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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 Section 240.14a-11(c) or Section 240.14a-12
MYRIAD GENETICS, INC.
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(Name of Registrant as Specified In Its Charter)
MYRIAD GENETICS, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
[LOGO OF MYRIAD GENETICS, INC.]
MYRIAD GENETICS, INC.
October 13, 1998
Dear Stockholder,
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of Myriad Genetics, Inc. (the "Company") to be held at 9:00 a.m. on Thursday,
November 12, 1998, at the Salt Lake City Marriott Hotel, 75 South West Temple,
Salt Lake City, Utah.
At the Annual Meeting, two persons will be elected to the Board of
Directors. 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 CARD PROMPTLY.
MYRIAD GENETICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 12, 1998
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 12,
1998, at the Salt Lake City Marriott Hotel, 75 South West Temple, Salt Lake
City, Utah, at 9:00 a.m. for the following purposes:
1. To elect two members to the Board of Directors to serve for a term
ending in 2001.
2. 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, 1999.
3. 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 September 18, 1998
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 13, 1998
MYRIAD GENETICS, INC.
320 WAKARA WAY
SALT LAKE CITY, UTAH 84108
(801) 584-3600
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PROXY STATEMENT
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GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Myriad Genetics, Inc., a Delaware corporation (the
"Company"), 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
South West Temple, Salt Lake City, Utah, on Thursday, November 12, 1998, at
9:00 a.m., and any adjournments thereof (the "Meeting").
Where the Stockholder specifies a choice on the enclosed proxy card 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 two nominees for director named herein 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, 1999. 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 the proposal to approve the
ratification of the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants. The election of directors requires a plurality
of the shares voted affirmatively or negatively at the Meeting. With respect
to the tabulation of votes on the matters proposed for the consideration of
the Stockholders at the Meeting, abstentions and broker non-votes will have no
effect on the vote.
The close of business on September 18, 1998 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 September 18, 1998, the Company had
9,345,535 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 13, 1998 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, 1998
("Fiscal 1998") 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 28, 1998
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. 7 hereof, and all
current directors and executive officers as a group.
SHARES
BENEFICIALLY OWNED(1)
-------------------------
NAME AND ADDRESS** NUMBER PERCENT
------------------ ------------- -----------
Bayer Corporation.................................... 588,235 6.3%
400 Morgan Lane
West Haven, CT 06516
UBS Asset Management (New York) Inc.(2).............. 650,000 7.0%
1345 Avenue of the Americas
New York, NY 10105
Forstmann-Leff Associates Inc.(3).................... 476,500 5.1%
590 Madison Avenue
New York, NY 10022
Peter D. Meldrum(4).................................. 207,870 2.2%
Mark H. Skolnick, Ph.D.(5)........................... 536,013 5.7%
Jay M. Moyes(6)...................................... 27,400 *
Arnold Oliphant, Ph.D.(7)............................ 10,550 *
Janet E. Haskell(8).................................. 59,500 *
Walter Gilbert, Ph.D.(9)............................. 171,470 1.8%
John J. Horan(7)..................................... 63,214 *
Arthur H. Hayes, M.D.(7)............................. 30,500 *
Dale A. Stringfellow, Ph.D.(7)....................... 10,871 *
Alan J. Main, Ph.D. ................................. 0 --
Michael J. Berendt, Ph.D. ........................... 0 --
All executive officers and directors as a group (12
persons)(10)........................................ 1,057,988 11.0%
- --------
* 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 28,
1998 was 9,345,535 shares. 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 28, 1998, plus shares of Common
Stock subject to options held by such person at August 28, 1998 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) This information is based solely on a Schedule 13G filed with the
Securities and Exchange Commission and dated February 13, 1998. UBS Asset
Management (New York) Inc. has sole dispositive power over all such shares.
(3) This information is based solely on a Schedule 13G filed with the
Securities and Exchange Commission and dated February 11, 1998. Consists of
65,900 shares of Common Stock over which Forstmann-Leff Associates Inc.
("Forstmann") has sole dispositive and voting power and 410,600 shares of
Common Stock over which Forstmann shares dispositive and voting power with
FLA Advisers L.L.C. ("FLA"). The managing members of FLA are principals of
Forstmann.
(4) Includes 34,000 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
118,942 shares of Common Stock subject to currently exercisable options.
(6) Includes 24,614 shares of Common Stock subject to currently exercisable
options.
(7) Consists of shares of Common Stock subject to currently exercisable
options.
(8) Includes 54,500 shares of Common Stock subject to currently exercisable
options.
(9) Includes 76,485 shares of Common Stock owned by Dr. Gilbert's wife, as to
which Dr. Gilbert disclaims beneficial ownership. Also includes 18,500
shares of Common Stock subject to currently exercisable options.
(10) Includes 311,391 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 2000 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 II Directors will be
elected at the upcoming Meeting for a term ending in 2001. 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............ 78 Chairman of the Board of Directors
Walter Gilbert, Ph.D. ... 66 Vice Chairman of the Board of Directors
Peter D. Meldrum......... 51 President, Chief Executive Officer, Director
Mark H. Skolnick Ph.D.... 52 Chief Scientific Officer, Executive Vice
President of Research and Development, Director
Arthur H. Hayes, Jr., 65 Director
M.D. ...................
Dale A. Stringfellow, 53 Director
Ph.D....................
Alan J. Main, Ph.D. ..... 44 Director
Michael J. Berendt, 49 Director
Ph.D. ..................
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 past Chairman of the
Pharmaceutical Manufacturers Association and a Director of the Robert Wood
Johnson Foundation.
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
3
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.
MARK H. SKOLNICK, PH.D., a scientific founder of the Company, has been a
director of the Company and Executive Vice-President of Research and
Development since its inception in 1991, and has served as Chief Scientific
Officer since 1997. 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, is Senior
Vice-President of Research at Novartis Pharmaceuticals Corporation, located in
Summit, New Jersey. Prior to this position, Dr. Main was Senior Vice-President
of Research and Preclinical Development from 1992 to 1997 for Ciba
Pharmaceuticals Division. He received a B.Sc. with honors in Chemistry from
the University of Aberdeen, Scotland in 1975 and a Ph.D. in Organic Chemistry
from the University of Liverpool, England in 1978. He is a Fellow of the Royal
Chemical Society and serves on the Board of Directors of the Inflammation
Research Association and the Research and Development Council of New Jersey.
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 Institute for Bone & Joint Disorders and Cancer. He received his
Doctorate in Microbiology/Immunology at Hahnemann Medical University. Dr.
Berendt also serves on the Board of Directors of Onyx Pharmaceuticals, Inc.
and Waters Corporation.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
Meeting Attendance. During the fiscal year ended June 30, 1998 there were
four 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 1998.
Audit Committee. The Audit Committee, which met one time in Fiscal 1998, 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 1998, has three members, Walter Gilbert, Ph.D. (Chairman), John
J. Horan and Dale A. Stringfellow, Ph.D. The
4
Compensation Committee administers the Company's stock plans and 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 each non-employee director $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 entitled
to receive options under the Company's 1992 Employee, Director and Consultant
Stock Option Plan (the "Plan"). The Plan provides for an annual grant to each
non-employee director of a 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 in three equal installments beginning on the first anniversary
of the date of grant, assuming continued membership on the Board. Options for
thirty thousand (30,000) shares were granted under this formula during Fiscal
1998.
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
---- --- --------
Gregory Critchfield,
M.D. .................. 47 President, Myriad Genetic Laboratories, Inc.
James S. Kuo, M.D. ..... 34 Vice President of Business Development
Jay M. Moyes............ 44 Chief Financial Officer, Vice President of Finance
Arnold Oliphant,
Ph.D. ................. 38 Vice President Research, Functional Genomics
GREGORY CRITCHFIELD, M.D., President of Myriad Genetic Laboratories, Inc., a
wholly owned subsidiary, joined the Company in July 1998. Dr. Critchfield
previously served as Senior Vice President, Chief Medical and Scientific
Officer of Quest Diagnostics (formerly Corning Clinical Laboratories). Prior
to Quest Diagnostics, Dr. Critchfield was Director of Clinical Pathology for
Intermountain Health Care. Dr. Critchfield received his M.D. from the
University of Utah and his M.S. in Biophysical Sciences from the University of
Minnesota. He is Board Certified in Clinical Pathology.
JAMES S. KUO, M.D., was appointed Vice President of Business Development in
June 1998. Dr. Kuo previously served as President and Chief Executive Officer
of Discovery Laboratories, a publicly-traded biopharmaceutical company. Dr.
Kuo continues to serve as a Director of Discovery Laboratories. Prior to his
employment with Discovery Laboratories, Dr. Kuo was a licensing and
development officer with Pfizer, Inc. Prior to Pfizer, Dr. Kuo served as
Managing Director of venture analysis at HealthCare Ventures, a venture
capital group in Edison, New Jersey where he managed a $378 million portfolio.
Dr. Kuo received his M.D. from the University of Pennsylvania School of
Medicine and his M.B.A. Degree from the Wharton School of Business, where he
concentrated in health care management and finance.
5
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.
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.
6
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 four other most highly compensated persons who were serving as executive
officers of the Company as of June 30, 1998 (collectively, the "named
executive officers") for services rendered to the Company in all capacities
during the three fiscal years ended June 30, 1998.
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........ 1998 $275,324 $100,000 $ -- 40,000 $5,072
President and Chief 1997 $240,325 $ 90,000 $ -- 40,000 $5,180
Executive Officer 1996 $205,324 $ 85,000 $ -- 40,000 $5,651
Mark H. Skolnick, Ph.D.. 1998 $245,324 $ 70,000 $ -- 35,000 $5,157
Executive Vice 1997 $215,324 $ 75,000 $ -- 40,000 $5,681
President of 1996 $176,151 $ 72,000 $ -- 40,000 $6,714
Research and
Development
Jay M. Moyes............ 1998 $145,324 $ 30,000 $ -- 15,000 $5,255
Vice President of 1997 $125,324 $ 40,000 $ -- 20,000 $5,085
Finance, Chief 1996 $105,284 $ 40,000 $ -- 20,000 $4,303
Financial Officer
Arnold Oliphant, Ph.D... 1998 $135,419 $ 30,000 $ -- 8,000 $5,488
Vice President 1997 $ 79,529 $ 10,868 $ -- 28,500 $3,132
Research, Functional 1996 $ 60,774 $ 3,031 $ -- 6,500 $2,503
Genomics
Janet E. Haskell........ 1998 $180,324 $ -- $ -- -- $5,760
President, Myriad 1997 $170,324 $ 30,000 $ -- 10,000 $5,903
Genetic 1996 $112,743 $ 47,000 $53,817 140,000 $3,811
Laboratories, Inc.
- --------
(1) All Other Compensation includes (i) the dollar value of premiums paid by
the Company with respect to term life insurance for the benefit of each
named executive officer and (ii) the Company's matching contributions made
under its 401(k) plan on behalf of each named executive officer.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding each stock option
granted during Fiscal 1998 to each of the named executive officers. The
potential realizable values that would exist for the respective options are
based on assumed rates of annual compound stock price appreciation of 5% and
10% from the date of grant over the full term of the option. Actual gains, if
any, on stock options, exercises and Common Stock holdings are dependent on
the future performance of the Common Stock.
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
--------------------------------------------- ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ---- ---------- ------------ --------- ---------- -------- ----------
Peter D. Meldrum........ 40,000(1) 9% $18.625 6/4/2008 $468,526 $1,187,338
Mark H. Skolnick........ 35,000(1) 8% $18.625 6/4/2008 $409,961 $1,038,921
Jay M. Moyes............ 15,000(1) 3% $18.625 6/4/2008 $175,697 $ 445,252
Arnold Oliphant......... 8,000(1) 2% $18.625 6/4/2008 $ 93,705 $ 237,468
Janet E. Haskell........ -- --% $ -- -- $ -- $ --
7
- --------
(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 Common Stock on the Nasdaq Stock
Market on the trading day immediately preceding the grant date.
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 1998. In addition, this
table includes the number of shares covered by both exercisable and
unexercisable stock options as of June 30, 1998 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........ 17,143 $280,717 34,000 116,000 $ 76,250 $152,500
Mark H. Skolnick........ 30,000 $736,035 117,513 113,858 $1,140,972 $184,295
Jay M. Moyes............ 2,500 $ 51,000 24,385 51,516 $ 97,586 $ 67,938
Arnold Oliphant......... -- $ -- 10,350 36,650 $ 15,250 $ 15,250
Janet E. Haskell........ 12,500 $155,938 54,500 68,000 $ 339,313 $366,000
- --------
(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 $14.625, the closing
sale price per share of the Company's Common Stock as reported by The
Nasdaq Stock Market on June 30, 1998.
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., Jay M. Moyes, and Arnold Oliphant,
Ph.D. in May 1993, January 1994, July 1993, and February 1995, respectively.
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 E. Haskell in August 1996. In July 1998, Ms. Haskell's employment was
terminated without cause. Pursuant to the agreement, the Company must pay Ms.
Haskell's salary for 12 months following termination or until Ms. Haskell
finds new employment, whichever occurs first. The employment agreement also
provides that she will not disclose confidential information of the Company
after employment. Pursuant to the Plan, Ms. Haskell's options remain
exercisable, to the extent vested at the time of termination of her
employment, for a period of three months.
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 Oliphant, will become immediately vested, unless provision
is made for the continuation of such options pursuant to the applicable
provisions of the Plan.
8
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 1998 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 to attract and retain
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, the
Compensation Committee also takes into account the intense level of
competition among biotechnology companies to attract talented personnel.
9
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 achieving 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 officers' 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 40,000 shares
at an exercise price of $24.75 in fiscal 1996, 40,000 shares at an exercise
price of $27.125 in fiscal 1997, and 40,000 shares at an exercise price of
$18.625 in fiscal 1998. 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.
10
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, 1998 (as measured by dividing (A) the
difference between the Company's share price at the end and the beginning of
the measurement period by (B) 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.
COMPARISON OF FOUR-YEAR CUMULATIVE TOTAL RETURN
AMONG MYRIAD GENETICS, INC., NASDAQ STOCK INDEX (U.S.)
AND NASDAQ HEALTH SERVICES STOCKS
[PERFORMANCE GRAPH APPEARS HERE]
Measurement Period MYRIAD NASDAQ STOCK NASDAQ HEALTH
(Fiscal Year Covered) GENETICS, INC. INDEX (U.S.) SERVICES STOCKS
- ------------------- -------------- ------------ ---------------
Measurement Pt- 10/06/95 $100 $100 $100
FYE 06/28/96 $138.89 $118.19 $135.48
FYE 06/30/97 $150.00 $143.70 $124.39
FYE 06/30/98 $ 81.25 $189.62 $121.26
11
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1998, all Section
16(a) filing requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with, except that each of the
following officers and directors filed late his year-end Form 5 disclosing the
number of transactions indicated: Mr. Meldrum (1 transaction); Dr. Skolnick (2
transactions); Mr. Moyes (1 transaction); Dr. Oliphant (1 transaction); and
Dr. Kuo (2 transactions).
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
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 2000 are Dr. Berendt, Dr. Main and Dr.
Stringfellow; the Class II Directors with a term ending in 1998 are Mr.
Meldrum and Dr. Skolnick (the "Class II Directors"); and the Class III
Directors with a term ending in 1999 are Dr. Gilbert, Dr. Hayes and Mr. Horan.
On September 10, 1998, the Board of Directors voted to nominate and
recommend to the Stockholders the election of the Class II Directors to the
Board of Directors with a term ending in 2001. 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 or she has been elected expires.
Unless authority to vote for either 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 MR. PETER MELDRUM AND DR.
MARK SKOLNICK AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED
IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
12
INDEPENDENT PUBLIC ACCOUNTANTS
(NOTICE ITEM 2)
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, 1999. 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, 1998. 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.
13
STOCKHOLDER PROPOSALS
To be considered for inclusion in the proxy statement relating to the Annual
Meeting of Stockholders to be held in 1999, 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 15, 1999. For
Stockholder proposals and director nominations to be considered for
presentation at the Annual Meeting (although not included in the proxy
statement), the Company's Restated By-Laws require that notice of such
Stockholder proposals and nominations be delivered to the Secretary of the
Company not less than 60 days nor more than 90 days prior to November 12,
1999, unless the date of the 1999 Annual Meeting is more than 30 days before
or more than 60 days after November 12, 1999, in which event Stockholders may
deliver such notice not earlier than the 90th day prior to the 1999 Annual
Meeting and not later than the close of business on the later of the 60th day
prior to the 1999 Annual Meeting or the close of business on the tenth 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 1999 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 13, 1998
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30,
1998 (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).
14
- --------------------------------------------------------------------------------
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 13, 1998 in
connection with the Annual Meeting to be held at 9:00 a.m. on Thursday, November
12, 1998, at the Salt Lake City Marriott Hotel, 75 S. West Temple, Salt Lake
City, Utah and hereby appoints Peter D. Meldrum and Jay M. Moyes, 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 1998 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 Statement.
SEE REVERSE SIDE FOR ALL 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
Proposal 2.
Please Mark
your vote as [X]
indicated in
this example
The Board of Directors recommends a vote FOR Proposals 1 and 2.
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: Peter D. Meldrum and Mark H. Skolnick, Ph.D.
2. Proposal to ratify the appointment of KPMG Peat Marwick LLP
as the Company's independent public accountants for the fiscal
year ending June 30, 1999.
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: ___________________________
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE*
