EXHIBIT 10.4
CONFIRMATION
Date: October 22, 1997
To: Myriad Genetics, Inc. ("Party B")
Attention: Jay Moyes
From: Swiss Bank Corporation, London Branch ("Party A")
Re: Equity Option Confirmation
Reference Number 1265547/1265545
_______________________________________________________________________
The purpose of this communication is to confirm the terms and conditions of the
transaction (the "Transaction") entered into between us on the Trade Date
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. (formerly
known as the International Swap Dealers Association, Inc.) ("ISDA")) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.
This Confirmation supplements, forms part of, and is subject to, the ISDA Master
Agreement dated as of October 8, 1997, as amended and supplemented from time to
time (the "Agreement"), between you and Swiss Bank Corporation. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
below.
The terms of the Transaction to which this Confirmation relates are as follows:
Trade Date : October 21, 1997
Buyer : Party B
Seller : Party A
Option Style : European Option
Option Type : Capped Call
Shares : Common Stock of Myriad Genetics, Inc. (Symbol: MYGN)
Number of Options : 400,000
Contract Multiplier : 1.00
Strike Price : USD 32.25
Cap Price : USD 40.50
Total Premium : Call options written by Party B on 400,000 shares
of Party B's Common Stock.
Premium
Payment Date : n/a
Expiration Date : December 11, 1998, or, if that date is not an
Exchange Business Day, the following day that is an
Exchange Business Day.
Currency
Business Day : Any day on which commercial banks are open for
business (including dealings in foreign exchange and
foreign currency deposits) in the cities from which
and in which a payment is to be made.
Exchange
Business Day : A day that is (or but for the occurrence of a Market
Disruption Event, would have been) a trading day on
the Exchange and the Philadelphia Stock Exchange
(other than a day on which trading on any such
exchange is scheduled to close prior to its regular
weekday closing time, first announced on the day of
such closing).
Normal
Trading Day : An Exchange Business Day on which no Market
Disruption Event has occurred or is continuing.
Market
Disruption Event : The occurrence or existence on any Exchange Business
Day during the one-half hour period that ends at the
close of business of any suspension of or limitation
imposed on trading (by reason of movements in price
exceeding levels permitted by the relevant exchange
or otherwise), provided that any such event is
material in the reasonable determination of the
Calculation Agent, on: (i) the Exchange in the
Shares; or (ii) the Philadelphia Stock Exchange in
options contracts on the Shares.
Exchange : Nasdaq National Market
Clearance System
Business Day : Any day on which the Clearance System is open for
the acceptance and execution of settlement
instructions.
Clearance System : Depository Trust Company, or any successor to or
transferee of such clearance system.
Calculation Agent : Party A, whose calculations shall be binding absent
manifest error.
Procedure for Exercise
- ----------------------
Exercise Date : The Expiration Date.
Expiration Time : 5:00 p.m. local time in New York City.
Automatic Exercise : The Transaction will be deemed to be automatically
exercised if it is In-the-Money on the Expiration
Date, unless (i) the Buyer has notified the Seller
or its agent (by telephone or in writing) prior to
5:00 p.m. local time in New York City on the
Expiration Date that it does not wish to exercise
the Transaction; or (ii) the Closing Value cannot be
determined on the Expiration Date. If the
Transaction is to be cash settled, "In-the-Money"
means that the Cash Settlement Amount is greater
than zero. If the Transaction is to be physically
settled, "In-the-Money" means that the Closing Value
is greater than the Strike Price. "Closing Value"
means the closing price of the Shares, as reported
on the Exchange, on the Expiration Date.
Telephone
or facsimile number
of Seller's agent
for purposes of
giving notice : Telephone: 312-554-5249
Fax: 312-554-6271
Attention: David P. Stowell
Settlement Terms
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Settlement : The Transaction will be cash settled; provided,
however, that Party B may elect to physically settle
the Transaction by giving notice to Party A no later
than 20 Exchange Business Days before the Expiration
Date (determined without regard to the parenthetical
in the definition of Exchange Business Day).
Physical Settlement : If the Transaction is to be physically settled, on
the Settlement Date, the Seller shall deliver to the
Buyer the number of Shares equal to the number of
Options exercised against payment by the Buyer to
the Seller of an amount equal to the product of (a)
the Strike Price, adjusted as hereinafter provided,
multiplied by (b) the number of Options exercised.
If the Closing Value exceeds the Cap Price, the
Strike Price shall be increased by the amount by
which the Closing Value exceeds the Cap Price; if
the Closing Value is equal to or less than the Cap
Price, no adjustment will be made to the Strike
Price. Such payment and such delivery will be made
through the Clearance System at the accounts
specified below, on a delivery versus payment basis.
Cash Settlement : If the Transaction is to be cash settled, on the
Settlement Date, Party A shall pay to Party B the
Cash Settlement Amount, if any. The "Cash Settlement
Amount" shall be the greater of (a) zero and (b) an
amount calculated by the Calculation Agent equal to
(i) the number of Options exercised multiplied by
(ii) the Price Differential. "Price Differential"
means (x) if the Reference Price exceeds the Cap
Price, the result of subtracting the Strike Price
from the Cap Price, and (y) if the Reference Price
is equal to or less than the Cap Price, the result
of subtracting the Strike Price from the Reference
Price.
Reference Price : (a) If the Valuation Period contains fifteen
Normal Trading Days, the Reference Price shall be
the arithmetic average of the Share Prices on those
fifteen Normal Trading Days.
(b) If the Valuation Period does not contain
fifteen Normal Trading Days, the Calculation Agent
shall determine the Share Price for the Valuation
Date and as many Exchange Business Days immediately
preceding the Valuation Date as shall be necessary,
when such Share Prices are taken together with the
Share Prices on all Normal Trading Days occurring
within the Valuation Period, to provide fifteen
Share Prices, and in such case the Reference Price
shall be the arithmetic average of those fifteen
Share Prices.
Share Price : The closing price of the Shares as reported on the
Exchange.
Valuation Period : The period from and including the fourteenth
Exchange Business Day immediately preceding the
Expiration Date (the "Initial Date") to and
including the Expiration Date, provided that if any
Exchange Business Day in the Valuation Period as so
determined, shall not be a Normal Trading Day, the
Valuation Period shall be extended so that the
Valuation Period includes fifteen Normal Trading
Days , but in no event shall the last day of the
Valuation Period be later than the fifteenth
Exchange Business Day after the Expiration Date, and
in no event shall the Valuation Period include any
day before the Initial Date.
Valuation Date : The last day of the Valuation Period.
Settlement Date : If the Transaction is to be cash settled, the
Settlement Date shall be three Currency Business
Days after the Valuation Date. If the Transaction is
to be physically settled, the Settlement Date shall
be three Clearance System Business Days after the
Exercise Date.
Adjustment Events
- -----------------
Adjustments : During the life of the Transaction, if any
adjustment is made by The Options Clearing
Corporation or its successors ("OCC") in the terms
of outstanding OCC-issued options ("OCC Options") on
the Shares which are the subject of the
Transactions, an equivalent adjustment shall be made
in the terms of the Transaction. Except as provided
in the following paragraph and in the "Additional
Adjustment Provisions" below, no adjustment shall be
made in the terms of the Transaction for any event
that does not result in an adjustment to the terms
of outstanding OCC Options on the Shares. Without
limiting the generality of the foregoing, NO
ADJUSTMENT SHALL BE MADE IN THE TERMS OF THE
TRANSACTIONS FOR ORDINARY CASH DIVIDENDS ON THE
SHARES EXCEPT AS PROVIDED IN THE "ADDITIONAL
ADJUSTMENTS" PROVISIONS BELOW.
If at any time during the life of the Transaction
there shall be no outstanding OCC Options on the
Shares, and an event shall occur for which an
adjustment might otherwise be made under the By-
Laws, Rules, and stated policies of the OCC
applicable to the adjustment of OCC Options (the
"OCC Adjustment Rules"), the parties shall use their
best
efforts, applying the principles set forth in the
OCC Adjustment Rules, to jointly determine whether
to adjust the terms of the Transaction and the
nature of any such adjustment.
Additional
Adjustments : Notwithstanding the foregoing, if upon the
occurrence of the following events during the life
of the Transaction no adjustment is required to be
made to the terms of the Transaction in accordance
with the foregoing provisions or if an adjustment
has been made but such adjustment is, in the
reasonable determination of the Calculation Agent,
insufficient to preserve the economic benefit of the
Transaction for the parties, the following
additional adjustments shall be made to the terms of
the Transaction:
If (a) an ordinary cash dividend is declared or paid
on the Shares or (b) a special cash dividend is
declared or paid on the Shares and in either case
the Ex-Dividend Date with respect to such dividend
occurs during the period from, and including, the
Effective Date to, but excluding, the Expiration
Date (each, a "Dividend Event"), the Strike Price
and the Cap Price shall each be adjusted for each
Dividend Event in accordance with the following
formulas:
SP\\0\\ (CP\\0\\ - DA)
----------------------
SP\\1 \\ = CP\\0\\
C\\0\\ (CP\\0\\ - DA)
---------------------
C\\1 \\ = CP\\0\\
Where:
(i) SP\\1\\ = Strike Price after the Dividend
Event
(ii) C\\1\\ = Cap Price after the Dividend Event
(iii) SP\\0\\ = Strike Price on the Exchange
Business Day immediately preceding the
Ex-Dividend Date with respect to the
Dividend Event
(iv) C\\0\\ = Cap Price on the Exchange Business
Day immediately preceding the Ex-Dividend
Date with respect to the Dividend Event
(v) CP\\0\\ = The closing price of the Shares, as
reported on the Exchange, on the Exchange
Business Day immediately preceding the
Ex-Dividend Date with respect to the
Dividend Event
(vi) DA = The amount of the ordinary cash dividend
or the special cash dividend, as the case
may be
Miscellaneous
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Transfer : Neither party may transfer the Transaction, in
whole or in part, without the prior written
consent of the non-transferring party.
Account Details
- ---------------
Payments and deliveries to Party A:
Account for payments: Previously Provided
Delivery instructions: Previously Provided
Payments and deliveries to Party B:
Account for payments: Previously Provided
Delivery instructions: Previously Provided
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us or by sending to us a letter or telex substantially
similar to this letter, which letter or telex sets forth the material terms of
the Transaction to which this Confirmation relates and indicates your agreement
to those terms.
Yours sincerely,
SWISS BANK CORPORATION, LONDON BRANCH
By: /s/ Victoria Harkness Sotgiu By: /s/ John Marshall
---------------------------- ----------------------------
Name: Victoria Harkness Sotgiu Name: John Marshall
Title: Authorised Signatory Title: Authorised Signatory
Confirmed as of the 22nd day
of October, 1997
MYRIAD GENETICS, INC.
By: /s/ Jay M. Moyes
----------------------------
Name: Jay M. Moyes
Title: C.F.O.