SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
MYRIAD GENETICS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MYRIAD GENETICS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
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________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
[MYRIAD LOGO APPEARS HERE]
MYRIAD GENETICS, INC.
October 23, 1997
Dear Stockholder,
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of Myriad Genetics, Inc. (the "Company") to be held at 9:00 a.m. on Thursday,
November 13, 1997 at the Salt Lake City Marriott Hotel, 75 S. West Temple,
Salt Lake City, Utah.
At the Annual Meeting, three persons will be elected to the Board of
Directors. The Company will also seek Stockholder approval of an amendment to
the Company's 1992 Employee, Director and Consultant Stock Option Plan (as
amended through September 11, 1997) to increase the aggregate number of shares
of Common Stock authorized for issuance thereunder. In addition, the Company
will also ask the stockholders to ratify the selection of KPMG Peat Marwick
LLP as the Company's independent public accountants. The Board of Directors
recommends the approval of each of these proposals. Such other business will
be transacted as may properly come before the Annual Meeting.
We hope you will be able to attend the Annual Meeting. Whether you plan to
attend the Annual Meeting or not, it is important that your shares are
represented. Therefore, you are urged promptly to complete, sign, date and
return the enclosed proxy card in accordance with the instructions set forth
on the card. This will ensure your proper representation at the Annual
Meeting.
Sincerely,
/s/ Peter D. Meldrum
Peter D. Meldrum
President and Chief Executive
Officer
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
MYRIAD GENETICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 13, 1997
To the Stockholders of Myriad Genetics, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Myriad Genetics, Inc., a
Delaware corporation (the "Company"), will be held on Thursday, November 13,
1997 at the Salt Lake City Marriott Hotel, 75 S. West Temple, Salt Lake City,
Utah, at 9:00 a.m. for the following purposes:
1. To elect three members to the Board of Directors.
2. To consider and act upon a proposal to amend the Company's 1992
Employee, Director and Consultant Stock Option Plan (as amended through
September 11, 1997) to increase by 500,000 shares the aggregate number
of shares of Common Stock authorized for issuance thereunder.
3. To consider and act upon a proposal to ratify the appointment of KPMG
Peat Marwick LLP as the Company's independent public accountants for the
fiscal year ending June 30, 1998.
4. To transact such other business as may be properly brought before the
Annual Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on October 1, 1997 as
the record date for the determination of Stockholders entitled to notice of
and to vote at the Annual Meeting and at any adjournments thereof.
All Stockholders are cordially invited to attend the Annual Meeting. Whether
you plan to attend the Annual Meeting or not, you are requested to complete,
sign, date and return the enclosed proxy card as soon as possible in
accordance with the instructions on the proxy card. A pre-addressed, postage
prepaid return envelope is enclosed for your convenience.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Corenne Wooldridge
Corenne Wooldridge
Secretary
October 23, 1997
MYRIAD GENETICS, INC.
320 WAKARA WAY
SALT LAKE CITY, UTAH 84108
(801) 584-3600
----------------
PROXY STATEMENT
----------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Myriad Genetics, Inc. (the "Company"), a Delaware
corporation, of proxies, in the accompanying form, to be used at the Annual
Meeting of Stockholders to be held at the Salt Lake City Marriott Hotel, 75 S.
West Temple, Salt Lake City, Utah, on Thursday, November 13, 1997 at 9:00
a.m., and any adjournments thereof (the "Meeting").
Where the Stockholder specifies a choice on the proxy as to how his or her
shares are to be voted on a particular matter, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the three nominees for director named herein, FOR the proposal to
amend the Company's 1992 Employee, Director and Consultant Stock Option Plan
(as amended through September 11, 1997) to increase by 500,000 shares the
aggregate number of shares of Common Stock authorized for issuance thereunder
and FOR the ratification of the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the fiscal year ending June 30,
1998. Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company a
written notice of revocation or a duly executed proxy bearing a later date.
Any Stockholder who has executed a proxy but is present at the Meeting, and
who wishes to vote in person, may do so by revoking his or her proxy as
described in the preceding sentence. Shares represented by valid proxies in
the form enclosed, received in time for use at the Meeting and not revoked at
or prior to the Meeting, will be voted at the Meeting. The presence, in person
or by proxy, of the holders of a majority of the outstanding shares of the
Company's common stock, par value $.01 per share ("Common Stock"), is
necessary to constitute a quorum at the Meeting.
The affirmative vote of a majority of the shares voted affirmatively or
negatively at the Meeting is required to approve each proposal, other than the
election of directors which requires a plurality of the shares voted
affirmatively or negatively at the Meeting. With respect to the tabulation of
votes on any matter, abstentions are treated as votes against a proposal,
while broker non-votes have no effect on the vote.
The close of business on October 1, 1997 has been fixed as the record date
for determining the Stockholders entitled to notice of and to vote at the
Meeting. As of the close of business on October 1, 1997, the Company had
9,265,101 shares of Common Stock outstanding and entitled to vote. Holders of
Common Stock are entitled to one vote per share on all matters to be voted on
by Stockholders.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock of the Company for their
expenses in forwarding proxy material to such beneficial owners. Solicitation
of proxies by mail may be supplemented by telephone, telegram, telex and
personal solicitation by the directors, officers or employees of the Company.
No additional compensation will be paid for such solicitation.
This Proxy Statement and the accompanying proxy are being mailed on or about
October 23, 1997 to all Stockholders entitled to notice of and to vote at the
Meeting.
The Annual Report to Stockholders for the fiscal year ended June 30, 1997
("Fiscal 1997") is being mailed to the Stockholders with this Proxy Statement,
but does not constitute a part hereof.
SHARE OWNERSHIP
The following table sets forth certain information as of August 22, 1997
concerning the ownership of Common Stock by each Stockholder known by the
Company to be the beneficial owner of more than 5% of its outstanding shares
of Common Stock, each current member of the Board of Directors, each executive
officer named in the Summary Compensation Table on p. 6 hereof, and all
current directors and executive officers as a group.
SHARES
BENEFICIALLY OWNED(1)
-------------------------
NAME AND ADDRESS** NUMBER PERCENT
------------------ ------------- -----------
Bayer Corporation.................................... 588,235 6.4%
400 Morgan Lane
West Haven, CT 06516
Ardsley Advisory Partners(2)......................... 1,060,000 11.5%
646 Steamboat Road
Greenwich, CT 06830
UBS Asset Management (New York) Inc.(3).............. 480,000 5.2%
1345 Avenue of the Americas
New York, NY 10105
Peter D. Meldrum(4).................................. 225,520 2.4%
Mark H. Skolnick(5).................................. 554,468 5.9%
Jay M. Moyes(6)...................................... 16,643 *
Janet H. Haskell(7).................................. 61,000 *
Walter Gilbert, Ph.D.(8)............................. 162,970 1.8%
John J. Horan(9)..................................... 60,714 *
Arthur H. Hayes, M.D.(10)............................ 27,000 *
Dale A. Stringfellow, Ph.D.(11)...................... 7,371 *
Alan J. Main, Ph.D................................... 0 *
Michael J. Berendt, Ph.D............................. 0 *
All executive officers and directors as a group (11
persons)(12)........................................ 1,118,236 11.7%
- --------
* Represents beneficial ownership of less than 1% of the Company's
outstanding shares of Common Stock.
** Addresses are given for beneficial owners of more than 5% of the
outstanding Common Stock only.
(1) The number of shares of Common Stock issued and outstanding on August 22,
1997 was 9,255,614. The calculation of percentage ownership for each
listed beneficial owner is based upon the number of shares of Common
Stock issued and outstanding at August 22, 1997, plus shares of Common
Stock subject to options held by such person at August 22, 1997 and
exercisable within 60 days thereafter. The persons and entities named in
the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them, except as noted below.
(2) Based solely upon a Schedule 13G filed in February 1997 by Ardsley
Advisory Partners ("AAP"), an investment advisor. AAP has shared voting
power with respect to all such shares and shared dispositive power as to
all such shares.
(3) Based solely upon a Schedule 13D filed in September 1997 by UBS Asset
Management (New York) Inc. ("UBS"), an investment advisor. UBS has sole
dispositive power as to all such shares.
(4) Includes 25,143 shares of Common Stock subject to currently exercisable
options.
(5) Includes shares held directly by Dr. Skolnick and his wife, shares held
by a family limited partnership of which Dr. Skolnick is a general
partner, as well as shares held by certain family members. Also includes
121,513 shares of Common Stock subject to currently exercisable options.
(6) Includes 15,057 shares of Common Stock subject to currently exercisable
options.
(7) Consists of 61,000 shares of Common Stock subject to currently
exercisable options.
(8) Includes 76,485 shares of Common Stock owned by Dr. Gilbert's wife, as to
which Dr. Gilbert disclaims beneficial ownership. Also includes 10,000
shares of Common Stock subject to currently exercisable options. Excludes
22,042 shares owned by Dr. Gilbert's son, as to which Dr. Gilbert
disclaims beneficial ownership.
(9) Consists of 60,714 shares of Common Stock subject to currently
exercisable options.
(10) Consists of 27,000 shares of Common Stock subject to currently
exercisable options.
(11) Consists of 7,371 shares of Common Stock subject to currently exercisable
options.
(12) Includes 330,348 shares of Common Stock subject to currently exercisable
options.
2
MANAGEMENT
DIRECTORS
The Company's Restated Certificate of Incorporation and Restated By-Laws
provide for the Company's business to be managed by or under the direction of
the Board of Directors. Under the Company's Restated Certificate of
Incorporation and Restated By-Laws, the number of directors is fixed from time
to time by the Board of Directors. The Board of Directors currently is fixed
at eight directorships and is divided into three classes. The Class I
Directors with a term ending in 1997 are Michael J. Berendt, Ph.D., Alan J.
Main, Ph.D., and Dale A. Stringfellow, Ph.D.; the Class II Directors with a
term ending in 1998 are Peter D. Meldrum and Mark H. Skolnick, Ph.D.; and the
Class III Directors with a term ending in 1999 are Walter Gilbert, Ph.D.,
Arthur H. Hayes, Jr., M.D., and John J. Horan. The Class I Directors will be
elected at the upcoming Meeting for a term ending in 2000. At each annual
meeting of Stockholders, directors are elected for a full term of three years.
Novartis Corporation ("Novartis") and Bayer Corporation ("Bayer") each have
Board representation rights which were granted in connection with their
strategic collaborations with the Company. Under the collaboration agreements,
the Company must nominate one representative of each of Novartis and Bayer for
election to the Board of Directors. Further, certain Company stockholders--
Mark H. Skolnick, Ph.D., Angela A. Skolnick, Walter Gilbert, Ph.D. and Celia
Gilbert (and, in the case of Bayer, the Skolnick Family Limited Partnership)--
have agreed to vote in favor of such nominees for election to the Board. Dr.
Main, a Director of the Company since April 1995, is Novartis' current
representative on the Board. Dr. Berendt is Bayer's current representative and
has served as a Director of the Company since February 1997.
The names of the Company's current directors and certain information about
them are set forth below:
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
John J. Horan............... 77 Chairman of the Board of Directors
Walter Gilbert, Ph.D. ...... 65 Vice Chairman of the Board of Directors
Peter D. Meldrum............ 50 President, Chief Executive Officer, Director
Mark H. Skolnick Ph.D....... 51 Executive Vice President of Research and
Development, Director
Arthur H. Hayes, Jr.,
M.D. ...................... 64 Director
Dale A. Stringfellow,
Ph.D....................... 52 Director
Alan J. Main, Ph.D. ........ 43 Director
Michael J. Berendt,
Ph.D. ..................... 48 Director
JOHN J. HORAN, Chairman of the Board of Directors of the Company since
joining the Board in November 1992, served as the Chairman of the Board and
Chief Executive Officer of Merck & Co., Inc. from 1975 through 1985. Mr. Horan
held a variety of positions with Merck from 1952 until his retirement from the
Merck Board in 1993. He has also served on the Board of Directors of General
Motors Corporation, J.P. Morgan, Inc., Morgan Guaranty Bank, NCR Corporation,
Burlington Mills, Celgene Corporation, PathoGenesis Corporation, and as
Chairman of Atrix Laboratories, Inc. Mr. Horan is a Director of the Robert
Wood Johnson Foundation and a past Chairman of the Pharmaceutical
Manufacturers Association.
WALTER GILBERT, PH.D., Vice Chairman of the Board of Directors, joined the
Company as a founding scientist 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. He has held
professorships at Harvard University in the Departments of Physics,
Biophysics, Biology, Biochemistry and Molecular Biology, and Molecular and
Cellular Biology. He presently holds the Carl M. Loeb University Professorship
at Harvard University.
PETER D. MELDRUM has been a Director of the Company since its inception in
May 1991 and has been President and Chief Executive Officer of the Company
since November 1991. Prior to joining the Company he was President and Chief
Executive Officer of Founders Fund, Inc., a venture capital group specializing
in the biotechnology industry. He received an M.B.A. degree from the
University of Utah in 1974 and a B.S. degree in Chemical Engineering from the
University of Utah in 1970.
3
MARK H. SKOLNICK, PH.D., Executive Vice President of Research and
Development and a Director of the Company since May 1991, is a scientific
founder of the Company. Dr. Skolnick and several colleagues were the first to
conceive of using restriction fragment length polymorphism technology as
genetic markers, a breakthrough that underpins the Human Genome Project. He
received his Ph.D. in Genetics from Stanford University in 1975, and a B.A.
degree in Economics from the University of California at Berkeley in 1968.
ARTHUR H. HAYES, JR., M.D., a Director of the Company since November 1992,
served as Commissioner of the U.S. Food and Drug Administration from 1981 to
1983. Since 1991 he has served as the President and CEO of Mediscience
Associates, Inc. From 1986 to 1991, Dr. Hayes served as the President and CEO
of EM Pharmaceuticals, Inc., the United States affiliate of E. Merck of
Darmstadt, Germany. He also served as Provost and Dean of New York Medical
College from 1983 to 1986. Dr. Hayes currently serves as the Vice Chairman and
Medical Director of Nelson Communications, Inc. Dr. Hayes serves on the board
of the following publicly traded companies: Napro Biotherapeutics, Inc. and
Celgene Corporation. He also serves on the Board of Directors of the Macy
Foundation and the Food and Drug Law Institute.
DALE A. STRINGFELLOW, PH.D., a Director of the Company since December 1991,
has been President of Berlex BioSciences, a wholly owned subsidiary of
Schering AG, since June 1995. Prior to that he was President, CEO and a
Director of Celtrix Pharmaceuticals from July 1990 until April 1995. In
addition, Dr. Stringfellow has held other positions, including Vice President
and Senior Director of Preclinical Cancer Research at Bristol-Myers Squibb
Co.; Research Head, Cancer Virology and Cellular Biology Research at Upjohn
Company; and Vice President, Research and Development at Collagen Corporation.
ALAN J. MAIN, PH.D., a Director of the Company since April 1995, has been
Senior Vice President of Research at Novartis Corporation Pharmaceuticals
Division, located in Summit, New Jersey, since October 1992. In this capacity,
he is responsible for all drug discovery and preclinical development
activities in the areas of arthritis and cardiovascular disease. In addition,
he is a member of the Novartis Corporation Pharmaceuticals Division Management
Committee and a member of the Global Research and Development Board
responsible for overseeing Novartis Limited's worldwide pharmaceutical
research and development effort. Prior to this position, Dr. Main held several
positions in the Novartis group of companies, both in Basel, Switzerland and
Summit, New Jersey. He received a B.Sc. with honors in Chemistry from the
University of Aberdeen, Scotland in 1975, a Ph.D. in Organic Chemistry from
the University of Liverpool, England in 1978. He is a Fellow of the Royal
Chemical Society and is Vice President of the Inflammation Research
Association.
MICHAEL J. BERENDT, PH.D., a Director of the Company since February 1997, is
currently serving as Senior Vice-President, Pharmaceutical Research at Bayer
Corporation, located in West Haven, Connecticut. Dr. Berendt has been with
Bayer since 1993 and has served as Director and subsequently Vice-President of
Bayer's Insititue for Bone & Joint Disorders and Cancer. He received his
Doctorate in Microbiology/Immunology at Hahnemann Medical. Dr. Berendt also
serves on the Board of Directors of Onyx Pharmaceuticals, Inc.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
Meeting Attendance. During the fiscal year ended June 30, 1997 there were
six meetings of the Board of Directors, and the various committees of the
Board of Directors met a total of two times. No director attended fewer than
75% of the total number of meetings of the Board and of committees of the
Board on which he served during fiscal 1997, except for Dr. Main who was
traveling outside of the country during three of the meetings.
Audit Committee. The Audit Committee, which met one time in Fiscal 1997, has
three members, Dale A. Stringfellow, Ph.D. (Chairman), Walter Gilbert, Ph.D.
and Arthur H. Hayes, Jr., M.D. The Audit Committee reviews the engagement of
the Company's independent accountants, reviews annual financial statements,
considers matters relating to accounting policy and internal controls and
reviews the scope of annual audits.
Compensation Committee. The Compensation Committee, which met one time
during Fiscal 1997, has three members, Walter Gilbert, Ph.D. (Chairman), John
J. Horan and Dale A. Stringfellow, Ph.D. The
4
Compensation Committee reviews, approves and makes recommendations on the
Company's compensation policies, practices and procedures to ensure that legal
and fiduciary responsibilities of the Board of Directors are carried out and
that such policies, practices and procedures contribute to the success of the
Company.
Nominating Committee. The Company does not have a standing Nominating
Committee.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee has three members, Walter Gilbert, Ph.D. (Chairman),
John J. Horan and Dale A. Stringfellow, Ph.D. No executive officer of the
Company is a member of the Compensation Committee. No executive officer of the
Company serves 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
the Company's Board of Directors or Compensation Committee.
COMPENSATION OF DIRECTORS
The Company pays its non-employee directors $2,000 for each meeting of the
Board of Directors that he attends. Non-employee directors nominated pursuant
to a contractual agreement are not entitled to such fee. All directors are
reimbursed for their out-of pocket expenses incurred in attending meetings.
Directors who are not employees of the Company or any affiliate are eligible
to participate in the Company's 1992 Employee, Director and Consultant Stock
Option Plan (as amended September 11, 1997) (the "Plan"). The Plan provides
for an annual grant to each non-employee director of an non-qualified option
to purchase 7,500 shares of Common Stock, at an exercise price equal to the
fair market value of the Common Stock on the grant date. Options granted under
the Plan to non-employee directors vest thirty-three and 33/100 percent
(33.33%) per full year of service, following one year of service after the
date of grant and assuming continued membership on the Board. Thirty thousand
(30,000) options were granted under this formula during Fiscal 1997.
EXECUTIVE OFFICERS
The names of, and certain information regarding, executive officers of the
Company who are not also directors, are set forth below. Except for executive
officers who have employment agreements with the Company, the executive
officers serve at the pleasure of the Board of Directors.
NAME AGE POSITION
---- --- --------
Jay M. Moyes............ 43 Chief Financial Officer, Vice President of Finance
Janet H. Haskell........ 41 President, Myriad Genetic Laboratories, Inc.
Arnold Oliphant,
Ph.D. ................. 37 Vice President Research, Functional Genomics
JAY M. MOYES, Vice President of Finance since July 1993 and named Chief
Financial Officer in June 1996, served as Vice President of Finance and Chief
Financial Officer of Genmark, Inc. from 1991 through July 1993. Mr. Moyes held
various positions with the accounting firm of KPMG Peat Marwick LLP from 1979
through 1991, most recently as a Senior Manager. He holds an M.B.A. degree
from the University of Utah, a B.A. degree in economics from Weber State
University, and is a Certified Public Accountant.
JANET E. HASKELL, President of Myriad Genetic Laboratories, Inc., a wholly-
owned subsidiary, joined the Company in September 1995. Ms. Haskell has 17
years of health care experience with SmithKline Beecham Corporation, most
recently serving as Vice President and General Manager in the Clinical
Laboratories Division of SmithKline. Ms. Haskell is a member of the Advisor
Committee of the National Center for Genome Resources and serves on various
committees of the Biotechnology Industry Organization. Ms. Haskell received a
M.S. in International Management at the American Graduate School of
International Management in 1978.
ARNOLD OLIPHANT, PH.D., Vice President Research, Functional Genomics since
June 1996, joined the Company in February 1995. Dr. Oliphant served the
Company as a Senior Scientist and later a Program Manager directing the
Company's technology development program before being named to his current
position. Prior to joining the Company, Dr. Oliphant led the assay development
team for Pioneer Hi-Bred, a major agricultural genetics company. He received a
Ph.D. in genetics from the Harvard Medical School and a bachelor's degree in
biology from the University of Utah.
5
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth summary information as
to compensation received by the Company's Chief Executive Officer and each of
the three other most highly compensated persons who were serving as executive
officers of the Company as of June 30, 1997 (collectively, the "named
executive officers") for services rendered to the Company in all capacities
during the three fiscal years ended June 30, 1997.
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------ ------------
OTHER SECURITIES
NAME AND PRINCIPAL FISCAL ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION(1)
------------------ ------ -------- -------- ------------ ------------ ---------------
Peter D. Meldrum........ 1997 $240,325 $ 90,000 $ -- 40,000 $5,180
President and Chief 1996 $205,324 $ 85,000 $ -- 40,000 $5,651
Executive Officer 1995 $175,355 $ 90,000 $ -- 50,000 $5,701
Mark H. Skolnick,
Ph.D................... 1997 $215,324 $ 75,000 $ -- 40,000 $5,681
Executive Vice 1996 $176,151 $ 72,000 $ -- 40,000 $6,714
President of 1995 $ 90,182 $100,000 $ -- 57,143 $3,679
Research and
Development
Jay M. Moyes............ 1997 $125,324 $ 40,000 $ -- 20,000 $5,085
Vice President of 1996 $105,284 $ 40,000 $ -- 20,000 $4,303
Finance, 1995 $ 92,186 $ 20,000 $ -- 21,286 $3,759
Chief Financial Officer
Janet E. Haskell........ 1997 $170,324 $ 30,000 $ -- 10,000 $5,903
President, Myriad 1996 $112,743 $ 47,000 $ 53,817 140,000 $3,811
Genetic 1995 $ -- $ -- $ -- -- $ --
Laboratories, Inc.
- --------
(1) All Other Compensation includes (i) the dollar value of premiums paid by
the Company with respect to term life insurance for the benefit of each
named executive officer and (ii) the Company's matching contributions made
under its 401(k) plan on behalf of each named executive officer.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding each stock option
granted during the fiscal 1997 year to each of the named executive officers.
The potential realizable values that would exist for the respective options
are based on assumed rates of annual compound stock price appreciation of 5%
and 10% from the date of grant over the full term of the option. Actual gains,
if any, on stock options, exercises and Common Stock holdings are dependent on
the future performance of the Common Stock.
INDIVIDUAL GRANTS
------------------------------------------- POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM
-----------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------ --------- ---------- -----------------------
Peter D. Meldrum........ 40,000(1) 10% $27.125 6/27/2007 $ 682,351 $ 1,729,211
Mark H. Skolnick........ 40,000(1) 10% $27.125 6/27/2007 $ 682,351 $ 1,729,211
Jay M. Moyes............ 20,000(1) 5% $27.125 6/27/2007 $ 341,175 $ 864,605
Janet H. Haskell........ 10,000(1) 2% $27.125 6/27/2007 $ 170,588 $ 432,303
- --------
(1) Options were granted pursuant to the Plan. Options granted vest 20% upon
each anniversary date of the date of grant. Options terminate ten years
after the grant date, subject to earlier termination in accordance with
the Plan and the applicable option agreement. Vesting of options will
accelerate upon a change in control of the Company in accordance with the
applicable option agreement. Options were granted at an exercise price
equal to the fair market value of the Company's Common Stock, as
determined by the closing price of the Nasdaq Stock Market on the trading
day immediately preceding the grant date.
6
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table provides information regarding the exercises of options
by each of the named executive officers during Fiscal 1997. In addition, this
table includes the number of shares covered by both exercisable and
unexercisable stock options as of June 30, 1997 and the values of "in-the-
money" options, which values represent the positive spread between the
exercise price of any such option and the fiscal year-end value of the
Company's Common Stock.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF THE UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
ACQUIRED END AT FISCAL YEAR-END(1)
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ---------- ----------- ------------- ----------- -------------
Peter D. Meldrum........ 2,857 $ 37,141 25,143 102,000 $ 360,860 $672,000
Mark H. Skolnick........ 63,000 $1,656,625 121,513 104,858 $2,925,355 $739,163
Jay M. Moyes............ 2,000 $ 61,625 15,057 48,344 $ 242,040 $285,883
Janet H. Haskell........ 5,000 $ 130,000 61,000 74,000 $1,149,000 $996,002
- --------
(1) The value of unexercised in-the-money options at fiscal year end assumes a
fair market value for the Company's Common Stock of $27.00, the closing
sale price per share of the Company's Common Stock as reported by The
Nasdaq Stock Market on June 30, 1997.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company entered into employment agreements with no defined term with
Peter D. Meldrum, Mark H. Skolnick, Ph.D., and Jay M. Moyes in May 1993,
January 1994, and July 1993, respectively. Pursuant to these agreements,
Messrs. Meldrum, Skolnick and Moyes receive annual base salaries of $100,000,
$65,000, and $80,000, respectively, which base salaries have been increased by
the Board of Directors and may be changed from time to time. 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 the Company during and after employment
and will not compete with the Company during the term of employment with the
Company.
The Company entered into an employment agreement with no defined term with
Janet H. Haskell in August 1996. Pursuant to the agreement, Ms. Haskell
receives an annual base salary of $150,000, which base salary has been
increased by the Board of Directors and may be changed from time to time at
the discretion of the Board. In addition to the Company's standard benefit
package, the Company provides Ms. Haskell with $1,000,000 life insurance
coverage. Either party may terminate employment with or without cause,
provided that Ms. Haskell must provide the Company with 60 days' prior written
notice. If (i) the Company terminates Ms. Haskell without cause, or (ii) Ms.
Haskell terminates her employment as a result of an uncured reduction of her
responsibilities after a change of control of the Company, then the Company
must pay Ms. Haskell's salary for up to 12 months following termination. The
employment agreement also provides that the employee will not disclose
confidential information of the Company during and after employment and will
not compete with the Company during the term of employment with the Company.
In the event of a change in control of the Company (as defined in the Plan),
all outstanding unvested options, including options held by Messrs. Meldrum,
Skolnick, Moyes and Ms. Haskell, will become immediately vested, unless
provision is made for the continuation of such options pursuant to the
applicable provisions of the Plan.
7
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Overview
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed entirely of outside directors. The Compensation
Committee, which consists of Dr. Gilbert, Mr. Horan and Dr. Stringfellow, is
responsible for establishing and administering the Company's executive
compensation policies. This report addresses the compensation policies for
fiscal year 1997 as they affected Mr. Meldrum, in his capacity as President
and Chief Executive Officer of the Company, and the other executive officers
of the Company.
General Compensation Policy
The objectives of the Company's executive compensation program are to:
- --Provide a competitive compensation package that will attract and retain
superior talent and reward performance.
- --Support the achievement of desired Company performance.
- --Align the interests of executives with the long-term interests of
stockholders through award opportunities that can result in ownership of
Common Stock, thereby encouraging the achievement of superior results over an
extended period.
Executive Officer Compensation Program
The Company's executive officer compensation program is comprised of: (i)
base salary, which is set on an annual basis; (ii) annual incentive bonuses,
which are based on the achievement of predetermined objectives; and (iii)
long-term incentive compensation in the form of periodic stock option grants,
with the objective of aligning the executive officers' long-term interests
with those of the stockholders and encouraging the achievement of superior
results over an extended period.
The Compensation Committee performs annual reviews of executive compensation
to confirm the competitiveness of the overall executive compensation packages
as compared with companies who compete with the Company for prospective
employees.
In considering compensation of the Company's executives, one of the factors
the Compensation Committee takes into account is the anticipated tax treatment
to the Company of various components of compensation. The Company does not
believe Section 162(m) of the Internal Revenue Code of 1986, as amended, which
generally disallows a tax deduction for certain compensation in excess of $1
million to any of the executive officers appearing in the Summary Compensation
Table above, will have an effect on the Company. The Compensation Committee
has considered the requirements of Section 162(m) of the Code and its related
regulations. It is the Compensation Committee's present policy to take
reasonable measures to preserve the full deductibility of substantially all
executive compensation, to the extent consistent with its other compensation
objectives.
Base Salary
The Compensation Committee reviews base salary levels for the Company's
executive officers on an annual basis. Base salaries are set competitively
relative to companies in the biotechnology industry and other comparable
companies. In determining salaries the Compensation Committee also takes into
consideration individual experience and performance. The Compensation
Committee seeks to compare the salaries paid by companies similar in size and
stage of development to the Company. Within this comparison group, the Company
seeks to make comparisons to executives at a comparable level of experience,
who have a comparable level of responsibility and expected level of
contribution to the Company's performance. In setting base salaries,
8
the Compensation Committee also takes into account the intense level of
competition among biotechnology companies to attract talented personnel.
Annual Incentive Bonuses
The Company, along with each executive officer, establishes goals related
specifically to that officer's areas of responsibility. The Compensation
Committee determines the amount of each executive's bonus based on a
subjective assessment by the Compensation Committee of the officer's progress
toward completing the established goals. Bonuses are awarded on an annual
basis.
Long-term Incentive Compensation
Long-term incentive compensation, in the form of stock options, allows the
executive officers to share in any appreciation in the value of the Company's
Common Stock. The Compensation Committee believes that stock option
participation aligns executive officer's interests with those of the
stockholders. The amounts of the awards are designed to reward past
performance and create incentives to meet long-term objectives. Awards are
made at a level calculated to be competitive within the biotechnology industry
as well as a broader group of companies of comparable size and complexity. In
determining the amount of each grant, the Compensation Committee takes into
account the number of shares held by the executive prior to the grant.
Chief Executive Officer Compensation
Mr. Meldrum was appointed to the position of President and Chief Executive
Officer in November 1991. In May 1993, Mr. Meldrum entered into the Company's
standard Employment Agreement as required of all Company employees. Under this
agreement, Mr. Meldrum receives an annual base salary of $100,000, which
salary has been increased by the Board of Directors periodically. This is
consistent with the range of salary levels received by his counterparts in
companies in the biotechnology industry and other comparable companies. The
Compensation Committee believes Mr. Meldrum has managed the Company well in a
challenging business climate and has continued to move the Company towards its
long-term objectives.
The Company granted stock options to Mr. Meldrum to purchase 50,000 shares
of Common Stock at an exercise price of $7.00 in fiscal 1995, 40,000 shares at
an exercise price of $24.75 in fiscal 1996, and 40,000 shares at an exercise
price of $27.125 in fiscal 1997. This option package is designed to align the
interests of Mr. Meldrum with those of the Company's stockholders with respect
to short-term operating results and long term increases in the price of the
Company's stock. The grant of these options is consistent with the goals of
the Company's stock option program as a whole.
THE COMPENSATION COMMITTEE:
Walter Gilbert, Ph.D., Chairman
John J. Horan
Dale A. Stringfellow, Ph.D.
9
PERFORMANCE GRAPH
The following graph compares the quarterly percentage change in the
Company's cumulative total stockholder return on its Common Stock during a
period commencing on October 6, 1995 (the date of the Company's initial public
offering) and ending on June 30, 1997 (as measured by dividing the difference
between the Company's share price at the end and the beginning of the
measurement period; by the share price at the beginning of the measurement
period) with the cumulative total return of The Nasdaq Stock Market and the
Nasdaq Health Services Stock Index during such period. It should be noted that
the Company has not paid any dividends on the Common Stock, and no dividends
are included in the representation of the Company's performance. The stock
price performance on the graph below is not necessarily indicative of future
price performance.
[PERFORMANCE GRAPH APPEARS HERE]
10/6/95 12/29/95 3/29/96 6/28/96 9/30/96 12/31/96 3/31/97 6/30/97
------- -------- ------- ------- ------- -------- ------- -------
Myriad Genetics, Inc.... $100.00 $181.25 $148.61 $138.89 $141.67 $140.28 $191.67 $150.00
Nasdaq Stock Index
(U.S.)................. $100.00 $104.46 $109.33 $118.25 $122.46 $128.47 $121.52 $143.80
Nasdaq Health Services
Stocks................. $100.00 $120.31 $125.44 $136.64 $135.87 $120.37 $112.44 $125.50
10
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of the Company's
Common Stock, to file with the Securities and Exchange Commission (the "SEC")
initial reports of beneficial ownership and reports of changes in beneficial
ownership of the Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1997 all Section
16(a) filing requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with, except that Mr. Meldrum
inadvertently under reported the number of shares sold in his timely filed
Form 4, which was corrected by an amended report.
ELECTION OF DIRECTORS
(NOTICE ITEM 1)
Under the Company's Restated Certificate of Incorporation and Restated By-
Laws, the number of directors is fixed from time to time by the Board of
Directors. The Board of Directors has fixed the size of the Board at eight (8)
directorships.
The Board of Directors currently consists of the following eight members:
Michael J. Berendt, Ph.D., Walter Gilbert, Ph.D., Arthur H. Hayes, Jr., M.D.,
John J. Horan, Alan J. Main, Ph.D., Peter D. Meldrum, Mark H. Skolnick, Ph.D.,
and Dale A. Stringfellow, Ph.D.
The Company's Board of Directors is divided into three classes. The Class I
Directors with a term ending in 1997 are Dr. Berendt, Dr. Main, and Dr.
Stringfellow (the "Class I Directors"); the Class II Directors with a term
ending in 1998 are Mr. Meldrum and Dr. Skolnick; and the Class III Directors
with a term ending in 1999 are Dr. Gilbert, Dr. Hayes, and Mr. Horan.
On September 11, 1997, the Board of Directors voted to nominate and
recommend to the Stockholders the election of the Class I Directors to the
Board of Directors with a term ending in 2000. At each annual meeting of
Stockholders, directors are elected for a full term of three years. Directors
chosen to fill vacancies on the classified board shall hold office for a term
expiring at the annual meeting of stockholders at which the term of office of
the class to which he has been elected expires.
Unless authority to vote for any of the nominees named above is withheld,
the shares represented by the enclosed proxy will be voted FOR the election as
directors of such nominees. In the event that any nominee shall become unable
or unwilling to serve, the shares represented by the enclosed proxy will be
voted for the election of such other person as the Board of Directors may
recommend in his place. The Board has no reason to believe that any nominee
will be unable or unwilling to serve.
A plurality of the shares voted affirmatively or negatively at the Meeting
is required to elect each nominee as a director.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF DR. BERENDT, DR. MAIN, AND
DR. STRINGFELLOW AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE
VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE
PROXY.
11
AMENDMENT TO THE COMPANY'S 1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION
PLAN TO INCREASE THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR
ISSUANCE THEREUNDER
(NOTICE ITEM 2)
GENERAL
The Company's Board of Directors and the Stockholders approved the 1992
Employee, Director and Consultant Stock Option Plan (the "Plan") in 1992 and
subsequently amended and/or restated the Plan, most recently in September
1997. A total of 1,500,000 shares of Common Stock have been reserved for
issuance under the Plan. By the terms of the Plan, the Plan may be amended by
the Board of Directors provided that any amendment approved by the Board of
Directors which is of a scope that requires Stockholder approval in order to
ensure favorable federal income tax treatment for any incentive stock options
under the Internal Revenue Code of 1986 ("the Code") Section 422 is subject to
obtaining such Stockholder approval. On September 11, 1997, the Board of
Directors voted to approve an amendment to the Plan to increase by 500,000
shares the aggregate number of shares of Common Stock for which stock options
may be granted under the Plan. The Board believes that the increase in the
number of shares reserved for issuance under the Plan is advisable to give the
Company the flexibility needed to attract, retain and motivate employees,
directors and consultants. This amendment is being submitted for Stockholder
approval to ensure continued favorable income tax treatment under Section 422
of the Code and to comply with the requirements of The Nasdaq Stock Market.
MATERIAL FEATURES OF THE PLAN
The purpose of the Plan is to attract, retain and motivate employees,
directors and consultants through the issuance of stock options and to
encourage ownership of shares of Common Stock by employees, directors and
consultants of the Company. The Plan is administered by the Board of
Directors. Subject to the provisions of the Plan, the Board of Directors
determines the persons to whom options will be granted, the number of shares
to be covered by each option and the terms and conditions upon which an option
may be granted, and has the authority to administer the provisions of the
Plan. All employees, directors and consultants of the Company and its
affiliates are eligible to participate in the Plan. The Company currently has
197 full-time equivalent employees.
Options granted under the Plan may be either (i) options intended to qualify
as "incentive stock options" under Section 422 of the Code, or (ii) non-
qualified stock options. Incentive stock options may be granted under the Plan
to employees of the Company and its affiliates. Non-qualified stock options
may be granted to consultants, directors and employees of the Company and its
affiliates. The Plan also provides for the automatic grant of 7,500 non-
qualified options to non-employee directors of the Company. The automatic
grant, which is issued annually on the date of the shareholders' meeting, has
a ten year exercise life and vests thirty-three and 33/100 percent (33.33%)
per year, assuming continued membership on the Board. Non-employee directors
nominated pursuant to a contractual obligation are not entitled to such
automatic grants. Thirty thousand (30,000) options were granted under this
formula during Fiscal 1997.
The aggregate fair market value (determined at the time of grant) of shares
issuable pursuant to incentive stock options which become exercisable in any
calendar year under any incentive stock option plan of the Company may not
exceed $100,000. Incentive stock options granted under the Plan may not be
granted at a price less than the fair market value of the Common Stock on the
date of grant, or 110% of fair market value in the case of employees holding
10% or more of the voting stock of the Company. Non-qualified stock options
granted under the Plan may not be granted at an exercise price less than the
par value per share of the Common Stock. Incentive stock options granted under
the Plan expire not more than ten years from the date of grant, or not more
than five years from the date of grant in the case of incentive stock options
granted to an employee holding 10% or more of the voting stock of the Company.
An option granted under the Plan is exercisable, during the optionholder's
lifetime, only by the optionholder and is not transferable by him or her
except (i) by will or by the laws of descent and distribution, or (ii) as
otherwise determined by the Administrator and set forth in the applicable
Option agreement.
12
An incentive stock option granted under the Plan may, at the Board of
Director's discretion, be exercised after the termination of the
optionholder's employment with the Company (other than by reason of death,
disability or termination for cause as defined in the Plan) to the extent
exercisable on the date of such termination, at any time prior to the earlier
of the option's specified expiration date or 90 days after such termination.
In granting any non-qualified stock option, the Board of Directors may specify
that such non-qualified stock option shall be subject to such termination or
cancellation provisions as the Board of Directors shall determine. In the
event of the optionholder's death or disability, both incentive stock options
and non-qualified stock options may be exercised, to the extent exercisable on
the date of death or disability (plus a prorata portion of the option if the
option vests periodically), by the optionholder or the optionholder's
survivors at any time prior to the earlier of the option's specified
expiration date or one year from the date of the optionholder's death or
disability. In the event of the optionholder's termination for cause, all
outstanding and unexercised options are forfeited.
If 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, the number of
shares of Common Stock deliverable upon the exercise of an option granted
under the Plan shall be appropriately increased or decreased proportionately,
and appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend. If the Company is to
be consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"), the
Board of Directors or the Board of Directors of any entity assuming the
obligations of the Company under the Plan (the "Successor Board"), shall, as
to outstanding options under the Plan either (i) make appropriate provision
for the continuation of such options by substituting on an equitable basis for
the shares then subject to such options the consideration payable with respect
to the outstanding shares of Common Stock in connection with the Acquisition
or securities of the successor or acquiring entity; or (ii) upon written
notice to the participants, provide that all options must be exercised (either
to the extent then exercisable or, at the discretion of the Board of
Directors, all options being made fully exercisable for purposes of such
transaction) within a specified number of days of the date of such notice, at
the end of which period the options shall terminate; or (iii) terminate all
options in exchange for a cash payment equal to the excess of the fair market
value of the shares subject to each such option (either to the extent then
exercisable or, at the discretion of the Board of Directors, all options being
made fully exercisable for purposes of such transaction) over the exercise
price thereof. In the event of a recapitalization or reorganization of the
Company (other than an Acquisition) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionholder upon exercising an option under the
Plan, shall be entitled to receive for the purchase price paid upon such
exercise the securities he or she would have received if he or she had
exercised such option prior to such recapitalization or reorganization.
The Plan may be amended by the Stockholders of the Company. The Plan may
also be amended by the Board of Directors, provided that any amendment
approved by the Board of Directors which is of a scope that requires
Stockholder approval in order to ensure favorable federal income tax treatment
for any incentive stock options under Code Section 422, is subject to
obtaining such Stockholder approval.
13
OPTION INFORMATION
The following table sets forth as of August 22, 1997, all options granted
pursuant to the Plan to (i) the named executive officers, (ii) all current
executive officers of the Company as a group, (iii) all current directors of
the Company who are not executive officers as a group, and (iv) all employees,
including all current officers who are not executive officers, as a group.
NO. OF OPTIONS
NAME TITLE GRANTED (1)
---- ----- --------------
Peter D. Meldrum........ President and Chief Executive Officer 127,143
Mark H. Skolnick,
Ph.D................... Executive Vice President of Research and Development 137,143
Jay M. Moyes............ Vice President of Finance and Chief Financial Officer 63,401
Janet H. Haskell........ President, Myriad Genetic Laboratories, Inc. 135,000
All current executive officers as a group (5 persons)......................... 501,687
All current directors who are not executive officers as a group (6 persons)... 95,000
All employees who are not executive officers as a group (2)................... 376,666
- --------
(1) Does not include options to purchase 2,857, 3,600, 15,000 and 700 shares
of Common Stock which have been previously exercised by Mr. Meldrum, Mr.
Moyes, Ms. Haskell, and Arnold Oliphant, Vice President Functional
Genomics, respectively.
(2) Net of all canceled options. Does not include options to purchase 73,012
shares of Common Stock that have been exercised by all such employees.
On August 22, 1997, market value of the Company's Common Stock was $24.375,
based on the closing price of such Common Stock as quoted on The NASDAQ Stock
Market.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a description of certain United States federal income tax
consequences of the issuance and exercise of options under the Plan:
Incentive Stock Options. An incentive stock option does not result in
taxable income to the optionee or deduction to the Company at the time it is
granted or exercised, provided that no disposition is made by the optionee of
the shares acquired pursuant to the option within two years after the date of
grant of the option nor within one year after the date of issuance of shares
to him (the "ISO holding period"). However, the difference between the fair
market value of the shares on the date of exercise and the option price will
be an item of tax preference includible in "alternative minimum taxable
income." Upon disposition of the shares after the expiration of the ISO
holding period, the optionee will generally recognize long term capital gain
or loss based on the difference between the disposition proceeds and the
option price paid for the shares. If the shares are disposed of prior to the
expiration of the ISO holding period, the optionee generally will recognize
taxable compensation, and the Company will have a corresponding deduction, in
the year of the disposition, equal to the excess of the fair market value of
the shares on the date of exercise of the option over the option price. Any
additional gain realized on the disposition will normally constitute capital
gain. If the amount realized upon such a disqualifying disposition is less
than fair market value of the shares on the date of exercise, the amount of
compensation income will be limited to the excess of the amount realized over
the optionee's adjusted basis in the shares.
Non-Qualified Stock Options. The grant of a non-qualified option will not
result in taxable income to the optionee or deduction to the Company at the
time of grant. The optionee will recognize taxable compensation, and the
Company will have a corresponding deduction, at the time of exercise in the
amount of the excess of the then fair market value of the shares acquired over
the option price. Upon disposition of the shares, the optionee will generally
realize capital gain or loss, and his basis for determining gain or loss will
be the sum of the option price paid for the shares plus the amount of
compensation income recognized on exercise of the option.
14
The affirmative vote of a majority of the shares voted affirmatively or
negatively at the Meeting is required to approve the increase in the aggregate
number of shares of Common Stock available under the Plan.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE ADOPTION OF AN AMENDMENT
TO THE PLAN TO INCREASE BY 500,000 SHARES THE AGGREGATE NUMBER OF SHARES FOR
WHICH STOCK OPTIONS MAY BE GRANTED UNDER THE PLAN, AND PROXIES SOLICITED BY
THE BOARD WILL BE VOTED IN FAVOR OF SUCH AMENDMENT UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
INDEPENDENT PUBLIC ACCOUNTANTS
(NOTICE ITEM 3)
The Board of Directors has appointed KPMG Peat Marwick LLP, independent
public accountants, to audit the financial statements of the Company for the
fiscal year ending June 30, 1998. The Board proposes that the Stockholders
ratify this appointment, although such ratification is not required under
Delaware law or the Company's Restated Certificate of Incorporation or
Restated By-Laws. KPMG Peat Marwick LLP audited the Company's financial
statements for the fiscal year ended June 30, 1997. The Company expects that
representatives of KPMG Peat Marwick LLP will be present at the Meeting, with
the opportunity to make a statement if they so desire, and will be available
to respond to appropriate questions.
The affirmative vote of a majority of the shares voted affirmatively or
negatively at the Meeting is required to ratify the appointment of the
independent public accountants.
In the event that ratification of the appointment of KPMG Peat Marwick LLP
as the independent public accountants for the Company is not obtained at the
Meeting, the Board of Directors will reconsider its appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS, AND
PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A
STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented to
the Meeting. If any other business is properly brought before the Meeting, it
is intended that proxies in the enclosed form will be voted in respect thereof
in accordance with the judgment of the persons voting the proxies.
15
STOCKHOLDER PROPOSALS
To be considered for presentation at the Annual Meeting of Stockholders to
be held in 1998, Stockholder proposals must be received, marked for the
attention of: Secretary, Myriad Genetics, Inc., 320 Wakara Way, Salt Lake
City, Utah 84108, not later than June 25, 1998. In addition, the Company's
Restated By-Laws require that notice of Stockholder proposals and nominations
for director for the 1998 Annual Meeting be delivered to the Secretary of the
Company not less than sixty (60) days nor more than ninety (90) days prior to
November 13, 1998, unless the date of the 1998 Annual Meeting is more than
thirty (30) days before or more than sixty (60) days after November 13, 1998,
in which event Stockholders may deliver such notice not earlier than the
ninetieth (90th) day prior to the 1998 Annual Meeting and not later than the
close of business on the later of the sixtieth (60th) day prior to the 1998
Annual Meeting or the close of business on the tenth (10th) day following the
day on which public disclosure of the date of the meeting was made. Nothing in
this paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to the 1998 Annual Meeting any stockholder
proposal that does not meet all of the requirements for inclusion established
by the Securities and Exchange Commission in effect at the time such proposal
is received.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
FILL OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE.
By order of the Board of Directors:
/s/ Corenne Wooldridge
---------------------------
Corenne Wooldridge
Secretary
October 23, 1997
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30,
1997 (OTHER THAN EXHIBITS THERETO) FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WHICH PROVIDES ADDITIONAL INFORMATION ABOUT THE COMPANY, IS
AVAILABLE TO BENEFICIAL OWNERS OF THE COMPANY'S COMMON STOCK WITHOUT CHARGE
UPON WRITTEN REQUEST TO SECRETARY, MYRIAD GENETICS, INC., 320 WAKARA WAY, SALT
LAKE CITY, UTAH 84108 (801-584-3600).
16
- --------------------------------------------------------------------------------
MYRIAD GENETICS, INC.
THIS PROXY IS BEING SOLICITED BY MYRIAD GENETICS, INC.'S BOARD OF DIRECTORS
The undersigned, revoking any previous proxies relating to these shares, hereby
acknowledges receipt of the Notice and Proxy Statement dated October 23, 1997 in
connection with the Annual Meeting to be held at 9:00 a.m. on Thursday, November
13, 1997 at the Salt Lake City Marriott Hotel, 75 S. West Temple, Salt Lake
City, Utah and hereby appoints Peter D. Meldrum and John J. Horan, and each of
them (with full power to act alone), the attorneys and proxies of the
undersigned, with power of substitution to each, to vote all shares of the
Common Stock of MYRIAD GENETICS, INC. registered in the name provided herein
which the undersigned is entitled to vote at the 1997 Annual Meeting of
Stockholders, and at any adjournments thereof, with all the powers the
undersigned would have if personally present. Without limiting the general
authorization hereby given, said proxies are, and each of them is, instructed to
vote or act as follows on the proposals set forth in said Proxy.
SEE REVERSE SIDE FOR ALL THREE PROPOSALS. If you with to vote in accordance
with the Board of Directors' recommendations, just sign on the reverse side.
You need not mark any boxes.
(SEE REVERSE SIDE)
----------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
This Proxy when executed will be voted in the manner directed herein. If no
direction is made this Proxy will be voted FOR the election of Directors and FOR
Proposals 2 and 3.
Please Mark
your vote as [X]
indicated in
this example
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
1. Election of Directors (To the right).
- ------------------------------------------------------------------
[_] For all nominees except as noted above.
FOR WITHHELD ELECTION OF DIRECTORS (or if any nominee is not available for
election, such substitute as the Board of Directors may
designate)
[_] [_] NOMINEES: Michael J. Berendt, Ph.D., Alan J. Main, Ph.D., and
Dale A. Stringfellow, Ph.D.
2. Proposal to amend the Myriad Genetics, Inc. 1992 Employee,
Director and Consultant Stock Option Plan to increase by
500,000 the aggregate number of shares of Common Stock
authorized for issuance thereunder.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP
as the Company's independent public accountants for the fiscal
year ending June 30, 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
IN THEIR DISCRETION THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENTS THEREOF.
I PLAN TO ATTEND THE MEETING [_]
Please sign exactly as name(s) appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
Date _________________________________
Signature: ___________________________
Date _________________________________
Signature: ___________________________
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*FOLD AND DETACH HERE*