 2010 | ☑ | CHCC^, RPIC | MYNZ | ||||||||||||
| Rashmi Kumar | Senior Vice President, Chief Information Officer, Medtronic plc | 2020 | ☑ | AFC, NESGC | - | ||||||||||||
| Lee N. Newcomer, M.D. | Former Senior Vice President for Oncology and Genetics, Chief Medical Officer, UnitedHealth Group | 2019 | ☑ | CHCC, RPIC^ | CHRS | ||||||||||||
| Colleen F. Reitan | Former Executive Vice President and President of Plan Operations and Chief Operating Officer, Health Care Services Corporation | 2019 | ☑ | AFC, NESGC^ | ALNY | ||||||||||||
| Daniel M. Skovronsky, M.D., Ph.D. ** | President, Lilly Research Laboratories, Chief Scientific Officer at Eli Lilly and Company | 2020 | ☑ | CHCC, RPIC | - | ||||||||||||
| Daniel K. Spiegelman ++ | Former Executive Vice President and Chief Financial Officer at BioMarin Pharmaceuticals, Inc. | 2020 | ☑ | AFC^++ | SPRB, KYTX | ||||||||||||
320 WAKARA WAY
84116
PROXY STATEMENT FOR THE MYRIAD GENETICS, INC.
2017 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 30, 2017
584-3532
‘‘us.’’
IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
April 17, 2024.
1
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.
 | By Internet or by telephone | ||||
| 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. | |||||
 | 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. | |||||
 | At the meeting | ||||
| To vote by Internet directly during the webcast of the Annual Meeting, you will need to visit the following URL: www.virtualshareholdermeeting.com/MYGN2024 and enter your control number. To vote during the Annual Meeting when the polls open use the ‘‘vote’’ button on the interface. | |||||
June 5, 2024.
2
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 11, 2024 and use the ‘‘vote’’ button during the online Annual Meeting to vote your shares.
3
firm if your bank, broker or other nominee exercises their discretion to vote your shares on this proposal.
Proposal 1: Elect Directors | The | Recommendation: FOR the election of the two Class I directors | |||||||
Proposal 2: | |||||||||
| |||||||||
4
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 | |||||
Recommendation: FOR | ||||||
Proposal 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 | |||||
| Recommendation: FOR | |||||
5
6
7
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, 2017 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 Executive Officers” or “NEOs”), (c) each of our directors
| Shares Beneficially Owned | ||||||||
Name and Address** | Number | Percent | ||||||
5% or More Stockholders | ||||||||
Baillie Gifford & Co. (1) | 10,159,758 | 14.8 | % | |||||
Calton Square — 1 Greenside Row | ||||||||
Edinburgh, Scotland EH13AN | ||||||||
BlackRock, Inc (2) | 9,391,168 | 13.7 | % | |||||
55 East 52nd Street | ||||||||
New York, NY 10055 | ||||||||
The Vanguard Group (3) | 5,353,743 | 7.8 | % | |||||
100 Vanguard Blvd. | ||||||||
Malvern, PA 19355 | ||||||||
Camber Capital Management LLC (4) | 4,060,000 | 5.9 | % | |||||
101 Huntington Avenue, Suite 2101 | ||||||||
Boston, MA 02199 | ||||||||
State Street Corporation (5) | 3,589,079 | 5.2 | % | |||||
One Lincoln Street | ||||||||
Boston, MA 02111 | ||||||||
D.E. Shaw & Co, L.P. (6) | 3,411,217 | 5.0 | % | |||||
1166 Avenue of the Americas, 9th Floor | ||||||||
New York, NY 10036 | ||||||||
Named Executive Officers | ||||||||
Mark C. Capone (7) | 1,333,467 | 1.9 | % | |||||
R. Bryan Riggsbee (8) | 37,160 | * | ||||||
Alexander Ford (9) | 130,976 | * | ||||||
Jerry S. Lanchbury, Ph.D. (10) | 804,039 | 1.2 | % | |||||
Richard M. Marsh (11) | 988,349 | 1.4 | % | |||||
8
Directors and Director Nominees | ||||||||
John T. Henderson, M.D. (12) | 207,800 | * | ||||||
Walter Gilbert, Ph.D. (13) | 102,500 | * | ||||||
Lawrence C. Best (14) | 167,500 | * | ||||||
Heiner Dreismann, Ph.D. | 17,500 | * | ||||||
Dennis H. Langer, M.D., J.D. (15) | 167,500 | * | ||||||
S. Louise Phanstiel (16) | 163,500 | * | ||||||
All current executive officers and directors as a group (15 persons) (17) | 4,858,238 | 6.7 | % |
9
10
MANAGEMENT AND CORPORATE GOVERNANCE
On September 14, 2017, our
Mr. Spiegelman was not nominated for re-election. The Board, upon the recommendation of the NESGC, approved a reduction in the number of directors constituting the full Board from nine to eight directors, effective as of the Annual Meeting. Mr. Spiegelman will continue as a director through the date of the Annual Meeting, when his current term expires.
| Name and Position | Age | Audit and Finance Committee | Compensation and Human Capital Committee | Nominating, Environmental, Social and Governance Committee | Research and Product Innovation Committee | ||||||||||||||||
|
| ||||||||||||||||||||
| S. Louise Phanstiel Chair of the Board of Directors | 65 |  |  |  | ||||||||||||||||
| |||||||||||||||||||||
| Paul J. Diaz President, Chief Executive Officer, Director | 62 | |||||||||||||||||||
Paul M. Bisaro (1) Director | 63 | |  | ||||||||||||||||||
| |||||||||||||||||||||
Heiner Dreismann, Ph.D. Director | 70 |  | | ||||||||||||||||||
Rashmi Kumar Director | 54 | | | ||||||||||||||||||
Lee N. Newcomer Director | 72 | |  | ||||||||||||||||||
Colleen F. Reitan Director | 64 | |  | ||||||||||||||||||
Daniel M. Skovronsky M.D., Director | 50 | | | ||||||||||||||||||
Daniel K. Spiegelman Director (2) | 65 |  | |||||||||||||||||||
| |||||
|
| |||||
| Research and Product Innovation Committee | ||||
| C | Committee Chair |
The following is
John T. Henderson, M.D., ChairmanFinance Committee and serve as the Chair of the Board of Directors, has beenAudit and Finance Committee.
11
pharmaceutical industry as President of Futurepharm LLC. Dr. Henderson currently serves on the Board of Directors of Cytokinetics, Inc. and during the past five years has served on the Board of Directors of Myrexis, Inc. Until his retirement in December 2000, he was with Pfizer for over 25 years, most recently as a Vice President 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 and 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, managerial 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, or CEO, of Myriad Genetics, Inc., and a member of the Board of Directors effective July 1, 2015. Previously, he servedat the Annual Meeting.
Annual Meeting.
| S. Louise Phanstiel | ||||||||||||||
 | Experience: | |||||||||||||
S. Louise Phanstiel, Chair of the Board, has been a director of Myriad since September 2009 and assumed the Chair of the Board role in March 2020, and held several executive positions at Elevance Health, 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 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. Ms. Phanstiel also provides the Board with valuable experience from serving as a director of Myriad since September 2009, and as Chair of the Board since March 2020, during which time she has made significant contributions to Myriad, including navigating us through the COVID-19 pandemic and its impact on our business, hiring a new Chief Executive Officer (Mr. Diaz), and presiding over the refreshment of our Board which included the appointment of five new directors and the appointment of a new executive leadership team. | ||||||||||||||
| Age: 65 | ||||||||||||||
Director Since:2009 | ||||||||||||||
| Committees: | ||||||||||||||
 | ||||||||||||||
 | ||||||||||||||
 | ||||||||||||||
| Paul J. Diaz | ||||||||||||||
 | Experience: | |||||||||||||
Paul J. Diaz was appointed as the President and Chief Executive Officer, or CEO, of Myriad Genetics, Inc., and a member of the Board, 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 at that time managed 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) then 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 as one of the Most Admired healthcare companies in the United States by Fortune magazine. Mr. Diaz currently serves on the board of trustees of Johns Hopkins Medicine (where he serves as chair of Johns Hopkins Health Plans). He was formerly on the board of directors of DaVita (NYSE: DVA) and 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 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 provides unique insights to our business. Mr. Diaz also has a background serving on both public and private healthcare boards. | ||||||||||||||
Age: 62 | ||||||||||||||
Director Since:2020 | ||||||||||||||
| President and Chief Executive Officer | ||||||||||||||
| Paul M. Bisaro | ||||||||||||||
 | Experience: | |||||||||||||
Paul M. Bisaro was appointed as a director of Myriad on October 31, 2022. Mr. Bisaro is an accomplished global business leader with more than 30 years of generic and branded pharmaceutical experience. In February 2024, Mr. Bisaro was reappointed to serve as a director and the Chairman of the board of directors of Mallinckrodt, plc, a position he had previously held from June 2022 to November 2023. Mr. Bisaro is also currently a member of the board of directors of Zoetis Inc. He previously served on the board of Zimmer Biomet Holding, Inc. and TherapueticsMD. Mr. Bisaro’s executive work experience includes serving as the Executive Chairman of Amneal Pharmaceuticals, Inc., from May 2018 until August of 2019. Prior to that appointment, from May 2017 to May 2018, Mr. Bisaro was President and Chief Executive Officer, and member of the board of directors, of Impax Laboratories, Inc., until its acquisition by Amneal Pharmaceuticals. Prior to joining Impax Laboratories, Mr. Bisaro served as Executive Chairman of Allergan, plc, from July 2014 to November 2016, and as President and CEO of Actavis, plc (and its predecessor firm Watson Pharmaceuticals Inc.) from September 2007 to July 2014. Mr. Bisaro served on the board of directors of Allergan (and its predecessor firms) from September 2007 until August 2018. Prior to Watson, he served as President, Chief Operating Officer, and a member of the board of directors of Barr Pharmaceuticals, Inc., from 1999 to 2007. Between 1992 and 1999, Mr. Bisaro served as General Counsel of Barr. Prior to joining Barr, he was associated with the law firm Winston & Strawn and a predecessor firm, Bishop, Cook, Purcell and Reynolds and served as a Senior Consultant with Arthur Andersen & Co. Mr. Bisaro holds an undergraduate degree in General Studies from the University of Michigan and a JD from Catholic University of America in Washington, D.C. The Board has determined that Mr. Bisaro should serve on the Board for the following reasons: He provides the Board with more than 25 years of business, management and leadership experience in the pharmaceutical industry. He has a track record of driving company growth through operational execution and corporate transformation. In addition, he has extensive experience as a public company director and in mergers and acquisitions, finance, accounting, and legal matters, all of which makes him a valuable member of our Board. | ||||||||||||||
Age: 63 | ||||||||||||||
Director Since:2022 | ||||||||||||||
| Committees: | ||||||||||||||
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 | ||||||||||||||
| Heiner Dreismann, Ph.D. | ||||||||||||||
 | Experience: | |||||||||||||
Heiner Dreismann, Ph.D., joined as a director of Myriad in June 2010. He 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. Dr. Dreismann currently serves as the Chairman of the board of Mainz Biomed N.V. and as a director of Talis Biomedical Corporation. Previously, Dr. Dreismann served on the board of directors of Med BioGene, Inc., Genenews Limited, Interpace Diagnostics and Ignyta, Inc. He also currently serves on a number of early-stage private company boards in the biotechnology industry. 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 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. 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: 70 | ||||||||||||||
Director Since:2010 | ||||||||||||||
| Committees: | ||||||||||||||
 | ||||||||||||||
| ||||||||||||||
| Rashmi Kumar | ||||||||||||||
 | Experience: | |||||||||||||
| Rashmi Kumar has been a director of Myriad since September 2020. Currently, Ms. Kumar serves as Senior Vice President, Chief Information Officer with Medtronic plc. She previously served as Senior Vice President and Chief Information Officer – Global IT with Hewlett Packard Enterprise (HPE) from January 2020 to November 2022. Ms. Kumar 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. She is a seasoned technology leader with wide ranging experience in IT leadership, healthcare, cybersecurity, consulting services, electric utilities, financial services, information technology, and media and 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, cybersecurity and large-scale business process transformations. Ms. Kumar has served as CIO and CTO for many Fortune 50 companies including McKesson, Southern California Edison, Toyota, HPE, and Tata Steel. Ms. 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 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. and Medtronic. 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. | ||||||||||||||
Age: 54 | ||||||||||||||
Director Since:2020 | ||||||||||||||
| Committees: | ||||||||||||||
 | ||||||||||||||
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| Lee N. Newcomer, M.D. | ||||||||||||||
 | Experience: | |||||||||||||
Lee Newcomer, M.D., was appointed as a member of the Board 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 Coherus BioSciences, Inc., a public biopharmaceutical 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 ten years including two years as Chairman. The Board 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. | ||||||||||||||
| Age: 72 | ||||||||||||||
Director Since:2019 | ||||||||||||||
| Committees: | ||||||||||||||
| ||||||||||||||
 | ||||||||||||||
| Colleen F. Reitan | |||||||||||||||||
 | Experience: | ||||||||||||||||
| Colleen F. Reitan was appointed as a member of the Board in September 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 President and 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 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. | |||||||||||||||||
| Age: 64 | |||||||||||||||||
Director Since:2019 | |||||||||||||||||
| Committees: | |||||||||||||||||
| |||||||||||||||||
 | |||||||||||||||||
| Daniel M. Skovronsky, M.D., Ph.D. | ||||||||||||||
 | Experience: | |||||||||||||
Daniel M. Skovronsky, M.D., Ph.D., joined the Company as a Director in July 2020. Currently, he serves as President of Lilly Research Laboratories, President of Lilly Immunology, and Chief Scientific Officer 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 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. As a director of Myriad, Dr. Skovronsky has made significant contributions to our research and development and product development efforts and our long-term growth strategy. | ||||||||||||||
Age: 50 | ||||||||||||||
Director Since:2020 | ||||||||||||||
| Committees: | ||||||||||||||
| ||||||||||||||
| ||||||||||||||
| Daniel K. Spiegelman | ||||||||||||||
 | Experience: | |||||||||||||
Daniel K. Spiegelman has been a director of the Company since May 2020. Most recently, he served as Executive Vice President and Chief 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 board of directors of Kyverna Therapeutics, Inc., a public clinical-stage biopharmaceutical 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 Opthea Limited, Jiya Acquisition Corp., 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 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 and having served as the audit committee chair of multiple public companies. In addition, he provides the Board with business, financial and investment expertise, as well as management expertise, resulting from his experience as an executive, and service as a director, of multiple pharmaceutical companies. | ||||||||||||||
Age: 65 | ||||||||||||||
Director Since:2020 | ||||||||||||||
| Committees: | ||||||||||||||
 | ||||||||||||||
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
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firm of Ernst & Young, where he specialized in serving multinational companies in the high technology and life sciences fields. He served a two-year fellowship at the SEC from 1979 to 1981 and a one-year term as a White House-appointed Presidential Exchange Executive in Washington, D.C. He is a founding directoror understanding of the President’s Council at Massachusetts General Hospital. Within the past five years Mr. Best also has served on the Boardfinancial and accounting function of Directors of Haemonetics Corp, Biogen, Inc.an enterprise in U.S. and as Executive Chairman of Valtech Cardio Ltd., a privately held medical device company basedinternational markets, resulting 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 broadproficiency in complex financial management, capital allocation, mergers and acquisitions and financial accounting and reporting expertiseprocesses.
Heiner Dreismann, Ph.D., a director of Myriad since 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. From 2006 to 2009, Dr. Dreismann served as the CEO of Vectrant Technologies, Inc., and until 2013 was the Interim CEO for GeneNews Limited. He currently serves on the Board of Directors of Ignyta, Inc. During the past five years, Dr. Dreismann served on the Board of Directors of Shrink Nanotechnologies, Med BioGene, Inc., Genenews Limited, and Interpace Diagnostics. 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 expertiserisk management. Demonstrated strengths in developing talent, planning succession, and commercially launching diagnostic products. Furthermore, Dr. Dreismann has extensive experience in international markets, specifically in Europe, which is important as we seek to expand internationally. His scientific backgrounddriving change and expertise also enable him to providelong-term growth.
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. (cum laude) 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 Boards of Delcath Systems, Inc. and Myrexis, 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 on 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,health care industry including expertise in commercializing health care products or services with emphasis in oncology, women’s health, and mental health. Healthcare market experience in both the United States and internationally is valued including experience with the U.S. and international healthcare regulatory environment.
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S. Louise Phanstiel, a director of Myriad since September 2009, held several important positions at WellPoint, Inc. from 1996 to 2007,anticipating technological trends including as President, Specialty Products (2003 to 2007), Senior Vice President, Chief of Staffcommercial and Corporate Planningproduct digital solutions, disruptive innovation that extend or create new business models. Expertise in the Office of the Chairman (2000 to 2003),cyber security 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 risk management.
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 andCompany Governance – Experience as a Certified Public Accountant. In addition, she providesboard member of other publicly traded companies.
 |  |  |  |  |  |  |  |  | |||||||||||||||||||||
| Board Diversity | Finance and Accounting | Leadership | Healthcare Industry | Diagnostic Industry | Research and Development | Provider or Payor Perspective | Technology | Public Company Governance | |||||||||||||||||||||
| S. Louise Phanstiel | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||
| Chair of the Board | |||||||||||||||||||||||||||||
| Paul M. Bisaro | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||||||
| Director | |||||||||||||||||||||||||||||
Paul J. Diaz President and CEO | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||
| Heiner Dreismann Ph.D. | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||
| Director | |||||||||||||||||||||||||||||
Rashmi Kumar Director | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||
| Lee N. Newcomer M.D. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||
| Director | |||||||||||||||||||||||||||||
Colleen F. Reitan Director | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||||
| Dan Skovronsky, M.D. Ph.D. | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||
| Director | |||||||||||||||||||||||||||||
| Daniel K. Spiegelman | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||
| Director | |||||||||||||||||||||||||||||
self-disclosed by our directors.
| Board Diversity Matrix (as of April 17, 2024) | ||||||||||||||
| Total Number of Directors | 9 | |||||||||||||
| Female | Male | Non-Binary | Did not Disclose Gender | |||||||||||
| Directors | 3 | 6 | — | — | ||||||||||
| Number of Directors who Identify in Any of the Categories Below: | ||||||||||||||
| African American or Black | — | — | — | — | ||||||||||
| Alaskan Native or Native American | — | — | — | — | ||||||||||
| Asian (other than South Asian) | 1 | — | — | — | ||||||||||
| South Asian | — | — | — | — | ||||||||||
| Hispanic or Latinx | — | 1 | — | — | ||||||||||
| Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
| White | 2 | 5 | — | — | ||||||||||
| Two or More Races or Ethnicities | — | — | — | — | ||||||||||
| LGBTQ+ | — | — | — | — | ||||||||||
| Did not Disclose Demographic Background | — | — | — | — | ||||||||||
Mr. Spiegelman.
14
meeting.
investor.myriad.com/corporate-governance.
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
15
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 Investor Information — UnderstandingInvestors Relations—About Myriad/Corporate Governance section of our website atwww.myriad.com.
investor.myriad.com/corporate-governance.
CHCC.
directors.
16
stockholder recommendations for proposed director nominees must be made in writing to the Nominating and Governance Committee,NESGC, care of Myriad’s Corporate Secretary at 320 Wakara Way,322 North 2200 West, Salt Lake City, Utah 84108,84116, 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:
17
Nasdaq.
investor.myriad.com/corporate-governance.
investor.myriad.com/corporate-governance.StrategicResearch and Product Innovation Committee.Our StrategicResearch and ProductInnovation Committee (or "RPIC") met twothree times duringin the 2023 fiscal 2017. This committeeyear. The RPIC currently has threefour members: Dr. Henderson (chair)Newcomer (Chair), Mr. BestBisaro, Dr. Dreismann, and Dr. Dreismann.Skovronsky. 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 Investor Information — UnderstandingInvestors Relations—About Myriad/Corporate Governance section of our website atwww.myriad.com.1823
Compensation Committee Interlocks and Insider Participation. Our Compensation Committee currently has three members: Dr. Dreismann (Chair), Dr. Gilbert, and Dr. Henderson. No member of our Compensation Committee has at any time been an employee of the Company. None of our executive officers is a member of the Compensation Committee, nor do any of our executive officers serve as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers serving as a member of our Board of directors or Compensation Committee.
| Name | Age | Position | ||||||||||
| 62 |
| ||||||||||
| President and Chief Executive Officer and Director | |||||||||||
| 54 | Senior Vice President, | ||||||||||
| 39 | |||||||||||
Scott J. Leffler (1) | 49 | Chief Financial Officer | ||||||||||
| Dale Muzzey | Chief Scientific Officer | |||||||||||
Sam S. Raha (2) | 52 | Chief Operating Officer | ||||||||||
| Shereen Solaiman | Chief People Officer | |||||||||||
| Mark Verratti | 55 | Chief Commercial Officer | ||||||||||
| Paul J. Diaz | ||||||||||||||
| President and Chief Executive Officer | |||||||||||||
Paul J. Diaz. Please see biography above under ‘‘Management and Corporate Governance—Board Composition and Refreshment.’’ | ||||||||||||||
Age:62 | ||||||||||||||
| Margaret Ancona | |||||||||||||||||
 | Senior Vice President, | ||||||||||||||||
| Maggie Ancona joined Myriad | ||||||||||||||||
Age: 54 | |||||||||||||||||
| Kevin R. | ||||||||||||||
 | Chief Technology Officer | |||||||||||||
Kevin R. Haas joined Myriad in May 2013 and was appointed Chief Technology Officer in February 2021. Previously, he was Senior Vice President of Technology and Senior Vice President of Engineering at Myriad and Vice President of Bioinformatics and Senior Director of Bioinformatics at Myriad Women's Health. Dr. Haas previously served on the Board of Directors and as 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 nine patent applications. | ||||||||||||||
Age: 39 | ||||||||||||||
| Scott J. Leffler | ||||||||||||||
 | Chief Financial Officer | |||||||||||||
Scott J. Leffler became Chief Financial Officer of Myriad on January 29, 2024. Prior to joining Myriad, he served as Chief Financial Officer of Clover Health Investments, Corp. since July 2022. Before joining Clover Health, Mr. Leffler served as Chief Financial Officer and Treasurer of Sotera Health, a provider of sterilization, lab testing and advisory services for the healthcare industry, from April 2017 to July 2022. Prior to joining Sotera Health, Mr. Leffler served as Chief Financial Officer at Exal Corporation (now called Trivium Packaging) and held various financial leadership positions at PolyOne Corporation (now called Avient). Mr. Leffler holds a B.A. in economics from Yale University and an M.B.A. from Emory University and is both a Certified Public Accountant (inactive) and a Certified Treasury Professional (inactive). | ||||||||||||||
| Dale Muzzey | ||||||||||||||
 | Chief Scientific Officer | |||||||||||||
Dale Muzzey was appointed Chief Scientific Officer of Myriad in April 2022. Previously, he served at Myriad as Interim Chief Scientific Officer and Senior Vice President, R&D from January 2022 to April 2022, Vice President, Bioinformatics, from October 2019 to December 2021, and Senior Director, Clinical Development from August 2018 to September 2019. From April 2014 to July 2018, Dr. Muzzey also served in a number of positions of increasing responsibility at Myriad Women's Health, including Director, Scientific Affairs, Staff Scientist, Computational Biology, Senior Scientist, and Computational Scientist I. Dr. Muzzey received a Bachelor of Arts degree in Biochemical Sciences and a Ph.D. in Biophysics from Harvard University. | ||||||||||||||
Age: 44 | ||||||||||||||
| Sam S. Raha | ||||||||||||||
 | Chief Operating Officer | |||||||||||||
Sam S. Raha became Chief Operating Officer of Myriad in December 2023. Prior to joining Myriad, he served as Senior Vice President and President, Diagnostics and Genomics Group, of Agilent Technologies, Inc. since April 2018. From May 2017 to April 2018, Mr. Raha served as Agilent's Senior Vice President, Strategy and Corporate Development. From July 2013 to January 2017, he served as Vice President, Global Marketing for Illumina, Inc., and from 2008 to 2012, he served as Vice President and General Manager, Genomics Assays / NextGen qPCR for Life Technologies, Inc. Mr. Raha graduated from the University of California, Berkeley, with a degree in molecular and cell biology and received his MBA from Santa Clara University. | ||||||||||||||
Age: 52 | ||||||||||||||
| Shereen Solaiman | ||||||||||||||
 | Chief People Officer | |||||||||||||
Shereen Solaiman, Chief People Officer, joined Myriad Genetics in March 2023. She previously served for over 12 years with OhioHealth, a not-for-profit, faith-based health system, most recently as Senior Vice President, Chief Human Resource Officer from August 2020 to October 2022. Prior to that role, she served in a number of positions at OhioHealth of increasing responsibility, including Vice President, HR Strategy and Business Enablement, from January 2018 to August 2020, Vice President, Total Rewards, from July 2016 to January 2018, and Vice President, Human Resources Central Ohio and Corporate, from October 2014 to July 2016. Prior to OhioHealth, she served over ten years at Borders Group, Inc., in a variety of human resources roles, including as Senior Vice President, Human Resources. She received a B.S. in Journalism and Public Relations from Ohio University and a Masters in Public Administration from New York University. | ||||||||||||||
Age: 51 | ||||||||||||||
| Mark S. Verratti | |||||||||||||||||
 | Chief Commercial Officer | ||||||||||||||||
Mark Verratti | was promoted to Chief Commercial Officer on April 14, 2022. He previously served as President, Mental Health or President, Myriad Neuroscience from August 2017 to April 2022, and as President of Myriad Autoimmune from May 2020 until the sale of the Myriad Autoimmune business in September 2021. Prior to his appointment as President, Myriad Neuroscience, he served as SVP, Chief Sales and Business Development officer at Assurex Mr. Verratti also held senior leadership positions worldwide 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: 55 | |||||||||||||||||
19
Mark C. Capone. Please see biography above under “Management and Corporate Governance — The Board of Directors.”
Alexander Ford, President of Myriad Genetic Laboratories, Inc. (“MGL”), a wholly owned subsidiary of Myriad, has served in his current role since July 1, 2015. Mr. Ford joined Myriad in June 2010. Before being named to his current position, he served as the Chief Commercial Officer of MGL. 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.,Executive Vice 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, 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.
20
Bernard F. Tobin, President of Crescendo Bioscience, Inc., 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 Assurex Health, Inc., a wholly owned subsidiary of Myriad, 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.
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EXECUTIVE COMPENSATION
The four
| Name | Title | ||||
| Paul J. Diaz | President and Chief Executive Officer | ||||
| R. Bryan Riggsbee | Former Chief Financial Officer (1) | ||||
| Samraat S. Raha | Chief Operating Officer (2) | ||||
| Nicole Lambert | Former Chief Operating Officer (3) | ||||
| Mark S. Verratti | Chief Commercial Officer | ||||
| Dale Muzzey, Ph.D. | Chief Scientific Officer | ||||
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, and employee engagement through the recognition of individual leadership, initiatives, achievements, and other contributions. EachFor short-term incentive awards for our executive officers for the 2023 fiscal year, our Compensation and Human Capital Committee approves Management Business Objectives("CHCC") approved Company performance metrics and employee and customer engagement metrics as well as individual management business objectives (“MBOs”) for, which consist of goals tailored to each executive officer that consistofficer. The short-term incentive award component of (i) pre-establishedour executive officers' compensation was balanced among the following factors:
22
Fiscal Year 2017 Performance
Forcustomer NPS each represented 5% of an executive officer's total score, and individual MBOs accounted for the remaining 20-40%, as noted in the following illustration:
| 50% of Equity Grant | 50% of Equity Grant | |||||||
| RSUs | PSUs | |||||||
•Number of RSUs granted is fixed at the grant date by the CHCC •Time-based vesting over three years (33.33% 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 revenue, adjusted earnings per share and relative total stockholder return targets during a three-year measurement period •Vest on three-year anniversary of the grant date | |||||||
We continued generating strong cash flows from operations7%, respectively. GAAP operating loss was $(257.4) million, and adjusted operating loss was $(25.5) million, an improvement of $7.3 million compared to adjusted operating loss of $(32.8) million in fiscal year 2017 we generated2022. GAAP loss per share was ($3.18) and non-GAAP adjusted loss per share was ($0.27) for the year ended December 31, 2023. GAAP operating expenses were $774.4 million and non-GAAP adjusted operating expenses were $545.5 million, an increase of 6.8% year over $100 million in GAAP free cash flow. year.
activities.
During fiscal year 2017 we reduced the level of our share repurchases to 1.6 million shares as we focused on reducing the balance on our credit facility associated with the Assurex acquisition. Since fiscal year 2010, we have purchased over 49 million shares of our common stock under our stock repurchase program for $1.239 billion at a weighted average price of $25.18 per share.
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the 2023 fiscal year increased 11% from the 2022 fiscal year, driven by growth in Prenatal, Prolaris, GeneSight and Hereditary Cancer.
IXHC in our stock performance chart because the IXHC 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.
Stabilizebusiness units:
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Grow new product volume
Expand reimbursement coverage for new products
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Increase RNA kit revenue internationally
Improve profitability with Elevate 2020
Performance Payfour NEOs for Fiscal Year 2017
To reflect our pay for performance philosophy, based on the Company’s performance for fiscal year 2017, our Compensation Committee:
Additionally, the Compensation Committee determined to freeze the level of RSUs awarded to our executive officers at the levels awarded in fiscal year 2016 aligning total compensation to our goal of between the 50th to 75th percentile of our compensation benchmarks.
Say-on-Pay Results
Additionally, we considered concerns raised by ISS
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Changes To Our Pay Practices and Philosophy
In response to the feedback expressed by our stockholders, ISS and Glass Lewis, we are making the following changes, or continuing prior responsive practices, to our executive compensation program:
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Pay Practices
Previously, we adopted other practices thatbelieve reflect the high standards our Compensation CommitteeCHCC seeks to attain forto support our compensation philosophy and pay practices, such as:
| What We Do: | What We Don't Do: | ||||
•Grant 50% of executive officers' equity in the form of PSUs that are subject to objective performance metrics | •Reprice stock options | ||||
•Cap PSUs earned at target if absolute total stockholder return is negative over the performance period | •Provide single-trigger change of control vesting for equity awards for executive officers | ||||
•Establish challenging performance metrics, including revenue and adjusted operating income targets | •Guarantee bonuses | ||||
•Require directors and executive officers to meet robust stock ownership guidelines | •Grant in-the-money stock options | ||||
•Provide full vesting of RSUs under our 2023 long-term incentive plan to executive officers only after three years | •Provide excessive perquisites | ||||
•Evaluate officer compensation levels against a peer group of similarly situated companies | •Repurchase underwater stock options | ||||
•Retain an independent compensation consultant | |||||
•Prohibit hedging transactions (no waivers granted) | |||||
•Utilize employee engagement and customer net promoter score as performance metrics in our 2023 short-term incentive plan | |||||
•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 | |||||
In connection with the annual review of our executive compensation program and compensation pay components, we will continue our general approach of establishing Company Financial MBOs and Individual 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.
program. for fiscal year 2023.2023 Fiscal Year 2017 Named Executive Officer CompensationElements of our Compensation ProgramThe compensation program for our executive officers consists principally of a base salary, an annual cash incentive bonus, long-term compensation inWhile 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 our NEOs. We believe that these elementscomponents 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.•Short-Term Incentive Award: The annual cashshort-term incentive bonusaward forms an important part of our compensation strategy by providing an incentive to rewardachieve short-term performance goals as measured by Company performance, an employee engagement score, customer NPS, and accomplishment of individual 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 bonus awards and equityEquity 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 stockholder value. For example, under our long-term cash incentive awards,financial and stock 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.28The Compensation Committee,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.Formulating and Setting Executive CompensationThe 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.officers. The Compensation CommitteeCHCC also assists the full boardour Board in establishing appropriate incentive compensation and equity-based plans generally for all employees and is responsible for administering these plans.ForDuring fiscal year 2017,2022, the Compensation CommitteeCHCC retained an independent compensation consultant, Mercer, (US) Inc. (“Mercer”) for the purpose of updatingto review 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.industry (the "2022 Mercer Executive Compensation Review"). The Compensation Committee usesCHCC used this competitive market data on compensation in determining annual salary compensation,base salaries, short-term (annual) incentive compensation, and long-term equity incentive compensation (both cash and equity incentive compensation) for the President and CEO and otherour executive officers of the Company (the “2017 Mercer Executive Compensation Review”).35
| Alkermes plc | ||||||||
| BioMarin Pharmaceutical Inc. | Ironwood Pharmaceuticals, Inc. | |||||||
| Bio-Techne Corporation | Jazz Pharmaceuticals plc | |||||||
| bluebird bio, Inc. | Natera, Inc. | |||||||
| Coherus BioSciences, Inc. | Neogenomics, Inc. | |||||||
| Exact Sciences Corporation | Neurocrine Biosciences Inc. | |||||||
| Exelixis Inc. | Seagen Inc. | |||||||
| lncyte Corporation | United Therapeutics Corporation | |||||||
| Vanda Pharmaceuticals Inc. | ||||||||
| Invitae Corporation | ||||||||
We believe that the compensation information obtained from the 2017 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 20172022 Mercer Executive Compensation Review, the Compensation CommitteeCHCC analyzed among other criteria, the average salary, short-term incentive bonus compensation, and long-term incentive bonus compensation (both cash and equity compensation) for each of our executive officers at the 25th, 50th and 75th percentile ranges. In addition, for long-term incentive equity compensation, the Compensation Committee analyzed, among other criteria, the average equity compensation for each of our executive officers at the 25th, 50th25th, 50th and 75th75th percentile range fromranges.
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The Compensation Committee 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 50th to 75th percentile of comparable companies in our industry. However, we may award compensation above the 75th 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 of this pay-for-performance philosophy, we haveCHCC 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; Company Financial MBOs and 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.
The CHCC may award compensation below or above the 50th percentile of comparable companies in our industry taking into account the foregoing factors and the need to ensure that the applicable compensation package provides sufficient compensation to attract and retain talented executives and achieve our other executive compensation program objectives.
As part
| Named Executive Officer | Base Salary During 2022 Fiscal Year ($) | Base Salary During 2023 Fiscal Year ($) | % Base Salary Increase From 2022 | ||||||||
Paul J. Diaz President and Chief Executive Officer | $1,050,000 | $1,092,000 | 4.0% | ||||||||
R. Bryan Riggsbee Former Chief Financial Officer (1) | $548,000 | $564,440 | 3.0% | ||||||||
Samraat S. Raha Chief Operating Officer (2) | N/A | $750,000 | —% | ||||||||
Nicole Lambert Former Chief Operating Officer (3) | $500,000 | $515,000 | 3.0% | ||||||||
Mark S. Verratti Chief Commercial Officer | $475,000 | $498,750 | 5.0% | ||||||||
| Dale Muzzey, Ph.D. Chief Scientific Officer | $400,000 | $450,000 | 12.5% | ||||||||
Name and Position | Fiscal 2018 Base Salary ($) | Fiscal 2017 Base Salary ($) | % Increase | |||||||||
Mark C. Capone | 852,000 | 852,000 | 0 | % | ||||||||
Alexander Ford | 499,200 | 499,200 | 0 | % | ||||||||
R. Bryan Riggsbee | 432,000 | 432,000 | 0 | % | ||||||||
Jerry S. Lanchbury, Ph.D. | 493,782 | 493,782 | 0 | % | ||||||||
Richard M. Marsh | 493,782 | 493,782 | 0 | % | ||||||||
We believe that maintaining all of our executive officers’ base salary at FY 2017 levels reflects the commitment and contributionsecond anniversaries of the executive officers to our goalcommencement of increasing our operating profitability, while being set at a level that appropriately attracts and retains key talent necessary to support the continued growth of the Company.
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Annual CashMr. Raha's employment with us.
Awards
Company. For fiscal year 2017, for purposes of determining2023, the annual cash incentive bonuses paid to our NEOs and executive officers, other than our President and CEO, the Compensation CommitteeCHCC used a formulaic approach to determine the short-term incentive awards for our executive officers. The formula was based on a target incentive bonus as a percentage of base salary, determined in early fiscal year 2017, Company financial performance, engagement score, customer NPS, and the achievement of 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 executive officer. The final payout percentage is then multiplied by the executive officer's base salary and by the executive officer's target incentive bonus asopportunity (which is a percentage of the executive officer's base salarysalary). The general formula for calculating bonus amounts for the 2023 fiscal year is as follows:
| Named Executive Officer | 2022 Fiscal Year Target Bonus Opportunity (% of Base Salary) | 2023 Fiscal Year Target Bonus Opportunity (% of Base Salary ) | ||||||
| Paul J. Diaz, President and Chief Executive Officer | 100% | 100% | ||||||
| R. Bryan Riggsbee, Former Chief Financial Officer and Treasurer | 60% | 75% | ||||||
| Nicole Lambert, Chief Operating Officer | 60% | 75% | ||||||
| Mark S. Verratti, Chief Commercial Officer | 60% | 75% | ||||||
| Dale Muzzey. Chief Scientific Officer | 50% | 50% | ||||||
| Named Executive Officer | Revenue Weight | Adjusted Operating Income Weight | Engagement Score Weight | Customer NPS Weight | Individual MBO Weight | ||||||||||||
| Paul J. Diaz President and Chief Executive Officer | 40% | 30% | 5% | 5% | 20% | ||||||||||||
| R. Bryan Riggsbee Former Chief Financial Officer | 40% | 30% | 5% | 5% | 20% | ||||||||||||
| Nicole Lambert Former Chief Operating Officer | 40% | 30% | 5% | 5% | 20% | ||||||||||||
| Mark S. Verratti Chief Commercial Officer | 40% | 30% | 5% | 5% | 20% | ||||||||||||
| Dale Muzzey Chief Scientific Officer | 30% | 20% | 5% | 5% | 40% | ||||||||||||
For fiscal year 2017, our pre-established financial performance targets were based on our revenues and adjusted operating income. We achieved $771 million in revenues and adjusted operating income of $97 million. Based on these financial results, compared to2023 budget, with the pre-established targets, the Compensation Committee determined that the Company Financial MBOs applicable to each executive officer had been achieved at the 87 percent level. Each executive officer was then scored on his or her Individual MBOs, as discussed belowtarget performance levels for our NEOs under “Named Executive Officer Performance for Fiscal 2017”. The composite MBO performance scores for the executive officer group ranged from 80 to 95 percent. Because we only partially achieved the revenue and adjusted operating income set at 100% of our 2023 budget for revenue and adjusted operating income. All of our 2023 adjusted operating income (loss) performance goalstargets were set at amounts higher than our 2022 adjusted operating loss of $(32.4) million, which was significantly below our 2022 adjusted operating income (loss) threshold target of $(13.1) million. Our 2023 adjusted operating income (loss) performance targets were also set with an expectation that the significant inflationary pressure that we set,experienced throughout fiscal year 2022 would continue into fiscal year 2023. We forecasted that this inflationary pressure would continue to significantly impact our supply costs, professional services, health benefits, and wages, all of which make up a significant portion of our operating expenses. Our 2023 adjusted operating income (loss) performance targets also reflected our forecast of a significant increase in marketing and sales expense for fiscal year 2023 to capitalize on market share opportunities from dislocation in our industry.
| Performance Metrics | Weighting * | Threshold Performance Level * | Target Performance Level * | Maximum Performance Level * | ||||||||||
| Revenue | 40% | $712.5 million Payout %: 20% | $750.0 million Payout %: 40% | $825.0 million Payout %: 60% | ||||||||||
| Adjusted Operating Income (Loss) | 30% | $(31.6) million Payout %: 15% | $(27.7) million Payout %: 30% | $(2.1) million Payout %: 45% | ||||||||||
| Engagement Score and Customer NPS | 10% | 4.5% improvement Payout %: 5% | 5.0% improvement Payout %: 10% | 7.0% improvement Payout %: 15% | ||||||||||
| Individual MBOs | 20% | The payout percentage for individual MBOs is determined by the CHCC in its sole and absolute discretion after considering the performance of each executive officer in achieving his or her individual MBOs. | ||||||||||||
| * The weighting of the performance metrics and potential payout percentage for threshold, target and maximum performance levels for Dr. Muzzey are as follows: (1) Revenue: 30% weighting, threshold, target and maximum potential payout is 15%, 30%, and 45%, respectively; (2) Adjusted Operating Income (Loss): 20% weighting, threshold, target and maximum payout is 10%, 20%, and 30%, respectively; (3) Engagement Score and Customer NPS: 10% weighting, threshold, target, and maximum payout 5%, 10%, and 15%, respectively; and (4) Individual MBOs, 40% weighting, the payout percentage is determined by the CHCC in its sole and absolute discretion. | ||||||||||||||
| Metric | Threshold | Target | Maximum | Actual Result | Achievement | Payout % (1) | ||||||||||||||
| Revenue | $712.5 million | $750.0 million | $825.0 million | $753.2 million | 102% | 40.8% | ||||||||||||||
| Adjusted Operating Income (Loss) | $(31.6) million | $(27.7) million | $(2.1) million | $(25.5) million | 104% | 31.2% | ||||||||||||||
| Engagement Score and Customer NPS (YoY Improvement) | 4.5% | 5.0% | 7.0% | Not applicable (2) | 100% | 10.0% | ||||||||||||||
| Total | 82% | |||||||||||||||||||
(1) The payout percentage for Dr. Muzzey for revenue, adjusted operating income (loss), and engagement score and customer NPS was 30.6%, 20.8%, and 10%, respectively, for a total payout percentage of 61.4%. (2) As previously discussed, the CHCC determined that the Company had achieved the target performance level for customer NPS and that the Company should receive the target payout percentage for engagement score notwithstanding that the Company's engagement score decreased in 2023 compared to the Company's engagement score in 2022. | ||||||||||||||||||||
| Named Executive Officer | Individual MBOs For FY2023 | MBO Achievements | MBO Score (%) | MBO Payout % | ||||||||||
Paul J. Diaz President and Chief Executive Officer | Included goals relating to improving patient and provider experience, coverage expansion, commercial transformation, laboratory of the future initiatives, organizational efficiency, and business development. | The CHCC determined that Mr. Diaz continued to successfully execute upon our growth strategy and achieved his 2023 MBOs. | 125% | 25% | ||||||||||
R. Bryan Riggsbee Former Chief Financial Officer | Included goals relating to operating expense, reducing no-pays, coverage expansion, business development, and engagement with investors. | The CHCC determined that Mr. Riggsbee substantially achieved his 2023 MBOs and executed upon a successful follow-on equity offering. | 100% | 20% | ||||||||||
Nicole Lambert Former Chief Operating Officer | Included goals relating to volume growth, reducing no-pays, reducing turn-around-time, improving customer engagement, and laboratory of the future initiatives. | The CHCC determined that Ms. Lambert substantially achieved her 2023 MBOs, including achieving certain laboratory of the future milestones. | 100% | 20% | ||||||||||
Mark S. Verratti Chief Commercial Officer | Included goals relating to sales and marketing, product management, and volume growth. | The CHCC determined that Mr. Verratti substantially achieved his 2023 MBOs, including Myriad obtaining double digit volume growth across all core products and business units. | 125% | 25% | ||||||||||
| Dale Muzzey, Ph.D. Chief Scientific Officer | Included goals relating to product development, clinical studies, and the launch of certain products. | The CHCC determined that Dr. Muzzey completed his 2023 MBOs, including the launch of a research use only MRD test. | 125% | 50% | ||||||||||
For our President and CEO, the Compensation Committee approved pre-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.metrics. The annual cash incentive bonus for our President and CEO was granted under our 2013 Executive Incentive Plan (the “Section 162(m) Incentive Plan”), which is a plan that permits 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 2017 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 2017 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 2017 total revenues divided by the designated total revenue target for fiscal year 2017. The Adjusted Operating Income Performance Factor equals the quotient of fiscal year 2017 adjusted operating income divided by the designated adjusted operating income target for fiscal year 2017. However, as set forth 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. 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 2017, the Compensation Committee determined that Mr. Capone had achieved a Total Performance Factor of 87%. Accordingly, the Compensation Committee awarded an annual cash incentive bonus for Mr. Capone for fiscal year 2017 in the amount of $741,240.
The Compensation CommitteeCHCC then determined the annual cash incentive bonuses for our NEOs for the 2023 fiscal year 2017 as set forth in the chart below.
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Name and Position | Target Incentive Bonus (as a % of Fiscal 2017 Base Salary) | MBO Performance Goals Score (as a %) | Fiscal 2017 Bonus Payment ($) | |||||||||
Mark C. Capone | 100 | 87 | 741,240 | |||||||||
Alexander Ford | 60 | 82 | 245,606 | |||||||||
R. Bryan Riggsbee | 60 | 89 | 230,688 | |||||||||
Jerry S. Lanchbury, Ph.D. | 50 | 87 | 214,795 | |||||||||
Richard M. Marsh, Esq. | 50 | 90 | 222,202 | |||||||||
We believe that this cash incentive bonus compensation is appropriate
| Named Executive Officer | Base Salary | Target Incentive Bonus (as a % of Base Salary) | Total Payout Percentage (as a %) (1) | 2023 Fiscal Year Bonus Payment ($) | ||||||||||
Paul J. Diaz President and Chief Executive Officer | $1,092,000 | 100% | 107.0% | $1,168,440 | ||||||||||
R. Bryan Riggsbee Former Chief Financial Officer | $564,440 | 75% | 102.0% | $431,797 | ||||||||||
Nicole Lambert Former Chief Operating Officer | $515,000 | 75% | 102.0% | $393,975 | ||||||||||
Mark S. Verratti Chief Commercial Officer | $498,750 | 75% | 107.0% | $400,247 | ||||||||||
Dale Muzzey, Ph.D. Chief Scientific Officer | $450,000 | 50% | 111.4% | $250,650 | ||||||||||
revenue, adjusted operating income, engagement score/customer NPS and individual MBO payout percentages. Mr. Diaz's revenue, adjusted operating income, engagement/customer NPS, and individual MBO payout percentages were 40.8%, 31.2%, 10.0% and 25.0%, respectively. Mr. Riggsbee's revenue, adjusted operating income, engagement/customer NPS, and individual MBO payout percentages were 40.8%, 31.2%, 10% and 20%, respectively. Ms. Lambert's revenue, adjusted operating income, engagement/customer NPS, and individual MBO payout percentages were 40.8%, 31.2%, 10%, and 20%, respectively. Mr. Verratti's revenue, adjusted operating income, engagement/customer NPS, and individual MBO payout percentages were 40.8%, 31.2%, 10%, and 25%, respectively. Dr. Muzzey's revenue, adjusted operating income, engagement/customer NPS, and individual MBO payout percentages were 30.6%, 20.8%, 10%, and 50%, respectively.
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Long-Term Incentive Awards
To incentivize and reward long-term performance by our executives, we currently provide two formsform of long-term incentive compensation: a three-year cash incentive bonus and the award 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 interests of our stockholders. The Compensation Committee determines 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 Board50% restricted stock units rather than stock options in ordersubject to reduce the dilutive effect of our equity compensation program.
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Three-Year Cash Incentive Bonus. 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 reviewedtime-based vesting 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 and FY2017, 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.
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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 continued strong financial performance. The three-year cash incentive bonus awards made to our NEOs in fiscal year 2017, and the maximum amount payable under these awards, are reported in the table for 2017 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.
Annual Equity Incentive Awards. In response to continued comments from our stockholders, we will continue to issue long-term equity incentive compensation grants in50% restricted stock units with one-fourth of the units granted vesting on an annual basis over four-plus years. Additionally, for our NEOs, the restricted stock units awarded are subject to achievement of a predetermined, formula-based, one-year revenue target that must be achieved in order for
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the award to commence vesting. Thus, for our NEOs, the actual number of restricted stock units earned will be determined based on the percentage achievement of the predetermined revenue target with no award being earned if a minimum revenue threshold is not achieved; thereafter, and only if the minimum threshold has been achieved, vesting of the award is based on the NEO’s continued employment with us.upon meeting certain performance metrics. 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 considerationmay consider 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 unitlong-term incentive award generally increases as the rank and responsibilities of the executive officer increases.
Restricted stock unit
Based on the 2017 Mercer Executive Compensation Review, which calculated market annual guidelines at the 50th and 75th percentile, the long-term incentive value of the annualCHCC.
| Named Executive Officer | 2023 Fiscal Year RSUs Granted (#) (1) | 2023 Fiscal Year Grant Date Fair Value of RSUs Granted ($) (3) | ||||||
| Paul J. Diaz, President and Chief Executive Officer | 197,023 | $4,596,547 | ||||||
| R. Bryan Riggsbee, Former Chief Financial Officer | 43,783 | $1,021,457 | ||||||
| Samraat S. Raha, Chief Operation Officer | 236,360 (2) | $4,502,658 | ||||||
| Nicole Lambert, Former Chief Operating Officer | 39,405 | $919,319 | ||||||
| Mark S. Verratti, President, Chief Commercial Officer | 39,405 | $919,319 | ||||||
| Dale Muzzey, Ph.D. Chief Scientific Officer | 28,459 | $663,948 | ||||||
We felt the RSU award levels were appropriateMarch 15, 2023, are based on the comparative long-term peer group compensation data from the 2017 Mercer Executive Compensation Review, given the Company’s performance relative to its peers, the individual accomplishmentsclosing price of our NEOs during fiscal year 2016, including our Presidentcommon stock on the Nasdaq Global Select Market on March 15, 2025, of $23.33, and CEO, relative to their MBOs and to continue to place an increased weighting(b) in the case of compensationRSUs granted on long term equity compensation. We also believe these equity awards, now moving to the 50th percentile for our President and CEO and CFO and Treasurer, were appropriateDecember 11, 2023, are based on the Company’s financial performance. Thus, these equityclosing price of our common stock on the Nasdaq Global Select Market on December 11, 2023, of $19.05.
beginning and end of the measurement period. The CHCC selected the IXHC as the appropriate benchmark because it includes a broad swath of healthcare growth companies and the CHCC believes that it best represents the Company from both a market and size perspective. In addition, the CHCC capped the number of PSUs earned with respect to the relative total stockholder return metric at target performance level if absolute total stockholder return is negative over the performance period. The measurement period for the relative total stockholder return metric is January 1, 2023 to December 31, 2025, and the revenue and adjusted earnings per share metrics will be measured based on fiscal year 2025 results. We do not publicly disclose our goals during the performance periods due to the proprietary nature and competitive sensitivity of the information. We believe these goals are consistent with our philosophy of establishing aggressive but achievable targets.
| Named Executive Officer | 2023 Fiscal Year Number of PSUs Granted (1) | 2023 Fiscal Year Grant Date Fair Value of PSUs Granted ($) (2) | ||||||
Paul J. Diaz President and Chief Executive Officer | 197,023 | $5,199,904 | ||||||
R. Bryan Riggsbee Former Chief Financial Officer | 43,783 | $1,155,535 | ||||||
Samraat S. Raha, Chief Operating Officer | — | $— | ||||||
Nicole Lambert Former Chief Operating Officer | 39,404 | $1,039,963 | ||||||
Mark S. Verratti Chief Commercial Officer | 39,404 | $1,039,963 | ||||||
| Dale Muzzey, Ph.D. Chief Scientific Officer | 28,459 | $751,097 | ||||||
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Establishment and Use of Management Business Objectives
The Compensation Committee 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 commences in the fourth quarter of each fiscal year as each executive officer meets with our President and CEO to establish annual MBOs for the ensuing fiscal year. After review and discussion, the President and CEO finalizes the executive officer’s MBOs for the ensuing fiscal year. Similarly, our President and CEO meets with the Compensation Committee 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. During the fiscal year, additional MBOs may be established and assigned to an executive officer, including our President and CEO.
At the end of the ensuing fiscal year, each executive officer’s performance for the fiscal year is reviewed, including an assessment by management and the Compensation Committee of the achievement of each executive officer’s respective MBOs. At this time, the President and CEO calculates and recommends to the Compensation Committee an annual cash incentive bonus amount and salary adjustment for the executive officers, other than himself. The Compensation Committee, after further review and discussion with our President and CEO, then determines the annual cash incentive bonus for the concluding fiscal year and base salary amount for the ensuing fiscal year for the executive officers, other than the President and CEO.
In the case of our President and CEO, the Compensation Committee makes its review and determinations for the President and CEO’s salary and annual cash incentive compensation without any recommendations from our President and CEO, who is not present in any portions of the meetings of the Compensation Committee where his compensation is calculated, discussed and approved. At the end of the fiscal year, the Compensation Committee determines the annual salary amount of our President and CEO for the ensuing fiscal year. The annual cash incentive bonus for our President and CEO’s is based on the 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. The annual cash incentive bonus amount, salary adjustments, and long-term incentive compensation for our President and CEO are reported to the independent members of the Board of Directors.
The MBOs for each executive officer for each fiscal year consist of (i) pre-established financial performance targets for the Company, which for fiscal year 2017 were based on total revenues and adjusted operating income, and (ii) individual objectives tailored to each executive. Each executive officer receives the same Company Financial MBOs as part of their respective MBOs. The Company Financial MBOs represents 50 percent of the total weighting of each executive officer’s MBOs.
From time to time, for those designated, an executive officer’s incentive compensation may be awarded and administered under our 2013 Executive Incentive Plan, whereby 100 percent of short-term incentive cash compensation (annual cash incentive bonus) and grants of restricted stock units are based on pre-established, objective financial performance targets and are subject to a cap. It is intended that incentive compensation paid under the 2013 Executive Incentive Plan will be deductible for tax purposes under Section 162(m) of the Internal Revenue Code; however, the Compensation Committee may award compensation which does not qualify under Section 162(m) in order to accomplish the compensation goals of the Company.
The MBOs for our NEOs for fiscal year 2017 were as follows:
Mark C. Capone, President and CEO — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2017; achieve designated financial targets for non-hereditary product revenues; achieve financial targets for increased revenue potential resulting from new reimbursement coverage decisions; and achieve designated milestones to advance the Company’s product pipeline.
Alexander Ford, President Myriad Genetic Laboratories, Inc. — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal 2017; achieve designated financial targets for Myriad Genetic Laboratories; achieve designated targets for managed care contract coverage for designated products; and achieve designated financial targets for new products in specified indications.
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R. Bryan Riggsbee, Chief Financial Officer and Treasurer — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2017; achieve designated financial target for cost savings; achieve designated financial targets relating to the integration of our acquisitions; evaluate and complete at least one strategic, revenue generating new business opportunity; and manage Enterprise Risk Management function.
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2017; advance product pipeline through approval of companion diagnostic tests; contribute to designated product launch; complete discovery phase for at least one Stage 1 discovery project; and expand companion diagnostic programs into additional indications.
Richard M. Marsh, Executive Vice President, General Counsel and Secretary — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2017; continue to develop and implement Company’s intellectual property strategy; oversee compliance plans for affiliated group, including international activities; and participate in industry intellectual property initiatives.
Named Executive Officer Performance for Fiscal 2017
President and CEO: Based on our financial results for fiscal year 2017, the Compensation Committee determined that Mr. Capone had achieved 87% of the financial performance targets set for him under the Company Financial MBOs for fiscal year 2017. The Compensation Committee also determined that Mr. Capone had accomplished his Individual MBOs based on the revenues generated from non-hereditary cancer products, the additional reimbursement coverage for new products, regulatory approvals for our companion diagnostics and advancements in our product pipeline. Additionally, the Compensation Committee noted, under Mr. Capone’s supervision, the accomplishments of the Company as discussed above under the caption: “Fiscal Year 2017 Performance.”
Other Named Executive Officers. The Compensation Committee determined that the other NEOs had substantially accomplished the Company Financial MBOs and their respective Individual MBOs based on the accomplishments of the Company as discussed above under the caption: “Fiscal Year 2017 Performance.”
Other Compensation
We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance, a 401(k) plan, and a discretionary December holiday bonus. 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. 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.
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CHCC.
We recognize that, as is the case with many publicly-held corporations,
Relationship of Elements of Compensation
As noted above, our compensation structure is primarily comprised of a base salary,
We utilize long term equity incentive compensation in the form of restricted stock units as a substantial component of compensation (prior to fiscal year 2015 we utilized stock options). The Compensation Committee views the award of restricted stock units 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 than 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 award also has a performance metric that, if not met, would require the NEO to forfeit a portion up to the entire restricted stock unit award regardless of the additional requirement of vesting. We believe that this vesting feature 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 Committee 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 Committee 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 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 $100,000 during the fiscal year ended June 30, 2017 and were serving as executive officers as of June 30, 2017.
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Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | |||||||||||||||||||||
Mark C. Capone | 2017 | 852,000 | 307 | 3,613,500 | 741,240 | 10,848 | 5,217,895 | |||||||||||||||||||||
President and Chief Executive Officer* | 2016 | 800,000 | 512 | 3,361,875 | 727,200 | 11,048 | 4,900,635 | |||||||||||||||||||||
| 2015 | 600,000 | 614 | 4,193,200 | 390,060 | 10,248 | 5,194,122 | ||||||||||||||||||||||
Alexander Ford | 2017 | 499,200 | 307 | 1,314,000 | 245,606 | 10,848 | 2,069,961 | |||||||||||||||||||||
President, Myriad Genetic Laboratories, Inc. | ||||||||||||||||||||||||||||
R. Bryan Riggsbee (4) | 2017 | 432,000 | 307 | 1,314,000 | 230,688 | 8,174 | 1,985,170 | |||||||||||||||||||||
Chief Financial Officer | 2016 | 400,000 | 512 | 2,037,500 | 180,000 | 10,016 | 2,628,028 | |||||||||||||||||||||
| 2015 | 265,625 | 10,000 | 1,050,900 | 119,531 | 119,623 | 1,565,679 | ||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | 2017 | 493,782 | 307 | 1,095,000 | 214,795 | 10,960 | 1,814,844 | |||||||||||||||||||||
Chief Scientific Officer | 2016 | 479,400 | 512 | 1,986,563 | 215,730 | 11,297 | 2,693,502 | |||||||||||||||||||||
| 2015 | 470,000 | 614 | 2,477,800 | 207,423 | 10,110 | 3,165,947 | ||||||||||||||||||||||
Richard M. Marsh, Esq. | 2017 | 493,782 | 307 | 1,095,000 | 222,202 | 10,921 | 1,822,212 | |||||||||||||||||||||
Executive VP, General Counsel & Secretary | 2016 | 479,400 | 512 | 1,925,438 | 218,127 | 10,830 | 2,634,306 | |||||||||||||||||||||
| 2015 | 470,000 | 614 | 2,401,560 | 207,423 | 10,513 | 3,090,110 | ||||||||||||||||||||||
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2017 Fiscal Year Grants of Plan-Based Awards
The following tables show information regarding grants of non-equity and equity awards that we made during the fiscal year ended June 30, 2017 to each of the executive officers named in the Summary Compensation Table.
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | ||||||||||||||||||||||||
Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | ||||||||||||||||||||
Mark C. Capone | 9/14/2016 | 115,500 | 165,000 | 3,613,500 | ||||||||||||||||||||||
| FY19 3-YR Award | 127,800 | 170,400 | 255,600 | |||||||||||||||||||||||
Alexander Ford | 9/14/2016 | 42,000 | 60,000 | 1,314,000 | ||||||||||||||||||||||
| FY19 3-YR Award | 56,160 | 74,880 | 112,320 | |||||||||||||||||||||||
R. Bryan Riggsbee | 9/14/2016 | 42,000 | 60,000 | 1,314,000 | ||||||||||||||||||||||
| FY19 3-YR Award | 48,600 | 64,800 | 97,200 | |||||||||||||||||||||||
Jerry S. Lanchbury | 9/14/2016 | 35,000 | 50,000 | 1,095,000 | ||||||||||||||||||||||
| FY19 3-YR Award | 55,551 | 74,067 | 111,111 | |||||||||||||||||||||||
Richard M. Marsh | 9/14/2016 | 35,000 | 50,000 | 1,095,000 | ||||||||||||||||||||||
| FY19 3-YR Award | 55,551 | 74,067 | 111,111 | |||||||||||||||||||||||
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Narrative Disclosure to Summary Compensation Table and 2017 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 15 days 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.
Previously, we have entered into an Executive Retention Agreement with each of our NEOs under which they are entitled to certain benefits upon a change-in-control, as discussed below under “Executive Compensation — Potential Payments Upon Termination or Change-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 to 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, 2017. Mr. Capone will be paid an annual base salary of $852,000 as our President and CEO for the fiscal year ending June 30, 2018. His annual cash incentive bonus for fiscal 2017 was $741,240 as approved by our Compensation Committee based on the level of achievement of pre-established performance goals. Additionally, in September 2016, 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 2019 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2017 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016, 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 2017, the restricted stock unit award was not reduced. On September 13, 2017, he was granted a restricted stock unit award of 165,000 shares of the Company, subject to time-based and performance-based vesting requirements.
Mr. Ford was appointed President of Myriad Genetic Laboratories, Inc. beginning July 1, 2015. He had previously entered into the Company’s standard form of employment agreement when he was initialed 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. As determined by our Compensation Committee, Mr. Ford received an annual salary of $499,200 for the fiscal year ended June 30, 2017, and will be paid an annual base salary of $499,200 for the fiscal year ending June 30, 2018. His annual cash incentive bonus for fiscal 2017 was $245,606 as determined by our Compensation Committee. Additionally, in September 2016, 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 2019 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2017 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016, 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 2017, the restricted stock unit award was not reduced. On September 13, 2017, Mr. Ford was granted a restricted stock unit award of 60,000 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, 2017. Mr. Riggsbee will be paid an annual base salary of $432,000 for the fiscal year ending June 30, 2018. His annual cash incentive bonus for fiscal 2017 was $230,688 as determined by our Compensation Committee. Additionally, in September 2016, 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 2019 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2017
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Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016, 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 2017, the restricted stock unit award was not reduced. On September 13, 2017, Mr. Riggsbee was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements.
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, 2017. Dr. Lanchbury will be paid an annual base salary of $493,782 for the fiscal year ending June 30, 2018. His annual cash incentive bonus for fiscal 2017 was $214,795 as determined by our Compensation Committee. Additionally, in September 2016, 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 $111,111 as of the end of fiscal 2019 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2017 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016, 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 2017, the restricted stock unit award was not reduced. On September 13, 2017, Dr. Lanchbury was granted a restricted stock unit award of 50,000 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, 2017, and will be paid an annual base salary of $493,782 for the fiscal year ending June 30, 2018. His annual cash incentive bonus for fiscal 2017 was $222,202 as determined by our Compensation Committee. Additionally, in September 2016, 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 $111,111 as of the end of fiscal 2019 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2017 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016, 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 2017, the restricted stock unit award was not reduced. On September 13, 2017, Mr. Marsh was granted a restricted stock unit award of 50,000 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 addition to the annual cash incentive bonus paid to each of our NEOs, all employees, including the named executive officers, received a holiday bonus of $307 in fiscal year 2017.
In September 2017, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which our executive officers and other key management members may be entitled to receive compensation at the end of fiscal year 2020 if certain predetermined performance goals are achieved. Following are the amounts that may be earned for our NEOs for the awards under our three-year cash incentive awards:
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| Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | ||||||||||||||||
Name | Award Period | Threshold | Target | Maximum | ||||||||||||
Mark C. Capone | FY18-20 | 127,800 | 170,400 | 255,600 | ||||||||||||
Alexander Ford | FY18-20 | 56,160 | 74,880 | 112,320 | ||||||||||||
R. Bryan Riggsbee | FY18-20 | 48,600 | 64,800 | 97,200 | ||||||||||||
Jerry S. Lanchbury, Ph.D. | FY18-20 | 55,551 | 74,067 | 111,111 | ||||||||||||
Richard M. Marsh, Esq. | FY18-20 | 55,551 | 74,067 | 111,111 | ||||||||||||
Outstanding Equity Awards at 2017 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, 2017, 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 | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(2) | 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 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($)(3) | |||||||||||||||||||||||||
Mark C. Capone | 9/10/2008 | 90,000 | 0 | $ | 22.93 | 9/10/2018 | ||||||||||||||||||||||||||||
| 2/18/2009 | 80,000 | 0 | $ | 30.12 | 2/18/2019 | |||||||||||||||||||||||||||||
| 09/15/2009 | 62,000 | 0 | $ | 30.34 | 9/15/2019 | |||||||||||||||||||||||||||||
| 03/03/2010 | 75,000 | 0 | $ | 23.11 | 3/3/2020 | |||||||||||||||||||||||||||||
| 09/15/2010 | 25,001 | 0 | $ | 16.53 | 9/15/2020 | |||||||||||||||||||||||||||||
| 02/23/2011 | 31,250 | 0 | $ | 18.00 | 2/23/2021 | |||||||||||||||||||||||||||||
| 09/13/2011 | 144,000 | 0 | $ | 19.47 | 9/13/2022 | |||||||||||||||||||||||||||||
| 03/07/2012 | 52,000 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
| 09/12/2012 | 300,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
| 09/17/2013 | 247,500 | 82,500 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
| 09/17/2014 | 49,714 | 1,284,610 | ||||||||||||||||||||||||||||||||
| 09/15/2015 | 59,028 | 1,525,284 | ||||||||||||||||||||||||||||||||
| 09/14/2016 | 165,000 | 4,263,600 | ||||||||||||||||||||||||||||||||
Alexander Ford | 06/22/2010 | 4,000 | 0 | $ | 15.98 | 6/22/2020 | ||||||||||||||||||||||||||||
| 09/13/2011 | 10,551 | 0 | $ | 19.47 | 9/13/2021 | |||||||||||||||||||||||||||||
| 03/07/2012 | 4,000 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
| 09/12/2012 | 35,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
| 09/17/2013 | 41,250 | 13,750 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
| 09/17/2014 | 8,250 | 213,180 | ||||||||||||||||||||||||||||||||
| 09/15/2015 | 12,375 | 319,770 | ||||||||||||||||||||||||||||||||
| 09/14/2016 | 60,000 | 1,550,400 | ||||||||||||||||||||||||||||||||
R. Bryan Riggsbee | 10/17/2014 | 15,000 | 387,600 | |||||||||||||||||||||||||||||||
| 09/15/2015 | 35,775 | 924,426 | ||||||||||||||||||||||||||||||||
| 09/14/2016 | 60,000 | 1,550,400 | ||||||||||||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | 2/18/2009 | 60,000 | 0 | $ | 30.12 | 2/18/2019 | ||||||||||||||||||||||||||||
| 09/15/2009 | 50,000 | 0 | $ | 30.34 | 9/15/2019 | |||||||||||||||||||||||||||||
| 03/03/2010 | 50,672 | 0 | $ | 23.11 | 3/3/2020 | |||||||||||||||||||||||||||||
| 02/23/2011 | 80,000 | 0 | $ | 18.00 | 2/23/2021 | |||||||||||||||||||||||||||||
| 09/13/2011 | 128,000 | 0 | $ | 19.47 | 9/13/2021 | |||||||||||||||||||||||||||||
| 03/07/2012 | 32,000 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
| 09/12/2012 | 160,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
| 09/17/2013 | 135,000 | 45,000 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
| 09/17/2014 | 29,376 | 759,076 | ||||||||||||||||||||||||||||||||
| 09/15/2015 | 34,880 | 901,299 | ||||||||||||||||||||||||||||||||
| 09/14/2016 | 50,000 | 1,292,000 | ||||||||||||||||||||||||||||||||
Richard M . Marsh, Esq. | 2/18/2009 | 77,654 | 0 | $ | 30.12 | 2/18/2019 | ||||||||||||||||||||||||||||
| 09/15/2009 | 66,139 | 0 | $ | 30.34 | 9/15/2019 | |||||||||||||||||||||||||||||
| 03/03/2010 | 70,672 | 0 | $ | 23.11 | 3/3/2020 | |||||||||||||||||||||||||||||
| 09/15/2010 | 79,999 | 0 | $ | 16.53 | 9/15/2020 | |||||||||||||||||||||||||||||
| 02/23/2011 | 84,445 | 0 | $ | 18.00 | 2/23/2021 | |||||||||||||||||||||||||||||
| 09/13/2011 | 144,000 | 0 | $ | 19.47 | 9/13/2021 | |||||||||||||||||||||||||||||
| 03/07/2012 | 31,830 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
| 09/12/2012 | 180,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
| 09/17/2013 | 142,500 | 47,500 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
| 09/17/2014 | 28,472 | 735,716 | ||||||||||||||||||||||||||||||||
| 09/15/2015 | 33,806 | 873,547 | ||||||||||||||||||||||||||||||||
| 09/14/2016 | 50,000 | 1,292,000 | ||||||||||||||||||||||||||||||||
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2017 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, 2017.
| 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 | None | — | 44,533 | 924,941 | ||||||||||||
Alexander Ford | None | — | 8,250 | 171,188 | ||||||||||||
R. Bryan Riggsbee | None | — | 19,425 | 390,242 | ||||||||||||
Jerry S. Lanchbury, Ph.D. | None | — | 26,315 | 546,557 | ||||||||||||
Richard M. Marsh, Esq. | None | — | 25,505 | 529,733 | ||||||||||||
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
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 the 90-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 by one-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.
44
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 tax gross-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 for one-year terms unless we provide notice of non-renewal at least 90 days prior to the end of each term.
As defined in the Retention Agreements:
45
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 Form 10-K, as amended.
46
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, 2017, 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 | — | 2,223,720 | 1,111,860 | |||||||||||
Stock option and RSU acceleration | 7,230,025 | 7,230,025 | 7,230,025 | |||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||
|
|
|
|
|
| |||||||||
Total | 7,230,025 | 12,100,192 | 9,710,332 | |||||||||||
Alexander Ford | Base salary | — | 1,497,600 | 748,800 | ||||||||||
Bonus | — | 736,818 | 368,409 | |||||||||||
Stock option and RSU acceleration | 2,074,413 | 2,074,413 | 2,074,413 | |||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||
|
|
|
|
|
| |||||||||
Total | 2,074,413 | 4,399,277 | 3,282,068 | |||||||||||
R. Bryan Riggsbee | Base salary | — | 1,296,000 | 648,000 | ||||||||||
Bonus | — | 692,064 | 346,032 | |||||||||||
Stock option and RSU acceleration | 2,907,000 | 2,907,000 | 2,907,000 | |||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||
|
|
|
|
|
| |||||||||
Total | 2,907,000 | 4,985,511 | 3,991,479 | |||||||||||
Jerry S. Lanchbury, Ph.D. | Base salary | — | 1,481,346 | 740,673 | ||||||||||
Bonus | — | 644,385 | 322,193 | |||||||||||
Stock option and RSU acceleration | 3,047,312 | 3,047,312 | 3,047,312 | |||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||
|
|
|
|
|
| |||||||||
Total | 3,047,312 | 5,263,490 | 4,200,624 | |||||||||||
Richard M. Marsh, Esq. | Base salary | — | 1,481,346 | 740,673 | ||||||||||
Bonus | — | 666,606 | 333,303 | |||||||||||
Stock option and RSU acceleration | 2,990,777 | 2,990,777 | 2,990,777 | |||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||
|
|
|
|
|
| |||||||||
| Total | 2,990,777 | 5,229,176 | 4,155,200 | |||||||||||
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 in-the-money stock options as of June 30, 2017 by the spread
47
|
Director Compensation
The following table shows the total compensation paid or accrued during the fiscal year ended June 30, 2017 to each of our nonemployee directors who served during fiscal year 2017. 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 ($) | |||||||||
Lawrence C. Best | 78,500 | 250,000 | 328,500 | |||||||||
Heiner Dreismann, Ph.D. | 85,000 | 250,000 | 335,000 | |||||||||
Walter Gilbert, Ph.D. | 70,000 | 250,000 | 320,000 | |||||||||
John T. Henderson, M.D. | 182,500 | 250,000 | 432,500 | |||||||||
Dennis H. Langer, M.D., J.D. | 90,500 | 250,000 | 340,500 | |||||||||
S. Louise Phanstiel | 97,500 | 250,000 | 347,500 | |||||||||
The following table shows outstanding and vested options and unvested RSUs for each nonemployee director as of June 30, 2017.
Name | Options Outstanding | Vested Options | Unvested RSUs | |||||||||
Lawrence C. Best | 150,000 | 150,000 | 15,024 | |||||||||
Heiner Dreismann, Ph.D. | — | — | 15,024 | |||||||||
Walter Gilbert, Ph.D. | 90,000 | 90,000 | 15,024 | |||||||||
John T. Henderson, M.D. | 210,000 | 210,000 | 15,024 | |||||||||
Dennis H. Langer, M.D., J.D. | 150,000 | 150,000 | 15,024 | |||||||||
S. Louise Phanstiel | 150,000 | 150,000 | 15,024 | |||||||||
The following table shows the grant date fair value for restricted stock unit awards granted to each nonemployee director in our fiscal year ended June 30, 2017.
Name | Granted (#) | Grant Date | Grant Date Fair Value ($) | |||||||||
Lawrence C. Best | 15,024 | 12/1/2016 | 250,000 | |||||||||
Heiner Dreismann, Ph.D. | 15,024 | 12/1/2016 | 250,000 | |||||||||
Walter Gilbert, Ph.D. | 15,024 | 12/1/2016 | 250,000 | |||||||||
John T. Henderson, M.D. | 15,024 | 12/1/2016 | 250,000 | |||||||||
Dennis H. Langer, M.D., J.D. | 15,024 | 12/1/2016 | 250,000 | |||||||||
S. Louise Phanstiel | 15,024 | 12/1/2016 | 250,000 | |||||||||
48
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:
| ||
Attendance
All directors are also reimbursed for their out-of-pocket expenses incurred in attending meetings.
Stock Option, Restricted and Unrestricted Stock Grants and Other Stock-Based Awards
Under our 2010 Plan, our nonemployee directors may be awarded stock options, 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. 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.
Options and restricted stock units granted to our nonemployee directors vest in full upon completion of one year of service on the Board. 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 under our 2010 Plan.
Beginning in fiscal year 2018, if our 2017 Plan is approved by our shareholders, our nonemployee directors will only receive restricted stock unit awards as provided for under our 2017 Plan in the manner described above.
49
Risks Related to Compensation Policies and Practices
During the fiscal year ended June 30, 2017, the Compensation Committee 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. The CHCC conducted its latest assessment in March 2024. 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, annual cash bonus payments are 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 three or 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.
Tax Deductibility
Section 162(m)certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws, including any required accounting restatement to correct an error in previously issued financial statements that (i) is material to the previously issued financial statements or (ii) is not material to previously issued financial statements, but that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. We are required to seek reimbursement or forfeiture of any excess incentive-based compensation received by a current or former executive officer during the three completed fiscal years immediately preceding the date on which we are required to prepare the accounting restatement. The amount of incentive-based compensation subject to recovery is the amount the covered executive received in excess of the Internal Revenue Code limits the deduction a public company is permitted foramount of incentive-based compensation that would have been paid to the chief executive officer and to the three most highly compensated executive officers other than the chief financial officer. Generally, amounts paid in excess of $1,000,000 to a covered executive cannot be deducted, unlesshad it been based on the compensation is paid pursuant to a plan that is performance related, nondiscretionary and has been approvedrestated financial statements, as determined by stockholders. In fiscal 2013, we adopted our 2013 Executive Incentive Plan under which incentive compensation paid to designated executive officers may be deductible for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. On September 14, 2017, our Board of Directors made certain amendmentsor the CHCC. Incentive-based compensation includes any compensation that is granted, earned, or vested based wholly or in part upon the attainment of any financial reporting measures that are determined and presented in accordance with the accounting principles used in preparing our financial statements and any measures derived wholly or in part from such measures, as well as non-GAAP measures, stock price, and total stockholder return. Incentive-based compensation may also include annual cash bonuses and time-based and performance-based restricted stock units.
| 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 or adoption of the stock ownership guidelines | ||||
| 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. Unexercised options and unvested PSUs do not count towards the ownership requirement. | ||||
| Calculation Method | Shares of common stock are valued at the greater of (i) the common stock closing price as of the date on which the determination is made and (ii) the common stock closing price on the date the shares were acquired by the director or officer | ||||
| 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. | ||||
Equity Compensation Plan Information
The following table provides certain aggregate informationthe target number of PSUs granted. However, with respect to allthe relative total stockholder return metric, if the Company's absolute total stockholder return over the performance period is negative, the vesting level may not exceed the target level (
50
PSUs granted).
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) | 7,954,187 | $ | 24.67 | 3,628,472 | (2) | |||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 7,954,187 | $ | 24.67 | 3,628,472 | (2) | |||||||
COMPENSATION COMMITTEE REPORT
Walter Gilbert,
John T. Henderson, M.D.
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($)(1) | Stock Awards ($) (2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||||
| Paul J. Diaz President and Chief Executive Officer | 2023 | $1,086,750 | $— | $9,796,451 | $— | $1,168,440 | $56,718 | $12,108,359 | ||||||||||||||||||
| 2022 | $1,043,750 | $9,513,661 | $766,500 | $67,277 | $11,391,188 | |||||||||||||||||||||
| 2021 | $1,000,000 | $500,000 | $9,869,920 | $1,279,000 | $138,749 | $12,787,669 | ||||||||||||||||||||
R. Bryan Riggsbee Former Chief Financial Officer (5) | 2023 | $562,324 | $— | $4,812,936 | $— | $431,797 | $29,708 | $5,836,764 | ||||||||||||||||||
| 2022 | $544,877 | $2,025,632 | $274,548 | $25,722 | $2,870,779 | |||||||||||||||||||||
| 2021 | $526,451 | $2,022,772 | $394,207 | $13,831 | $2,957,261 | |||||||||||||||||||||
| Samraat S. Raha Chief Operating Officer | 2023 | $14,368 | $500,000 | $4,502,658 | $— | $— | $390 | $5,017,416 | ||||||||||||||||||
Nicole Lambert Former Chief Operating Officer (6) | 2023 | $448,745 | $— | $3,810,058 | $— | $393,975 | $65,630 | $4,718,409 | ||||||||||||||||||
| 2022 | $498,933 | $1,849,751 | $213,000 | $34,979 | $2,596,663 | |||||||||||||||||||||
| 2021 | $475,250 | $2,086,457 | $336,192 | $13,785 | $2,911,684 | |||||||||||||||||||||
| Mark S. Verratti Chief Commercial Officer | 2023 | $495,781 | $— | $1,959,282 | $— | $400,247 | $19,779 | $2,875,089 | ||||||||||||||||||
| 2022 | $464,423 | $1,296,869 | $313,267 | $17,157 | $2,091,716 | |||||||||||||||||||||
| 2021 | $434,489 | $1,292,885 | $275,032 | $13,769 | $2,016,175 | |||||||||||||||||||||
| Dale Muzzey, Ph.D. Chief Scientific Officer | 2023 | $443,750 | $111,039 | $1,415,045 | $— | $250,650 | $11,066 | $2,231,550 | ||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units (# of units) | All Other Option Awards: Number of Securities Underlying Options (# of shares) | Exercise or Base Price of Option Awards ($/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 | 546,000 | 1,092,000 | 1,638,000 | ||||||||||||||||||||||||||||||||||
| Time-Based RSUs | 3/15/2023 | 197,023 (3) | $4,596,547 | |||||||||||||||||||||||||||||||||||
| PSUs | 3/15/2023 | 98,512 | 197,023 | 295,535 | $5,199,904 | |||||||||||||||||||||||||||||||||
| R. Bryan Riggsbee | Short-term Cash Incentive Bonus | 211,665 | 423,330 | 634,995 | ||||||||||||||||||||||||||||||||||
| Time-Based RSUs | 3/15/2023 | 43,783 (8) | $1,021,457 | |||||||||||||||||||||||||||||||||||
| PSUs | 3/15/2023 | 21,892 | 43,783 (8) | 65,675 | $1,155,535 | |||||||||||||||||||||||||||||||||
| Accelerated RSUs and PSUs | 12/15/2023 | 113,327 (4) | $2,635,944 | |||||||||||||||||||||||||||||||||||
| Samraat S. Raha | Time-Based RSUs | 12/11/2023 | 236,360 (5) | $4,502,658 | ||||||||||||||||||||||||||||||||||
| Nicole Lambert | Short-term Cash Incentive Bonus | 193,125 | 386,250 | 579,375 | ||||||||||||||||||||||||||||||||||
| Time-Based RSUs | 3/15/2023 | 39,405 (8) | $919,319 | |||||||||||||||||||||||||||||||||||
| PSUs | 3/15/2023 | 19,702 | 39,404 (8) | 59,106 | $1,039,963 | |||||||||||||||||||||||||||||||||
| Accelerated RSUs and PSUs | 10/4/2023 | 92,337 (6) | $1,850,776 | |||||||||||||||||||||||||||||||||||
| Mark Verratti | Short-term Cash Incentive Bonus | 187,031 | 374,063 | 561,094 | ||||||||||||||||||||||||||||||||||
| Time-Based RSUs | 3/15/2023 | 39,405 (3) | $919,319 | |||||||||||||||||||||||||||||||||||
| PSUs | 3/15/2023 | 19,702 | 39,404 | 59,106 | $1,039,963 | |||||||||||||||||||||||||||||||||
| Dale Muzzey, Ph.D. | Short-term Cash Incentive Bonus | 112,500 | 225,000 | 337,500 | ||||||||||||||||||||||||||||||||||
| Time-Based RSUs | 3/15/2023 | 28,459 (3) | $663,948 | |||||||||||||||||||||||||||||||||||
| PSUs | 3/15/2023 | 14,230 | 28,459 | 42,689 | $751,097 | |||||||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have not Vested (#)(3) | Market Value of Shares or Units of Stock that Have not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($)(4) | |||||||||||||||||||||||
| Paul J. Diaz | 08/13/2020 | 256,530 (1) | 85,510 (1) | $13.38 | 08/13/2027 | |||||||||||||||||||||||||||
| 08/13/2020 | 203,452 (2) | 135,636 (2) | $13.38 | 08/13/2027 | ||||||||||||||||||||||||||||
| 08/13/2020 | 49,826 | $953,670 | ||||||||||||||||||||||||||||||
| 10/08/2020 | 111,359 | $2,131,411 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 79,957 | $1,530,377 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 117,134 | $2,241,945 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 129,858 | $2,485,482 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 173,143 | $3,313,957 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 197,023 | $3,771,020 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 197,023 | $3,771,020 | ||||||||||||||||||||||||||||||
| R. Bryan Riggsbee | 02/18/2020 | 25,000 | $478,500 | |||||||||||||||||||||||||||||
| 10/08/2020 | 11,238 | $215,095 | ||||||||||||||||||||||||||||||
| 10/08/2020 | 16,744 | $320,480 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 16,386 | $313,628 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 24,003 | $459,417 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 25,345 | $485,103 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 36,865 | $705,596 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 43,783 | $838,007 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 43,783 | $838,007 | ||||||||||||||||||||||||||||||
| Samraat S. Raha | 12/11/2023 | 236,360 | $4,523,930 | |||||||||||||||||||||||||||||
| Nicole Lambert | 10/08/2020 | 11,052 | $211,535 | |||||||||||||||||||||||||||||
| 10/08/2020 | 16,467 | $315,178 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 14,778 | $282,851 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 21,646 | $414,304 | ||||||||||||||||||||||||||||||
| 12/08/2021 | 5,000 | $95,700 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 16,832 | $322,164 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 33,664 | $644,329 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 39,405 | $754,212 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 39,404 | $754,193 | ||||||||||||||||||||||||||||||
| Mark S. Verratti | 10/08/2020 | 7,814 | $149,560 | |||||||||||||||||||||||||||||
| 10/08/2020 | 11,642 | $222,828 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 7,720 | $147,761 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 11,308 | $216,435 | ||||||||||||||||||||||||||||||
| 09/21/2021 | 5,000 | $95,700 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 14,428 | $276,152 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 19,238 | $368,215 | ||||||||||||||||||||||||||||||
| 04/14/2022 | 7,500 | $143,550 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 39,405 | $754,212 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 39,404 | $754,193 | ||||||||||||||||||||||||||||||
| Dale Muzzey, Ph.D. | 10/08/2020 | 897 | $17,169 | |||||||||||||||||||||||||||||
| 03/24/2021 | 2,167 | $41,476 | ||||||||||||||||||||||||||||||
| 03/24/2021 | 3,174 | $60,750 | ||||||||||||||||||||||||||||||
| 12/08/2021 | 2,250 | $43,065 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 12,012 | $229,910 | ||||||||||||||||||||||||||||||
| 03/22/2022 | 16,016 | $306,546 | ||||||||||||||||||||||||||||||
| 04/14/2022 | 5,625 | $107,663 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 28,459 | $544,705 | ||||||||||||||||||||||||||||||
| 03/15/2023 | 28,459 | $544,705 | ||||||||||||||||||||||||||||||
AUDIT COMMITTEE REPORT
| Option Awards | Stock Awards | ||||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | |||||||||||||
| Paul J. Diaz | 303,017 | $6,212,793 | |||||||||||||||
| R. Bryan Riggsbee | 92,646 | $1,759,642 | |||||||||||||||
| Sam Raha | — | $— | |||||||||||||||
| Nicole Lambert | 66,650 | $1,234,096 | |||||||||||||||
| Mark S. Verratti | 46,980 | $856,622 | |||||||||||||||
| Dale Muzzey, Ph.D. | 10,583 | $227,370 | |||||||||||||||
| Named Executive Officer | Executive Benefits and Payments Upon Termination | Change in Control and Involuntary Termination Without Cause or for Good Reason ($) (1) | Involuntary Termination Without Cause or for Good Reason ($) (1) | |||||||||||
| Base salary | $2,184,000 | $2,184,000 | ||||||||||||
| Bonus | $3,276,000 | $3,276,000 | ||||||||||||
| Paul J. Diaz | Stock option, RSU and PSU acceleration (2) | $21,472,683 | $20,008,555 | |||||||||||
| COBRA benefits | $45,087 | $45,087 | ||||||||||||
| Total | $26,977,770 | $25,513,642 | ||||||||||||
| Base salary | $1,125,000 | $1,125,000 | ||||||||||||
| Bonus | $594,863 | $594,863 | ||||||||||||
| Samraat S. Raha | RSU and PSU acceleration (3) | $4,523,930 | $3,392,948 | |||||||||||
| COBRA benefits | $45,087 | $45,087 | ||||||||||||
| Total | $6,288,881 | $5,157,898 | ||||||||||||
| Base salary | $498,750 | $498,750 | ||||||||||||
| Bonus | $748,125 | $748,125 | ||||||||||||
| Mark S. Verratti | RSU and PSU acceleration (3) | $3,128,605 | $2,838,250 | |||||||||||
| COBRA benefits | $30,058 | $30,058 | ||||||||||||
| Total | $4,405,538 | $4,115,183 | ||||||||||||
| Base salary | $450,000 | $450,000 | ||||||||||||
| Bonus | $450,000 | $450,000 | ||||||||||||
| Dale Muzzey, Ph.D. | RSU and PSU acceleration (3) | $1,895,989 | $1,683,301 | |||||||||||
| COBRA benefits | $30,058 | $30,058 | ||||||||||||
| Total | $2,826,047 | $2,613,359 | ||||||||||||
| Year | Summary Compensation Table Total for First PEO1 $ | Summary Compensation Table Total for Second PEO1 $ | Summary Compensation Table Total for Third PEO1 $ | Compensation Actually Paid to First PEO1,3,4,8 $ | Compensation Actually Paid to Second PEO1,3,4, 8 $ | Compensation Actually Paid to Third PEO1,3,4,8 $ | Average Summary Compensation Table Total for Non-PEO NEOs1 $ | Average Compensation Actually Paid to Non-PEO NEOs1,3,4,8 $ | Value of Initial Fixed $100 Investment on June 30, 2019 Based on: | Net Income $ (millions) | Revenue7 $ (millions) | |||||||||||||||||||||||||||
Total Shareholder Return5 | Peer Group Total Shareholder Return6 | |||||||||||||||||||||||||||||||||||||
| 2023 | 12,108,359 | — | — | 14,201,749 | — | — | 4,135,846 | 3,194,672 | 68.90 | 117.12 | -263.3 | 753.2 | ||||||||||||||||||||||||||
| 2022 | 11,391,188 | — | — | (4,479,782) | — | — | 2,665,450 | (161,281) | 52.23 | 109.93 | -112.0 | 678.4 | ||||||||||||||||||||||||||
| 2021 | 12,787,669 | — | — | 29,789,160 | — | — | 2,483,005 | 4,670,387 | 99.35 | 138.15 | -27.2 | 690.6 | ||||||||||||||||||||||||||
2020T2 | 15,500,821 | 1,816,406 | — | 21,673,140 | 4,070,113 | — | 1,479,328 | 2,508,329 | 71.18 | 143.23 | -53.1 | 299.8 | ||||||||||||||||||||||||||
| 2020 | — | 4,203,341 | 6,174,458 | — | 1,095,973 | 308,756 | 1,911,438 | 151,229 | 40.82 | 123.27 | -199.6 | 638.6 | ||||||||||||||||||||||||||
| Year | First PEO | Second PEO | Third PEO | NEOs included in Average | ||||||||||
| 2023 | Paul Diaz | — | — | R. Bryan Riggsbee, Dale Muzzey, Nicole Lambert, Mark Verratti, Samraat S. Raha | ||||||||||
| 2022 | Paul J. Diaz | — | — | R. Bryan Riggsbee, Jerry S. Lanchbury, Ph.D., Nicole Lambert, Mark S. Verratti, and Kevin R. Haas, Ph.D. | ||||||||||
| 2021 | Paul J. Diaz | — | — | R. Bryan Riggsbee, Jerry S. Lanchbury, Ph.D., Nicole Lambert, Mark S. Verratti | ||||||||||
| 2020T | Paul J. Diaz | R. Bryan Riggsbee | — | Jerry S. Lanchbury, Ph.D., Nicole Lambert, Mark S. Verratti | ||||||||||
| 2020 | — | R. Bryan Riggsbee | Mark C. Capone | Alexander Ford, Jerry S. Lanchbury, Ph.D., Nicole Lambert, Bernard J. Tobin, Gary A. King | ||||||||||
| 2023 | 2022 | 2021 | 2020 Transition Period | 2020 | ||||||||||||||||||||||||||||||||||
| First PEO | Avg Non-PEO NEO | First PEO | Avg Non-PEO NEO | First PEO | Avg Non-PEO NEO | First PEO | Second PEO | Avg Non-PEO NEO | Second PEO | Third PEO | Avg Non-PEO NEO | |||||||||||||||||||||||||||
| Reported SCT figures | ||||||||||||||||||||||||||||||||||||||
| Reported SCT Total ($) | 12,108,359 | 4,135,846 | 11,391,188 | 2,665,450 | 12,787,669 | 2,483,005 | 15,500,821 | 1,816,406 | 1,479,328 | 4,203,341 | 6,174,458 | 1,911,438 | ||||||||||||||||||||||||||
| Reported SCT Stock Award Value ($) | 9,796,451 | 3,299,996 | 9,513,661 | 1,890,185 | 9,869,920 | 1,649,044 | 8,394,628 | 1,264,541 | 1,075,166 | 3,461,500 | 4,489,500 | 1,149,312 | ||||||||||||||||||||||||||
| Reported SCT Option Award Value ($) | — | — | — | — | — | — | 5,500,006 | — | — | — | — | — | ||||||||||||||||||||||||||
| Equity Award Adjustments | ||||||||||||||||||||||||||||||||||||||
| Year-end Fair Value of Unvested Awards Granted in the Applicable Fiscal Year ($) | 7,979,605 | 1,943,821 | 5,183,465 | 576,200 | 10,879,576 | 1,740,847 | 20,066,953 | 2,023,026 | 1,654,258 | 1,598,940 | 348,705 | 319,334 | ||||||||||||||||||||||||||
| Change in Fair Value of Awards Granted in Prior Years that were Unvested as of Applicable Fiscal Year End ($) | 2,039,494 | 260,459 | (11,226,199) | (1,133,716) | 8,276,036 | 1,209,889 | — | 1,428,885 | 413,607 | (1,325,475) | (1,941,975) | (669,356) | ||||||||||||||||||||||||||
| Change in Fair Value of Awards Granted in Prior Years that Vested in the Applicable Fiscal Year ($) | 1,870,743 | 154,543 | (314,575) | (379,031) | 7,715,799 | 885,690 | — | 66,338 | 36,302 | 80,667 | 217,068 | (260,876) | ||||||||||||||||||||||||||
| Compensation Actually Paid ($) | 14,201,749 | 3,194,672 | (4,479,782) | (161,281) | 29,789,160 | 4,670,387 | 21,673,140 | 4,070,113 | 2,508,329 | 1,095,973 | 308,756 | 151,229 | ||||||||||||||||||||||||||
| Revenue | ||
| Adjusted operating income | ||
| Adjusted earnings per share | ||
| Relative total stockholder return | ||
Engagement score1 | ||
Customer NPS1 | ||
| Fees Earned or | Stock | ||||||||||
| Name | Paid in Cash ($) | Awards ($) | Total ($) | ||||||||
| Paul Bisaro | $83,500 | $174,983 (1) | $258,483 | ||||||||
| Heiner Dreismann, Ph.D. | $93,500 | $349,988 (2) | $443,488 | ||||||||
| Rashmi Kumar | $83,500 | $349,988 (2) | $433,488 | ||||||||
| Lee N. Newcomer, M.D. | $98,000 | $349,988 (2) | $447,988 | ||||||||
| S. Louise Phanstiel | $213,500 | $349,988 (2) | $563,488 | ||||||||
| Colleen F. Reitan | $93,500 | $349,988 (2) | $443,488 | ||||||||
| Daniel M. Skovronsky, M.D., Ph.D. | $83,500 | $349,988 (2) | $433,488 | ||||||||
| Daniel K. Spiegelman | $88,000 | $349,988 (2) | $437,988 | ||||||||
| (1) Amount shown reflects the grant date fair value of an award of 7,575 RSUs calculated in accordance with FASB ASC Topic 718. The grant date fair value was determined by multiplying the number of shares by $23.10, the closing price of our common stock on the Nasdaq Global Select Market on June 1, 2023, the date of the grant. These RSUs awarded to Mr. Bisaro vest 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. | |||||||||||
| (2) Amounts shown reflect the grant date fair value of an award of 15,151 RSUs calculated in accordance with FASB ASC Topic 718. The grant date fair value was determined by multiplying the number of shares by $23.10, the closing price of our common stock on the Nasdaq Global Select Market on June 1, 2023, the date of the grant. These RSUs awarded to certain of our non-employee directors following the 2023 Annual Meeting of Stockholders held on June 1, 2023 vest 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. | |||||||||||
| Unvested | |||||
| Name | RSUs | ||||
| Paul Bisaro | 7,575 | ||||
| Heiner Dreismann, Ph.D. | 15,151 | ||||
| Rashmi Kumar | 15,151 | ||||
| Lee N. Newcomer, M.D. | 15,151 | ||||
| S. Louise Phanstiel | 15,151 | ||||
| Colleen F. Reitan | 15,151 | ||||
| Daniel M. Skovronsky, M.D., Ph.D. | 15,151 | ||||
| Daniel K. Spiegelman | 15,151 | ||||
| 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, Environmental, Social and Governance Committee | $20,000 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, Environmental, Social and Governance Committee (1) | $10,000 additional | ||||
Members of the Research and Product Innovation Committee (1) | $13,500 additional | ||||
| (1) Other than the chairperson of such committee | |||||
| 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)) (3) | |||||||||||
| Equity compensation plans approved by security holders (1) | 4,231,455 | — | 6,001,310 | |||||||||||
| Equity compensation plans not approved by security holders (2) | 842,313 | $13.38 | — | |||||||||||
| Total | 5,073,768 | $13.38 | 6,001,310 | |||||||||||
| Shares Beneficially Owned | ||||||||
| Name and Address** | Number | Percent | ||||||
| Beneficial Owners of More Than 5% of Our Common Stock | ||||||||
| BlackRock, Inc. (1) | 14,658,349 | 16.2% | ||||||
| 55 East 52nd Street | ||||||||
| New York, NY 10055 | ||||||||
| The Vanguard Group (2) | 9,954,233 | 11.0% | ||||||
| 100 Vanguard Blvd. | ||||||||
| Malvern, PA 19355 | ||||||||
| Camber Capital Management LP (3) | 7,635,000 | 8.4% | ||||||
| 101 Huntington Avenue, Suite 2101 | ||||||||
| Boston, MA 02199 | ||||||||
| Wellington Management Company (4) | 7,219,706 | 8.0% | ||||||
| 280 Congress Street | ||||||||
| Boston, MA 02210 | ||||||||
| Glenview Capital Management, LLC (5) | 5,283,982 | 5.8% | ||||||
| 767 Fifth Avenue, 44th Floor | ||||||||
| New York, NY 10153 | ||||||||
| State Street Global Advisors (6) | 4,700,631 | 5.2% | ||||||
| 1 Lincoln Street | ||||||||
| Boston, MA 02111 | ||||||||
| Named Executive Officers | ||||||||
| Paul J. Diaz (7) | 1,030,094 | 1.1% | ||||||
| R. Bryan Riggsbee (8) | 140,087 | * | ||||||
| Sam S. Raha | — | * | ||||||
| Nicole Lambert (9) | 154,724 | * | ||||||
| Mark S. Verratti (10) | 166,303 | * | ||||||
| Dale Muzzey, Ph.D. (11) | 26,007 | * | ||||||
| Directors and Director Nominees | ||||||||
| S. Louise Phanstiel (12) | 145,072 | * | ||||||
| Paul Bisaro (13) | 24,450 | * | ||||||
| Heiner Dreismann, Ph.D. (14) | 115,953 | * | ||||||
| Rashmi Kumar (14) | 69,197 | * | ||||||
| Lee N. Newcomer, M.D. (14) | 72,850 | * | ||||||
| Colleen F. Reitan (14) | 72,850 | * | ||||||
| Daniel M. Skovronsky, M.D., Ph.D. (14) | 70,315 | * | ||||||
| Daniel K. Spiegelman (14) | 40,493 | * | ||||||
| All current executive officers and directors as a group (16 persons) (15) | 1,911,466 | 2.1% | ||||||
In fulfilling its oversight responsibility, the Audit and Finance Committee reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters, performance of the independent auditors, and the extent to which the independent registered public accounting firm may be retained to perform non-audit services. Additionally, the Audit and Finance Committee reviewed the performance of Ernst & Young LLP ("EY") prior to recommending its appointment for the fiscal year ended December 31, 2023, and met with representatives of EY to discuss the scope and results of the firm’s audit work. The Audit and Finance Committee also considered several other factors in deciding whether to re-engage EY, including the quality of EY’s staff, work and quality control, EY’s policies related to independence, and EY’s capability and expertise to perform an audit of our financial statements and internal control over financial reporting. As part of its auditor engagement process, the Audit and Finance Committee also considers whether to rotate the independent registered public accounting firm. EY has been our independent registered public accounting firm since 2006. EY rotates its lead audit engagement partner at least every five years.
•discussed with EY the matters required to be discussed in accordance with Statement on Auditing Standards No. 16, Communications with |
Lawrence C. Best
Dennis H. Langer, M.D., J.D.
52
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
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Related Person Transactions
53
54
investor.myriad.com/corporate-governance.
ELECTION OF DIRECTORS
On September 14, 2017,expiring at the Annual Meeting.
We have adopted a policy on plurality votes for the election of directors. Under this policy, in non-contested elections, if a director receives a greater number of WITHHOLD votes than FOR votes, the Board will decide, through a process managed by the Nominating and Governance Committee and excluding the nominee in question, whether it should request
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF WALTER GILBERT, PH.D., DENNIS H. LANGER, M.D., J.D. AND LAWRENCE C. BEST AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
55
PROPOSAL 2:
APPROVAL OF OUR 2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN
General
On September 14, 2017, our Board of Directors unanimously approved, subject to your approval at the Annual Meeting, the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan (the “2017 Plan”). The 2017 Plan will allow for the issuance of up to 1,400,000 shares of our common stock pursuant to awards granted under the 2017 Plan and will allow for the issuance of up to a maximum of 9,851,092 shares of common stock that are represented by (i) 2,187,611 options outstanding under our 2003 Employee, Director and Consultant Stock Option Plan (the “2003 Plan”) and (ii) 7,663,481 options and restricted stock units (“RSUs”) outstanding under our 2010 Employee, Director and Consultant Equity Incentive Plan (the “2010 Plan”), that expire or are cancelled without delivery of shares of common stock on or after the date of stockholder approval of the 2017 Plan. Upon approval of the 2017 Plan, the remaining shares available for grant under our 2010 Plan will be cancelled and not available for award; accordingly, no additional shares will be awarded under our 2010 Plan.
The 2017 Plan is being submitted to you for approval at the Annual Meeting as 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 1,400,000 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 issue only restricted stock and 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 2017 Plan is in our best interests and those of its stockholders and recommends a vote “FOR” the approval of the 2017 Plan.
The 2017 Plan includes the following provisions:
56
A complete copy of the 2017 Plan 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 4, 2017, there were 7,480,444 stock options outstanding with a weighted average exercise price of $24.75 and a weighted average remaining life of 3.58 years. All options granted vest 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 | ||||||||||
Substantially in-the-money options outstanding in excess of four years | 7,320,444 | $ | 24.73 | 3.56 | ||||||||
Other options outstanding in excess of four years | 0 | 0 | 0 | |||||||||
All options outstanding less than four years | 160,000 | $ | 25.84 | 4.19 | ||||||||
|
|
|
|
|
| |||||||
Total vested options outstanding | 7,480,444 | $ | 24.75 | 3.58 | ||||||||
Essentially all of the company’s outstanding options are in the money based upon the closing stock price of $36.37 on October 4, 2017. Additional information regarding these options is a follows:
Grant Date | Remaining Contractual Life (years) | Exercise Price | Vested Options | |||||||||
02/28/08 | 0.40 | $ | 13.28 | 26,024 | ||||||||
05/28/08 | 0.65 | $ | 16.99 | 250 | ||||||||
06/17/08 | 0.70 | $ | 16.48 | 1,200 | ||||||||
08/05/08 | 0.84 | $ | 23.52 | 3,000 | ||||||||
09/10/08 | 0.93 | $ | 22.93 | 169,533 | ||||||||
11/13/08 | 1.11 | $ | 24.39 | 115,000 | ||||||||
02/18/09 | 1.38 | $ | 30.12 | 411,186 | ||||||||
04/07/09 | 1.51 | $ | 30.53 | 300 | ||||||||
04/21/09 | 1.55 | $ | 28.82 | 1,500 | ||||||||
06/10/09 | 1.68 | $ | 26.02 | 1,000 | ||||||||
09/15/09 | 1.95 | $ | 30.34 | 521,949 | ||||||||
09/16/09 | 1.95 | $ | 29.94 | 60,000 | ||||||||
11/04/09 | 2.08 | $ | 24.79 | 30,000 | ||||||||
11/05/09 | 2.09 | $ | 24.40 | 60,000 | ||||||||
03/03/2010 | 2.41 | $ | 23.11 | 389,976 | ||||||||
06/22/2010 | 2.72 | $ | 15.98 | 4,000 | ||||||||
08/03/2010 | 2.83 | $ | 14.88 | 30,000 | ||||||||
09/14/2010 | 2.95 | $ | 16.42 | 800 | ||||||||
09/15/2010 | 2.95 | $ | 16.53 | 271,893 | ||||||||
12/03/2010 | 3.16 | $ | 21.66 | 90,000 | ||||||||
01/04/2011 | 3.25 | $ | 21.73 | 300 | ||||||||
01/15/2011 | 3.28 | $ | 27.64 | 15,000 | ||||||||
02/23/2011 | 3.39 | $ | 18.00 | 433,481 | ||||||||
03/22/2011 | 3.46 | $ | 19.21 | 3,000 | ||||||||
04/01/2013 | 3.49 | $ | 25.12 | 12,500 | ||||||||
57
05/25/2011 | 3.64 | $ | 24.89 | 30,000 | ||||||||
05/28/2013 | 3.65 | $ | 32.17 | 2,500 | ||||||||
06/04/2013 | 3.67 | $ | 31.46 | 5,000 | ||||||||
09/13/2011 | 3.94 | $ | 19.47 | 910,470 | ||||||||
09/17/2013 | 3.95 | $ | 26.49 | 1,736,100 | ||||||||
12/02/2011 | 4.16 | $ | 21.29 | 120,000 | ||||||||
03/07/2012 | 4.42 | $ | 23.98 | 255,750 | ||||||||
09/12/2012 | 4.94 | $ | 27.07 | 1,457,482 | ||||||||
10/08/2012 | 5.01 | $ | 27.89 | 1,250 | ||||||||
12/05/2012 | 5.17 | $ | 27.61 | 150,000 | ||||||||
|
| |||||||||||
Total substantially in-the-money- options outstanding in excess of four years | 7,320,444 |
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 makenon-contested election, each director be elected by 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 4, 2017 we had approximately 2,155 individuals eligible to participate.
Limitations on Grants.If this Proposal 2 is approved by our stockholders, the 2017 Plan will provide for the issuance of up to 1,400,000 shares (as approved by shareholders in this proposal). Additionally, up to 2,187,611 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 7,663,481 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 (upon approval of the 2017 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 a one-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, for non-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.
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.
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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:
All equity grants must have a minimum of a one year vesting period. Historically, our equity grants have been granted under a four-year 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:
Amendments and Termination. The 2017 Plan may be amended by our stockholders. It may also be amended by our Compensation Committee, provided that any amendment approved by the Board 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 2010 Stock Plan. The 2017 Plan will expire on September 14, 2027. Upon approval by the stockholders of the 2017 Plan, no additional shares will be awarded under the 2010 Plan.
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, and we cannot determine at this time either the persons who will receive awards under the 2017 Plan although we anticipate that most of our grants will be in the form of RSUs and we will use most of the 1,400,000 shares authorized to make grants in fiscal year 2018.
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.
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|
|
The affirmative vote ofconstituting a majority of the shares voted affirmatively or negatively for the proposal at the Annual Meeting is required to approve the adoption of the 2017 Plan.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL 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 2017 PLAN UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
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PROPOSAL 3:
RE-APPROVAL OF THE 2013 EXECUTIVE INCENTIVE PLAN, AS AMENDED
On September 12, 2012 the Compensation Committee of our Board of Directors adopted the 2013 Executive Incentive Plan (the “Incentive Plan”), which was approved by our stockholders on December 15, 2012 at our 2012 Annual Meeting. On September 14, 2017, our Board of Directors authorized certain amendments to the Incentive Plan, and recommended the Incentive Plan, as amended, for approval by the stockholders at our 2017 Annual Meeting in order for the Incentive Plan to continue to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code (“Section 162(m)”). If such approval is not obtained by our stockholders, the awards granted thereunder beginning in Fiscal 2018 will no longer qualify as “performance-based compensation” under Section 162(m) therefore, if such approval is not obtained, the Incentive Plan will be terminated. The Incentive Plan has been amended as follows:
The following three additional performance objectives have been added:
Adjusted operating income
Adjusted operating margins
Revenues from new products, designated products or categories of products.
The maximum payment pursuant to the Incentive Plan in any performance period has been increased to $10 million.
A complete copy of the Incentive Plan, as amended, is attached hereto as Appendix C. The following summary description of the Incentive Plan, as amended, is qualified in its entirety by reference to Appendix C.
Purpose
The Incentive Plan provides for incentive compensation to our key officers and employees, who, from time to time may be selected for participation. The Incentive Plan is intended to provide incentives and rewards for the contributions of such employees toward the successful achievement of our financial and business goals established for the applicable performance period. Our policy is to have a significant portion of a participant’s total compensation tied to our performance. Payments pursuant to the Incentive Plan are intended to qualify as “performance-based compensation” within the meaning of Section 162(m). Under Section 162(m), we may not receive a federal income tax deduction for compensation paid to certain executive officers to the extent that compensation exceeds $1 million per year. However, if compensation is deemed to be performance based under Section 162(m), we may still receive a federal income tax deduction even if the compensation exceeds the $1 million threshold. The Incentive Plan is intended to allow us to pay incentive, performance-based compensation that is fully deductible on our federal income tax return.
Participation
The Incentive Plan will be administered by the Compensation Committee, who designates the eligible participants, the beginning and ending dates of the performance period (generally our fiscal year), the target award amounts and the performance objectives to be achieved during a performance period. Executive officers and other key employees who otherwise make comparable contributions are eligible to participate. However, a participant for a given performance period is not guaranteed of participation in subsequent periods. For our 2018 fiscal year, for annual cash incentive bonus awards, the Compensation Committee has determined that the only participant will be Mark C. Capone, our President and Chief Executive Officer. For our 2018 fiscal year, for equity incentive awards, the Compensation Committee has determined that only our five NEOs will be participants for restricted stock unit awards.
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Performance Objectives
During the first 90 days of each performance period and at a time when the achievement of such performance objective is substantially unknown, the Compensation Committee will establish one or more performance objectives from the list set forth below:
Where applicable, performance objectives will be calculated from our audited financial statements but may be modified to take into consideration changes in accounting principles; extraordinary, unusual or infrequent events; significant dispositions; gains or losses from certain claims, litigation and insurance recoveries; the impact of impairment on intangible assets; restructuring, investments or acquisitions; and certain corporate capitalization events.
Awards
Target awards are established by the Compensation Committee during the first 90 days of the performance period, expressed as a percentage of the participant’s eligible salary with payments ranging from 0 to 130% of the target award, or in the case of an equity award as a designated number of restricted stock units. Award payments are made as soon as practicable after completion of the performance period based on the receipt by the Compensation Committee of our audited financial statements for a performance period and the certification by the Compensation Committee that the participants achieved the performance objectives. Awards may be paid in cash, shares of our common stock, restricted stock, or restricted stock units of our common stock issued pursuant to a stockholder approved equity plan. The Compensation Committee may reduce performance awards at its discretion, but it may not increase awards for the performance period. No participant may receive an award payment greater than $10 million for any performance period. To the extent that a target award is expressed by reference to a number of shares of the Company’s stock, then for purposes of applying the maximum award limitation, the value of the stock award shall be calculated based upon the maximum potential number of award shares and the closing price of our common stock on the date of grant of the award.
Participants whose employment is terminated for any reason other than death or disability will receive no payment for that performance period. Participants who die or become disabled during a performance period will receive a prorated payment. All or part of a target award may be paid upon a change in control provided that the participant remains employed through the date of the change in control, as defined in the Incentive Plan.
Amendment and Termination
The Compensation Committee has authority to make rules and adopt administrative procedures not specifically addressed in the Incentive Plan, provided the new procedures are consistent with the purposes of the Incentive Plan. The Compensation Committee or the Board may also suspend, discontinue, or terminate the Incentive Plan at any time.
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New Plan Benefits
Because awards under the Incentive Plan are determined based on actual performance it is not possible to determine the amounts, if any, that may be paid to participants under the Incentive Plan for fiscal 2018 or other future periods. For fiscal 2018, our President and CEO is the only executive officer who has been designated to participate in the Incentive Plan for an annual cash incentive bonus award. If the Incentive Plan is approved by our stockholders, our President and CEO’s annual cash bonus for fiscal 2018 will be awarded under the Incentive Plan and will be based on the following formula:
Base Salary × Target Incentive Bonus Percentage of 100% × Total Performance Factor.
The Total Performance Factor is based on the Company’s fiscal year 2018 total revenues and adjusted operating income and is calculated as follows:
(the Revenue Performance Factor × .5) + (the Adjusted Operating Income Factor × .5).
For fiscal year 2018, our five NEOs have been designated as the only participants in the Incentive Planvotes cast with respect to equity incentive awardsthat director’s election. The Restated By-Laws also provide that if, in the form of restricted stock unitsan election that haveis not a performance objective and a vesting requirement. If the Incentive Plan is approved by our stockholders, the restricted stock units awarded to our NEOs will be awarded under the Incentive Plan and will be based on the achievement of our total revenues for fiscal year 2018 with a minimum revenue threshold objective, which ifcontested election, an incumbent director does not surpassed, no restricted stock units will be awarded. Additionally, each restricted stock unit award is subject to a pro rata, four year vesting requirement. On September 13, 2017, our Compensation Committee made the following awards of restricted stock units to our NEOs subject to a pro rata, four year vesting requirement, as well as a performance-based objective (total revenues for our fiscal year 2018) and a minimum revenue threshold requirement (of fiscal year 2018 total revenues):
| Restricted Performance Stock Awards | ||||||||
Name | Number of Shares (#) | Fair Market Value ($)(1) | ||||||
Mark C. Capone, President and Chief Executive Officer | 165,000 | 5,374,050 | ||||||
Alexander Ford, President, Myriad Genetic Laboratories, Inc. | 60,000 | 1,954,200 | ||||||
R. Bryan Riggsbee, Chief Financial Officer | 60,000 | 1,954,200 | ||||||
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer | 50,000 | 1,628,500 | ||||||
Richard M. Marsh, Esq., Executive Vice President, General Counsel and Secretary | 50,000 | 1,628,500 | ||||||
If our stockholders do not approve the Incentive Plan, then the Compensation Committee will need to establish a new short term incentive compensation program for our President and CEO, and a new equity incentive program for our NEOs, for fiscal year 2018.
Vote Required
The affirmative vote ofreceive a majority of the shares voted affirmativelyvotes cast, such director must submit an irrevocable resignation to the NESGC. The NESGC will make a recommendation to the Board as to whether to accept or negatively forreject the proposal atresignation of such incumbent director, or whether other action should be taken. The Board must act on the Annual Meeting is required to re-approveresignation, taking into account the 2013 Executive Incentive Plan, as amended.
THE BOARD OF DIRECTORS RECOMMENDS RE-APPROVAL OF THE 2013 EXECUTIVE INCENTIVE PLAN, AS AMENDED. PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF PLAN APPROVAL UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
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NESGC’s recommendation, and publicly disclose (by filing an appropriate disclosure with the SEC) its decision regarding the resignation within ninety (90) days following certification of the election results. The NESGC in making its recommendation and the Board in making its decision each may consider any factors and other information that they consider appropriate and relevant.
| ü | The Board Recommends the Election of S. Louise Phanstiel and Daniel M. Skovronsky, M.D., Ph.D. and Proxies Solicited by the Board Will Be Voted in Favor of Such Directors Unless a Stockholder Has Indicated Otherwise on the Proxy. | ||||
SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
2:
December 31, 2024.
Type of Fee | Fiscal Year Ended June 30, 2017 | Fiscal Year Ended June 30, 2016 | ||||||
Audit Fees | $ | 1,074,795 | $ | 800,300 | ||||
Audit Related Fees | 15,000 | — | ||||||
Tax Fees | — | — | ||||||
All Other Fees | — | — | ||||||
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Total | $ | 1,089,795 | $ | 800,300 | ||||
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year ended December 31, 2023 and the year ended December 31, 2022:
| Fiscal Year Ended | Fiscal Year Ended | ||||||||||
| Type of Fee | December 31, 2023 | December 31, 2022 | |||||||||
| Audit Fees | 1,833,302 | 1,922,605 | |||||||||
| Audit Related Fees | — | — | |||||||||
| Tax Fees | — | — | |||||||||
| All Other Fees | 222,000 | 17,445 | |||||||||
| Totals | 2,055,302 | 1,940,050 | |||||||||
Tax Fees—
accounting research.
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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.
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| ü | The Board 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
3:
NEOs.
goals
.personalize mental health medication treatment decisions based on smoking status.
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As evidence of our pay for performance philosophy, fiscal year 2017 total compensation paid to three of our five NEOs, including our President and CEO, was below the 50th percentile of total compensation of our peer group as determined by Mercer under the 2017 Mercer Executive Compensation Review; and the other two NEO’s total compensation for fiscal year 2017 was between the 50th and 75th percentiles of total compensation of our peer group. With respect to the annual cashshort-term incentive bonusawards paid to our NEOs (other than Mr. Raha, who was not eligible for a bonus since he was hired at the end of 2023) for the 2023 fiscal year, 2017, we paid between 82%102 percent and 90%,111.4 percent, respectively, of the target awards, based on the level of accomplishment of the pre-determined incentive goals. Similarly, we made no payouts under our three-year cash incentive awards for fiscal year 2017 as the threshold targets were not met. We believe these actions are demonstrative of our pay for performance practices.
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.
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PROPOSAL 6:
ADVISORY VOTE ON THE FREQUENCY OF HOLDING AN ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
We are seeking your input with regard to the frequency
| ü | The Board 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. | ||||
The Compensation Committee, Board of Directors and management believe that it is appropriate and in our best interests for our shareholders to vote in favor of an annual advisory vote on the compensation of our named executive officers. An advisory vote each year will permit our shareholders to provide annual feedback to us on our compensation policies, practices and compensation awards for our named executive officers. This is consistent with our policy of giving shareholders the opportunity to voice concerns with management or our Board under our previously established policy on communications with our Board of Directors. An annual advisory vote will give the Board, the Compensation Committee and management more timely feedback from the shareholders to allow us to evaluate and adjust, when we consider appropriate, the compensation of our named executive officers.
The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the Board’s recommendation. The choice that receives the highest number of votes will be deemed the frequency approved, on an advisory basis, by our stockholders. However, because the vote on the frequency of holding future advisory votes on the compensation of our named executive officers is not binding, the Compensation Committee and the Board of Directors will review the voting results and take them into consideration when making a decision regarding the frequency of holding future advisory votes on the compensation of our named executive officers.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE, ON AN ADVISORY BASIS, THE FREQUENCY OF HOLDING AN ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS EVERY YEAR, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF HOLDING AN ADVISORY VOTE EACH YEAR UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY CARD.
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CORPORATE CODE OF CONDUCT AND ETHICS AND WHISTLEBLOWER POLICY
Conduct
OTHER MATTERS
Nasdaq.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR
To be considered
84116.
October 12, 2017
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EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST AND PAYMENT OF AN APPROPRIATE PROCESSING FEE.
| Years ended June 30, | ||||||||
| 2017 | 2016 | |||||||
GAAP Net Income | $ | 21.8 | $ | 125.3 | ||||
Acquisition — integration related costs | 13.9 | 0.1 | ||||||
Acquisition — amortization of intangible assets | 33.0 | 12.6 | ||||||
Elevate 2020 costs | 0.3 | — | ||||||
Accrual for legal expenses | 0.6 | — | ||||||
Tax impact related to equity compensation | 3.0 | (12.7 | ) | |||||
Tax expense associated with R&D tax credit reserves | — | (6.0 | ) | |||||
Potential future consideration related to acquisitions | (0.8 | ) | — | |||||
One-time debt restructuring charges | 1.3 | — | ||||||
One-time non-deductible costs | 2.7 | — | ||||||
Impairment of Raindance Investment | 2.4 | — | ||||||
Tax expense associated with non-GAAP adjustments | (5.8 | ) | — | |||||
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Non-GAAP Net Income | $ | 72.4 | $ | 119.3 | ||||
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GAAP Diluted EPS | $ | 0.32 | $ | 1.71 | ||||
Adjustment to net income | $ | 0.73 | ($ | 0.08 | ) | |||
Non-GAAP Diluted EPS | $ | 1.05 | $ | 1.63 | ||||
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| GAAP Net Loss | $ | (263.3) | $ | (112.0) | |||||||
| Acquisition — amortization of intangible assets | 42.7 | 40.9 | |||||||||
| Goodwill and long-lived asset impairment charges | — | 16.8 | |||||||||
| Equity compensation | 40.6 | 37.8 | |||||||||
| Real estate optimization | 27.0 | 3.7 | |||||||||
| Transformation initiatives | 6.8 | 14.2 | |||||||||
| Acquisition-related costs | — | 5.1 | |||||||||
| Legal charges, net of insurance reimbursement | 114.9 | (11.4) | |||||||||
| Other adjustments | 1.1 | 0.7 | |||||||||
| Tax adjustments | 7.6 | (20.0) | |||||||||
| Adjusted Net Loss | $ | (22.6) | $ | (24.2) | |||||||
| GAAP Diluted Loss Per Share | $ | (3.18) | $ | (1.39) | |||||||
| Adjustment to net loss | $ | 2.91 | $ | 1.09 | |||||||
| Adjusted Diluted Loss Per Share | $ | (0.27) | $ | (0.30) | |||||||
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| GAAP Operating Loss | $ | (257.4) | $ | (140.6) | |||||||
| Acquisition — amortization of intangible assets | 42.7 | 40.9 | |||||||||
| Goodwill and long-lived asset impairment charges | — | 16.8 | |||||||||
| Equity compensation | 40.6 | 37.8 | |||||||||
| Real estate optimization | 27.0 | 3.7 | |||||||||
| Transformation initiatives | 6.8 | 14.2 | |||||||||
| Acquisition-related costs | — | 5.1 | |||||||||
| Legal charges, net of insurance reimbursement | 114.9 | (11.4) | |||||||||
| Other adjustments | (0.1) | 0.7 | |||||||||
| Adjusted Operating Loss | $ | (25.5) | $ | (32.8) | |||||||
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
GAAP Operating Expenses (1) | $ | 774.4 | $ | 617.0 | |||||||
| Acquisition - amortization of intangible assets | (41.3) | (40.7) | |||||||||
| Goodwill and long-lived asset impairment charges | — | (16.8) | |||||||||
| Equity compensation | (39.2) | (36.5) | |||||||||
| Real estate optimization | (27.0) | (3.7) | |||||||||
| Transformation initiatives | (6.6) | (14.1) | |||||||||
| Acquisition-related costs | — | (5.0) | |||||||||
| Legal charges, net of insurance reimbursement | (114.9) | 11.4 | |||||||||
| Other adjustments | 0.1 | (0.7) | |||||||||
| Adjusted Operating Expenses | $ | 545.5 | $ | 510.9 | |||||||
| (1) Consists of research and development expense, selling, general, and administrative expense, and goodwill and long-lived asset impairment charges from the Consolidated Statements of Operations. | |||||||||||
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| GAAP Cash Flows from Operations | $ | (110.9) | $ | (106.3) | |||||||
| Real estate optimization | 12.3 | 3.7 | |||||||||
| Transformation initiatives | 6.8 | 14.2 | |||||||||
| Legal charges, net of insurance reimbursement | 86.4 | 49.9 | |||||||||
| Acquisition-related costs | — | 5.1 | |||||||||
| Other adjustments | 1.5 | — | |||||||||
| Adjusted Operating Cash Flow | $ | (3.9) | $ | (33.4) | |||||||
| Capital expenditures | (63.2) | (45.3) | |||||||||
| Capitalization of internal-use software costs | (10.1) | — | |||||||||
| Adjusted Free Cash Flow | $ | (77.2) | $ | (78.7) | |||||||
Three months ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| GAAP Net Loss | $ | (31.2) | $ | (42.3) | |||||||
| Acquisition — amortization of intangible assets | 10.7 | 10.5 | |||||||||
| Goodwill and long-lived asset impairment charges | — | 6.1 | |||||||||
| Equity compensation | 10.3 | 8.2 | |||||||||
| Real estate optimization | 13.0 | 1.9 | |||||||||
| Transformation initiatives | — | 3.8 | |||||||||
| Acquisition-related costs | — | 4.9 | |||||||||
| Legal charges, net of insurance reimbursement | 1.6 | 1.5 | |||||||||
| Other adjustments | 1.1 | 1.4 | |||||||||
| Tax adjustments | (2.0) | (5.7) | |||||||||
| Adjusted Net Loss | $ | 3.5 | $ | (9.7) | |||||||
| GAAP Diluted Loss Per Share | $ | (0.36) | $ | (0.52) | |||||||
| Adjustment to net loss | $ | 0.40 | $ | 0.40 | |||||||
| Adjusted Diluted Loss Per Share | $ | 0.04 | $ | (0.12) | |||||||
Three months ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| GAAP Cash Flows from Operations | $ | (54.7) | $ | (7.3) | |||||||
| Real estate optimization | 4.0 | 1.9 | |||||||||
| Transformation initiatives | — | 3.8 | |||||||||
| Legal charges, net of insurance reimbursement | 63.1 | — | |||||||||
| Acquisition-related costs | — | 4.9 | |||||||||
| Other adjustments | 1.1 | — | |||||||||
| Adjusted Operating Cash Flow | $ | 13.5 | $ | 3.3 | |||||||
| Capital expenditures | (10.0) | (14.6) | |||||||||
| Capitalization of internal-use software costs | (3.5) | — | |||||||||
| Adjusted Free Cash Flow | $ | — | $ | (11.3) | |||||||
financial measure:
Costs related to closing and integration of acquired companies
1
2. Acquisitions — amortization of intangible assets
3. Elevate 2020South San Francisco, California, while maintaining our current laboratories in those locations.
Expenses tied related to Elevate 2020 program.
4. Accrual forrestructuring.
Accrual associated with anticipated future net of insurance reimbursement. For the year ended December 31, 2023, we accrued $77.5 million for the settlement of the securities class action lawsuit and $34.0 million for settlement of the Ravgen litigation. For the year ended December 31, 2022, we received reimbursement of prior legal expenses.
5. Tax impactexpenses and settlements.
Changesacquisitions, changes in effective tax rate based upon ASU 2016-09.
6. Tax expense associated with R&D tax credit reserves
One time net benefits associated with the releasefair value of R&D tax credit reserves.
7. Potential futurecontingent consideration related to acquisitions
Non-cash expenses related from prior years, and the reclassification of cumulative translation adjustments to valuationincome upon liquidation of an investment in a foreign entity.
8. One-time debt restructuring charges
Charges relatednon-GAAP adjustments, differences between stock compensation recorded for book purposes as compared to the restructuring of the company’s debt from a one-year term loan to a revolving credit facility.
9. One-time non-deductible costs
One-time non-deductibleallowable tax items.
10. Impairment of RainDance Investment
One-time impairment charge associated with Myriad’s investment in RainDance Technologies.
2
Appendix B
MYRIAD GENETICS, INC.
2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN
Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Myriad Genetics, Inc. 2017 Employee, Directordeductions, and Consultant Equity Incentive Plan 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 Companyvaluation allowance recognized against federal 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:
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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 Exchange Act of 1934, as amended.
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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 theover-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 theover-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 the over-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 a pre-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.
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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.
(a) The number of Shares which may be issued from time to time pursuant to this Plan shall not exceed one million four hundred thousand (1,400,000) shares of Common Stock plus (ii) 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, or awards 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.
(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.
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;
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(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 any non-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 any sub-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, which sub-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.
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 Rule 16a-1 under the Exchange Act).
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
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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.
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 the Delaware 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.
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.
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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.
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.
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.
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
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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.
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.
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.
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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.
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.
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.
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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.
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 other non-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
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.
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(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.
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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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.
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.
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 this six-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
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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.
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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Appendix C
MYRIAD GENETICS, INC.
2013 EXECUTIVE INCENTIVE PLAN
Adopted effective: September 12, 2012
Approved by the Stockholders: December 5, 2012
Amended September 14, 2017
Proposed To be Re-Approved by the Stockholders: November 30, 2017
Section 1 — Purposes.
This Myriad Genetics 2013 Executive Incentive Plan, as amended (the “Plan”), provides for incentive compensation to those key officers and employees of Myriad Genetics, Inc. or any affiliated entity (collectively, the “Company “), who, from time to time may be selected for participation. The Plan is intended to provide incentives and rewards for the contributions of such employees toward the successful achievement of the Company’s financial and business goals established for the applicable performance period. The Company’s policy is to have a significant portion of a participant’s total compensation tied to the Company’s performance. Payments pursuant to the Plan are intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code (“Section 162(m)”).
Section 2 — Administration.
The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of Myriad Genetics, Inc. (“Myriad”) which has been designated to administer programs intended to qualify as “performance-based compensation” within the meaning of Section 162(m). The Committee shall have authority to make rules and adopt administrative procedures in connection with the Plan and shall have discretion to provide for situations or conditions not specifically provided for herein consistent with the purposes of the Plan. The Committee shall determine the beginning and ending dates for each performance period. Unless otherwise determined by the Committee, the performance period shall correspond to Myriad’s fiscal year. Notwithstanding any other provision of the Plan to the contrary, the Plan shall be administered and its provisions interpreted so that payments pursuant to the Plan qualify as “performance-based compensation” within the meaning of Section 162(m). Determinations by the Committee shall be final and binding on the Company and all participants.
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Section 3 — Selection of Participants.
The executive officers of the Company as well as those other key employees of the Company who, in the opinion of the Committee, may become executive officers of the Company or who otherwise may make comparable contributions to the Company shall be eligible to participate in the Plan. Each performance period, the Committee may designate from among those employees who are eligible to participate in the Plan those employees who shall participate in the Plan for such performance period. Accordingly, an employee who is a participant for a given performance period in no way is guaranteed or assured of being selected for participation in any subsequent performance period.
Section 4 — Establishing Performance Objectives.
During the first ninety (90) days of each performance period, and at a time when the achievement of such performance objective is substantially unknown, the Committee shall establish one or more performance objectives, at least one of which shall be based on a shareholder approved business criteria. The performance objectives may differ from participant to participant and from target award to target award. The maximum possible payout shall be based solely on shareholder approved business criteria. The shareholder approved business criteria, which shall be based on or derived from the Company’s audited financial statements, are as follows:
All criteria that are based on Myriad’s audited financial statements may be modified by the Committee at the time the specific criteria are selected to take into consideration one or more of the following: (1) changes in accounting principles that become effective during the performance period, (2) extraordinary, unusual or infrequently occurring events, (3) the disposition of a business or significant assets, (4) gains or losses from all or certain claims and/or litigation and insurance recoveries, (5) the impact of impairment of intangible assets, (6) restructuring activities, (7) the impact of investments or acquisitions, and/or (8) changes in corporate capitalization such as stock
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splits and certain reorganizations. Notwithstanding the foregoing, the Committee must select criteria that collectively satisfy the requirements of performance-based compensation for the purposes of Section 162(m), including by establishing the targets at a time when the performance relative to such targets is substantially uncertain.
Section 5 — Establishing Target Awards.
During the first ninety (90) days of each performance period the Committee shall establish a target award, expressed as a percentage of eligible salary for that performance period, or in the case of an equity award as a designated number of Restricted Stock Units, for each participant in the Plan. Unless otherwise determined by the Committee, eligible salary shall be annual base salary determined at the time the Committee establishes the target award, excluding pay for disability, overtime, bonuses, sick pay and other reimbursements and allowances. Individual participants may earn an award payout ranging from zero percent to a maximum of one hundred thirty percent of their target award. The Committee will establish an award payout schedule based upon the extent to which the Company performance objectives and/or other performance objectives are or are not achieved or exceeded. Pursuant to Section 4, entitlement to an award shall be based solely on shareholder approved business criteria; however, non-shareholder approved criteria may be used to reduce the amount of an award payable to one or more participants. Notwithstanding the foregoing, no participant shall receive a payment pursuant to the Plan that exceeds $10 million for any performance period. To the extent that a target award is expressed by reference to a number of shares of the Company’s common stock, for the purpose of applying the limitations on a maximum award as set forth in this Section 5, the value of such stock award shall be the Value of Common Stock on the grant date of the maximum number of shares subject to such award.
Section 6 — Determining Final Awards.
No later than forty-five (45) days after the receipt by the Committee of the audited financial statements for a performance period, the Committee shall determine whether the established performance objectives for each participant in the Plan were achieved. The Committee shall have discretion to reduce final awards from the target award depending on (a) the extent to which the Company performance objective(s) is either exceeded or not met, and (b) the extent to which other objectives, e.g. subsidiary, division, department, unit or other performance objectives are attained. The Committee shall have full discretion to reduce individual final awards based on individual performance as it considers appropriate in the circumstances. The Committee shall not have discretion to increase awards for the performance period.
Section 7 — Termination of Employment.
Participants whose employment by the Company is terminated for any reason other than death or disability during any performance period will receive no payment under the Plan for such performance period. Participants who die or become totally and permanently disabled during any performance period will receive prorated payments under the Plan based on the number of whole
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months of employment completed during the performance period. Except as provided in Section 9, participants whose employment by the Company is terminated for any reason after the close of the performance period but before the distribution of payments under the Plan will be paid all amounts applicable under this Plan for such performance period.
Section 8 — Time of and Payment of Awards.
Payment of awards shall be made as soon as practicable following the later of (a) the receipt by the Committee of the audited financial statements for the applicable performance period or (b) the certification by the Committee that the performance and other criteria for payment have been satisfied (the “ Certification Date “). The Committee shall have the discretion to pay awards in the form of (i) cash, (ii) Common Stock, (iii) Restricted Stock, (iv) Stock Units, (v) Restricted Stock Units, or (vi) a combination of the foregoing. Payroll and other taxes shall be withheld as determined by the Company.
For the purposes of this Section 8, the following definitions shall apply:
“Common Stock” shall mean common stock of the Company.
“Restricted Stock” shall mean Common Stock that is subject to Vesting as set forth in the Restricted Stock Agreement adopted by the Committee.
“Stock Units” shall mean an unfunded, unsecured commitment by the Company to deliver a pre-determined number of shares of Common Stock (or the cash equivalent of such Common Stock) to a participant at a future time in accordance with the terms and conditions of a Stock Unit Agreement adopted by the Committee.
“Restricted Stock Unit” shall mean a Stock Unit that is subject to Vesting as set forth in the Restricted Stock Unit Agreement adopted by the Committee.
“Vesting” shall mean a requirement that a participant remain an employee of the Company, or an affiliate of the Company, for an additional period of time in order to retain the Common Stock (in the case of Restricted Stock) or the Stock Unit (in the case of a Restricted Stock Unit).
“Value of Common Stock” shall mean: (a) if the Common Stock is listed on any established stock exchange or a national market system, the closing sales price of the Common Stock as quoted on such exchange or system (or the exchange with the greatest volume of trading in the Common Stock) on the day of valuation, as reported in The Wall Street Journal or such other source as the Committee deems reliable; and (b) if there is no closing sales price for the Common Stock on the day of valuation, the closing sales price on the last preceding day for which such quotation exists. Vesting shall not be taken into account in determining the Value of Common Stock for this purpose.
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In the event the Committee does not specify the form of the payment at the time the Committee establishes the target award, the form of payment shall be in the form of cash unless the Committee determines (a “Retroactive Determination”) on or before the Certification Date that the form of payment will include some non-cash consideration. In the event the Committee makes a Retroactive Determination, the total value of the payment shall not exceed the value if the payment were made only in cash. The Committee shall be deemed to be in compliance with the preceding sentence if the sum of (i) the Value of Common Stock, (ii) the Value of Common Stock that is Restricted Stock, (iii) the Value of Common Stock that is subject to Stock Units or Restricted Stock Units, and (iv) the cash in the payment pursuant to the Retroactive Determination would be less than or equal to an all-cash payment on both the last day of the performance period and the Certification Date.
Shares of Common Stock issued directly or as Restricted Stock or pursuant to Stock Units or Restricted Stock Units shall be issued pursuant to a shareholder approved equity incentive plan, unless otherwise determined by the Committee.
It is the intent of the company that this Plan is exempt from Section 409A of the Internal Revenue Code of 1986, as amended under the “short-term deferral” rule and any ambiguities or inconsistencies herein will be interpreted in a manner consistent with the short-term deferral rule.
Section 9 — Forfeiture.
It shall be an overriding precondition to the payment of any award (a) that the participant not engage in any activity that, in the opinion of the Committee, is in competition with any activity of the Company or any affiliated entity or otherwise inimical to the best interests of the Company and (b) that the participant furnish the Committee with all such information confirming satisfaction of the foregoing condition as the Committee shall reasonably request. If the Committee makes a determination that a participant has engaged in any such competitive or otherwise inimical activity, such determination shall operate to immediately cancel all then unpaid award amounts.
Section 10 — Death.
Any award remaining unpaid, in whole or in part, at the death of a participant shall be paid to the participant’s legal representative or to a beneficiary designated by the participant in accordance with the rules established by the Committee.
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Section 11 — Change in Control.
A target award may, in accordance with Treasury Regulation §1.162-27(e)(2)(v), provide that all or a portion of the target award may be paid upon a change in control, provided that the participant remains employed through the date of the change in control. A change in control shall mean a transaction in which any one person, entity or group acquires (i) stock in the Company that, together with the stock in the Company already held by such person, entity or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company or (ii) more than 80% of the assets of the Company. The definition of change in control for purposes of this Plan be interpreted, to the extent applicable, to comply with Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended.
Section 12 — No Right to Employment or Award.
No person shall have any claim or right to receive an award, and selection to participate in the Plan shall not confer upon any employee any right with respect to continued employment by the Company or continued participation in the Plan. Further the Company reaffirms its at-will relationship with its employees and expressly reserves the right at any time to dismiss a participant free from any liability or claim for benefits pursuant to the Plan, except as provided under this Plan or other written plan adopted by the Company or written agreement between the Company and the participant.
Section 13 — Discretion of Company, Board of Directors and Committee.
Any decision made or action taken by the Company or by the Board of Directors of Myriad or by the Committee arising out of or in connection with the creation, amendment, construction, administration, interpretation or effect of the Plan shall be within the absolute discretion of the Company, the Board of Directors, or the Committee, as the case may be, and shall be conclusive and binding upon all persons. To the maximum extent possible, no member of the Committee shall have any liability for actions taken or omitted under the Plan by such member or any other person.
Section 14 — No Funding of Plan.
The Company shall not be required to fund or otherwise segregate any cash or any other assets which may at any time be paid to participants under the Plan. The Plan shall constitute an “unfunded” plan of the Company. The Company shall not, by any provisions of the Plan, be deemed to be a trustee of any property, and any rights of any participant or former participant shall be no greater than those of a general unsecured creditor or shareholder of the Company, as the case may be.
Section 15 — Non-Transferability of Benefits and Interests.
Except as expressly provided by the Committee, no benefit payable under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge,
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any such attempted action shall be void, and no such benefit shall be in any manner liable for or subject to debts, contracts, liabilities, engagements or torts of any participant or former participant. This Section 15 shall not apply to an assignment of a contingency or payment due (i) after the death of a participant to the deceased participant’s legal representative or beneficiary or (ii) after the disability of a participant to the disabled participant’s personal representative.
Section 16 — Law to Govern.
All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Utah.
Section 17 — Non-Exclusivity.
The Plan does not limit the authority of the Company, the Board of Directors or the Committee, or any current or future subsidiary of the Company to grant awards or authorize any other compensation to any person under any other plan or authority, other than that specifically prohibited herein.
Section 18 — Section 162(m) Conditions; Bifurcation of Plan.
It is the intent of the Company that the Plan and all payments made hereunder satisfy and be interpreted in a manner that, in the case of participants who are persons whose compensation is subject to Section 162(m), satisfies any applicable requirements as performance-based compensation. Any provision, application or interpretation of the Plan inconsistent with this intent to satisfy the standards in Section 162(m) shall be disregarded. Notwithstanding anything to the contrary in the Plan, the provisions of the Plan may at any time be bifurcated by the Board of Directors or the Committee in any manner so that certain provisions of the Plan or any payment intended (or required in order) to satisfy the applicable requirements of Section 162(m) are only applicable to persons whose compensation is subject to Section 162(m).
Section 19 — Arbitration of Disputes.
The Federal Arbitration Act shall apply to and govern all disputes arising under or pursuant to the Plan. Any disputes with respect to the terms of this Plan or any rights granted hereunder, including, without limitation, the scope of this arbitration, shall be subject to arbitration pursuant to the rules of the American Arbitration Association governing commercial disputes. Arbitration shall occur in Salt Lake City, Utah. Judgment on any arbitration award may be entered in any court having jurisdiction. A single arbitrator shall be used unless the amount in dispute exceeds $200,000 and a party to the arbitration proceeding requests that the arbitration be heard by a panel of three arbitrators. If a panel of three arbitrators is used, the arbitration decision shall be made by a majority of the three arbitrators. By electing to participate in the Plan, the Company and each participantEXPRESSLY AGREE TO ARBITRATION AND WAIVE ANY RIGHT TO TRIAL BY
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JURY, JUDGE, OR ADMINISTRATIVE PROCEEDING.An arbitrator shall have the same powers that a judge for a United States District Court located in the State of Utah may exercise in comparable circumstances. Nothing in this Plan shall limit or restrict any right of offset a party may have.
Section 20 — Effective Date.
The Plan, as amended, is effective as of September 14, 2017, subject to approval by the Company’s stockholders at the 2017 Annual Meeting of Stockholders of the Company. However, if the Plan does not receive stockholder approval, no future awards will be made under the Plan.
Section 21 — Amendment or Termination.
The Board of Directors of the Company and the Committee each reserves the right at any time to make any changes in the Plan as it may consider desirable or may suspend, discontinue or terminate the Plan at any time.
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