DEF 14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

Filed by the Registrant  ☒                            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))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Under Rule 14a-12

Myriad Genetics, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:

 

     

  3)  

Filing party:

 

     

  4)  

Date Filed:

 

     

 

 

 


Table of Contents

LOGO

‘‘At our core we are a genetics and information company. Our goal is to empower patients, as consumers, and their physicians and our payer partners with the data to help guide treatment decisions, improve clinical outcomes and lower healthcare costs. As we look forward, we are confident we can deliver on our mission to be a trusted advisor, and the opportunity to transform our business, and strategically position Myriad Genetics for sustainable growth and profitability.’’

Paul J. Diaz, President and CEO, Myriad Genetics

October 15, 2020

Dear Stakeholders,

From its beginning 29 years ago, Myriad Genetics has been in the business of improving and saving lives by unlocking the power of genetics and precision medicine. We empower patients with the information they need to take control of their own health and wellness, and healthcare professionals with data-driven genetic insights to better diagnose, treat and prevent disease. Our purpose is clear and our mission has never been more relevant than it is today. This ability to proactively impact patients, and accelerate the transition to a healthcare system that is patient-centered, and focused on prevention and early detection is what compelled me to join Myriad Genetics. It is a passion shared by my 2,700 Myriad teammates around the world.

Market trends

The challenges and pressures on our current healthcare system reinforce the opportunity for Myriad Genetics to play a meaningful role in transforming healthcare and precision medicine, building on our long-standing record of innovation and leadership in women’s health, oncology and neuroscience.

These trends include:

 

  -

Accelerating shifts in consumer engagement, early detection, home-based care models, telemedicine and virtual care

 

  -

Dramatic changes and disruption in the way outpatient care is delivered in the wake of the COVID-19 pandemic, coupled with broadened awareness of the vital role of diagnostic testing

 

  -

Expanding access to clinical-grade, genetic solutions for underserved populations with increased focus on disparities in healthcare outcomes and access for challenged communities

 

  -

Growth in personalized medicine and the interest in new partnership models to advance companion diagnostics and serve patients with specific treatments based on their own genetic makeup and biology.

Business Opportunity

These market trends create new opportunities to position Myriad Genetics, and our products and services, for growth and commercial success through enhanced customer service levels and a stronger alignment of our value proposition with physicians and payers. Patient safety, quality, and service excellence are paramount. We are committed to creating a superior end-to-end experience in everything we do, making it easier for patients, physicians, and our payer partners to do business with us. We also believe that by leveraging our R&D and technology capabilities and commercial platform we can improve our go-to-market strategies and more quickly adapt to evolving customer preferences and market dynamics.


Table of Contents

 

There are also meaningful ways for Myriad Genetics to improve its financial position, by reducing complexity and cost, and extending our commercial reach. We will embrace a growth mindset as we drive efficiency and productivity and focus our efforts on markets and products where we can lead. Finally, we are committed to developing a more disciplined approach to allocating our human and financial capital to drive growth and improve our investors’ return on invested capital.

Altogether, we have a powerful thesis for transformation and growth. The development of a comprehensive plan to improve our commercial capabilities and reset our base is underway, incorporating a range of external perspectives, industry best practices and internal learnings. Our initial focus will span sales, marketing, pricing, reimbursement and related areas. I look forward to sharing our future strategic vision as plans progress.

Business Highlights and Proposed Enhancements to Corporate Governance

The fiscal year ended June 30, 2020, was one of significant change for Myriad Genetics, its Board of Directors, its business, and the world at large. Before the COVID-19 pandemic hit the U.S., the company already was facing headwinds to its business operations and was starting to overcome these challenges. The pandemic created new hurdles beginning in the spring of 2020, including a worldwide economic contraction and severe disruption to the molecular diagnostics industry.

But the company is emerging from these setbacks, and I am excited to share with you a few examples of steps we have taken to improve our operations and governance as we accelerate growth:

 

  -

Leadership Changes: Our new Board Chair Louise Phanstiel and I are humbled at the reception and support we have received from our teammates and shareholders after taking on our new roles. Over the last eight weeks I have been impressed by the dedication of our leadership team and employees who are deeply committed to our mission, open to change, and willing to challenge the way we do things.

 

  -

Board Composition: Following the Annual Meeting, Myriad’s Board of Directors will be very different from the Board of just 16 months ago. In that time span, the company will have added six new directors, changed the Board Chair, changed one critical committee chair, expanded the responsibility of one committee, and completely redefined another. As of December 4, 2020, two thirds of the Board will be new directors, introducing new perspectives and skills while retaining the experience and continuity of longer-tenured directors. At the same time, we have improved the diversity of our Board in a meaningful way.

 

  -

Corporate Governance: We have engaged actively with our shareholders, heard their feedback and have begun to address their concerns. The resulting actions include a change from plurality to majority voting for directors, instituting a retirement age for directors, and changing our fiscal year end from a June 30th to a calendar fiscal year end to better align with industry standards.

 

  -

Executive Compensation: To help spur our recovery from COVID-19 and other headwinds, we have refocused our executive compensation on financial metrics that better align management incentives with shareholder interests. For example, equity granted as long-term incentive compensation will comprise 50% performance shares, with the company’s performance on earnings per share and relative total shareholder return driving the number of shares ultimately awarded to each executive. In addition, the Short Term Bonus plan now will be more heavily weighted to financial goals, including Core Operating Revenue (40%) and Adjusted Operating Income (30%), with the balance tied to specific goals aligned with our transformation plan.

 

  -

Business Highlights: Fiscal year 2020 was challenging due to the impact of the hereditary cancer coding transition and COVID-19 pandemic. Based on our response and implementation of cost saving measures, we still were able to generate positive free cash flow in the fiscal year. This year we crossed an important milestone and have now served over 5 million patients worldwide. Additionally, we achieved a number of other important business milestones, including:

 

     

New coverage for our GeneSight test by UnitedHealthcare, the largest commercial payer in the country.


Table of Contents

 

 

     

American College of Rheumatology guidelines supporting Vectra as an accepted disease activity measure.

 

     

National Comprehensive Cancer Network guidelines for Prolaris for unfavorable intermediate and high-risk patients.

 

     

Publication of new utility data showing the clinical importance of expanded carrier screening.

 

     

New initiatives and resources to strengthen the Myriad brand and digital marketing, including a refresh of our corporate homepage www.myriad.com and other websites.

 

     

Formed Myriad’s first Diversity, Equity and Inclusion Resource Group to promote an inclusive workplace that fosters diverse perspectives.

As we move beyond the COVID-19 pandemic, given recent catalysts and future opportunities, we believe we are well positioned to return to growth and profitability.

Annual Shareholders Meeting

I sincerely hope you will participate in the Annual Shareholders Meeting. The following actions will be proposed to stockholders of the company for their vote to:

 

  1.

Elect three Class III directors to the Board of Directors to serve until the Annual Meeting of Stockholders in 2023;

 

  2.

Approve a proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended, to replenish the share pool for equity incentive grants;

 

  3.

Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020 (the interim period before commencing our new calendar fiscal year on January 1, 2021); and

 

  4.

Approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement.

The Board of Directors recommends the approval of all of these proposals, and other business will be transacted that may be properly addressed during the Annual Meeting.

Myriad Genetics is a purpose-driven organization committed to its mission to improve and save lives by unlocking the power of genetics while delivering value to all of its stakeholders. This mission is even more meaningful and relevant today than it was at the founding of our company 29 years ago. On behalf of the entire Myriad team, thank you for your continued support. We look forward to working diligently over the next year to reward that support with superior company performance.

 

Sincerely,
LOGO
Paul J. Diaz
President and Chief Executive Officer


Table of Contents

MYRIAD GENETICS, INC.

320 Wakara Way

Salt Lake City, Utah 84108

NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS

 

 

 

LOGO

 

TIME:

8:00 a.m. MST

 

LOGO

 

DATE:

Friday, December 4, 2020

 

PLACE:

This year’s Annual Meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/MYGN2020 and entering the 16-digit control number included in the Notice of Internet Availability or proxy card that you receive. For further information about the virtual annual meeting, please call our investor relations department at (801) 584-1143.

 

  

PURPOSES:

 

1.   To elect three Class III directors to the Board of Directors to serve until the Annual Meeting of Stockholders in 2023;

 

2.   To approve a proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended, to replenish the share pool for equity incentive grants;

 

3.   To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020 (the interim period before commencing our new calendar fiscal year on January 1, 2021);

 

4.   To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement;

 

5.   To transact such other business that is properly presented at the Annual Meeting and any adjournments or postponements thereof.

WHO MAY VOTE:

You may vote if you were an owner of record of Myriad Genetics, Inc. common stock at the close of business on October 7, 2020. A list of stockholders of record will be available for inspection online during the Annual Meeting at www.virtualshareholdermeeting.com/MYGN2020 and, during the 10 days prior to the meeting, at the office of the Secretary at Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.

All stockholders are cordially invited to attend the Annual Meeting. Whether you plan to attend the meeting or not, please vote by following the instructions on the Notice of Internet Availability of Proxy Materials that you have previously received, or will shortly receive, which we refer to as the Notice, or in the section of this proxy statement entitled ‘‘Important Information About the Annual Meeting and Voting —How Do I Vote?’’ or, if you requested printed proxy materials, your proxy card. You may change or revoke your proxy at any time before it is voted.

On or about October 15, 2020, we began sending the Notice of Internet Availability of Proxy Materials to all stockholders entitled to vote at the annual meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Benjamin G. Jackson                                          

Secretary                                                             

October 15, 2020


Table of Contents

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR

THE STOCKHOLDER MEETING TO BE HELD ON DECEMBER 4, 2020

This proxy statement and our annual report on Form 10-K to stockholders for the fiscal year ended June 30, 2020 are available for viewing, printing, and downloading at www.proxyvote.com. To view these materials, please have available your 16-digit control number(s) that appears on your Notice or proxy card. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to stockholders by electronic delivery.

Additionally, you may find a copy of our annual report on Form 10-K, which includes our financial statements for the fiscal year ended June 30, 2020, on the website of the Securities and Exchange Commission at www.sec.gov, or in the ‘‘Financial Reporting/SEC Filings’’ section of the ‘‘Investors’’ section of our website at www.myriad.com. You also may obtain a printed copy of our annual report on Form 10-K, including our financial statements from us, free of charge, by sending a written request to: Secretary, Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108. Exhibits will be provided upon written request and payment of an appropriate processing fee.


Table of Contents

TABLE OF CONTENTS

 

 

     Page

 

 

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

     1  

Attending the Annual Meeting

     6  

Householding of Annual Disclosure Documents

     6  

Electronic Delivery of Company Stockholder Communications

     7  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     8  

MANAGEMENT AND CORPORATE GOVERNANCE

     10  

The Board of Directors

     10  

Board of Director Qualifications, Expertise, and Attributes

     20  

Director Independence

     21  

Leadership Structure of the Board

     21  

Board’s Role in the Oversight of Risk Management

     21  

Board’s Consideration of Diversity

     22  

Board’s Disclosure of Third Party Director and Nominee Compensation

     22  

Committees of the Board of Directors and Meetings

     22  

Stockholder Communications to the Board

     26  

Executive Officers

     27  

EXECUTIVE COMPENSATION: Compensation Discussion and Analysis

     30  

Summary Compensation Table

     48  

2020 Fiscal Year Grants of Plan-Based Awards

     49  

Narrative Disclosure to Summary Compensation Table and 2020 Fiscal Year Grants of Plan-Based Awards Table

     50  

Outstanding Equity Awards at 2020 Fiscal Year End

     55  

2020 Fiscal-Year Option Exercises and Stock Vested

     56  

Pension Benefits

     57  

Potential Payments Upon Termination or Change-in-Control

     57  

Director Compensation

     60  

Risks Related to Compensation Policies and Practices

     62  

Tax Deductibility of Compensation

     62  

Equity Compensation Plan Information

     63  

COMPENSATION COMMITTEE REPORT

     64  

AUDIT AND FINANCE COMMITTEE REPORT

     65  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     66  

PROPOSAL 1: ELECTION OF DIRECTORS

     67  

 

        

 

 

LOGO

  

 

i


Table of Contents

TABLE OF CONTENTS

 

 

     Page

 

 
PROPOSAL 2: APPROVAL TO AMEND OUR 2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN, AS AMENDED      68  

General

     68  

Additional Equity Plan Information for Stock Options Previously Issued

     69  

Material Features of the 2017 Plan

     69  

New Plan Benefits

     71  

Existing Plan Benefits

     72  

Federal Income Tax Considerations

     72  

PROPOSAL 3: SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     74  

Policy on Audit and Finance Committee Preapproval of Audit and Permissible Non-Audit Services of Independent Public Accountant

     74  
PROPOSAL 4: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT      76  

CORPORATE CODE OF CONDUCT

     78  

OTHER MATTERS

     78  

STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR

     78  

APPENDIX A

     A-1  

APPENDIX B

     B-1  

 

 

ii

  

 

LOGO


Table of Contents

MYRIAD GENETICS, INC.

320 WAKARA WAY

SALT LAKE CITY, UTAH 84108

(801) 584-3600

 

 

PROXY STATEMENT FOR THE MYRIAD GENETICS, INC.

2020 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 4, 2020

 

 

This proxy statement, along with the accompanying Notice of 2020 Annual Meeting of Stockholders, contains information about the 2020 Annual Meeting of Stockholders of Myriad Genetics, Inc., including any adjournments or postponements of the annual meeting, which we refer to as the Annual Meeting. To attend the Annual Meeting please visit the following URL: www.virtualshareholdermeeting.com/MYGN2020. In this proxy statement, we refer to Myriad Genetics, Inc. as ‘‘Myriad,’’ ‘‘the Company,’’ ‘‘we’’ and ‘‘us.’’

This proxy statement relates to the solicitation of proxies by our Board of Directors for use at the Annual Meeting. On or about October 15, 2020, we began sending the Notice of Internet Availability of Proxy Materials, which we refer to throughout this proxy statement as the Notice, to all stockholders entitled to vote at the Annual Meeting.

IMPORTANT INFORMATION ABOUT THE

ANNUAL MEETING AND VOTING

 

Why is the Company Soliciting My Proxy?

The Board of Directors of Myriad Genetics, Inc. is soliciting your proxy to vote at the Annual Meeting to be held via webcast on Friday, December 4, 2020, at 8:00 a.m. MST and any adjournments of the Annual Meeting. The proxy statement, along with the accompanying Notice of 2020 Annual Meeting of Stockholders, summarizes the purposes of the Annual Meeting and the information you need to know to vote at the meeting.

We have sent you the Notice and made this proxy statement, the Notice of 2020 Annual Meeting of Stockholders, and our annual report on Form 10-K to stockholders for the fiscal year ended June 30, 2020 available to you on the internet because you owned shares of Myriad Genetics, Inc. common stock on the record date. We also have delivered printed versions of these materials to certain stockholders by mail. The Company commenced distribution of the Notice and the proxy materials to stockholders on or about October 15, 2020.

Why Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?

As permitted by the rules of the U.S. Securities and Exchange Commission, or the SEC, we may furnish our proxy materials to our stockholders by providing access to such documents on the internet, rather than mailing printed copies of these materials to each stockholder. Most stockholders will not receive printed copies of the proxy materials unless they request them. We believe that this process should expedite stockholders’ receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. If you received a Notice by mail or electronically, you will not receive a printed or email copy of the proxy materials, unless you request one by following the instructions included in the Notice. Instead, the Notice will provide instructions on how you may access and review all of the proxy materials and submit your proxy on the Internet or by telephone. If you requested a paper copy of the proxy materials, you may authorize the voting of your shares by following the instructions on the enclosed proxy card, in addition to the other methods of voting described in this proxy statement.

Why Are You Holding a Virtual Annual Meeting?

Due to the public health impact of COVID-19 and to support the health and well-being of our stockholders, this year’s Annual Meeting will be held in a virtual meeting format only. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and communication. For example, the virtual format allows stockholders to communicate with us in advance of, and during, the annual meeting so they can ask questions of our board of directors or management, as time permits.

 

        

 

 

LOGO

  

 

1


Table of Contents

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

 

 

What Happens If There Are Technical Difficulties During the Annual Meeting?

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting, voting at the Annual Meeting or submitting questions at the Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call 1-(800) 586-1548 or international 1-(303) 562-9288.

Who Can Vote?

Only stockholders who owned Myriad Genetics, Inc. common stock at the close of business on October 7, 2020 are entitled to vote at the Annual Meeting. On this record date, there were 75,206,891 shares of our common stock outstanding and entitled to vote. Common stock is our only class of voting stock.

You do not need to attend the Annual Meeting to vote your shares. Shares represented by valid proxies, received in time for the Annual Meeting and not revoked prior to the meeting, will be voted at the meeting. For instructions on how to change or revoke your proxy, see ‘‘May I Change or Revoke My Proxy?’’ below.

How Many Votes Do I Have?

Each share of Myriad Genetics, Inc. common stock that you owned at the close of business on the record date, October 7, 2020, entitles you to one vote.

 

 

2

  

 

LOGO


Table of Contents

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

 

 

How Do I Vote?

Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy. To attend the annual meeting shareholders need to go to the following URL: www.virtualshareholdermeeting.com/MYGN2020 and enter their control number. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via Internet or telephone. You may specify whether your shares should be voted for or against each nominee for director, and whether your shares should be voted for, against or abstain with respect to each of the other proposals. If you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with the board’s recommendations as noted below. Voting by proxy will not affect your right to attend the Annual Meeting. If your shares are registered directly in your name through our stock transfer agent, American Stock Transfer and Trust Company, or you have stock certificates registered in your name, you may vote:

 

  LOGO    By Internet or by telephone
   To vote by Internet or telephone in advance of the meeting, follow the instructions included in the Notice or, if you received printed materials, in the proxy card, to vote by Internet or telephone.
  
   LOGO    By mail
   If you received your proxy materials by mail, you can vote by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with the board’s recommendations as noted below.
  
   LOGO    At the meeting
   To vote by Internet directly during the webcast of the Annual Meeting, you will need to visit the following URL: www.virtualshareholdermeeting.com/MYGN2020 and enter your control number. To vote during the annual meeting when the polls open push the ‘‘vote,’’ button on the interface.

Telephone and Internet voting facilities for stockholders of record will be available 24-hours-a-day and will close at 11:59 p.m. EST on December 3, 2020.

If your shares are held in ‘‘street name’’ (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card before the meeting in order to vote. To vote you must be a shareholder of record as of Oct. 7, 2020 and during the online annual meeting use the ‘‘vote,’’ button to vote your shares.

How Does the Board of Directors Recommend That I Vote on the Proposals?

The Board of Directors recommends that you vote as follows:

 

Proposal 1:   ‘‘FOR’’ the election of the three Class III directors to the Board of Directors to serve until the Annual Meeting of Stockholders in 2023;
Proposal 2:   ‘‘FOR’’ the approval of a proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended, to replenish the share pool for equity incentive grants;
Proposal 3:   ‘‘FOR’’ the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020 (the interim period before commencing our new calendar fiscal year on January 1, 2021); and
Proposal 4:   ‘‘FOR’’ the approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement.

If any other matter is presented, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his or her best judgment. At the time this proxy statement was first made

 

 

LOGO

  

 

3


Table of Contents

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

 

 

available, we knew of no matters that needed to be acted on at the Annual Meeting, other than those described in this proxy statement.

May I Change or Revoke My Proxy?

If you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any of the following ways:

 

   

By re-voting by Internet or by telephone as instructed above;

 

   

If you received printed proxy materials, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above;

 

   

By notifying our Secretary in writing before the Annual Meeting that you have revoked your proxy; or

 

   

By attending the Annual Meeting and voting by Internet during the Annual Meeting in accordance with the instructions. Attending the Annual Meeting will not in and of itself revoke a previously submitted proxy unless you specifically re-vote during the annual meeting.

Your most current vote, whether by telephone, Internet or proxy card, is the one that will be counted.

What if I Receive More Than One Notice or Proxy Card?

You may receive more than one Notice or proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described under ‘‘How Do I Vote?’’ for each account to ensure that all of your shares are voted.

Will My Shares Be Voted if I Do Not Vote?

If your shares are registered in your name, they will not be voted if you do not vote as described above under ‘‘How Do I Vote?’’ If your shares are held in street name and you do not provide voting instructions to the bank, broker or other holder of record of your shares as described above, the holder of record has the authority to vote your unvoted shares only on Proposal 3 if it does not receive instructions from you and does not have the ability to vote your uninstructed shares on any other proposal. Therefore, we encourage you to provide voting instructions. This ensures that your shares will be voted at the Annual Meeting and in the manner you desire. When your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority or because your broker chooses not to vote on a matter for which it does have discretionary voting authority, it is referred to as a ‘‘broker non-vote.’’ Thus, if you hold your shares in a street name and do not instruct your bank, broker or other nominee how to vote, no votes will be cast on any proposal on your behalf other than the ratification of the selection of the public accounting firm.

 

 

4

  

 

LOGO


Table of Contents

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

 

 

What Vote is Required to Approve Each Proposal and How are Votes Counted?

 

     

Proposal 1:

Elect Directors

   The affirmative vote of a majority of the shares voted affirmatively or negatively is required for each nominee for director to be elected. Abstentions will have no effect on the results of this vote. Brokerage firms do not have the authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.   

Recommendation:

FOR

the election of the three Class III directors for director

     

Proposal 2:

Approve the Amendment to Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive Plan, as Amended

   The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to approve the amendment to the Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive Plan, as amended. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.   

Recommendation:

FOR

     

Proposal 3:

Ratify the Selection of our Registered Independent Public Accounting Firm

   The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020, the Audit and Finance Committee of the Board of Directors will reconsider its selection.   

Recommendation:

FOR

     

Proposal 4:

Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers

   The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement. Abstentions will have no effect on the result of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. Although the advisory vote is non-binding, the Compensation Committee and the Board of Directors will review the voting results and take them into consideration when making future decisions regarding the compensation of our named executive officers.   

Recommendation:

FOR

Is Voting Confidential?

We will keep all the proxies, ballots and voting tabulations private. We only let our Inspector of Elections and our transfer agent, American Stock Transfer and Trust, examine these documents. Management, other than the Inspector of Elections Benjamin G. Jackson, General Counsel and Secretary, will not know how you voted on a

 

 

LOGO

  

 

5


Table of Contents

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

 

 

specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make on the proxy card or elsewhere.

Where Can I Find the Voting Results of the Annual Meeting?

The preliminary voting results will be announced at the Annual Meeting, and we will publish preliminary results, or final results if available, in a Current Report on Form 8-K within four business days of the Annual Meeting. If final results are unavailable at the time the Form 8-K is filed, we will file an amended report on Form 8-K to disclose the final voting results within four business days after the final results are known.

What Are the Costs of Soliciting these Proxies?

We will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and directors no additional compensation for these services. We may ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to deliver proxies. We will then reimburse them for their expenses.

What Constitutes a Quorum for the Annual Meeting?

The presence, in person (by means of remote communication as authorized by the Board) or by proxy, of the holders of a majority of the voting power of the outstanding shares of our common stock is necessary to constitute a quorum at the Annual Meeting. Votes of stockholders of record who are present at the meeting in person (by means of remote communication as authorized by the Board) or by proxy, abstentions, and broker non-votes are counted for purposes of determining whether a quorum exists.

Attending the Annual Meeting

The Annual Meeting will be held at 8:00 a.m. MST on Friday, December 4, 2020 via Internet webcast.

This year, our Annual Meeting will be held in a virtual meeting format only. To attend the virtual Annual Meeting, go to www.virtualshareholdermeeting.com/MYGN2020 shortly before the meeting time, and follow the instructions for downloading the webcast. If you miss the Annual Meeting, you can view a replay of the webcast at www.virtualshareholdermeeting.com/MYGN2020 for one year following the annual meeting. You need not attend the Annual Meeting in order to vote.

Householding of Annual Disclosure Documents

SEC rules concerning the delivery of annual disclosure documents allow us or your broker to send a single Notice or, if applicable, a single set of our proxy materials to any household at which two or more of our stockholders reside, if we or your broker believe that the stockholders are members of the same family. This practice, referred to as ‘‘householding,’’ benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our Notices, annual reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your address will be ‘‘householded,’’ the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.

If your household received a single Notice or, if applicable, set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge by calling their toll free number 1-866-540-7095. If you do not wish to participate in ‘‘householding’’ and would like to receive your own Notice or, if applicable, a set of proxy materials in future years, follow the instructions described below. Conversely, if you share an address with another Myriad Genetics, Inc. stockholder and together both of you would like to receive only a single Notice or, if applicable, set of proxy materials, follow these instructions:

 

   

If your Myriad Genetics, Inc. shares are registered in your own name, please contact Broadridge and inform them of your request by calling them at 1-866-540-7095 or writing them at Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717.

 

 

6

  

 

LOGO


Table of Contents

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

 

 

   

If a broker or other nominee holds your Myriad Genetics, Inc. shares, please contact the broker or other nominee directly and inform them of your request. Be sure to include your name, the name of your brokerage firm and your account number.

Electronic Delivery of Company Stockholder Communications

Most stockholders can elect to receive notices of the availability of future proxy materials by email instead of receiving a paper copy in the mail. You can choose this option and save the cost of producing and mailing these documents by following the instructions provided on your Notice or proxy card or following the instructions provided when you vote over the Internet at www.proxyvote.com.

 

 

LOGO

  

 

7


Table of Contents

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

 

 

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of September 1, 2020 for (a) each stockholder that we know to be the beneficial owner of more than 5% of our common stock, (b) each of our executive officers named in the Summary Compensation Table of this proxy statement (the ‘‘Named Executive Officers’’ or ‘‘NEOs’’), (c) each of our directors and director nominees, and (d) all of our current directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of September 1, 2020 pursuant to the exercise of options and the vesting of restricted stock unit awards to be outstanding for the purpose of computing the percentage ownership of an individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 74,709,791 shares of common stock outstanding on September 1, 2020.

 

    

Shares Beneficially Owned

 

 
 Name and Address**    Number      Percent  

5% or More Stockholders

     

BlackRock, Inc (1)
55 East 52nd Street
New York, NY 10055

     12,752,119        17.1 %     

The Vanguard Group (2)
100 Vanguard Blvd.
Malvern, PA 19355

     8,320,574        11.1 %     

Camber Capital Management (3)
101 Huntington Ave.
Boston, MA 02199

     4,000,000        5.4 %     

State Street Corporation (4)
1 Lincoln St.
Boston, MA 02111

     3,886,276        5.2 %     

D.E. Shaw & Co, L.P. (5)
1166 Avenue of the Americas, 9th Floor
New York, NY 10036

     3,791,528        5.1 %     

Named Executive Officers

     

Mark C. Capone (6)

     1,402,967        1.9 %     

R. Bryan Riggsbee (7)

     65,454       

Alexander Ford (8)

     173,432       

Jerry S. Lanchbury, Ph.D. (9)

     752,612        1.0 %     

Nicole Lambert (10)

     22,657       

Bernard F. Tobin

     160,636       

Gary A. King (11)

     393,014       

Directors and Director Nominees

     

John T. Henderson, M.D. (12)

     186,403       

Walter Gilbert, Ph.D. (13)

     102,463       

Lawrence C. Best (14)

     169,103       

Heiner Dreismann, Ph.D.

     43,103       

Dennis H. Langer, M.D., J.D. (15)

     109,103       

S. Louise Phanstiel (16)

     165,103       

 

 

8

  

 

LOGO


Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

 

     Shares Beneficially Owned
 Name and Address**    Number      Percent

 Colleen F. Reitan

     0        *     

 Lee N. Newcomer M.D.

     0        *     

 Daniel M. Skovronsky M.D., Ph.D

     0        *     

 Daniel K. Spiegelman

     0        *     

 Rashmi Kumar

     0        *     

 Paul J. Diaz

     0        *     

 All current executive officers and directors as a group (19 persons) (17)

     2,153,142        2.8%    

 

*

Represents beneficial ownership of less than 1% of our outstanding shares of common stock.

 

**

Unless otherwise indicated, the address for each beneficial owner is c/o Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.

 

(1)

This information is based on a Schedule 13G/A filed with the SEC on February 3, 2020 with respect to Myriad Genetics common stock. BlackRock, Inc. beneficially owns these shares and has sole dispositive power for 12,752,119 of these shares and sole voting power for 12,579,836 of these shares.

 

(2)

This information is based on a Schedule 13G/A filed with the SEC on February 10, 2020 with respect to Myriad Genetics common stock. The Vanguard Group beneficially owns these shares and has sole dispositive power for 8,240,957 of these shares and sole voting power for 79,285 of these shares.

 

(3)

This information is based on a Schedule 13G filed with the SEC on June 22, 2020 with respect to Myriad Genetics common stock. Camber Capital Management LP beneficially owns these shares and has sole dispositive power and sole voting power for 0 of these shares.

 

(4)

This information is based on a Schedule 13G filed with the SEC on February 14, 2020 with respect to Myriad Genetics common stock. State Street Corporation beneficially owns these shares and has sole dispositive power and sole voting power for 0 of these shares.

 

(5)

This information is based on a Schedule 13G/A filed with the SEC on June 4, 2020 with respect to Myriad Genetics common stock. D.E. Shaw & Co, L.P. beneficially owns these shares and has sole dispositive power and sole voting power for 0 of these shares.

 

(6)

Includes 1,037,876 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2020.

 

(7)

Includes 54,375 shares of common stock subject to restricted stock unit awards which vest within 60 days of September 1, 2020.

 

(8)

Includes 161,619 shares of common stock subject to restricted stock unit awards which vest within 60 days of September 1, 2020.

 

(9)

Includes 675,172 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2020.

 

(10)

Includes 16,328 shares of common stock subject to restricted stock unit awards which vest within 60 days of September 1, 2020.

 

(11)

Includes 314,367 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2020.

 

(12)

Includes shares held directly by Dr. Henderson and his wife, as well as 120,000 shares of common stock subject to currently exercisable options as of September 1, 2020.

 

(13)

Includes 60,000 shares of common stock subject to currently exercisable options as of September 1, 2020.

 

(14)

Includes 120,000 shares of common stock subject to currently exercisable options as of September 1, 2020.

 

(15)

Includes 60,000 shares of common stock subject to currently exercisable options as of September 1, 2020.

 

(16)

Includes 120,000 shares of common stock subject to currently exercisable options as of September 1, 2020.

 

(17)

See Notes 6-16 above. Also includes 293,685 shares of common stock subject to currently exercisable options and options exercisable and restricted stock unit awards which vest within 60 days of September 1, 2020 held by other current executive officers.

 

 

LOGO

  

 

9


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

The Board of Directors

Our Restated Certificate of Incorporation, as amended, and Restated By-Laws provide that our business is to be managed by or under the direction of our Board of Directors. Our Board of Directors is divided into three classes for purposes of election. One class is elected at each annual meeting of stockholders to serve for a term to expire at the third succeeding annual meeting after their election. The Board of Directors currently consists of 12 members, classified into three classes as follows: John T. Henderson, M.D., S. Louise Phanstiel, Daniel M. Skovronsky M.D., Ph.D, and Daniel K. Spiegelman constitute a class with a term ending at the 2021 Annual Meeting (the ‘‘Class I Directors’’); Paul J. Diaz, Heiner Dreismann, Ph.D., and Colleen F. Reitan constitute a class with a term ending at the 2022 Annual Meeting (the ‘‘Class II Directors’’); and Lawrence C. Best, Walter Gilbert, Ph.D., Rashmi Kumar, Dennis H. Langer, M.D., J.D., and Lee N. Newcomer, M.D. constitute a class with a term ending at the 2020 Annual Meeting (the ‘‘Class III Directors’’).

Board Composition and Refreshment

Annually, the Nominating and Governance Committee of the Board of Directors considers the size, structure and needs of the Board, reviews changes to the Board, and recommends director nominees to the Board for approval.

In its review of directors, and its director nominees, the Board considers its composition, including its diversity, and the capabilities, areas of expertise, and experience of the Board, as well as the current and future business strategies and challenges and opportunities for the Company. These considerations have resulted in a change in Board leadership, the addition of five, new independent directors over the past two years, and the appointment of a new CEO (also a director) this year. The Board also renamed and refocused the former Strategic Committee, now the Research and Product Innovation Committee, to enhance our competitive focus on product development. Finally, the Board fleshed out the renamed Audit and Finance Committee’s responsibility over the Company’s internal financial analysis and external financial messaging.

In 2020, the Board appointed S. Louise Phanstiel, then serving as an independent director, as Chair of the Board of Directors.

In 2019, the Board appointed Dr. Lee Newcomer, former senior executive of United Healthcare and former Medical Director at United Healthcare and Cigna Healthcare, and Ms. Colleen Reitan, former President of Health Plan Operations at Health Care Services Corporation, the largest customer-owned health plan in the U.S., as directors. In 2020, the Board appointed Ms. Rashmi Kumar, Senior Vice President and Global Chief Information Officer of Hewlett Packard Enterprise Company, Dr. Daniel Skovronsky, Chief Scientific Officer and President of Lilly Research Laboratories at Eli Lilly and Company, and Daniel Spiegelman, former Executive Vice President and Chief Financial Officer at BioMarin Pharmaceutical, Inc., as directors. Also, in 2020, the Board appointed Mr. Paul Diaz former Partner at Cressey & Company LP and former CEO of Kindred Healthcare, Inc. as our CEO and an executive director. At our Annual Meeting, Mr. Larry Best, Dr. Walter Gilbert, and Dr. John Henderson will retire from the Board after distinguished service and innumerable contributions to the Company. Effective as of the Annual Meeting the size of the Board of Directors will be reduced to nine members.

On September 24, 2020, our Board of Directors accepted the recommendation of the Nominating and Governance Committee and unanimously approved a resolution to nominate Rashmi Kumar, Dennis H. Langer, M.D., J.D., and Lee N. Newcomer M.D. for election at the Annual Meeting for a term to serve until the 2023 Annual Meeting of Stockholders, and until their respective successors have been elected and qualified, or until their earlier death, resignation, retirement or removal.

Set forth below are the names of the persons nominated as directors and the directors whose terms do not expire this year and who will continue to serve as directors following the Annual Meeting, their ages as of September 1, 2020, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which

 

 

10

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

such persons currently hold directorships or have held directorships in the past five years. Additionally, information about the specific experience, qualifications, attributes or skills that led to the Board’s conclusion at the time of the filing of this proxy statement that each person listed below should serve as a director is set forth below for each individual director.

 

 Name and Position    Age    Audit and
Finance
Committee
   Compensation
Committee
  

 

Nominating
and
Governance
Committee

   Research and
Product
Innovation
Committee

 S. Louise Phanstiel
Chair of the Board of Directors

   62    LOGO    LOGO    LOGO   

 Lawrence C. Best (1)
Director

   71    LOGO         

 Paul J. Diaz
President, Chief Executive Officer, Director

   58            

 Heiner Dreismann, Ph.D.
Director

   67       LOGO       LOGO

 Walter Gilbert, Ph.D. (1)
Director

   88       LOGO       LOGO

 John T. Henderson, M.D. (1)
Director

   76       LOGO    LOGO   

 Rashmi Kumar
Director

   51    LOGO         

 Dennis H. Langer, M.D., J.D.
Director

   68    LOGO       LOGO   

 Lee N. Newcomer
Director

   67       LOGO       LOGO

 Colleen F. Reitan
Director

   60    LOGO       LOGO   

 Daniel M. Skovronsky M.D., Ph.D
Director

   47             LOGO

 Daniel K. Spiegelman
Director

   61    LOGO          LOGO

 

LOGO

   Audit and Finance Committee
LOGO    Compensation Committee

LOGO

   Nominating and Governance Committee
LOGO    Research and Product Innovation Committee
 C    Committee Chair
 (1)    Following the annual stockholder meeting on December 4, 2020 Dr. Henderson, Dr. Gilbert, and Mr. Best will retire from the Board of Directors.

 

 

LOGO

  

 

11


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

The following is a brief biography of each of the persons nominated as directors and the directors whose terms do not expire this year and who will continue to serve as directors following the Annual Meeting.

 

 S. Louise Phanstiel

 

LOGO

  

Experience:

 

  

 

S. Louise Phanstiel, Chair of the Board of Directors, has been a Director of Myriad since September 2009, held several executive positions at Anthem, Inc., formerly WellPoint, Inc. from 1996 to 2007. She was President, Specialty Products which included behavioral health services; Senior Vice President, Chief of Staff and Corporate Planning in the Office of the Chairman; and Chief Accounting Officer, Controller and Chief Financial Officer for all WellPoint, Inc. subsidiaries. Previously, Ms. Phanstiel was a partner at the international services firm PricewaterhouseCoopers, LLP, formerly Coopers & Lybrand, LLP where she specialized in insurance. Ms. Pantile’s life science experience includes having previously served on the Board of Directors and Chair of the Audit Committees at publicly traded companies, Inveresk Research Group, Inc. and Verastem, Inc.

 

The Board of Directors has determined that Ms. Phanstiel should serve on the Board for the following reasons: She provides the Board with important expertise in the healthcare industry based on her extensive experience in several senior positions at WellPoint, Inc. This expertise is critical as we rely on healthcare third-party reimbursement for our molecular diagnostic testing services. Ms. Phanstiel also provides the Board with financial accounting, internal control and public company reporting expertise from her work at Coopers & Lybrand, LLP and as a Certified Public Accountant. In addition, she provides the Board with business, financial and investment expertise, as well as management expertise, resulting from managing and service as a director of publicly traded companies.

 

 

12

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 Paul J. Diaz

  

 

LOGO

  

 

Experience:

  

 

Paul J. Diaz was appointed as the President and Chief Executive Officer, or CEO, of Myriad Genetics, Inc., and a member of the Board of Directors, effective August 13, 2020. Mr. Diaz was most recently a partner at Cressey & Company (2016-2020), a private investment firm headquartered in Chicago, Illinois, which currently manages over $3.0 billion in committed capital. Cressey & Company is a healthcare focused middle-market private equity firm with over 30 years of success investing in and helping to build high quality healthcare businesses. Mr. Diaz is the former president and CEO and vice chairman of Kindred Healthcare, Inc. (2002-2016) a Fortune 500 Company and one of the largest providers of healthcare services in the United States. At the time, Kindred had revenues of $7.2 billion, rehabilitation hospitals, sub-acute units, home health and hospice agencies and contract rehabilitation locations. For six years in a row, during his tenure as CEO, Kindred was ranked one of the Most Admired healthcare companies in the U.S. by Fortune magazine. Mr. Diaz currently serves on the board of directors of DaVita (NYSE: DVA), the board of trustees of Johns Hopkins Medicine (where he serves as chair of Johns Hopkins Healthcare), and the board of visitors of the Georgetown University Law Center. He was formerly on the board of directors of PharMerica Corporation (NYSE: PMC), and previously served on the board of the Federation of American Hospitals, and the Bloomberg School of Public Health at Johns Hopkins University. While CEO of Kindred, Mr. Diaz was a member of the Business Roundtable and the Wall Street Journal CEO Council. Modern Healthcare magazine named Mr. Diaz one of the 100 Most Influential People in Healthcare and named him one of the top 25 Minority Executives in Healthcare for numerous years. In addition, Hispanic magazine named Mr. Diaz one of the 25 Best Latinos in business in multiple years. Mr. Diaz earned a bachelor’s degree in Finance and Accounting from American University’s Kogod School of Business and a law degree from Georgetown University Law Center in Washington, D.C.

 

The Board of Directors has determined that Mr. Diaz should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his 15 years at Kindred Healthcare, including specific expertise in managing healthcare service companies and business transformation. Furthermore, Mr. Diaz has extensive experience in private equity with healthcare companies, including businesses in the personalized medicine space. Furthermore, his background in finance and accounting and law provide unique insights to our business. Mr. Diaz also has a background serving on both public and private healthcare boards.

 

 

LOGO

  

 

13


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

 Heiner Dreismann, Ph.D.

 

 

LOGO

 

Experience:

 

 

 

Heiner Dreismann, Ph.D., joined as a Director of Myriad in June 2010, had a successful career at the Roche Group from 1985 to 2006 where he held several senior positions, including President and CEO of Roche Molecular Systems, Head of Global Business Development for Roche Diagnostics and member of Roche’s Global Diagnostic Executive Committee. From 2006 to 2009, Dr. Dreismann served as the CEO of Vectrant Technologies, Inc., and until 2013 was the Interim CEO for GeneNews Limited. During the past five years, Dr. Dreismann served on the Board of Directors of Med BioGene, Inc., Genenews Limited, Interpace Diagnostics and Ignyta, Inc.. He earned a M.S. degree in biology and his Ph.D. in microbiology/molecular biology (summa cum laude) from Westfaelische Wilhelms University (The University of Münster) in Germany.

 

The Board of Directors has determined that Dr. Dreismann should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his more than 20 years at Roche, including specific expertise in developing and commercially launching diagnostic products. Furthermore, Dr. Dreismann has extensive experience in international markets, specifically in Europe, while he was CEO of Roche Molecular Systems, the international leader in molecular diagnostics, which is important as we seek to expand internationally. His scientific background and expertise also enable him to provide the Board with technical advice on product research and development. Dr. Dreismann has a diversified background in managing and serving as a director of several companies in the healthcare industry

   

 

 

14

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

 Rashmi Kumar

 

  

 

LOGO

  

Experience:

 

  

 

Rashmi Kumar has been a Director of the Company since September 2020. Currently, Ms. Kumar serves as the SVP CIO – Global IT with Hewlett Packard Enterprise in Houston. She is a seasoned technology leader with wide ranging experience in IT Leadership, healthcare, consulting services, electric utilities, financial services, information technology, media & entertainment and steel industries. With more than 25 years of experience, Ms. Kumar’s primary areas of focus include Digital Transformation, AI/ML, Data & Analytics, strategic planning, Enterprise Architecture, and large-scale business process transformations. Rashmi Kumar’s joined HPE in 2018 as VP Global IT to focus on Applications Operations, and Support, NGIT Program Build and Deployment, and technology leadership to enable HPE business to achieve transformation goals. Ms. Kumar has served as CIO and CTO for many Fortune 50 companies like, McKesson, Southern California Edison, Toyota, HPE, and Tata Steel. Rashmi Kumar earned a bachelor’s degree in Metallurgical Engineering from the Bihar Institute of Technology in Sindri, India. She also holds an MBA from the University of California, Irvine; Paul Merage School of Business. She is very passionate about the topic of equality and is executive sponsor for various ERG’s and sits on Diversity & Inclusion Steering committees.

 

The Board of Directors has determined that Ms. Kumar should serve on the Board for the following reasons: She provides the Board with important expertise in the healthcare industry based on her extensive experience at McKesson Corp. Ms. Kumar also has extensive experience in information technology management at leading companies across a diverse range of industries. This skill set is especially important as Myriad looks to upgrade its information technology systems relating to its customer interfaces. Ms. Kumar also has a strong scientific and engineering background providing expertise from a scientific and product development standpoint.

 

 

LOGO

  

 

15


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

 Dennis H. Langer, M.D., J.D.

 

 

LOGO   

 

Experience:

  

 

Dennis H. Langer, M.D., J.D., has been a Director of Myriad since May 2004. From January 2013 to July 2014, he served as Chairman and Chief Executive Officer of AdvanDx, Inc. From August 2005 to May 2010, Dr. Langer served as Managing Partner of Phoenix IP Ventures, LLC. From January 2004 to July 2005, he was President, North America for Dr. Reddy’s Laboratories, Inc. From September 1994 until January 2004, Dr. Langer held several high-level positions at GlaxoSmithKline, and its predecessor, SmithKline Beecham, including most recently as a Senior Vice President of Research and Development. He has a broad base of experience in innovative R&D companies such as Eli Lilly, Abbott and Searle. He is also a clinical professor at the Department of Psychiatry, Georgetown University School of Medicine. Dr. Langer received a J.D. from Harvard Law School, an M.D. from Georgetown University School of Medicine, and a B.A. in Biology from Columbia University. During the past five years, Dr. Langer served on the Board of Pernix Therapeutics Holdings, Inc., Delcath Systems, Inc. and Dicerna Pharmaceuticals, Inc. Dr. Langer is also a Director of the Whitehead Institute of Biomedical Research.

 

The Board of Directors has determined that Dr. Langer should serve on the Board for the following reasons: His medical background provides the Board with expertise in developing predictive, personalized, and prognostic testing products. Dr. Langer provides the Board with business and management expertise from senior positions at several major pharmaceutical companies, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. He brings international experience as we implement strategies for global expansion. Dr. Langer’s background as a board-certified psychiatrist with extensive experience in neuropsychiatric drug development and personalized medicine provides the Board with expertise in developing and commercializing diagnostics for patients suffering from neuropsychiatric and other medical conditions. Dr. Langer also has a diversified background in managing and serving as a director of several companies in the healthcare industry.

    

 

 

16

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

 Lee Newcomer, M.D.

 

 

LOGO   

 

Experience:

  

 

Lee Newcomer, M.D., was appointed as a member of the Board of Directors in September 2019. Dr. Newcomer currently manages his own consulting business, Lee N. Newcomer Consulting, LLC, and previously held senior executive roles at United Healthcare including Senior Vice President for Oncology and Genetics, Chief Medical Officer and Senior Vice President of Health Policy and Strategy for UnitedHealth Group. Dr. Newcomer also worked for Vivius, Inc., a consumer directed health plan, holding the position of Executive Vice President and Chief Medical Officer. Dr. Newcomer received a Master’s Degree in Healthcare Administration & Management from the University of Wisconsin, Madison, an M.D. from the University of Nebraska, Omaha, and a B.S. from Nebraska Wesleyan University. Dr. Newcomer currently serves on the Board of Cellworks Group Inc., a private precision medicine company and Intervention Insights, a genomic test decision support company. He also served on the Board of Directors of Park Nicollet Health Systems, a hospital health care system with approximately 1,000 physicians and 400 beds, for 10 years including two years as Chairman.

 

The Board of Directors has determined that Dr. Newcomer should serve on the Board for the following reasons: His extensive reimbursement and managed care experience will aid the Company in its efforts to expand reimbursement for its new innovative precision medicine tests. He provides the Board with expertise on the medical insurance industry based on his extensive experience in several senior positions at UnitedHealth Group, Inc. and CIGNA Corporation. Additionally, Dr. Newcomer’s medical background provides the Board with expertise in developing predictive, personalized and prognostic testing products. Furthermore, Dr. Newcomer brings extensive business management experience from his 28 years of work in the managed care and pharmaceutical industries.

    

 

 

LOGO

  

 

17


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

 Colleen F. Reitan

 

  

 

LOGO   

 

Experience:

  

 

Colleen F. Reitan was appointed as a member of the Board of Directors in September of 2019. Ms. Reitan previously held numerous senior leadership positions at Health Care Services Corporation (HCSC) including most recently as the Executive Vice President and President of Plan Operations and as the Chief Operating Officer. Prior to working at HCSC, Ms. Reitan held numerous senior management positions at Blue Cross and Blue Shield of Minnesota including Chief Operating Officer. In aggregate, Ms. Reitan has over 35 years of experience in the managed care industry. Ms. Reitan holds a B.A. from Minnesota State University at Mankato and a M.S. in Health Care Administration from the University of Minnesota-Twin Cities. She currently serves on the board of Alnylam Pharmaceuticals, Inc.

 

The Board of Directors has determined that Ms. Reitan should serve on the Board for the following reasons: Her extensive reimbursement and managed care experience will aid the Company in its efforts to expand reimbursement for its new innovative precision medicine tests. Furthermore, she provides the Board with important expertise on the medical insurance industry based on her extensive experience in several senior positions at Health Care Services Corporation and Blue Cross and Blue Shield of Minnesota. In addition, she provides the Board with management expertise, resulting from managing private companies and serving as a director of a publicly-traded company.

    

 

 

 Daniel M. Skovronsky, M.D., Ph.D.

 

  

 

LOGO   

 

Experience:

 

  

 

Daniel M. Skovronsky, M.D., Ph.D., joined the Company as a Director in July 2020. Currently, he serves as Chief Science Officer and President of Lilly Research Laboratories at Eli Lilly and Company. Previously, he was Chief Executive Officer of Avid Radiopharmaceuticals Inc., a company he founded in 2004. Dr. Skovronsky earned his M.D. from the Perelman School of Medicine, University of Pennsylvania, his Ph.D. in neuroscience from University of Pennsylvania and a B.S. in molecular biophysics and biochemistry from Yale University.

 

The Board of Directors has determined that Dr. Skovronsky should serve on the Board for the following reasons: His medical and scientific background provides the Board with expertise in developing predictive, personalized, and prognostic testing products. Dr. Skovronsky provides the Board with business and management expertise from senior positions at several major pharmaceutical companies, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. Dr. Skovronsky’s background as a board-certified neuropathologist with extensive experience in neuroscience provides the Board with expertise in developing and commercializing diagnostics for patients suffering from neuropsychiatric and other medical conditions.

 

 

18

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

 Daniel K. Spiegelman

 

LOGO

 

 

Experience:

 

 

Daniel K. Spiegelman has been a Director of the Company since May 2020. Most recently, he served as Executive Vice President and Chief Financial Officer at BioMarin Pharmaceuticals, Inc. Prior to that, he held several roles, including Senior Vice President and Chief Financial Officer of CV Therapeutics and Treasurer at Genentech, Inc. He is currently a member of the Board of Directors at Tizona Therapeutics, Inc., a private pharmaceutical company. Mr. Spiegelman received a B.A. degree from Stanford University and a M.B.A. from the Stanford Graduate School of Business.

 

The Board of Directors has determined that Mr. Spiegelman should serve on the Board for the following reasons: He provides the Board with important expertise in the healthcare industry based on her extensive experience in several senior positions at major pharmaceutical companies. Mr. Spiegelman also provides the Board with financial accounting, internal control and public company reporting expertise from his work as Chief Financial Officer of multiple public companies. In addition, he provides the Board with business, financial and investment expertise, as well as management expertise, resulting from managing and service as a director of a private pharmaceutical company.

 

 

 

LOGO

  

 

19


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

Board of Director Qualifications, Expertise, and Attributes

Below are charts showing board diversity, the age range of our director, director independence, and the average tenure of our directors.

 

LOGO

Director Capability Definitions

Board Diversity – Representation of gender, ethnic, cultural, or other perspectives that expand the Board’s understanding of the needs and viewpoints of our patients, physician partners, employees, governments, and other stakeholders.

Financial – Experience leading or managing the financial function of an enterprise, resulting in proficiency in complex financial management, capital allocation, and financial reporting. Experience or expertise in financial accounting and reporting processes or the financial management of a major organization.

Leadership – Experience leading a significant enterprise, resulting in a practical understanding of organizations, processes, strategic planning, and risk management. Demonstrated strengths in developing talent, planning succession, and driving change and long-term growth.

Healthcare Industry – Experience with and understanding of complex issues within the health care industry.

Research and Development – Experience and expertise in contributing to healthcare research and development projects aimed at introducing innovative products and services that satisfy unmet medical needs and contribute to the Company’s profits. Expertise in assessing the medical and/or commercial implications for improving health and cost outcome.

Research and Development—Experience and expertise in new product development and life cycle management, resulting in the successful introduction of innovative products and services that satisfy unmet medical needs and contribute to the Company’s profits. Expertise in designing and implementing clinical trials and in research methods used to evaluate and demonstrate improvements in health and cost outcomes.

Technology – A significant background working in technology, resulting in knowledge of how to anticipate technological trends including digital solutions, generate disruptive innovation and extend or create new business models. Significant expertise and experience in leading technology functions of an enterprise.

Public Company Governance - Experience as a board member of other publicly traded companies.

Diagnostics Industry—Experience with complex issues involving the development and distribution of diagnostic tests, providing test results and interpretation, providing clinical laboratory services, and developing and supplying molecular diagnostics, instrumentation equipment, and consumable materials.

 

 

20

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

 

DIRECTOR CAPABILITY MATRIX

               
 

LOGO

 

Board  Diversity 

 

LOGO

 

  Financial  

 

LOGO

 

 Leadership 

 

LOGO

 

 Healthcare  Industry

 

LOGO

 

 Diagnostic  Industry

 

LOGO

 

 Research and  Development

 

LOGO

 

 Technology 

 

LOGO

 

Public

Company

 Governance 

                 

 S. Louise Phanstiel

 Chair of the Board

                     
               

 Paul J. Diaz CEO

                     
               

 Heiner Dreismann Ph.D.

 Director

                         
               

 Rashmi Kumar Director

                         
               

 Dennis Langer M.D., J.D.

 Director

                   
               

 Lee N. Newcomer M.D.

 Director

                       
               

 Colleen F. Reitan Director

                     
               

 Dan Skovronsky, M.D. Ph.D.

 Director

                       
               

 Daniel K. Spiegelman

 Director

                       

Director Independence

Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with Myriad, either directly or indirectly. Based on this review, the Board has determined that the following members of the Board are ‘‘independent directors’’ as defined by The Nasdaq Stock Market LLC ‘‘Nasdaq’’: Mr. Best, Dr. Dreismann, Dr. Gilbert, Dr. Henderson, Ms. Kumar, Dr. Langer, Dr. Newcomer, Ms. Phanstiel, Ms. Reitan, Dr. Skovronsky, and Mr. Spiegelman.

Leadership Structure of the Board

The Board does not have a policy regarding the separation of the roles of Chair of the Board and Chief Executive Officer because the Board believes that it is in our best interests to make that determination based on the position and direction of the Company and the membership of the Board. However, at this time, and since our inception, the Board has determined that having an independent director serve as Chair of the Board is in the best interests of our stockholders. Thus, the roles of Chair of the Board and Chief Executive Officer are separated. This structure enables a greater role for the independent directors in the oversight of the Company and their active participation in setting agendas and establishing Board policies, priorities and procedures. This structure also allows the Chief Executive Officer to focus on the management of our day-to-day operations.

Board’s Role in the Oversight of Risk Management

The Board has an active role, directly and through its committees, in the oversight of our risk management efforts. The Board carries out this oversight role through several levels of review. It regularly reviews and discusses with members of management information regarding the management of risks inherent in the operations of our businesses and the implementation of our strategic plan, including our risk mitigation efforts.

 

 

LOGO

  

 

21


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

Each of the Board’s committees also oversees the management of risks that are under each committee’s areas of responsibility. For example, the Audit and Finance Committee oversees management of accounting, auditing, external reporting, internal controls, cash investment risks, and our compliance policies.

The Nominating and Governance Committee oversees the Company’s Code of Conduct, conflicts of interest, director independence and corporate governance policies. The Compensation Committee oversees risks arising from compensation practices and policies. While each committee has specific responsibilities for oversight of risk, the Board is regularly informed by each committee about such risks. In this manner the Board is able to coordinate its risk oversight.

Board’s Consideration of Diversity

The Board and Nominating and Governance Committee do not have a formal policy with respect to the consideration of diversity in identifying nominees for director positions. However, the Board and Nominating and Governance Committee strive to nominate individuals with a variety of diverse backgrounds, skills, qualifications, attributes and experience such that the Board, as a group, will possess the appropriate expertise, talent and skills to fulfill its responsibilities to manage the Company in the long-term interests of the stockholders.

Board’s Disclosure of Third-Party Director and Nominee Compensation

No member of the Board of Directors has any agreement or arrangement with any person or entity other than the Company relating to compensation or other payment in connection with the director’s service as a director of the Company.

Committees of the Board of Directors and Meetings

Meeting Attendance. During the fiscal year ended June 30, 2020, or fiscal 2020, there were 16 meetings of the Board of Directors, and the various committees of the Board met a total of 18 times. No director attended fewer than 75 percent of the total number of meetings of the Board and of each committee of the Board on which he or she served during fiscal 2020. The Board has adopted a policy under which each member is encouraged, but not required to attend each annual meeting of stockholders. At the time of our 2019 Annual Meeting of Stockholders, all members of the Board of Directors were in attendance.

Audit and Finance Committee. Our Audit and Finance Committee met seven times during fiscal 2020. This committee currently has six members: Mr. Spiegelman (chair), Mr. Best, Ms. Kumar, Dr. Langer, Ms. Phanstiel, and Ms. Reitan. The Audit and Finance Committee’s roles and responsibilities are set forth in its written charter and include the authority to retain and terminate the services of our independent registered public accounting firm. In addition, the Audit and Finance Committee reviews annual financial statements; considers matters relating to accounting policy and internal controls; reviews the scope of annual audits; and monitors our processes for compliance with laws, regulations and our Code of Conduct. Our Board of Directors has determined that all members of the Audit and Finance Committee satisfy the current independence standards promulgated by the SEC and by Nasdaq, as such standards apply specifically to members of audit committees. The Board has determined that Mr. Spiegelman, Mr. Best and Ms. Phanstiel are each an ‘‘audit committee financial expert,’’ as the SEC has defined that term in Item 407 of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act. A copy of the Audit and Finance Committee’s written charter is publicly available on the Investor Information – Understanding Myriad/Corporate Governance section of our website at www.myriad.com.

Please also see the report of the Audit and Finance Committee set forth elsewhere in this proxy statement.

Compensation Committee. Our Compensation Committee met seven times during fiscal 2020. This committee currently has five members: Dr. Dreismann (chair), Dr. Gilbert, Dr. Henderson, Dr. Newcomer and Ms. Phanstiel. The Compensation Committee’s role and responsibilities are set forth in its written charter and include reviewing, approving and making recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of the Board of Directors are carried out and that such policies, practices and procedures contribute to our success. The Compensation Committee also is responsible for evaluating and determining the compensation of our President and Chief Executive Officer and

 

 

22

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

conducts its decision-making process with respect to that issue without the President and Chief Executive Officer present. The Board has determined that all members of the Compensation Committee qualify as independent under the definition promulgated by Nasdaq.

The Compensation Committee is charged with establishing a compensation policy for our executives and directors that is designed to attract and retain qualified executive talent, to motivate them to achieve corporate objectives, and reward them for superior performance. Our Compensation Committee is also responsible for establishing and administering our executive compensation policies and equity compensation plans. The Compensation Committee meets at least two times per year and more often as necessary to review and make decisions with regard to executive compensation matters. As part of its review of these matters, the Compensation Committee may delegate any of the powers given to it to a subcommittee. A copy of the Compensation Committee’s written charter is publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website at www.myriad.com.

Further discussion of the process and procedures for considering and determining executive compensation, including the role that our executive officers play in determining compensation for other executive officers is included below in the section entitled ‘‘Executive Compensation — Compensation Discussion and Analysis.’’ The Compensation Committee has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its duties. For purposes of fiscal 2020 executive compensation determinations, the Compensation Committee retained Mercer (US), Inc. (‘‘Mercer’’) to update our peer group of companies and provide competitive market data on the salaries and short-term and long-term incentive compensation of executive officers at comparable companies within our industry. Mercer also was engaged to provide the Compensation Committee an analysis of, and recommendations for, annual salary compensation, short-term incentive compensation, and long-term incentive compensation for the President and CEO and other executive officers. Mercer performs services solely on behalf of the Compensation Committee and has no relationship with Myriad or its management except as may relate to performing such services. The Compensation Committee has assessed the independence of Mercer pursuant to SEC rules and the corporate governance rules of the Nasdaq and concluded that no conflict of interest exists that would prevent Mercer from independently representing the Compensation Committee.

Please also see the report of the Compensation Committee set forth elsewhere in this proxy statement.

Compensation Committee Interlocks and Insider Participation. No member of our Compensation Committee has at any time been an employee of the Company. None of our executive officers is a member of the Compensation Committee, nor do any of our executive officers serve as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers serving as a member of our Board of directors or Compensation Committee.

Nominating and Governance Committee. Our Nominating and Governance Committee met four times during fiscal 2020. This committee currently has four members: Dr. Langer (chair), Dr. Henderson, Ms. Phanstiel, and Ms. Reitan. This committee’s role and responsibilities are set forth in the Nominating and Governance Committee’s written charter and include evaluating and making recommendations to the full Board as to the size and composition of the Board and its committees, identifying and evaluating potential candidates and recommending the director nominees for election, developing and recommending corporate governance guidelines applicable to the Board, and reviewing and approving potential or actual conflicts of interest between our executive officers or members of the Board. The committee also oversees the annual Board performance evaluations, which may be submitted anonymously at the discretion of the director concerned. In adding new directors to the Board, the Nominating and Governance Committee engages a nationally recognized search firm to identify and help evaluate candidates. This process helps attract qualified and independent directors, as shown in the recent additions to the Board.

In October 2020, the Nominating and Governance Committee recommended to the Board, and the Board unanimously approved, an amendment to the Company’s Restated By-Laws and the Committee’s charter to change from plurality voting to majority voting for directors in non-contested elections. This change, which will

 

 

LOGO

  

 

23


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

be effective for the Class III directors standing for re-election at the annual meeting on December 4, 2020, is described in more detail in ‘‘Proposal 1 — Election of Directors’’ of this proxy statement. The Board of Directors has determined that all members of the Nominating and Governance Committee qualify as independent under the definition promulgated by Nasdaq.

Also in October 2020, the Nominating and Governance Committee recommended to the Board, and the Board unanimously approved, an amendment to the Company’s Corporate Governance Principles (available on our website) to institute a retirement age for directors. Specifically, when a director reaches 75 years of age, the director must tender his or her resignation before the next annual meeting at which the director is scheduled to stand for re-election. The Nominating and Governance Committee and the Board may then accept the resignation or not. If the resignation is not accepted, and the director wishes to continue service, then the director must again tender his or her resignation before each following annual meeting at which the director is scheduled to stand for re-election.

Finally in October 2020, the Nominating and Governance Committee recommended to the Board, and the Board unanimously approved, that the Company change from a fiscal year running from July 1 to June 30, to a calendar year fiscal year effective January 1, 2021. We believe this improves investor and analyst visibility into the Company’s financial performance by enabling easier comparison to our peer companies.

If a stockholder wishes to nominate a candidate for director who is not included in our proxy statement, the stockholder must follow the procedures described in our Restated By-Laws and in ‘‘Stockholder Proposals and Nominations for Director’’ at the end of this proxy statement.

In addition, under our current corporate governance policies, the Nominating and Governance Committee may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third-party search firms or other appropriate sources. For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment; business and professional skills and experience; independence, knowledge of the industry in which we operate, possible conflicts of interest, the extent to which the candidate would fill a present need on the Board; and concern for the long-term interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to propose a candidate for consideration by the Nominating and Governance Committee under our corporate governance policies, for each annual meeting, the Committee will consider only one recommended nominee from any stockholder or group of affiliated stockholders, and such recommending stockholder or group must have held at least 5 percent of common stock for at least one year. All stockholder recommendations for proposed director nominees must be made in writing to the Nominating and Governance Committee, care of Myriad’s Secretary at 320 Wakara Way, Salt Lake City, Utah 84108, and must be received no later than 120 days prior to the first anniversary of the date of the proxy statement for the previous year’s Annual Meeting. The recommendation must be accompanied by the following information concerning the recommending stockholder:

 

   

The name, address and telephone number of the recommending stockholder;

 

   

The number of shares of our common stock owned by the recommending stockholder and the time period for which such shares have been held;

 

   

If the recommending stockholder is not a stockholder of record, a statement from the record holder verifying the holdings of the recommending stockholder and a statement from the recommending stockholder of the length of time such shares have been held (alternatively, the recommending stockholder may furnish a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the SEC, together with a statement of the length of time that the shares have been held); and

 

   

A statement from the recommending stockholder as to the good faith intention to continue to hold such shares through the date of the next annual meeting.

 

 

24

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

The recommendation must also be accompanied by the following information concerning the proposed nominee:

 

   

The information required by Items 401, 403 and 404 of Regulation S-K under the Securities Act;

 

   

A description of all relationships between the proposed nominee and the recommending stockholder, including any agreements or understandings regarding the nomination;

 

   

A description of all relationships between the proposed nominee and any of our competitors, customers, suppliers, labor unions or other persons with special interests regarding the Company; and

 

   

The contact information for the proposed nominee.

The recommending stockholder must also furnish a statement supporting a view that the proposed nominee possesses the minimum qualifications as set forth below for director nominees and describing the contributions that the proposed nominee would be expected to make to the Board and to the governance of Myriad and must state whether, in the stockholder’s view, the proposed nominee, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of Myriad. The recommendation must also be accompanied by the written consent of the proposed nominee (i) to be considered by the Nominating and Governance Committee and interviewed if the Nominating and Governance Committee chooses to do so in its discretion, and (ii) if nominated and elected, to serve as a director.

For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, including the following threshold criteria:

 

   

Candidates should possess the highest personal and professional standards of integrity and ethical values;

 

   

Candidates must be committed to promoting and enhancing the long-term value of Myriad for its stockholders;

 

   

Candidates must be able to represent fairly and equally all stockholders without favoring or advancing any particular stockholder or other constituency of Myriad;

 

   

Candidates must have demonstrated achievements in one or more fields of business, professional, governmental, community, scientific or educational endeavor, and possess mature and objective business judgment and expertise;

 

   

Candidates are expected to have sound judgment, derived from management or policy making experience that demonstrates an ability to function effectively in an oversight role;

 

   

Candidates must have a general appreciation regarding major issues facing public companies of a size and operational scope similar to Myriad, including governance concerns, regulatory obligations, strategic business planning, competition and basic concepts of accounting and finance; and

 

   

Candidates must have, and be prepared to devote, adequate time to the Board of Directors and its committees.

In addition, the Nominating and Governance Committee will take into account the extent to which the candidate would fill a present need on the Board, including the extent to which a candidate meets the independence and experience standards promulgated by the SEC and by Nasdaq.

A copy of the Nominating and Governance Committee’s written charter is publicly available on the Investor Information – Understanding Myriad/Corporate Governance section of our website at www.myriad.com.

The descriptions of our corporate governance policies contained in this proxy statement are qualified in their entirety and subject to the terms of such policies as modified by the Board of Directors from time to time. The following corporate governance documents are publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website at www.myriad.com:

 

   

Policy on Annual Shareholder Meeting Attendance by Directors;

 

   

Policy on Security Holder Communications with Directors;

 

 

LOGO

  

 

25


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

   

Policy on Security Holder Recommendation of Candidates for Election as Directors;

 

   

Procedures for Security Holders Submitting Nominating Recommendations;

 

   

Policy Regarding Qualifications of Directors;

 

   

Policy For Handling Complaints Regarding Accounting and Auditing Matters and Code of Conduct Matters;

 

   

Policy on Limiting Service on Public Company Boards;

 

   

Policy on New Director Orientation;

 

   

Policy on Continuing Education for the Board;

 

   

Policy on Related Person Transactions;

 

   

Director and Executive Officer Stock Ownership Guidelines;

 

   

Policy on Incentive Compensation Repayment;

 

   

Corporate Governance Principles;

 

   

Corporate Code of Conduct and Ethics and Whistleblower Policy;

 

   

Policy on Incentive Compensation Repayment;

 

   

Nominating and Governance Committee Charter;

 

   

Audit and Finance Committee Charter;

 

   

Compensation Committee Charter; and

 

   

Research and Product Innovation Committee Charter.

Research and Product Innovation Committee. Our former Strategic Committee was renamed and refocused as the Research and Product Innovation Committee in 2020. This Committee did not meet during fiscal 2020. This committee currently has five members: Dr. Newcomer (chair), Dr. Gilbert, Dr. Dreismann, Dr. Skovronsky, and Mr. Spiegelman. The committee’s roles and responsibilities are set forth in the Research and Product Innovation Committee’s written charter and include advising and consulting with senior management on a broad range of strategic and product development initiatives and making recommendations to the Board regarding such opportunities. A copy of the Research and Product Innovation Committee’s written charter is publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website at www.myriad.com.

Stockholder Communications to the Board

Generally, stockholders who have questions or concerns should contact our Investor Relations department at (801) 584-1143. However, any stockholder who wishes to address questions regarding our business directly with the Board of Directors, or any individual director, should send his or her questions in writing to the Chair of the Board or a designated member of the Board at 320 Wakara Way, Salt Lake City, Utah 84108. Communications will be distributed to the Board, to the Nominating and Governance Committee, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:

 

   

Junk mail and mass mailings;

 

   

Resumes and other forms of job inquiry;

 

   

Surveys; and

 

   

Solicitations or advertisements.

In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is excluded will be made available to any outside director upon request.

 

 

26

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

Executive Officers

The following table sets forth the name, age (as of October 15, 2020) and position of each of our current executive officers. Unless indicated otherwise, general references to ‘‘executive officers’’ throughout this proxy statement refer to the following officers:

 

  Name

   Age    Position

 Paul J. Diaz

   58    President and Chief Executive Officer and Director

 Jayne B. Hart

   60   

Executive Vice President of Human Resources

 Benjamin G. Jackson

   41    Executive Vice President, General Counsel and Secretary

 Nicole Lambert

   46   

President of Myriad Womens Health, Oncology, and International

 Jerry S. Lanchbury, Ph.D.

   61    Chief Scientific Officer

 Paul C. Parkinson

   54   

Executive Vice President for Reimbursement Strategy

 R. Bryan Riggsbee

   49    Chief Financial Officer and Treasurer

 Mark Verratti

   52   

President, Myriad Neuroscience

 

 

 

 Paul J. Diaz

 

LOGO

 

Experience:

 

 

Paul J. Diaz. Please see biography above under ‘‘Management and Corporate Governance — The Board of Directors.’’

 

 

 Jayne B. Hart

 

LOGO

  Experience:
 

Jayne B. Hart, Executive Vice President of Human Resources, joined Myriad in May 2011. She has more than twenty years of professional experience in the human resources field. Prior to joining Myriad, Ms. Hart served as vice president of human resources at LANDesk Software, a global software company. Before that, she was vice president of human resources for 360networks, a wholesale telecommunications company, and at AT&T Wireless, a global telecommunications company, where she began her career.

 

 

 

LOGO

  

 

27


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

Benjamin G. Jackson

 

LOGO

  Experience:
 

 

Benjamin G. Jackson, Executive Vice President, General Counsel and Secretary, joined Myriad in February 2006. He has held various positions in Myriad’s Legal Department, including serving as associate general counsel prior to assuming the role of general counsel. Mr. Jackson received his J.D. degree from the J. Reuben Clark Law School at Brigham Young University and a B.S. degree in microbiology, immunology, and molecular genetics from the University of California Los Angeles.

 

 

Nicole Lambert

  

 

LOGO

  Experience:
 

 

Nicole Lambert, President of Myriad Womens Health, Oncology, and International, has served in her current role since April 1, 2019. Ms. Lambert joined the Company in June 2001. Prior to her current position, she served as General Manager for the Oncology and Urology business units and Vice President of Dermatology. Prior to joining Myriad, she was a genetic councilor at LabCorp. Ms. Lambert received her Bachelor’s degree in Biology and Sociology from Boston College and her Master’s degree in Genetic Counseling from Mt. Sinai School of Medicine at New York University.

 

 

Jerry S. Lanchbury, Ph.D.

 

LOGO

  Experience:
 

 

Jerry S. Lanchbury, Ph.D., Chief Scientific Officer, joined the Company in September 2002 as Senior Vice President of Research. In July 2005 he was appointed Executive Vice President of Research, a position he held until he was named to his current position in February 2010. Dr. Lanchbury came to us from GKT School of Medicine, King’s College where he had served as Reader in Molecular Immunogenetics and Head of Molecular Immunogenetics Unit since 1997. Dr. Lanchbury earned his Ph.D. from the University of Newcastle upon Tyne and 1st Class Honours, B.Sc. ‘‘Biology of Man & his Environment’’ degree from the University of Aston.

 

 

Paul C. Parkinson

 

LOGO

  Experience:
 

 

Paul ‘‘Chip’’ Parkinson, Executive Vice President for Reimbursement Strategy, joined the Company in 2016. Previously, he was president of OmedaRx and chief pharmacy officer of Regence Blue Cross Blue Shield health plans. In this role, Mr. Parkinson was responsible for managing $1.7 billion in annual pharmacy spending for the Regence Blue Cross Blue Shield health plans in Utah, Washington, Oregon and Idaho, which have more than two million members. Prior to that, he was vice president, Managed Markets and general manager, Urology at Myriad. During his tenure, Prolaris was included in the NCCN Guidelines for prostate cancer and received Medicare reimbursement. Before joining Myriad, he served in management and managed care leadership roles at Pfizer Inc. Mr. Parkinson received his B.S. degree in Communications from Weber State University.

 

 

28

  

 

LOGO


Table of Contents

MANAGEMENT AND CORPORATE GOVERNANCE

 

 

  R. Bryan Riggsbee

            

 

LOGO

 

  Age: 48

 

Experience:

 

 

 

R. Bryan Riggsbee, Chief Financial Officer and Treasurer, and Interim President and Chief Executive Officer from February 6 to August 12, 2020, joined us in October 2014. He previously served 10 years with Laboratory Corporation of America (LabCorp) where his most recent position was as Senior Vice President of Corporate Finance with responsibility for the financial planning and analysis and treasury functions. Prior to LabCorp, Mr. Riggsbee served in various finance roles with General Electric and began his career in the audit division of KPMG. He received a B.A. in Accounting from North Carolina State University, a B.A. in political science from the University of North Carolina at Chapel Hill and an M.B.A. from Northwestern University. Mr. Riggsbee is a Certified Public Accountant licensed in the State of North Carolina.

 

 

  Mark Verratti

 

            

 

 

LOGO

  Age: 51

 

Experience:

 

 

 

Mark Verratti, President of Myriad Neuroscience and Myriad Autoimmune., and has served in his current role since August 1, 2017. He previously served as SVP, Chief Sales and Business Development officer at Assurex since January 2016. Mr. Verratti also held senior leadership positions with Cyberonics (now known as LivaNova) from 2005-2016, and earlier with Forest Pharmaceuticals where he led commercial teams with revenues approaching $500 million dollars. He received a B.S. in Life Sciences with a minor in Physiology from The Pennsylvania State University.

 

We have entered into standard employment agreements with each of the above executive officers. For each such officer, we have also entered into our standard Severance and Change in Control Agreements, which are described elsewhere in the proxy statement under the caption ‘‘Executive Compensation — Narrative Disclosure to Summary Compensation Table and 2020 Fiscal Year Grants of Plan-Based Awards Table.’’

 

 

LOGO

  

 

29


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

Executive Summary

Overview

We are a leading personalized medicine company, with the goal of providing physicians and their patients with critical information to guide healthcare management. Our goal is to manage our business to maximize the value we provide through our services, making the Company more successful and valuable, and hence maximizing our long-term stockholder value. Our compensation programs are designed to support these goals, with the primary objectives of attracting and retaining executive talent, motivating our executive officers through pay-for-performance metrics to enhance our growth and profitability, and increasing long-term stockholder value.

With the arrival of a new President and Chief Executive Officer in August 2020, and two-thirds of the Board consisting of directors added within the last 16 months, the Company has begun the process of revamping its approach to executive compensation. As discussed in more detail below, the Company is also transitioning from a fiscal year running from July 1 to June 30 to a calendar year fiscal year. This leaves a six-month transition period in the second half of calendar year 2020, which is referred to herein as the ‘‘2020 transition period’’. This proxy statement will report (a) compensation paid under our fiscal year 2020 plan; (b) compensation to be paid during the 2020 transition period; and (c) certain elements of compensation to be paid under our new calendar 2021 plan. Beginning with the 2020 transition period and continuing into calendar 2021, the three principal components of our compensation program for executive officers are:

 

   

Annual salary;

 

   

Short-term incentive compensation in the form of an annual cash incentive bonus;

 

   

Long-term incentive compensation in the form of (a) restricted stock units (RSUs) subject to time-based vesting and (b) performance-based restricted stock units (PSUs) subject to financial metrics followed by time-based vesting.

We believe that these compensation components provide the appropriate balance of short-term and long-term compensation and incentives to our executives to drive our performance, success and long-term growth. As indicated in the charts below, our pay mix for fiscal 2020 largely followed that of our peers, with the majority of our compensation in the form of long-term incentive compensation. Peer Pay Mix data is a composite of our peer group data and published survey data.

 

LOGO

 

 

30

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

Our compensation program seeks to align compensation with Company performance, and hence reward our executive officers for their contribution to our growth, profitability and increased stockholder value through the recognition of individual leadership, initiatives, achievements and other contributions. For fiscal 2020, our Compensation Committee approved individual Management Business Objectives (‘‘MBOs’’), which consist of goals tailored to each executive, and awarded short-term annual cash bonuses based on individual achievement against these MBOs. In determining these bonus amounts, however, the Compensation Committee also applied a 50% deduction multiplier based on Company financial performance for fiscal 2020. The Committee then awarded the bonuses in the form of RSU grants in order to preserve cash while the Company recovers from the impact of the COVID-19 pandemic on its business.

For short-term cash bonuses for our executive officers for the 2020 transition period, our Compensation Committee has approved Company performance and financial goal metrics as well as individual MBOs. Thus, the annual cash bonus component of an executive’s compensation will be balanced between these performance and financial metrics on one hand and the individual MBOs on the other, with greater weight to be given to the performance and financial metrics. For example, performance and financial metrics for the 2020 transition period will represent 70% of an executive’s total score and individual MBOs will account for the remaining 30%, as in the following illustration.

 

LOGO

 

 

LOGO

  

 

31


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

Long-term incentives, such as equity grants, will also be based at least in part on the Company’s performance against performance metrics set by the Compensation Committee, as in the following illustration. For the 2020 transition period and calendar 2021, for example, 50% of an executive’s equity grant will be RSUs and 50% will be PSUs, with the metrics determining the ultimate number of PSUs awarded comprised of earnings per share and relative total shareholder return.

 

50% of Annual Share Grant

 

   

50% of Annual Share Grant

 

   

Restricted Stock Units (RSUs):

   

Performance Stock Units (PSUs):

•  Number of shares fixed in advance by the compensation committee

•  Time-based vesting

   

•  Target number of shares set by the compensation committee

•  Actual number of shares granted depends on the company financial performance

•  Time-based vesting

•  Based on adjusted EPS and total share holder return targets

 

This compensation structure for the 2020 transition period and calendar 2021 differs from previous years primarily in that (a) no new three-year LTI cash bonus plans will be instituted, starting in the 2020 transition period; and (b) short-term cash incentives and long-term equity incentives will be weighted toward Company financial performance more than individual objectives. The Compensation Committee believes this new structure represents an appropriate mix of individual objectives and financial performance targets, which incentivize executive officers to increase our profitability, success and long-term stockholder value.

Fiscal Year 2020 Performance

For fiscal year 2020 our revenues declined 25 percent year-over-year to $639 million and we had GAAP earnings per share of ($2.69) and non-GAAP earnings per share of ($0.08) which declined relative to fiscal year 2019. Two factors significantly detrimentally impacted our revenue and profitability in fiscal year 2020. The first was the Current Procedural Terminology (CPT) code transition under the Centers for Medicare and Medicaid Services (CMS) clinical laboratory fee schedule for hereditary cancer testing codes. On January 1, 2019, following recommendations from the American Medical Association Current Procedural Terminology Editorial Panel, the CMS clinical laboratory fee schedule was updated discontinuing the use of legacy hereditary cancer CPT codes 81211 and 81213, which reduced reimbursement levels. Given that these codes were utilized in a number of long-term commercial payer contracts, the Company was forced to renegotiate many of these contracts at rates lower than historical averages. This led to a meaningful pricing headwind for the hereditary cancer business in fiscal year 2020. Secondly, Myriad’s business was significantly impacted by the global COVID-19 pandemic in fiscal year 2020 which caused a dramatic decline in elective testing by physicians in the second half of the fiscal year. Despite these challenges, during fiscal year 2020, we believe we accomplished a number of our strategic objectives that position the Company for future long-term growth.

Notwithstanding the headwinds faced by the Company in fiscal year 2020, Myriad generated positive cash flows from operations with $64 million in non-GAAP free cash flow. We ended the year with a strong balance sheet with approximately $255 million in cash, cash equivalents, and marketable investment securities and plan to continue to exercise a balanced approach to capital deployment, including investing for future growth, paying down debt associated with recent acquisitions, and business development activities.

An explanation of the adjustments to our GAAP financial measures used in this proxy statement and a reconciliation of the adjusted financial measures to the comparable GAAP financial measures are included in Appendix A to this proxy statement.

Focusing on our longer-term growth, over the past five years, our revenue has declined at a compound annual rate of negative three percent since fiscal year 2016. This negative growth trajectory is primarily due to declines in hereditary cancer revenue as a result of competition following the loss of our patents related to hereditary cancer testing, which declines have been partially offset by new product growth over that period, as well as declines in fiscal

 

 

32

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

year 2020 due to the impact of the COVID-19 global pandemic and hereditary cancer coding transition discussed above. In fiscal year 2020, 73 percent of our test volume and 50 percent of our revenue was derived from new (non-hereditary cancer) products. Going forward, we believe the Company is positioned to return to revenue growth rates given increasing stability in hereditary cancer revenues and continued growth from new products.

 

LOGO

 

Over the past five years, we experienced a -20 percent annual stockholder return on our stock price versus a 15 percent return for the Nasdaq composite index and a 5 percent return for the Nasdaq Healthcare Providers Stock Index reflecting the increased competition we faced after the loss of key hereditary cancer patents in fiscal year 2013. We included the Nasdaq Healthcare Providers Stock Index in our Stock Performance Chart as the Nasdaq Healthcare Providers Stock Index is comprised of companies which also operate in the healthcare industry. We caution that historical stock price performance, including the stock price performance shown in the chart below, is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock.

 

LOGO

 

 

LOGO

  

 

33


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

In addition to our financial results during fiscal year 2020, we also achieved the following progress on our three critical success factors:

Build Upon a Solid Hereditary Cancer Foundation

 

   

Grew hereditary cancer test volumes at a six percent year-over-year growth rate prior to the global COVID-19 pandemic.

 

   

Received reimbursement and launched the BRACAnalysis® Diagnostic System in Japan to help physicians determine which people affected with breast and ovarian cancer have Hereditary Breast and Ovarian Cancer (HBOC) syndrome and qualify for additional diagnostic and medical management. BRACAnalysis previously was approved by Japan’s Ministry of Health, Labour and Welfare in November 2019 for this indication.

 

   

Published a new study for riskScore® in the Journal of the American Medical Association Network Open demonstrating the ability of Myriad’s polygenic risk score to modify breast cancer risk stratification in women diagnosed with pathogenic mutations in common breast cancer genes.

Grow New Product Volume

 

   

Launched a new radiographic progression (RP) enhancement tool for the Vectra® test report that is personalized based on the age, gender and adiposity of the patient. The new test report will provide individual risk of a patient’s risk of RP within one year.

 

   

Received FDA approval for BRACAnalysis CDx as a companion diagnostic test for patients with metastatic pancreatic cancer seeking treatment with Lynparza (olaparib).

 

   

Received FDA approval for the myChoice CDx® test for use as a companion diagnostic by healthcare professionals to identify advanced ovarian cancer patients with positive homologous recombination deficiency status, who are eligible or may become eligible, for first-line maintenance treatment with Lynparza (olaparib) in combination with bevacizumab.

 

   

Received FDA approval for the BRACAnalysis CDx® test for use as a companion diagnostic by healthcare professionals to identify men with metastatic castration-resistant prostate cancer who are eligible for treatment with Lynparza® (olaparib).

 

   

Published a new study in Prenatal Diagnosis demonstrating that Prequel® is the only non-invasive prenatal screening (NIPS) test that outperforms traditional measures of aneuploidy detection across all classes of obesity. Other NIPS testing methodologies can have failure rates up to 24 percent in obese patients leading the American College of Gynecology to recommend against using NIPS in patients with significant obesity.

Expand Reimbursement Coverage for New Products

 

   

Announced coverage decision from UnitedHealthcare, the largest commercial payer in the United States, covering GeneSight for patients that have a diagnosis of major depressive disorder or anxiety and have failed at least one prior medication.

 

   

Received favorable coverage decisions for Prolaris® from six new commercial health plans including one of the top five national providers of health insurance. In aggregate the new health plans represent over 26 million covered lives.

 

   

Published the precision medicine analysis of the GUIDED study in the Journal of Clinical Psychiatry. The study evaluated 787 patients at baseline who were on medications with known gene drug interactions. The analysis showed that patients who had their treatment guided by GeneSight saw a 70 percent improvement in remission, 42 percent improvement in response, and a 23 percent improvement in symptoms, all of which were statistically significant.

 

   

Vectra was included in an American College of Rheumatology publication stating that the test was one of several disease activity measures that met a minimum standard for regular clinic use.

 

   

Received favorable new guidelines for Prolaris including the National Comprehensive Cancer Network updating their professional guidelines to include Prolaris across all major risk categories and the European Urology Association Guidelines for 2020 recommending biomarker testing, including Prolaris for prostate cancer patients where there is clear clinical actionability.

 

 

34

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

   

Published a GeneSight meta-analysis covering four major clinical studies and 1,556 patients. Across the patient populations, patients who received guided care with GeneSight saw a 43 percent improvement in symptoms relative to treatment as usual, a 40 percent improvement in response rates, and a 49 percent improvement in remission rates, all of which were highly statistically significant.

 

   

Published a new study in Genetics in Medicine comprising over 93,000 patients which showed the challenges associated with ethnicity-based guidelines for carrier screening used by both the American College of Medical Genetics (ACMG) and the American College of Gynecology (ACOG). In the study, following ethnicity-based guidelines from ACOG and ACMG would have resulted in 77 percent of carriers of severe genetic disease being missed.

Performance Pay for Fiscal Year 2020

As noted above, the compensation structure for executive officers for fiscal 2020 approved in September 2019 differed from our compensation structure going forward. In applying the fiscal year 2020 compensation plan, however, our Compensation Committee incorporated the themes of our new compensation structure by heavily weighting Company financial performance in fiscal 2020. The Committee also took into account the impact of COVID-19 on the Company’s business. Thus, the Compensation Committee approved the following features of fiscal 2020 compensation for NEOs and executive officers.

 

 

awarded fiscal year 2020 annual bonuses to our NEOs at 38 to 50 percent of target based on each NEO’s MBOs score reflecting the degree to which individual Company objectives were achieved (as part of our effort to reduce expenses during the COVID-19 pandemic, the bonuses were paid this year in the form of a restricted stock unit grant which vests over a two-year period rather than in cash);

 

 

awarded no cash payments under our fiscal year 2018-2020 three-year, long term cash incentive plan as the target metrics were not achieved;

 

 

Withheld any pay increases to our executive officer salaries until at least January 1, 2021; and

 

 

awarded long-term equity incentive compensation in the form of 12 RSUs, vesting over a four-year period, and 12 PSUs, where the final number of shares awarded depends on Company financial performance (and also vesting over a four-year period).

The below chart shows CEO pay by year. For fiscal year 2020 the chart shows the combined total compensation of both Mr. Riggsbee and Mr. Capone:

 

LOGO

 

 

LOGO

  

 

35


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

Say-on-Pay Results

At our last annual meeting of stockholders in December 2019, we held a stockholder advisory vote on the fiscal year 2019 compensation of our NEOs. This is generally referred to as a ‘‘Say-on-Pay’’ vote. ISS and Glass Lewis recommended for the approval of our Say-on-Pay vote and our stockholders approved the compensation of our NEOs with 91 percent of stockholder votes cast in favor of our Say-on-Pay resolution for fiscal year 2019. Notwithstanding this high approval percentage, we continued our outreach to our stockholders to identify and understand feedback that they may have about our executive compensation with the goal of sustaining a high level of approval. This ISS, Glass Lewis, and stockholder feedback was considered in devising the new compensation structure for the 2020 transition period and the Compensation Committee’s decisions on fiscal 2020 compensation, both discussed in detail above. The Compensation Committee will monitor further stakeholder feedback, Company performance, and market developments for potential further improvements to the Company’s compensation structure for executive officers.

Pay Practices

Additionally, we have adopted other practices that reflect the high standards our Compensation Committee seeks to attain for our compensation philosophy and pay practices, such as:

 

   

A significant portion of equity granted to all executive officers, not only NEOs, will be restricted stock units subject to predetermined, objective, formula-based, financial performance metrics;

 

   

The period required for full vesting of restricted stock units—other than in exceptional cases, such as the two-year vesting for RSUs granted in lieu of cash bonuses in August 2020—shall be greater than four years;

 

   

Stock ownership guidelines for our directors (three times annual cash retainer) and executive officers (for President and CEO, three times annual base salary, and for other executive officers, two times annual base salary);

 

   

Prohibiting hedging the economic risk of holding our stock, including trading in our stock on a short-term basis, short sales of our stock and similar transactions, for which waivers are not granted;

 

   

Prohibiting any tax gross-up payments by the Company with respect to compensation paid to any employee or director;

 

   

Prohibiting executives and directors from engaging in any transaction in which they may profit from short-term speculative swings in the value of the Company’s securities. This includes ‘‘short sales’’ (selling borrowed securities that the seller hopes can be purchased at a lower price in the future) or ‘‘short sales against the box’’ (selling owned, but not delivered securities), and ‘‘put’’ and ‘‘call’’ options;

 

   

Prohibiting the pledge or use of our stock to secure a margin or other loan, for which waivers are not granted;

 

   

Prohibiting the Company’s repurchase of underwater stock options;

 

   

Prohibiting the repricing of stock options and other awards without stockholder approval;

 

   

Prohibiting the grant of in-the-money stock options; and

 

   

Employing each executive officer on an ‘‘at will’’ basis without any guarantee as to employment term, salary, or bonus.

CEO Pay Ratio

The following is a reasonable estimate prepared under the Securities and Exchange Commission (SEC) rules, of the ratio of the annual total compensation of our President and Chief Executive Officer to the median of the annual total compensation of our other employees. We determined that as of April 30, 2020 our employee population consisted of approximately 2,609 U.S. employees. All international employees were excluded in the 5% de minimis exemption adjustment as permitted by SEC rules. We then selected our median employee based on the W-2 calculated income of our U.S. employees as of December 31, 2019. For employees hired on or after January 1, 2020, we used their W-2 income earned as of April 30, 2020.

 

 

36

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

For Fiscal Year 2020:

 

   

The annual total compensation of the employee identified at median of the Company (excluding the CEO) was $89,031;

 

   

As disclosed in the summary compensation table, the annual total compensation of our President and CEO for purposes of determining the CEO Pay Ratio was $10,377,799 which combines the total compensation for Mr. Capone and Mr. Riggsbee for fiscal year 2020; and

 

   

based on this information, for fiscal year 2020, the ratio of the annual total compensation of our President and CEO to the median of the annual total compensation of all other U.S. employees was estimated to be 117 to 1.

This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodologies prescribed by the SEC. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Using consistently applied measures, we did not make any assumptions, adjustments or estimates with respect to base pay and we did not annualize compensation for any employee not employed for the entire year.

Due to the flexibility afforded by the rules of the SEC in calculating the pay ratio amount, the ratio calculated may not be comparable to the CEO pay ratio presented by other companies.

Fiscal Year 2020 Named Executive Officer Compensation

Elements of our Compensation Program

In recent years up to and including fiscal 2020, the compensation program for our executive officers consisted principally of a base salary, an annual cash incentive bonus, long-term compensation in the form of a three-year cash incentive bonus award, and equity incentive compensation in the form of restricted stock units with a performance-based factor applicable to our NEOs. While each of these components of our compensation program are discussed in detail in the following pages, the following is a brief introduction:

Base Salary: An annual base salary provides the foundation of our compensation program and ensures that the executive officer is being paid ongoing compensation, which allows us to attract and retain high-quality talent.

Annual Cash Bonus: The annual cash incentive bonus forms an important part of our compensation strategy by providing an incentive to reward short-term performance as measured by Company performance and accomplishment of Individual MBOs.

Long-Term Cash Bonus: The long-term cash incentive bonus award has been phased out starting in the 2020 transition period and calendar 2021 as the Compensation Committee emphasizes equity for long-term incentive compensation going forward. For plans instituted September 2019 or before, payments will continue to be made to the extent required metrics are achieved, but no new plans will be instituted starting in September 2020. As noted herein, required metrics were not achieved and no payment was made under the plan established in fiscal 2018 and potentially payable in September 2020.

Equity: Equity incentive compensation formed an important part of our previous compensation strategy and will be further emphasized going forward. These equity grants reward our executive officers for the long-term performance of Myriad and help to ensure that our executive officers have a stake in our long-term success by providing an incentive to improve our overall growth and value. For example, under our refocused equity grants, financial and share price performance metrics are included that align with our strategic goals and objectives and thus align the executive officers’ interests with stockholders’ long-term interests.

The Compensation Committee, in collaboration with management, attempts to develop an overall compensation program that incentivizes the executive officers to achieve their objectives without encouraging them to take excessive risks to the business. We believe that this is accomplished through the balance of the various elements of our compensation program.

 

 

LOGO

  

 

37


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

Formulating and Setting Executive Compensation

The Compensation Committee is responsible for formulating, evaluating and approving the compensation, including the award of equity compensation, for our executive officers, including our President and CEO. The Compensation Committee also assists the full board in establishing appropriate incentive compensation and equity-based plans generally for all employees and is responsible for administering these plans.

For fiscal year 2020, the Compensation Committee retained Mercer for the purpose of updating our peer group of companies and to provide competitive market data on the salary, short-term incentive compensation and long-term incentive compensation of executive officers at comparable companies within our industry. The Compensation Committee uses this competitive market data on compensation in determining annual salary compensation, short-term (annual) incentive compensation and long-term incentive compensation (both cash and equity incentive compensation) for the President and CEO and other executive officers of the Company (the ‘‘2020 Mercer Executive Compensation Review’’).

As a basis for the source market data for the 2020 Mercer Executive Compensation Review, Mercer utilized compensation data from the following group of 12 peer companies. Mercer recommended that we retain nine companies from last year’s peer group and added three new companies. We believe the selected peer group of companies reflects our industry and aligns with the ISS and Glass Lewis selected peer group for Myriad. Presently, 9 of the 12 companies in our peer group are companies which were selected by ISS as part of ISS’s compensation pay review from last year, and 8 of the 12 companies in our peer group of companies are companies selected by Glass Lewis as part of Glass Lewis’ compensation pay review from last year. Only one of the 12 companies in our peer group were not in either the ISS or Glass Lewis peer group from last year.

 

Alkermes plc    BioMarin Pharmaceutical Inc.    Bio-Techne Corp.
Exact Sciences Corporation    Exelixis Inc.    Jazz Pharmaceuticals plc
lncyte Corporation    lonis Pharmaceuticals, Inc    Neogenomics, Inc.
Neurocrine Biosciences Inc.    Seattle Genetics, Inc.    United Therapeutics Corporation

In addition, Mercer gathered competitive market data from published survey data in the biotech industry for similarly sized entities as reflected in the 2019 Mercer US Global Premium Executive Remuneration Suite and the 2020 Radford Global Life Sciences Survey. To determine competitive market compensation, where possible, composite survey data were equally blended with the proxy data from our peer group set forth above. Compensation data for the peer group were collected from available proxy-disclosed data. This information was gathered and analyzed for the 25th, 50th and 75th percentiles for annual salary, short-term incentive pay elements and long-term incentive pay elements. Where possible, our executive officers were matched to appropriate proxy and survey positions based on job content and level of responsibility. Proxy-based and survey-based salaries were aged to 2020 at an annual rate of 3.5 percent, the average 2019/2020 salary increase for executives in the U.S. Restricted stock units were valued at fair market value (the closing price of our common stock) on the date of grant.

We believe that the compensation information obtained from the 2020 Mercer Executive Compensation Review provides us appropriate compensation data and benchmarks, because it is derived from companies that are in our industry, share similar corporate structures, and have similar factors such as number of employees, market value, revenues, net income, product pipeline and gross margins. Through Mercer, we have selected those companies that we believe represent the various factors of our business as outlined above.

Utilizing the composite peer group data provided to us in the 2020 Mercer Executive Compensation Review, the Compensation Committee analyzed, among other criteria, the average salary, short-term incentive bonus compensation and long-term incentive bonus compensation (both cash and equity compensation) for each of our executive officers at the 25th, 50th and 75th percentile ranges. In addition, for long-term incentive equity compensation, the Compensation Committee analyzed, among other criteria, the average equity compensation for each of our executive officers at the 25th, 50th and 75th percentile range from the Mercer composite compensation data. The Compensation Committee also analyzed our equity burn rate, issued equity overhang, total equity overhang and stockholder value transfer. Finally, the Compensation Committee considered the number of restricted stock units awarded to executive officers as a group, as compared to all restricted stock units awarded. In so doing, the Compensation Committee noted that this ratio has become increasingly

 

 

38

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

weighted towards overall employees based upon recent initiatives to increase equity ownership among a broader set of Myriad employees. For example, in fiscal year 2020 all Company employees with management roles received stock-based compensation and all employees ranked as top-25 percent employees in annual merit reviews received a small equity grant.

The Compensation Committee has approved a pay-for-performance philosophy for the compensation of our executive officers that is intended, in general, to provide base salary, bonus and total compensation within the 50th to 75th percentile of comparable companies in our industry taking into account the financial performance of the Company. However, we may award compensation above the 75th percentile when deemed appropriate to further promote and achieve the primary objectives of our compensation programs. The comparable group of companies on which we rely to corroborate our determinations are those represented by the peer groups utilized in the Mercer Executive Compensation Review and those that participated in the industry survey reports used by Mercer. Within the scope of this pay-for-performance philosophy, we have determined the components of each executive’s compensation package based on various factors, including: the executive’s particular background, training and relevant work experience; the executive’s role and responsibilities and the compensation paid to similar persons in comparable companies represented in the compensation data that we utilized; the demand for individuals with the executive’s specific talents and expertise and our ability to attract and retain comparable talent; Individual MBOs; the other expectations of the executive for the position; and the comparison to other executives within our Company having similar skills and experience levels and responsibilities.

Incident to the change from a July-June fiscal year to a calendar year, the Compensation Committee approved full-year goals for all forms of variable compensation for the 2020 transition period, which will consist of the six months between July 1, 2020 and December 31, 2020, with the recognition that these goals will likely be re-evaluated at the start of the calendar year in January 2021.

Base Salary

Each year we evaluate base salaries as part of our management performance program, and establish each executive’s base salary for the ensuing year. In establishing base salaries, we assess the executive officer’s performance in each of the areas of their individual MBOs, the financial performance of the Company in the areas of responsibility of the executive officer, the overall financial performance of the Company, the experience of the executive, the executive’s role and responsibilities and particular background, and other significant accomplishments and contributions of the executive officer. An executive’s base salary is also evaluated together with other components of the executive’s compensation.

For fiscal year 2020, the base salary of our President and CEO and CFO and Treasurer and our named executive officers were increased by an average of 4.4% (as compared to fiscal 2019) and all were between the 50 to 75 percent range of our peer group. For the 2020 transition period, no salary increases were made in part due to the impact on our business from the COVID-19 global pandemic. There will be no increase to the salary of our President and CEO in the 2020 transition period because he began his service, and his salary was determined, within such period. Salaries may be revisited after our transition to a calendar fiscal year, starting on January 1, 2021. Furthermore, salaries for our named executive officers were reduced by 30 percent for three months for the pay periods of April 15, 2020 through July 15, 2020 to reduce expenses during the peak impact period from the COVID-19 pandemic to date. This led to lower salary payments to our named executive officers during fiscal year 2020 and will lead to lower payments in the 2020 transition period. The apparent year-over-year increases in salaries for our named executive officers (where applicable) shown in the table below are attributable to the majority of this temporary pay reduction falling in fiscal year 2020 rather than in the 2020 transition period (while the original annual base salary amounts remained the same).

 

 

LOGO

  

 

39


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 Name and Position    2020
Transition
Period
Base Salary
($)(1)
    Fiscal 2020
Base Salary
($)
    %      
Increase       
 

 R. Bryan Riggsbee

      

Interim President and Chief Executive Officer, Chief

      

Financial Officer and Treasurer

     477,000       552,796 (2)      (14%)  

 Mark C. Capone

      

Former President and Chief Executive Officer

     0 (3)       870,560       N/A        

 Alexander Ford

      

Former Chief Operating Officer.

     557,000 (4)      513,271       9%  

 Jerry S. Lanchbury, Ph.D.

      

Chief Scientific Officer

     519,000       493,496       5%  

 Nicole Lambert

      

Group President Myriad Women’s Health, Oncology, and

      

International

     420,000       386,859       9%  

 Bernard F. Tobin

      

Former President, Autoimmune

     0 (5)       431,295       N/A        

 Gary A. King

      

Former Executive Vice President of Myriad International

 

    

 

428,000

 

(6)  

 

   

 

405,725

 

 

 

   

 

5%

 

 

 

 

(1)

2020 transition period base salary figures are annualized.

 

(2)

Mr. Riggsbee’s fiscal year 2020 salary consists of his partial year salary of $483,000 while he served as Chief Financial Officer and Treasurer, his partial year salary of $723,000 while he served as interim President and Chief Executive Officer, with the application of the temporary salary reductions due to the global coronavirus pandemic.

 

(3)

Mr. Capone resigned as Chief Executive Officer effective February 6, 2020 and will not receive a salary for the 2020 transition period.

 

(4)

Mr. Ford resigned from the Company effective October 2, 2020.

 

(5)

Mr. Tobin’s position was eliminated on May 1, 2020 as part of Myriad’s leadership restructuring and he will not receive a salary in the 2020 transition period.

 

(6)

Mr. King retired from the Company on October 1, 2020, at which point he entered a consulting agreement under which he will continue to provide consulting and transitional services to the Company until December 31, 2020 (which period may be extended by mutual agreement of the parties). Effective April 1, 2020, Mr.King was no longer an executive officer of the Company.

The decision to delay increasing our executive officers’ base salary for the 2020 transition period reflects the need to monitor expenses while we navigate the global coronavirus pandemic, and we plan to reassess this decision no earlier than January 1, 2021.

Annual Cash Incentive Bonus

The annual cash incentive bonus amount is determined as part of our management performance program. The Compensation Committee assesses (a) the Company’s performance against specific, objective financial metrics and (b) the executive officer’s performance against each of their individual MBOs.

For fiscal year 2020, for purposes of determining the annual cash incentive bonuses paid to our executive officers including our President and CEO, the Compensation Committee used a formulaic approach, based on a target incentive bonus as a percentage of base salary determined in early fiscal year 2020, Company performance, and the achievement of Individual MBOs. The target incentive bonus as a percentage of base salary for each executive officer (other than our President and CEO) ranged from 45 to 60 percent, depending on the responsibilities and experience of the executive officer, and was based on the target incentive bonus percentage from our peer group for each of the individual executive officers. For our former President and CEO the target incentive bonus as a percentage of base salary was 100 percent. Our Interim President and CEO also had a target incentive bonus as a percentage of base salary of 100 percent for the period in fiscal year 2020 in which he served as Interim President and CEO. The annual cash incentive bonus amount for each executive officer and our President and CEO was then determined based on the following formula:

(Annual Salary) * (Target Bonus %) * (Individual MBO Achievement) * 50% (Company performance) = Bonus Amount

 

 

40

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

The 50% multiplier was an across the board reduction based on the Company’s financial underperformance in fiscal 2020, specifically total revenue of $639 million and adjusted operating loss of ($29) million. Each executive officer was also scored on his or her individual MBOs, as discussed below for our NEOs under ‘‘Named Executive Officer Performance for Fiscal 2020’’. The MBO Performance Goals Score for the executive officer group ranged from 85 to 100 percent. Both Mr. Capone and Mr. Tobin were paid a percentage of their accrued bonus in cash pursuant to their separation agreements. In order to preserve cash, the Board decided to pay the 2020 MBO bonuses for all other named executive officers in the form of a one-time restricted stock unit grant vesting over two years, with a grant date value equivalent to the cash bonus amount earned by such executive officer as determined by the Compensation Committee.

The Compensation Committee determined the annual cash incentive bonuses for our NEOs for fiscal year 2020 (which were paid in the form of a restricted stock unit grant) as set forth in the chart below.

 

 Name and Position   

Target Incentive

Bonus (as a % of

Fiscal 2020

Base Salary)

    

MBO

Performance

Goals Score

(as a %)

    

Company

Multiplier

(as a %)

    

Total

Performance

Factor

    

Fiscal 2020

Bonus

Payment
($)(1)

 

 R. Bryan Riggsbee
Chief Financial Officer and
Treasurer

     60        35        50        18        29,584  

Interim President and Chief
Executive Officer

     100        100        50        50        150,625  

 Mark C. Capone
Former President and Chief
Executive Officer

     100        NA        NA        NA        184,211  

 Alexander Ford
Former Chief Operating Officer

     60        89        50        45        150,643  

 Jerry S. Lanchbury, Ph.D.
Chief Scientific Officer

     50        100        50        50        131,599  

 Nicole Lambert
Group President Myriad
Women’s Health, Oncology,
and International

     50        94        50        44        99,934  

 Bernard J. Tobin
Former President Myriad
Autoimmune

     50        NA        NA        NA        95,163  

 Gary A. King
Former Executive Vice President
of Myriad International

 

    

 

50

 

 

 

    

 

100

 

 

 

    

 

50

 

 

 

    

 

50

 

 

 

    

 

108,193

 

 

 

(1)

Bonuses were paid in the form of RSUs with two-year vesting with the exception of Mr. Capone and Mr. Tobin, whose bonuses were paid in cash pursuant to their separation agreements.

We believe that this cash incentive bonus compensation, structured as a share grant rather than a cash payment, was appropriate based on the performance of the Company in fiscal 2020.

For the 2020 transition period, the Compensation Committee has decided to change the components for determining the annual cash incentive bonus for executive officers that were used for fiscal year 2020, while retaining the same overall formulaic approach. The general formula for calculating bonus amounts for the 2020 transition period, and likely continuing for calendar year 2021, is as follows:

(Annual Salary) * (Target Bonus %) * [F*(Company Financial Performance) + G*(Individual MBO Achievement)] = Bonus Amount

Where F = weighting of Company financial metrics; G = weighting of individual MBOs; and F will be weighted more heavily than G.

 

 

LOGO

  

 

41


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

Application of this new formula will focus primarily on the achievement of revenue and operating profit targets for the year, such that these financial metrics will be weighted more heavily than individual performance goals. For example, for the 2020 transition period the Compensation Committee weighted the financial metrics at 70% and the individual MBOs at 30%.

The Compensation Committee has also established the following target incentive bonus percentages for our new President and CEO and for our NEOs who are currently serving as executive officers, which will be used in determining annual cash incentive bonus amounts for 2020 transition period performance. With the exception of the increase for Ms. Lambert, these are unchanged from the targets for each position that were established for fiscal year 2020.

 

 Executive Officer   

Target Incentive Bonus
(% of base salary for

2020 Transition Period)

 Paul J. Diaz
President and Chief Executive Officer

   100

 R. Bryan Riggsbee
Chief Financial Officer and Treasurer

     60

 Jerry S. Lanchbury
Chief Scientific Officer

     50

 Nicole Lambert
Group President of Myriad Women’s Health, Oncology, and International

 

     60

 

Long-Term Incentive Awards

To incentivize and reward long-term performance by our executives, we have historically provided two forms of long-term incentive compensation: a three-year cash incentive bonus and initial and annual equity awards.

Three-Year Cash Incentive Bonus. In December 2012, the Compensation Committee established a long-term cash incentive bonus program for our executive officers based on predetermined, objective financial formula-based performance targets to be accomplished at the end of the third ensuing fiscal year. In September 2020, the Compensation Committee discontinued this program, such that no further plans will be instituted. However, payouts over the next two fiscal years, under plans instituted before September 2020, may still be made under the terms of each such plan as described below.

For any amount to be paid under these three-year cash bonus plans, the minimum predetermined financial metric thresholds must be surpassed; otherwise, no bonus amount is paid. As reflected in the following table, the financial metrics for these payouts are reviewed and determined when each three-year award is established. The three-year incentive bonus award amount is based on a target bonus amount as a percentage of base salary of 20 percent for our President and CEO and 15 percent for our other executive officers. For all executive officers, the bonus amount is capped at 150% of the target bonus. Based on the Company’s financial performance, we have only made a payout under our long-term cash incentive bonus program for the three-year performance periods ending with FY2015 and FY2019. For the other three-year performance periods ending in FY2016, FY2017, FY2018, and FY2020, none of the target thresholds were achieved, so no payouts were made.

 

 

42

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

The following table summarizes each of the three-year cash incentive awards established for our executive officers.

 

Date of

Award

 

Three-Year

Performance

Period

  Performance Criteria   

Payout Under

Plan

December 2012

  FY 2013-2015   Revenue (50%), EBITDA (25%) and EPS (25%)    Payout at 47.55% of Target Award

September 2013

  FY 2014-2016   Revenue (50%) and EBITDA (50%)    No Payout

September 2014

  FY 2015-2017   Revenue (50%) and Net Income (50%)    No Payout

September 2015

  FY 2016-2018   Revenue (50%) and EBITDA (50%)    No Payout

September 2016

  FY 2017-2019   Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%)    Payout at 34% of Target Award

September 2017

  FY 2018-2020   Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%)    No Payout

September 2018

  FY 2019-2021   Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%)    TBD

September 2019

  FY 2020-2022  

Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%)

 

   TBD

Initial Equity Awards. Executives who join us, who are often granted equity, are granted restricted stock unit awards. The amount of the initial restricted stock unit award is determined based on the executive’s position and analysis of the competitive practices of the companies similar in size as represented in the compensation data that we review with the goal of creating a total compensation package for new executives that is competitive with other similar companies and that will enable us to attract high quality management personnel. One-fourth of each initial equity award vests on an annual basis over four-plus years.

Annual Equity Incentive Awards. In response to comments from our stockholders, we will continue to issue long-term equity incentive compensation grants in restricted stock units. Historically these grants have included entirely time-based vesting for all executive officers other than expected NEOs. For these time-based RSUs, one-fourth of the units granted vested on an annual basis over a period of four years.

For our NEOs, all restricted stock units awarded were subject to achievement of a predetermined, formula-based, financial target that must have been achieved in order for the award to commence vesting. These performance-based RSUs are referred to as PSUs. Thus, for our NEOs, the actual number of units earned was determined based on the percentage achievement of the predetermined financial target with no award earned if the minimum threshold was not achieved; thereafter, and only if the minimum threshold was achieved, vesting of the award was based on the NEO’s continued employment with us. Once the final number of shares to be awarded was determined, these vested in the same way as the time-based RSUs.

For the 2020 transition period, all executive officers, expected NEOs and others, were awarded a mix of 50% time-based RSUs and 50% PSUs. The performance metrics for these PSUs will be measured against earnings per share and relative total shareholder return for the period from July 1, 2020 to June 30, 2021. We believe this mix, especially these metrics for the PSU portion of equity grants, better aligns executive incentives with long-term shareholder interests by allowing stock performance to impact the amount of equity awarded to executive officers.

In determining the amount of equity compensation to be awarded, the Compensation Committee considers various factors, including our financial and operating performance for the applicable period; the executive officer’s contribution to our performance; the anticipated contribution of the executive officer to our future

 

 

LOGO

  

 

43


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

performance; the accomplishments of the executive officer as measured by achievement of MBOs; a review of compensation for comparable positions in our peer group from our benchmarking studies; and the total compensation of the executive officer and the anticipated retentive effect of the grant of additional equity compensation. We also take into consideration the total number of outstanding shares of our common stock, the relative dilution to stockholders, as well as our gross equity burn rate, issued equity overhang and total equity overhang. The size of the restricted stock unit award generally increases as the rank and responsibilities of the executive officer increases.

Restricted stock unit awards are made once a year at our Compensation Committee meeting held in connection with the Board of Director meetings that are generally held in September. The Board customarily determines the dates of its meetings for the ensuing year at a meeting of the Board in the preceding year. Thus, the dates on which equity compensation is granted are set well in advance. The Compensation Committee does not time the grant of equity compensation with respect to the release of material nonpublic information, whether or not that information may favorably or unfavorably impact the price of our common stock. Restricted stock unit awards for the executive officers, including our President and CEO, are approved by the Compensation Committee.

Based on the 2020 Mercer Executive Compensation Review, which calculated market annual guidelines at the 50th and 75th percentile, the long-term incentive value of the annual restricted stock unit awards made to our executive officers on October 8, 2020, based on fiscal year 2020 performance were below the 50th percentile. For our NEOs, it was determined, based on our revenues for fiscal year 2020, and adjusted for the impact of the COVID-19 pandemic, that the financial performance metric for fiscal year 2020 associated with the grant of these restricted stock units was achieved at the 82 percent threshold; hence, there was a reduction in the number of restricted stock units originally awarded to our NEOs. The long-term incentive value of the annual restricted stock unit awards made to our NEOs in fiscal year 2020 is reported in the table for 2020 Fiscal Year Grants of Plan Based Awards and was determined at their grant date fair value calculated in accordance with ASC Topic 718 based on achieving 82 percent of the award.

We felt the RSU award levels were appropriate based on the comparative long-term peer group compensation data from the 2020 Mercer Executive Compensation Review, given the Company’s performance relative to its peers, the individual accomplishments of our NEOs during fiscal year 2020 relative to their MBOs and our goal of continuing to place an increased weighting of compensation on long term equity compensation. We also believe these equity awards are consistent with our goal of placing our NEOs in the 50th-75th percentile and are appropriate based upon the Company’s financial performance.

Compensation Objectives

The primary objectives of our Compensation Committee in establishing and maintaining our executive compensation programs are to:

 

   

Attract and retain the best possible executive talent;

 

   

Motivate our executive officers to enhance our growth and profitability;

 

   

Increase long-term stockholder value; and

 

   

Reward the executive officers for their contribution to our growth, profitability and increased stockholder value through the recognition of individual leadership, initiatives, achievements and other contributions.

The specific directives of the Compensation Committee are to provide appropriate short and long-term compensation and incentives, in the form of cash and equity, that motivate and reward the accomplishment of individual and corporate objectives and that align executive officer compensation with the creation of stockholder value. Though the greater weight in determining executive compensation will be given to objective financial metrics, such as revenue and adjusted operating income, the Compensation Committee has adopted and implemented a compensation plan where our executive officers’ compensation is based in part on a variety of factors set forth in MBOs.

 

 

44

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Establishment and Use of Management Business Objectives

The Compensation Committee has implemented an annual management performance program for the purpose of establishing annual performance objectives for our executive officers to align their performance with the overall goals and objectives for the Company. This process commences in the fourth quarter of each fiscal year as each executive officer meets with our President and CEO to establish annual MBOs for the ensuing fiscal year. After review and discussion, the President and CEO finalizes the executive officer’s MBOs for the ensuing fiscal year. Similarly, our President and CEO meets with the Compensation Committee at the end of each fiscal year to establish his MBOs for the ensuing fiscal year which, after review and discussion, are finalized by the Compensation Committee. On October 8, 2020, the Compensation Committee approved all MBOs for our executive officers for the 2020 transition period. During the calendar year 2021, additional MBOs are expected to be established and assigned to each executive officer, including our President and CEO.

At the end of the ensuing fiscal year (or the 2020 transition period), each executive officer’s performance for the fiscal year is reviewed, including an assessment by management and the Compensation Committee of the achievement of each executive officer’s respective MBOs. At this time, the President and CEO calculates and recommends to the Compensation Committee an annual cash incentive bonus amount and salary adjustment for the executive officers, other than himself. The Compensation Committee, after further review and discussion with our President and CEO, then determines the annual cash incentive bonus for the concluding fiscal year and base salary amount for the ensuing fiscal year for the executive officers, other than the President and CEO. As noted above, no salary increases were made for the 2020 transition period, given COVID considerations, and any increases will take place at the earliest in calendar year 2021.

In the case of our President and CEO, the Compensation Committee makes its review and determinations for the President and CEO’s salary and annual cash incentive compensation without any recommendations from our President and CEO, who is not present in any portions of the meetings of the Compensation Committee where his compensation is calculated, discussed and approved. At the end of the fiscal year, the Compensation Committee determines the annual salary amount of our President and CEO for the ensuing fiscal year, which determination may be delayed in exceptional circumstances such as the COVID pandemic. The annual cash incentive bonus for our President and CEO is based on the Company’s accomplishment of its financial goals and the President and CEO’s accomplishment of his performance metrics as previously determined by our Compensation Committee. The annual cash incentive bonus amount, salary adjustments, and long-term incentive compensation for our President and CEO are reported to the independent members of the Board of Directors.

The MBOs for each executive officer for each fiscal year consist of individual objectives tailored to each executive.

The MBOs for our NEOs for fiscal year 2020 were as follows:

Mark C. Capone, Former President and CEO — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2020; achieve financial targets for increased revenue potential resulting from new reimbursement coverage decisions; achieve designated milestones to advance the Company’s product pipeline; and achieve Elevate 2020 projects to increase operating income.

Alexander Ford, Former Chief Operating Officer — complete a complete technology and operations assessment; develop organization strategy for technology, billing, customer service, and business unit intelligence services; and improve billing and revenue operations results.

R. Bryan Riggsbee, Interim President and CEO, Chief Financial Officer and Treasurer — achieve financial targets for the second half of fiscal year 2020 from a revenue and earnings per share standpoint; assess the Company’s billing and collection processes to improve the budgeting and forecasting process; and successfully execute the neuroscience business expansion.

Jerry S. Lanchbury, Ph.D., Chief Scientific Officer — complete transition to cloud based laboratory information management system and integrate new technology into the hereditary cancer testing process;

 

 

LOGO

  

 

45


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

validate riskScore in Hispanic ancestry and make progress in other ethnicities; publish Vectra manuscripts for radiographic progression risk and cardiovascular risk; prepare commercial laboratory for myChoice CDx launch; and drive organizational integration in R&D department.

Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International — achieve revenue and operating income targets for the Myriad Women’s Health, Oncology, and International business units; grow new products, and expand guidelines and reimbursement for new products.

Bernard J. Tobin, Former President of Myriad Autoimmune — achieve revenue and operating income targets for the Myriad Autoimmune business unit; increase reimbursement coverage for Vectra; improve Vectra value proposition through product enhancements; and improve patient engagement on repeat testing.

Gary A. King, Former Executive Vice President of International — achieve revenue and operating profit targets for the Myriad International business unit; increase reimbursement for companion diagnostics and EndoPredict outside the United States; develop roadmap for future international products; and divest the German clinic.

For the 2020 transition period, MBOs will be streamlined and, as discussed above, will constitute a proportion of each executive officer’s scoring for cash bonuses that is smaller than the financial metrics of revenue and adjusted operating income.

Named Executive Officer Performance for Fiscal 2020

President and CEO: Based on our financial results for fiscal year 2020, and the degree of accomplishment of Individual MBOs, the Compensation Committee determined that Mr. Riggsbee achieved a Total Performance Factor of 18% for determining his annual cash incentive bonus during his time serving as Chief Financial Officer and Treasurer and a Total Performance Factor of 50% for his time serving as Interim President and Chief Executive Officer. As part of this determination, the Compensation Committee noted the successful navigation of the global coronavirus pandemic, the attainment of additional reimbursement coverage for new products, and key advancements in our product pipeline. Additionally, the Compensation Committee noted the accomplishments of the Company, including under Mr. Riggsbee’s supervision for his time serving as Interim President and Chief Executive Officer, as discussed above under the caption: “Fiscal Year 2020 Performance.”

Other Named Executive Officers: The Compensation Committee determined that the other NEOs had substantially accomplished their respective Individual MBOs based on the accomplishments of the Company as discussed above under the caption: “Fiscal Year 2020 Performance.”

Role of Management in Our Compensation Program

Our management, including our President and CEO, supports the Compensation Committee, attends portions of its meetings upon request, and performs various administrative functions at its request. Our President and CEO provides input to the Compensation Committee on the effectiveness of our compensation program and makes specific recommendations as to the base salary amounts, annual cash incentive bonus amounts, and equity incentive awards for the executive officers, other than for himself. At the end of each fiscal year, our President and CEO evaluates the annual performance of each of our executive officers, including an assessment of the accomplishment of each executive officer’s MBOs, and submits his calculations and recommendations to the Compensation Committee which then determines an annual cash incentive bonus amount for the concluding fiscal year, the base salary amount for the ensuing fiscal year and long term equity incentive compensation for each of the executive officers. Except for our President and CEO, no executive officer is present when the Compensation Committee discusses and determines the salary and bonus amounts and equity compensation to be awarded to the executive officers. Our President and CEO is excused from all meetings, and is not present, where matters pertaining to his compensation are determined and approved by the Compensation Committee.

 

 

46

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Other Compensation

We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance, a 401(k) plan, and a discretionary December holiday bonus. Additionally, we may provide other benefits to new executive officers such as a relocation package or other related compensation as determined on a case-by-case basis. We may also provide certain compensation benefits in connection with the retirement of our executive officers based on their accomplishments and tenure of employment with us.

Termination and Change-in-Control-Based Compensation

We recognize that, as is the case with many publicly held corporations, the possibility of a change in control of the Company, or an abrupt termination for business necessity, exists and that such possibility, and the uncertainty and questions which it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of us and our stockholders. Therefore, we have entered into a new Severance and Change in Control Agreement with each of our executive officers, other than our Chief Executive Officer whose arrangements with respect to severance and change in control of the Company are addressed in his employment agreement with us. This new Severance and Change in Control Agreement differs from past retention agreements with these executive officers, and brings the new agreement into line with the market, by:

 

  -

Increasing the ownership threshold required for a change in control to 50%;

 

  -

Replacing single-trigger accelerated vesting in a change in control with double-trigger vesting (i.e., change in control and termination now required for accelerated vesting and cash severance benefits);

 

  -

Reducing change in control severance payments from 3X salary and bonus to 1X salary and bonus;

 

  -

Reducing benefits (COBRA) payments from 36 months to 12 months; and

 

  -

Introducing severance payments (1X salary and bonus) and equity acceleration (two years of vesting) upon a termination without Cause or for Good Reason not in connection with a change in control.

We believe that the terms of our new Severance and Change in Control Agreement are consistent with those maintained by others in our industry and therefore are important for attracting and retaining key employees who are critical to our long-term success. The potential benefits provided under the Severance and Change in Control Agreement are in addition to the current compensation arrangements we have with our executive officers.

For the payments each of our NEOs is entitled to receive upon termination, including termination incident to a change in control, see “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” later in this proxy statement.

Relationship of Elements of Compensation

As noted above, our compensation structure is primarily comprised of a base salary, an annual cash incentive bonus, and long-term incentive compensation in the form of equity incentive awards. In setting executive compensation, the Compensation Committee considers the aggregate compensation payable to an executive officer and the form of the compensation. The Compensation Committee seeks to achieve an appropriate balance between immediate cash rewards and long-term financial incentives.

We utilize long-term equity incentive compensation in the form of a mix of RSUs and PSUs as a substantial component of compensation. The Compensation Committee views the award of RSUs and PSUs as a primary long-term retention benefit by tying the earning of these awards to a vesting schedule that will be over a period greater than four years for full vesting of restricted stock units. If an employee leaves the Company before the completion of the vesting period, then that employee will not be entitled to any benefit from the non-vested portion of the award. In addition to time-based vesting, PSUs also have performance metrics that, if not met, would require forfeiture of a portion or potentially the entire PSU award regardless of the additional requirement of vesting. We believe that the time-based vesting feature of RSUs and PSUs makes it more attractive to remain as our employee and this arrangement does not require substantial cash payments by the Company.

 

 

LOGO

  

 

47


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

The Compensation Committee reviews from time to time the mix of the compensation elements for executive officers against comparable companies in our industry as represented in the compensation data we utilize. The size and mix of each element in a compensation package is based on the impact of the position on the Company, market practice and overall corporate and individual performance relative to stated corporate goals. The level of incentive compensation typically increases in relation to an executive officer’s responsibilities and ability to meet individual and corporate goals. The Compensation Committee believes that making a significant portion of an executive officer’s compensation contingent on corporate performance more closely aligns the executive officer’s interests with those of our stockholders.

Conclusion

Our compensation policies are designed and are continually being developed to retain and motivate our executive officers and to ultimately reward them for outstanding individual and corporate performance.

Summary Compensation Table

The following table shows the total compensation paid or accrued during the fiscal years indicated to each person who served as our President and Chief Executive Officer or our Chief Financial Officer during the fiscal year ended June 30, 2020, and our three next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended June 30, 2020 and were serving as executive officers as of June 30, 2020. Additionally, it shows the total compensation for two of our former executive officers whose total compensation in fiscal year 2020 would have made them among our top three next most highly compensated executive officers in fiscal year 2020 but who were no longer serving as officers as of June 30, 2020. For details of the impact of their resignations on actual compensation received by Mr. Capone, Mr. Ford, Mr. Tobin, and Mr. King, please see “Narrative Disclosure to Summary Compensation Table and 2020 Fiscal Year Grants of Plan-Based Awards Table.”

 

Name and Principal Position   

Fiscal

Year

  

Salary

($)

  

Stock

Awards

($) (1)

  

Non-Equity

Incentive Plan

Compensation

($) (2) (3)

  

All Other

Compensation

    ($) (4)

  Total ($)

R. Bryan Riggsbee Chief

                            

    Financial Officer and

       2020        552,796        3,461,500        180,209        8,836       4,203,341

    Treasurer; Interim President

       2019        466,650        2,392,500        260,671        19,162       3,138,983

    and Chief Executive Officer

       2018        432,000        1,954,200        254,016        5,366       2,645,582

Mark C. Capone

       2020        870,560        4,489,500        184,211        630,187 (5)        6,174,458

    Former President and Chief

       2019        887,000        7,177,500        802,735        29,449       8,896,684

    Executive Officer and Director

       2018        852,000        5,374,050        817,920        10,980       7,054,950

Alexander Ford

       2020        513,271        1,496,500        150,643        22,629       2,183,043

    Former Chief Operating

       2019        519,168        2,392,500        293,226        26,808       3,231,702

    Officer

       2018        499,200        1,954,200        296,525        11,020       2,760,945

Jerry S. Lanchbury, Ph.D.

       2020        493,496        1,197,200        131,599        6,943       1,829,238

    Chief Scientific Officer

       2019        508,595        1,914,000        250,228        12,927       2,685,750
       2018        493,782        1,628,500        244,422        10,972       2,377,676

Nicole Lambert

       2020        386,859        1,197,200        99,934        20,713       1,704,706

    Group President of Myriad

                            

    Women’s Health, Oncology,

       2019        369,169        416,626        194,198        13,795       993,788

    and International

       2018        319,072        278,474        94,860        10,863       703,269

Bernard F. Tobin

       2020        431,295        1,047,550        95,163        305,037 (6)        1,879,045

    Former President of Myriad

       2019        441,334        1,674,750        199,262        26,162       2,341,508

    Autoimmune

       2018        424,360        1,302,800        201,571        10,950       1,939,681

Gary A. King

                            

    Former Executive Vice

       2020        405,725        808,110        108,193        639,131 (7)        1,961,159

    President International

       2019        383,294        1,291,950        200,079        229,832 (7)        2,105,155

    Operations

 

      

 

2018

 

 

      

 

389,045

 

 

      

 

977,100

 

 

      

 

174,563

 

 

      

 

317,475

 

(7)

 

 
     

 

1,858,183

 

 

(1)  Amounts shown reflect the aggregate grant date fair value of restricted stock unit awards granted in each year presented calculated in accordance with FASB ASC Topic 718. Amounts reflect the maximum potential value of each award assuming the highest level of performance associated with the award and are based on the closing price of our common stock on the Nasdaq Global Select Market on the date of grant of the award. For fiscal year 2020, based on the level of achievement of the applicable performance criteria established on the grant date for these restricted stock unit awards, they were awarded at 82 percent of the prior grant level.

 

(2)  For Mr. Capone, for fiscal year 2018, the amounts reported in this column reflect the actual cash awards paid under our 2013 Executive Incentive Plan to Mr. Capone pursuant to his annual cash incentive bonus award, calculated based on measurement

   

   

 

 

48

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

  against plan metrics and performance results for fiscal year 2017. For fiscal year 2019, the amounts reported in this column reflect the actual annual cash incentive awards paid. For all other NEOs, for fiscal years 2018-2019, the amounts reported in this column reflect the actual annual cash incentive awards paid. No payment was made under our long-term, three-year cash incentive bonus plan which concluded in fiscal years 2017-2018 as our performance goals for that plan were not achieved. For fiscal year 2019 cash payments under the three-year cash incentive bonus plan were paid out at 34 percent of the target. For fiscal year 2020 no cash payments were made under the three-year cash incentive bonus plan as our performance goals for that plan were not achieved.

 

(3)

For fiscal year 2020 the non-equity incentive plan compensation to Mr. Riggsbee, Mr. Ford, Dr. Lanchbury, and Ms. Lambert was paid out as a restricted stock grant with two-year vesting in order to preserve cash given the impact of the global coronavirus pandemic on the business. Payments to Mr. Capone, Mr. Tobin, and Mr. King were in cash.

 

(4)

All amounts shown for fiscal year 2020 consist of an average of $307.87 per year of premiums paid by us with respect to term life insurance for the benefit of each NEO for their respective periods served and the balance of the amount shown for matching contributions made under our 401(k) plan on behalf of each NEO. This also includes a de minimis holiday bonus of $150-$300.

 

(5)

Amounts include $600,231 in severance that Mr. Capone received as part of his severance agreement.

 

(6)

Amounts include $281,096 in severance that Mr. Tobin received as part of this severance agreement.

 

(7)

In addition to the amounts included discussed in Note 4, amounts also include tax payments made by the Company on Mr.  King’s behalf of $306,037, $213,271 and $629,715 in fiscal years 2018, 2019 and 2020, respectively.

2020 Fiscal Year Grants of Plan-Based Awards

The following tables show information regarding grants of non-equity and equity awards that we made during the fiscal year ended June 30, 2020 to each of the executive officers named in the Summary Compensation Table.

 

         Estimated Future Payouts Under
Non-Equity Incentive Plan Awards ($) (1)
   Estimated Future
Payouts Under Equity
Incentive Plan
Awards (#)(2)
  

Grant Date

Fair Value

of Stock

and Option

Name    Grant Date   Threshold    Target    Maximum    Threshold    Target   

Awards

($)(3)

R. Bryan Riggsbee

      

9/25/2019
FY21 3-YR
Award


      54,338        72,450        108,675        35,000        50,000        1,496,500
      
2/08/2020 
(4)
 
                          100,000        1,965,000

Mark C. Capone (5)

      

9/25/2019
FY21 3-YR
Award


      137,760        183,681        275,521        105,000        150,000        4,489,500

Alexander Ford (6)

      

9/25/2019
FY21 3-YR
Award


      63,450        84,600        126,900        35,000        50,000        1,496,500

Jerry S. Lanchbury

      

9/25/2019
FY21 3-YR
Award


      59,175        78,900        118,350        28,000        40,000        1,197,200

Nicole Lambert

      

9/25/2019
FY21 3-YR
Award


      47,840        63,787        95,680        28,000        40,000        1,197,200

Bernard J. Tobin (7)

      

9/25/2019
FY21 3-YR
Award


      51,413        68,550        102,825        24,500        35,000        1,047,550

Gary A. King (8)

      

 

9/25/2019
FY21 3-YR
Award

 



 

      48,687        64,916        97,374        18,900        27,000        808,110

 

(1)  The amounts represent the threshold, target, and maximum amounts awarded to our NEOs under our Three-Year Cash Incentive Bonus Plan for fiscal years 2020-2022. The metrics against which performance is to be measured are discussed in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation- Long Term Incentive Awards Three Year Cash Incentive Bonus Plan.”

 

(2)  The amounts represent the threshold and target (which is also the maximum) number of our shares that may be awarded with respect to the restricted stock unit awards made to our NEOs on September 25, 2019. Based on our level of achievement of the revenue performance criteria established on the grant date for these awards, the number of shares underlying these restricted stock units were awarded at the 82 percent threshold. These shares vest one-fourth per year beginning September 26, 2020.

 

(3)  The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 and are based on the closing price of our common stock on the Nasdaq Global Select Market on September 25, 2019 of $29.93.

 

(4)  Pursuant to Mr. Riggsbee assuming the interim Chief Executive Officer position in February 2020, the Compensation Committee granted him 100,000 restricted stock units. The grant date value of such grant has been calculated in accordance with FASB ASC Topic 718 and is based on the closing price of our common stock on the Nasdaq Global Select Market on February 18, 2020 of $19.65.

 

   

   

   

   

 

 

LOGO

  

 

49


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

(5)

Mark C. Capone resigned from the Company effective February 6, 2020. As such, (a) he will not receive any payment under the FY21 3-YR Award (or any subsequent 3-YR Awards) and (b) no further shares granted to him under any equity incentive plan awards will or have vested after the end of his consulting period on September 30, 2020.

 

(6)

Alec Ford resigned from the Company effective October 2, 2020. As such, (a) he will not receive any payment under the FY21 3-YR Award (or any subsequent 3-YR Awards) and (b) no further shares granted to him under any equity incentive plan awards will or have vested after the date of his resignation.

 

(7)

Bernard J. Tobin left the Company as part of a leadership restructuring effective May 1, 2020. As such, (a) he will not receive any payment under the FY21 3-YR Award (or any subsequent 3-YR Awards) and (b) no further shares granted to him under any equity incentive plan awards will or have vested after the date of his resignation.

 

(8)

Gary A. King retired from the Company on October 1, 2020, is no longer serving as an executive officer, and entered a consulting arrangement with the Company through December 31, 2020. As such, (a) he will not receive any payment under the FY21 3-YR Award (or any subsequent 3-YR Awards) and (b) no further shares granted to him under any equity incentive plan awards are anticipated to vest after his separation date.

Narrative Disclosure to Summary Compensation Table and 2020 Fiscal Year Grants of Plan-Based Awards Table

We have entered into standard form employment agreements with no defined term with each of our NEOs. Pursuant to these agreements, either party may terminate employment without cause at any time upon a specified period of written notice to the other party or immediately with cause upon written notice to the other party. Each employment agreement also provides that the employee will not disclose confidential information of ours during and after employment and includes standard non-competition and non-solicitation provisions. Since the dates of these agreements entered into with our NEOs, the compensation paid to each NEO has been increased and equity awards have been granted, the most recent of which are as discussed below.

Previously, we entered into an Executive Retention Agreement with each of our NEOs under which they were entitled to certain benefits upon a change-in-control. More recently, we replaced these Executive Retention Agreements with a Severance and Change in Control Agreement with each NEO that provides similar benefits, but significantly lower compensation, upon a change in control as well as benefits and compensation upon termination not incident to a change in control. These agreements are discussed below under “Executive Compensation — Potential Payments Upon Termination or Change-in-Control.”

Mr. Riggsbee was appointed to the position of Chief Financial Officer and Treasurer in October, 2014, and entered into the Company’s standard form of employment agreement at that time. During fiscal year 2020, he was appointed interim CEO on February 6, 2020 following the resignation of Mr. Capone and served in this position through August 13, 2020. As determined by our Compensation Committee, he received an annual salary of $552,796 for the fiscal year ended June 30, 2020 which reflected the combination of his salary as Interim President and Chief Executive Officer and Chief Financial Officer and Treasurer during the fiscal year. Mr. Riggsbee will be paid an annual base salary of $477,000 for the fiscal year ending June 30, 2021. His annual MBO incentive bonus for fiscal 2020 was $180,209 as determined by our Compensation Committee and paid out in restricted stock units that vest over a two-year period. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Riggsbee will be entitled to receive up to $108,675 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards —Three-Year Cash Incentive Bonus.” On September 25, 2019, he was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2019, the restricted stock unit award was reduced to 82 percent of the original grant or 41,000 shares. On October 8, 2020, Mr. Riggsbee was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements.

Mr. Capone is our former President and CEO. He was appointed to the position of President and CEO of the Company beginning July 1, 2015 and resigned as CEO effective February 6, 2020. He had previously entered into the Company’s standard form of employment agreement when he was initially hired by the Company in October 2002 as the Vice President of Sales for MGL. Thereafter, in September 2005, he was appointed to the position of Senior Vice President of Sales for MGL. In February 2006, he was appointed to the position of Chief Operating Officer for MGL, and then in March 2010 he was appointed President of MGL. As determined by our Compensation Committee, he received an annual salary of $870,560 for the fiscal year ended June 30, 2020

 

 

50

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

for the time he served as CEO. His actual salary for fiscal year 2020 was $918,045. His annual MBO incentive bonus for fiscal 2020 was $184,211, pursuant to his separation agreement, as approved by our Compensation Committee based on the level of achievement of pre-established performance goals. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Capone would have been entitled to receive up to $275,521 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” However, given he is no longer an employee of the Company, he is no longer eligible for this award. On September 25, 2019, Mr. Capone was granted a restricted stock unit award of 150,000 shares of the Company, subject to time-based and performance-based vesting requirements. These shares will be forfeited given the vesting periods occur following his resignation as CEO. Based on the level of accomplishment of the performance-based metric for fiscal 2020, the restricted stock unit award was reduced to 82 percent of the original grant or 123,000 shares. 25% of these shares (30,750) vested on September 26, 2020, but no further shares under this award will vest since Mr. Capone is no longer employed by the Company.

Mr. Ford is our former Chief Operating Officer. He had previously entered into the Company’s standard form of employment agreement when he was initially hired by the Company in June 2010 as the Vice President of Sales for MGL. Thereafter, in July 2011, he was appointed to the position of GM Preventative Care, and thereafter as MGL’s Chief Commercial Officer in January 2013. Thereafter he was appointed as President of MGL until 2018. Effective October 2, 2020, Mr. Ford resigned his employment at the Company. As determined by our Compensation Committee, Mr. Ford received an annual salary of $513,271 for the fiscal year ended June 30, 2020. His annual MBO incentive bonus for fiscal 2020 was $150,643 as determined by our Compensation Committee and paid out in restricted stock units that, but for his resignation, would have vested over a two-year period. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Ford, but for his resignation, would have been entitled to receive up to $126,900 as of the end of fiscal 2022 if we achieved the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 25, 2019, he was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2020, the restricted stock unit award was reduced to 82 percent of the original grant or 41,000 shares. 25% of those shares vested on September 26, 2020, but the balance will not vest due to Mr. Ford’s resignation. Mr. Ford did not receive a restricted stock unit award for the 2020 transition period given he is no longer an employee.

Dr. Lanchbury was appointed to the position of Senior Vice President, Research in November 2002 and entered into the Company’s standard form of employment agreement at that time. In September 2005, he was promoted to Executive Vice President, Research. In February 2010, Dr. Lanchbury was appointed Chief Scientific Officer. As determined by our Compensation Committee, he received an annual salary of $493,496 for the fiscal year ended June 30, 2020. Dr. Lanchbury will be paid an annual base salary of $519,000 for the fiscal year ending June 30, 2021. His annual MBO incentive bonus for fiscal 2020 was $131,599 as determined by our Compensation Committee and paid out in restricted stock units that vest over a two-year period. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Dr. Lanchbury will be entitled to receive up to $118,350 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 25, 2019, he was granted a restricted stock unit award of 40,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2020, the restricted stock unit award was reduced to 82 percent of the original grant or 32,800 shares. October 8, 2020, Dr. Lanchbury was granted a restricted stock unit award of 48,000 shares of the Company, subject to time-based and performance-based vesting requirements.

Ms. Lambert was appointed to the position of Group President Myriad Women’s Health, Oncology, and International during fiscal year 2020 and entered into the Company’s standard form of employment agreement

 

 

LOGO

  

 

51


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

at that time. Prior to this position she served as the President for Myriad Oncology. As determined by our Compensation Committee, she received an annual salary of $386,859 for the fiscal year ended June 30, 2020. Ms. Lambert will be paid an annual base salary of $420,000 for the fiscal year ending June 30, 2021. Her annual MBO incentive bonus for fiscal 2020 was $99,934 as determined by our Compensation Committee and paid out in restricted stock units that vest over a two-year period. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Ms. Lambert will be entitled to receive up to $95,680 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards —Three-Year Cash Incentive Bonus.” On September 25, 2019, she was granted a restricted stock unit award of 40,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2020, the restricted stock unit award was reduced to 82 percent of the original grant or 32,800 shares. On October 8, 2020, Ms. Lambert was granted a restricted stock unit award of 48,000 shares of the Company, subject to time-based and performance-based vesting requirements.

Mr. Tobin is the former President of Myriad Autoimmune. He was appointed to the position of President of Myriad Autoimmune in December 2014 and entered into the Company’s standard form of employment agreement at that time. As determined by our Compensation Committee, he received an annual salary of $431,295 for the fiscal year ended June 30, 2020 for the time he served in his role and his actual fiscal year 2020 salary was $456,000. Mr. Tobin will not receive a salary for the 2020 transition period as his position was eliminated as part of a leadership restructuring. His annual cash MBO incentive bonus for fiscal 2020 was $95,163 as determined by our Compensation Committee. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Tobin would have been entitled to receive up to $102,825 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” However, given he is no longer an employee of the Company, he is no longer eligible to receive this award. On September 25, 2019, he was granted a restricted stock unit award of 35,000 shares of the Company, subject to time-based and performance-based vesting requirements. Because Mr. Tobin was no longer employed by the Company at the time of the first scheduled vesting, he received and will receive no shares under this award. Mr. Tobin did not receive a restricted stock unit award for the 2020 transition period given he is no longer an employee.

Mr. King is our former Executive Vice President of International. He was appointed to the position of Executive Vice President of International in July 2010 and entered into the Company’s standard form of employment agreement at that time. Mr. King retired from the Company on October 1, 2020, at which point he entered a consulting agreement under which he will continue to provide consulting and transitional services to the Company until December 31, 2020 (which period may be extended by mutual agreement of the parties). As determined by our Compensation Committee, he received an annual salary of $405,725 for the fiscal year ended June 30, 2020. Mr. King was paid an annual base salary of $428,000 for the portion of the 2020 transition period during which he was an employee and will be paid a fee of $10,000 per month during his consulting arrangement. His annual MBO incentive bonus for fiscal 2020 was $108,193 as determined by our Compensation Committee and paid out in restricted stock units that vest over a two-year period. Such shares will only vest in the event Mr. King’s consulting agreement is extended through August 2021. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. King would have been entitled to receive up to $97,374 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” However, Mr. King retired from the Company on October 1, 2020 and consequently is no longer eligible to receive this award. On September 25, 2019, he was granted a restricted stock unit award of 27,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2020, the restricted stock unit award was reduced to 82 percent of the original grant or 22,140 shares. Mr. King did not receive a restricted stock unit award for the 2020 transition period given his retirement from the Company.

 

 

52

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Mr. Diaz was appointed to the position of President and Chief Executive Officer on August 13, 2020, and entered into an employment agreement with the Company at that time. Pursuant to the employment agreement, Mr. Diaz receives an annual salary of $1,000,000. Mr. Diaz’s agreement also provides for a $1,000,000 signing bonus, of which one-half was paid following the commencement of his employment and the remaining one-half will be paid following the one-year anniversary of his employment with the Company. Mr. Diaz is eligible to receive an annual MBO incentive bonus in a target amount equal to 100% of his base salary, and he is also eligible to receive three-year cash incentive awards under our 2013 Executive Incentive Plan. On August 13, 2020, the Board of Directors further authorized the grant to Mr. Diaz, of a restricted stock unit award for 298,954 shares of Myriad’s common stock (the “RSUs”); a performance stock unit award for 298,954 shares (the “PSUs”); a time-based non-qualified stock option for the purchase of 342,040 shares (the “Time-Based Option”); and a performance-based non-qualified stock option for the purchase of 339,088 shares (the ‘‘Performance-Based Option,’’ and all together the “Inducement Awards”). Of the RSUs, 50% will vest on the first anniversary of Mr. Diaz’s commencement date, and the remaining 50% will vest in three equal tranches on each of the second, third and fourth anniversaries of his commencement date. The PSUs are subject to being earned based on achievement of pre-established milestones for the fiscal year ending June 30, 2021 set by the Compensation Committee. To the extent the PSUs are determined to have been earned based on milestone achievement, 25% will vest when they are deemed earned, and the remaining 75% will vest in three equal installments on the following three anniversaries of Mr. Diaz’s commencement date. The Time-Based Options vest in four equal installments on each of the first four anniversaries of Mr. Diaz’s commencement date. The Performance-Based Options vest in five equal installments based on achievement (as measured in the option agreement) of pre-determined stock price increases of Myriad common stock, provided that no portion of the Performance-Based Options may vest earlier than the first anniversary of Mr. Diaz’s commencement date.

Under the terms of Mr. Diaz’s employment agreement, if his employment is terminated without “Cause” or if he is separated from the Company for “Good Reason” (each is defined in the agreement and set forth below), then he will receive: (i) an amount equal to two times his then-current annual base salary and two times his then-current target annual bonus; (ii) a prorated portion of his target annual bonus for the then-current fiscal year; (iii) immediate vesting of RSUs scheduled to vest within four years after termination; (iv) vesting of PSUs for two years following termination to the extent the relevant performance metrics for the PSU grant are achieved; and (v) reimbursement for continued medical benefits until the earlier of 18 months after the date of termination or the date he begins employment with another employer.

If Mr. Diaz’s employment is terminated without “Cause” or if he separates from the Company for “Good Reason”, within three months before or 24 months after a “Change in Control” (as defined in the agreement and set forth below), then he will receive the same benefits described in the preceding paragraph, except that all outstanding and unvested equity grants will immediately vest in full.

As defined in Mr. Diaz’s employment agreement:

 

   

Cause” means: (i) Executive’s gross negligence in the performance of Executive’s duties to the Company; (ii) Executive’s willful misconduct, embezzlement, misappropriation, fraud, or professional dishonesty; (iii) Executive’s material breach of any non-disclosure, invention assignment, non-competition, or similar agreement between Executive and the Company; (iv) Executive’s commission of a felony or of a crime involving moral turpitude; (v) Executive’s willful and material failure to comply with lawful directives of the Board; or (vi) Executive’s willful and material breach of a material provision of any employment agreement between Executive and the Company or willful and material violation of a material provision of any written Company employment policy applicable to its senior executive officers; provided that (A) the Company provides Executive with written notice that the Company intends to terminate Executive’s employment hereunder for one of the circumstances set forth in this Section 2(d) within sixty (60) days of the Board’s knowledge of such circumstance(s) occurring (which notice shall set forth in reasonable detail the circumstance(s) that the Company alleges constitute(s) Cause), (B) in the event that a circumstance described in (iii), (v) or (vi) is capable of being cured, Executive has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) the Company terminates Executive’s

 

 

LOGO

  

 

53


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

 

employment within sixty five (65) days from the date of the notice referred to in clause (A). Conduct shall not be considered “willful” unless done (or omitted to be done) not in good faith and without a reasonable belief that such conduct (or lack thereof) was in the best interest of the Company.

 

   

Good Reason” means: (i) a material diminution in Executive’s duties, authority or responsibilities; (ii) a material diminution in Executive’s Base Salary, other than a reduction of similar magnitude to the base salaries of other Company senior executives if there is a reduction of Company senior executive base salaries generally, or a failure by the Company to provide the compensation and benefits provided for in this Agreement; (iii) any change in Executive’s position such that he is no longer the Company’s CEO reporting solely to the Board; or (iv) a material breach by the Company of this Agreement or any other agreement between the Company and Executive; provided that (A) Executive provides the Company with written notice that Executive intends to terminate Executive’s employment hereunder for one of the circumstances set forth in this Section 2(e) within sixty (60) days of such circumstance occurring (which notice shall set forth in reasonable detail the circumstance(s) that Executive alleges constitute(s) Good Reason), (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) Executive terminates Executive’s employment within sixty five (65) days from the date of the notice referred to in clause (A). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of a specific occurrence of Good Reason shall not disqualify Executive from asserting Good Reason for any subsequent occurrence of Good Reason.

 

   

Change in Control” means the occurrence of any of the following events: (A) Ownership: any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, any subsidiary of the Company, or any employee benefit plan of the Company); or (B) Merger/Sale of Assets: (1) a merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such entity, as the case may be, outstanding immediately after such merger or consolidation; or (2) the sale or disposition by the Company of all or substantially all of the Company’s assets; or (C) Board Change: a change in the Board or its members such that individuals who, as of the Commencement Date (including Executive) or, if later, the date that is one year prior to such change (the later of such two dates referred to herein as the ”Measurement Date”), constitute the Board (the “Incumbent Board”) cease to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Measurement Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, any new members whose election or nomination was so approved, without counting the member and his or her predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.

All annual PSU awards granted to our NEOs before the 2020 transition period are subject to a predetermined, formula-based financial performance metric that must be met in order for these awards to vest annually over a four-plus year period.

In September 2020, the Compensation Committee discontinued the three-year cash incentive award program. Though payments may still be made under plans instituted before the 2020 transition period, no new plans were or will be instituted.

 

 

54

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Outstanding Equity Awards at 2020 Fiscal Year End

The following table shows the grants of stock options and PSUs outstanding on the last day of the fiscal year ended June 30, 2020, to each of our NEOs. We have not granted any stock options that are subject to performance conditions.

 

     Option Awards (1)      Stock Awards  
Name   

Date of

Grant

  

Number of

Securities

Underlying
Unexercised

Options

Exercisable

(#)

 

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

(#)

    

Option

Exercise

Price

($)

    

Option

Expiration

Date

    

Number of

Shares

or Units of

Stock that

Have not

Vested

(#)(2)

    

Market

Value of

Shares

or Units of

Stock that

Have not

Vested

($)(3)

    

Equity

Incentive

Plan Awards:

Number of

Unearned

Shares, Units

or Other Rights

that Have

not Vested

(#)(4)

 

Equity

Incentive

Plan Awards:

Market or

Payout

Value of

Unearned

Shares, Units

or Other Rights

that Have

not Vested

($)(3)

R. Bryan Riggsbee

   09/14/2016                 15,000        170,100       
   09/13/2017                 30,000        340,200       
   09/19/2018                 37,500        425,250       
   09/25/2019                       50,000       567,000  
   02/18/2020                 100,000        1,134,000       

Mark C. Capone

   09/15/2010      25,001       0            $16.53        09/15/2020                                     
   02/23/2011      31,250       0            $18.00        02/23/2021             
   09/13/2011      144,000       0            $19.47        09/13/2022             
   03/07/2012      52,000       0            $23.98        03/07/2022             
   09/12/2012      300,000       0            $27.07        09/12/2022             
   09/17/2013      330,000       0            $26.49        09/17/2021             
   09/14/2016                          41,250        467,775       
   09/13/2017                          41,250        467,775       
   09/19/2018                          37,500        425,250       
   09/25/2019                                37,500       425,250  

Alexander Ford

   09/13/2011      10,551       0            $19.47        09/13/2021                                     
   03/07/2012      4,000       0            $23.98        03/07/2022             
   09/12/2012      35,000       0            $27.07        09/12/2022             
   09/17/2013      55,000       0            $26.49        09/17/2021             
   09/14/2016                          15,000        170,100       
   09/13/2017                          30,000        340,200       
   09/19/2018                          37,500        425,250       
   09/25/2019                                50,000       567,000  

Jerry S. Lanchbury, Ph.D.

   02/23/2011      80,000       0            $18.00        02/23/2021                                     
   09/13/2011      128,000       0            $19.47        09/13/2021             
   03/07/2012      32,000       0            $23.98        03/07/2022             
   09/12/2012      160,000       0            $27.07        09/12/2022             
   09/17/2013      180,000         0            $26.49        09/17/2021             
   09/14/2016                          12,500        141,750       
   09/13/2017                          25,000        283,500       
   09/19/2018                          30,000        340,200       
   09/25/2019                                40,000         453,600    

Nicole Lambert

   09/14/2016                                            2,011        22,805                   
   09/13/2017                          4,274        48,467       
   09/19/2018                          121        1,372       
   09/19/2018                          6,412        72,712       
   09/25/2019                          40,000        453,600       

Gary A. King

   08/03/2010      6,480       0            $14.88        08/03/2020                                     
   02/23/2011      5,555       0            $18.00        02/23/2021             
     09/13/2011      7,432       0            $19.47        09/13/2021                                     

 

 

LOGO

  

 

55


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

     Option Awards (1)      Stock Awards  
Name   

Date of

Grant

    

Number of

Securities

Underlying

Unexercised

Options

Exercisable

(#)

 

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

(#)

   

Option

Exercise

Price

($)

    

Option

Expiration

Date

    

Number of

Shares

or Units of

Stock that

Have not

Vested

(#)(2)

  

Market

Value of

Shares

or Units of

Stock that

Have not

Vested

($)(3)

 

Equity

Incentive

Plan Awards:

Number of

Unearned

Shares, Units

or Other Rights

that Have

not Vested

(#)(4)

    

Equity

Incentive

Plan Awards:

Market or

Payout

Value of

Unearned

Shares, Units

or Other Rights

that Have

not Vested

($)(3)

 
     03/07/2012        6,000       0           $23.98        03/07/2022             
     09/12/2012        130,000       0           $27.07        09/12/2022             
     09/17/2013        110,000         0           $26.49        09/17/2023             
     09/14/2016                  7,500        85,050       
     09/13/2017                  15,000        170,100       
     09/19/2018                  20,250        229,635       
     09/25/2019                  27,000        306,180         

Bernard F. Tobin (5)

                       

 

 

(1)

Stock Option Vesting Schedules:

 

   

Options granted on and between September 14, 2005 through and including September 15, 2010 were granted pursuant to our 2003 Employee, Director and Consultant Stock Option Plan, as amended (the “2003 Plan”) and vested as to 25 percent of the shares per year on each anniversary of the date of grant.

 

   

Options granted beginning on and after February 23, 2011 were granted pursuant to our 2010 Plan and vested as to 25 percent of the shares per year on each anniversary date of the grant.

 

(2)

Restricted stock units vest 1/4 per year beginning no earlier that at least the annual anniversary of the grant date on which the restricted stock units were granted. Restricted stock units awarded to Mr. Riggsbee in connection with commencement of employment vest 1/4 per year from the date of grant. The vesting of unvested restricted stock unit awards held by our NEOs will accelerate upon termination with or without a change of control of Myriad in accordance with the Severance and Change in Control Agreements described below under “Potential Payments Upon Termination or Change-in-Control.”

 

(3)

The market value of restricted stock unit awards is determined by multiplying the number of shares by $11.34, the closing price of our common stock on the Nasdaq Global Select Market on June 30, 2020, the last day of our fiscal year.

 

(4)

On September 24, 2020, based on the degree of accomplishment of the revenue performance criteria for our fiscal year 2020, the number of shares actually earned was 82% of the award. The restricted stock units began vesting 1/4 per year on September 26, 2020.

 

(5)

Mr. Tobin’s position was eliminated as part of a management restructuring effective May 1, 2020 and, consequently, he forfeited all unvested awards at that time.

2020 Fiscal-Year Option Exercises and Stock Vested

The following table shows information regarding exercises of options to purchase our common stock and vesting of restricted stock unit awards by our NEOs during the fiscal year ended June 30, 2020.

 

     Option Awards   Stock Awards
Name   

Number of Shares

Acquired on

Exercise (#)

 

Value Realized on

Exercise ($) (1)

 

Number of Shares

Acquired on

Vesting (#)

 

Value Realized

on Vesting

($)(2)

R. Bryan Riggsbee

     None             53,800       1,575,232  

Mark C. Capone

     137,000       2,413,670       137,801       4,045,180  

Alexander Ford

     1,307       14,220       46,000       1,351,918  

Jerry S. Lanchbury, Ph.D.

     None             46,126       1,349,187  

Nicole Lambert

     None             8,341       244,415  

Bernard F. Tobin

     None             28,750       847,488  

Gary A. King

 

    

 

80,400

 

   

 

   

 

1,218,409

 

   

 

   

 

30,375

 

   

 

   

 

888,161

 

   

 

(1)

Amounts shown in this column do not necessarily represent the actual value realized from the sale of the shares acquired upon exercise of the options because the shares may not be sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise.

 

(2)

Amounts shown in this column represent the market value of restricted stock unit awards upon vesting as determined by multiplying the number of shares by $29.93, the closing price of our common stock on the Nasdaq Global Select Market on September 25, 2019, for shares which vested on that date, and by $28.63, the closing price of our common stock on the Nasdaq Global Select Market on September 30, 2019, for shares which vested on that date.

 

 

56

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Pension Benefits

We do not have any qualified or non-qualified defined pension benefit plans.

Nonqualified Deferred Compensation

We do not have any nonqualified defined contribution plans or other deferred compensation plans.

Potential Payments Upon Termination or Change-in-Control

Beginning October 9, 2020 (and thereafter for subsequently appointed executive officers), we entered into new Severance and Change in Control Agreements with our executive officers other than our Chief Executive Officer.

Under the terms of these Agreements, if the employment of an executive officer is terminated without “Cause” or if the executive officer separates from Myriad for “Good Reason” (each is defined in the agreement and set forth below), then the executive officer will receive: (i) an amount equal to the executive’s then-current annual base salary and the executive’s then-current target annual bonus, any compensation previously deferred and any compensation previously deferred; (ii) a prorated portion of the executive’s target annual bonus for the then-current fiscal year; (iii) immediate vesting of RSUs scheduled to vest within two years after termination; (iv) vesting of PSUs for two years following termination to the extent the relevant performance metrics for the PSU grant are achieved; and (v) reimbursement for continued medical benefits until the earlier of 12 months after the date of termination or the date the executive begins employment with another employer.

If the employment of an executive officer is terminated without “Cause” or if the executive officer separates from Myriad for ‘‘Good Reason’’, within three months before or 24 months after a “Change in Control” (as defined in the agreement and set forth below), then the executive officer will receive the same benefits described in the preceding paragraph, except that all outstanding and unvested equity grants will immediately vest in full.

As defined in the Severance and Change-in-Control Agreements:

 

   

Cause” means: (i) Employee’s gross negligence in the performance of Employee’s duties to the Company; (ii) Employee’s willful misconduct, embezzlement, misappropriation, fraud, or professional dishonesty; (iii) Employee’s material breach of any non-disclosure, invention assignment, non-competition, or similar agreement between Employee and the Company; (iv) Employee’s commission of a felony or of a crime involving moral turpitude; (v) Employee’s willful and material failure to comply with lawful directives of the Board; or (vi) Employee’s willful and material breach of a material provision of any employment agreement between Employee and the Company or willful and material violation of a material provision of any written Company employment policy applicable to its senior executive officers; provided that (A) the Company provides Employee with written notice that the Company intends to terminate Employee’s employment hereunder for one of the circumstances set forth in this Section 1(b) within sixty (60) days of the Board’s knowledge of such circumstance(s) occurring (which notice shall set forth in reasonable detail the circumstance(s) that the Company alleges constitute(s) Cause), (B) in the event that a circumstance described in subsection (v) or (vi) is capable of being cured, Employee has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) the Company terminates Employee’s employment within sixty five (65) days from the date of the notice referred to in clause (A). Conduct shall not be considered “willful” unless done (or omitted to be done) not in good faith and without a reasonable belief that such conduct (or lack thereof) was in the best interest of the Company.

 

   

“Good Reason” means: (i) a material diminution in Employee’s duties, authority or responsibilities; (ii) a material diminution in Employee’s Base Salary, other than a reduction of similar magnitude to the base salaries of other Company senior executives if there is a reduction of Company senior executive base salaries generally, or a failure by the Company to provide the compensation and benefits provided for in this Agreement; or (iii) a material breach by the Company of this Agreement or any other agreement between the Company and Employee; provided that (A) Employee provides the Company with written notice that Employee intends to terminate Employee’s employment hereunder

 

 

LOGO

  

 

57


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

 

for one of the circumstances set forth in this Section 1(c) within sixty (60) days of such circumstance occurring (which notice shall set forth in reasonable detail the circumstance(s) that Employee alleges constitute(s) Good Reason), (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) Employee terminates Employee’s employment within sixty five (65) days from the date of the notice referred to in clause (A). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of a specific occurrence of Good Reason shall not disqualify Employee from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A of the Internal Revenue Code of 1986, as amended, and any successor statute, regulation and guidance thereto.

 

   

“Change in Control” means the occurrence of any of the following events: (A) Ownership: any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, any subsidiary of the Company, or any employee benefit plan of the Company); or (B) Merger/Sale of Assets: (1) a merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such entity, as the case may be, outstanding immediately after such merger or consolidation; or (2) the sale or disposition by the Company of all or substantially all of the Company’s assets; or (C) Board Change: a change in the Board or its members such that individuals who, as of the Effective Date or, if later, the date that is one year prior to such change (the later of such two dates referred to herein as the “Measurement Date”), constitute the Board (the “Incumbent Board”) cease to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Measurement Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, any new members whose election or nomination was so approved, without counting the member and his or her predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.

 

 

58

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

The Company recently entered into new Severance and Change in Control Agreements with NEOs to replace their prior Executive Retention Agreements. The following table summarizes the potential payments to each of our NEOs under the new Severance and Change in Control Agreements in connection with (i) a termination without cause or with good reason following a change in control or (ii) a termination without cause or with good reason independent of a change in control.

 

    

Executive Benefits                

and Payments Upon Termination                 

  

Change in Control

and Involuntary

Termination Without

Cause or for Good

Reason ($)

  

Involuntary

Termination

Without Cause or for

Good Reason ($)

 

Mark C. Capone (1)

                         

R. Bryan Riggsbee

  Base salary        552,796             552,796     
  Bonus                 180,209                      180,209     
  Stock option and RSU acceleration        3,348,444             1,721,316     
  Cobra benefits        24,815                          24,815                  
      

 

 

         

 

 

    
  Total        4,106,264             2,479,136     

Alexander Ford (2)

                         

Jerry S. Lanchbury, Ph.D.

  Base salary        493,496             493,496     
  Bonus        131,599             131,599     
  Stock option and RSU acceleration        1,590,132             1,117,016     
  Cobra benefits        24,815             24,815     
      

 

 

         

 

 

    
  Total        2,240,042             1,766,926     

Nicole Lambert

  Base salary        386,859             386,859     
  Bonus        99,934             99,934     
  Stock option and RSU acceleration        828,405             472,191     
  Cobra benefits        24,815             24,815     
      

 

 

         

 

 

    
  Total        1,340,013             983,799     

Bernard F. Tobin (3)

                         

Gary A. King (4)

 

 

 

        

 

 

 

 

                 

 

 

 

 

        
(1)

Mr. Capone’s employment with the Company terminated on February 6, 2020 and the information for Mr. Capone is provided based on the provisions of his Separation and Consulting Agreement with the Company. Mr. Capone received $600,231 in severance payments, a prorated bonus of $184,211, and vested in 232,500 restricted stock units.

 

(2)

Mr. Ford resigned from the Company effective October 2, 2020.

 

(3)

Mr. Tobin’s employment with the Company terminated on May 1, 2020 and the information for Mr. Tobin is provided based on the provisions of his separation agreement with the Company. Mr. Tobin received $281,096 in a single severance payment and a prorated bonus of $95,163..

 

(4)

Mr. King retired from the Company on October 1, 2020.

The following is a description of the assumptions that were used in creating the above table.

 

   

Vesting Acceleration Calculation – The value of the vesting acceleration was calculated by multiplying the number of unvested restricted stock units by the closing price of our common stock on the Nasdaq Global Select Market on June 30, 2020 which was $11.34.

 

 

LOGO

  

 

59


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Director Compensation

The following table shows the total compensation paid or accrued during the fiscal year ended June 30, 2020 to each of our nonemployee directors who served during fiscal year 2020. Directors who are employed by Myriad are not compensated for their service on our board of directors.

 

Name   

Fees Earned or

    Paid in Cash ($)    

 

Stock      

  Awards ($)      

      Total ($)  

Lawrence C. Best

     79,500       300,005 (1)      379,505  

Heiner Dreismann, Ph.D.

     84,375       300,005 (1)      384,380  

Walter Gilbert, Ph.D.

     71,250       300,005 (1)      371,255  

John T. Henderson, M.D.

     158,188       300,005 (1)      458,193  

Dennis H. Langer, M.D., J.D.

     88,438       300,005 (1)      388,443  

S. Louise Phanstiel

     103,019       300,005 (1)      401,774  

Lee N. Newcomer, M.D.

     70,250       300,005 (1)      370,255  

Colleen F. Reitan

     73,313             300,005 (1)      373,318  

Daniel K. Spiegelman

     9,188       300,000  (2)(3)      309,187  
(1)

Amounts shown reflect the aggregate grant date fair value of 11,687 restricted stock units awarded to each nonemployee director who served during fiscal year 2020 calculated in accordance with FASB ASC Topic 718 and are determined by multiplying the number of shares by $25.67, the closing price of our common stock on the Nasdaq Global Select Market on December 5, 2019, the date of the grant. These RSUs awarded to our nonemployee directors vest in full one year from date of grant at the Company’s next annual meeting of stockholders.

 

(2)

Amount shown reflects the aggregate grant date fair value of 20,562 restricted stock units awarded to Mr. Spiegelman calculated in accordance with FASB ASC Topic 718 and is determined by multiplying the number of shares by $14.59, the closing price of our common stock on the Nasdaq Global Select Market on May 27, 2020, the date of the grant. This award vests in full one year from date of grant.

 

(3)

Mr. Spiegelman joined the Board of Directors on May 28, 2020. Mr. Spiegelman received an initial grant of restricted stock units equal to $300,000.

The following table shows outstanding and vested options and unvested RSUs for each nonemployee director as of June 30, 2020.

 

Name   

Options

    Outstanding    

 

Vested

    Options    

    

    Unvested    

RSUs

Lawrence C. Best

     120,000       120,000        11,687  

Heiner Dreismann, Ph.D.

                  11,687  

Walter Gilbert, Ph.D.

     60,000       60,000        11,687  

John T. Henderson, M.D.

     120,000       120,000        11,687  

Dennis H. Langer, M.D., J.D.

     60,000       60,000        11,687  

S. Louise Phanstiel

     120,000             120,000        11,687  

Lee N. Newcomer, M.D.

                  11,687  

Colleen F. Reitan

                  11,687    

Daniel K. Spiegelman

                  20,562  

The following table shows the grant date fair value for restricted stock unit awards granted to each nonemployee director in our fiscal year ended June 30, 2020.

 

Name      Granted (#)       Grant Date       

Grant Date

 Fair Value ($) 

 

Lawrence C. Best

     11,687       12/05/2019        300,005  

Heiner Dreismann, Ph.D.

     11,687       12/05/2019        300,005  

Walter Gilbert, Ph.D.

     11,687       12/05/2019        300,005  

John T. Henderson, M.D.

     11,687       12/05/2019        300,005  

Dennis H. Langer, M.D., J.D.

     11,687       12/05/2019        300,005  

S. Louise Phanstiel

     11,687             12/05/2019        300,005  

Lee N. Newcomer, M.D.

     11,687       12/05/2019        300,005  

Colleen F. Reitan

     11,687       12/05/2019        300,005  

Daniel K. Spiegelman

     20,562       05/27/2020        300,000  

 

 

60

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Director Compensation Policy

Our nonemployee directors are compensated on a role-based model and are paid cash fees based on the annual retainers (25 percent paid following each quarter of service). The following is a description of the standard compensation arrangements under which our nonemployee directors are compensated for their service as directors, including as members of the various board committees:

 

Annual retainer      

All members

   $60,000

Chair of the Board

   $65,000 additional

Chair of the Audit and Finance Committee

   $28,000 additional

Chair of the Compensation Committee

   $20,000 additional

Chair of the Nominating and Governance Committee

   $15,000 additional

Members of the Audit and Finance Committee

   $13,500 additional

Members of the Compensation Committee

   $10,000 additional

Members of the Nominating and Governance Committee

   $7,500 additional

Members of the Research and Product Innovation Committee

   $5,000 additional

Attendance

 

   

Board Meetings: In addition to the annual retainer amounts, we pay each nonemployee director a per-meeting cash fee of $2,000 for attendance at board meetings in excess of five in-person meetings and four telephonic meetings per fiscal year.

 

   

Committee Meetings other than Research and Product Innovation Committee: We also pay each nonemployee director a per-meeting cash fee of $2,000 for attendance at committee meetings in excess of four meetings (per each committee), whether in person or telephonic, per fiscal year.

 

   

Research and Product Innovation Committee: No per meeting fee will be paid for meetings of the Research and Product Innovation Committee.

All directors are also reimbursed for their out-of-pocket expenses incurred in attending meetings.

Restricted and Unrestricted Stock Grants and Other Stock-Based Awards

Under our 2017 Plan, our nonemployee directors may be awarded restricted and unrestricted stock grants and/or other stock-based awards. Beginning in fiscal year 2017, as recommended and determined by our Compensation Committee, and approved by our Board of Directors, on each date of our annual meeting of stockholders, the Company shall grant to each non-employee director, other than new nonemployee directors appointed within six months of the annual meeting, a restricted stock unit award equal to $300,000 divided by the closing price of the Company’s common stock on the applicable date of our annual meeting of stockholders. In addition, depending on the proximity to our annual meeting of stockholders, it is our policy to grant a restricted stock unit award for shares of our common stock to each new nonemployee director upon initial appointment to the Board.

Restricted stock units granted to our nonemployee directors vest in full upon completion of one year of service on the Board at the Company’s next annual meeting of stockholders. Options granted to our nonemployee directors are exercisable after the termination of the director’s service on the Board to the extent exercisable on the date of such termination for the remainder of the life of the option. All options or restricted stock units granted to our nonemployee directors will become fully exercisable upon a change of control of Myriad or upon their death as provided for under the forms of award agreement for directors.

 

 

LOGO

  

 

61


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Risks Related to Compensation Policies and Practices

During the fiscal year ended June 30, 2020, the Compensation Committee conducted a risk assessment of our compensation policies and practices for our employees and concluded that our policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. For this purpose, we considered the compensation structure of the Company for its employees including executive officers, which is based on an annual salary, annual bonus (for bonus-eligible employees), three-year cash incentive bonuses for executive officers, sales commissions and bonuses (for sales staff and managers), and equity incentive compensation in the form of stock option or restricted stock unit grants. We do not believe we offer any short-term incentives that might result in high-risk actions or conduct by our employees. For example, incentive compensation for executive officers in the form of an annual cash bonus or long-term three-year cash incentive bonus is based on a predetermined formula and management objectives approved by the Compensation Committee and is subject to a cap. There is no unique operational division or group of employees who are specially compensated, or who, as a group, are responsible for a material portion of our revenues or profits. We do not believe that the awarding of long-term incentive compensation under our three-year cash incentive bonus or equity incentive compensation in the form of restricted stock units creates any undue compensation risks to the Company. Additionally, we believe that we have appropriate internal controls that support the accurate and timely recognition of Company revenues. Accordingly, we believe that we have a balanced pay and performance program that does not promote undue or excessive risk taking.

Policy Regarding Hedging

Our Insider Trading Policy provides that no employee, officer or director may engage in any of the following activities with respect to the Company’s securities:

 

   

Trading in the Company’s securities on a short-term basis. Any shares of Company common stock purchased in the open market must be held for a minimum of six months and ideally longer. This rule does not apply to sales made following the exercise of options that were granted by the Company or to sales of shares purchased through the Company’s qualified Employee Stock Purchase Plan;

 

   

Short sales of the Company’s securities;

 

   

Use of the Company’s securities to secure a margin or other loan;

 

   

Transactions in straddles, collars, or other similar risk reduction devices;

 

   

Transactions in publicly traded options relating to the Company’s securities (i.e., options that are not granted by the Company); and

 

   

Buying or selling puts or calls.

Tax Deductibility of Compensation

Based on changes to U.S. tax laws, incentive compensation for our executive officers will no longer be determined under a section 162 (m) plan since the exception to the $1 million deduction limitation for qualified performance-based compensation has been eliminated.

 

 

62

  

 

LOGO


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

 

 

Equity Compensation Plan Information

The following table provides certain aggregate information with respect to all of the Company’s equity compensation plans in effect as of June 30, 2020.

 

Plan category

(a)

Number of

securities to be

issued upon

exercise of

outstanding

options, warrants

and rights

(b)

Weighted-average

exercise price of

outstanding

options, warrants

and rights

(c)

Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

column (a))

Equity compensation plans approved by security holders (1)

  4,764,911   $24.47   2,560,432 (2) 

Equity compensation plans not approved by security holders

     

Total

  4,764,911   $24.47   2,560,432 (2) 
(1)

These plans consist of our 2003 Employee, Director and Consultant Stock Option Plan, as amended (the “2003 Plan”), our 2010 Employee, Director and Consultant Equity Plan, as amended (the “2010 Plan”), our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2017 Plan”), and our Employee Stock Purchase Plan, as amended.

(2)

Column (c) includes 341,360 shares available for future issuance under our Employee Stock Purchase Plan. No shares are available for issuance under the 2003 Plan or the 2010 Plan.

 

 

LOGO

  

 

63


Table of Contents

COMPENSATION COMMITTEE REPORT

 

 

The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, which appears elsewhere in this proxy statement, with our management. Based on this review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

MEMBERS OF THE COMPENSATION COMMITTEE:

Heiner Dreismann, Ph.D., Chair

Walter Gilbert, Ph.D.

John T. Henderson, M.D.

Lee N. Newcomer, M.D.

S. Louise Phanstiel

 

 

64

  

 

LOGO


Table of Contents

AUDIT AND FINANCE COMMITTEE REPORT

 

The Audit and Finance Committee of the Board of Directors, which consists entirely of directors who meet the independence and experience requirements of The Nasdaq Stock Market LLC, has furnished the following report:

The Audit and Finance Committee assists the Board in overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in the Audit and Finance Committee Charter adopted by the Board, which is available in the Investors — Understanding Myriad/Corporate Governance section of our website at www.myriad.com. This committee reviews and reassesses the Audit and Finance Committee Charter annually and recommends any changes to the Board for approval. The Audit and Finance Committee is responsible for overseeing our overall financial reporting process and for the appointment, compensation, retention, and oversight of the work of our independent registered public accounting firm.

In fulfilling its responsibilities for the financial statements for the fiscal year ended June 30, 2020, the Audit and Finance Committee took the following actions:

 

   

Reviewed and discussed the audited financial statements for the fiscal year ended June 30, 2020 with management and Ernst & Young LLP, our independent registered public accounting firm;

 

   

Discussed with Ernst & Young LLP the matters required to be discussed in accordance with Statement on Auditing Standards No. 16, Communications with Audit Committees; and

 

   

Received written disclosures and letters from Ernst & Young LLP regarding its independence as required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent auditors, the independent auditors’ independence; and

 

   

The Audit and Finance Committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate.

Based on the Audit and Finance Committee’s review of the audited financial statements and discussions with management and Ernst & Young LLP, the Audit and Finance Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 for filing with the SEC.

MEMBERS OF THE AUDIT AND FINANCE COMMITTEE

Daniel K. Spiegelman, Chair

Lawrence C. Best

Dennis H. Langer, M.D., J.D.

Colleen F. Reitan

S. Louise Phanstiel

 

 

LOGO

  

 

65


Table of Contents

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

 

We were not a party to any transactions with related persons since July 1, 2019 that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Policy on Approval of Related Person Transactions

We have adopted a Policy on Related Person Transactions (the “Policy”) under which the Audit and Finance Committee reviews, approves or ratifies all related person transactions. Under our Policy, a related person transaction is one in which Myriad is a participant, and the amount involved exceeds $120,000, and in which any of the following persons have or will have a direct or indirect material interest:

 

   

Executive officers of the Company;

 

   

Members of the Board;

 

   

Beneficial holders of 5 percent or more of Myriad’s securities;

 

   

Immediate family members, as defined by Item 404 of Regulation S-K under the Securities Act, of any of the foregoing persons;

 

   

Any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal, is in a similar position or in which the person has a 5 percent or greater beneficial ownership interest; and

 

   

Any other persons whom the Board determines may be considered to be related persons as defined by Item 404 of Regulation S-K under the Securities Act.

Under the Policy, the Audit and Finance Committee will approve only those related person transactions that are determined to be in, or not inconsistent with, the best interests of Myriad and its stockholders, taking into account all available facts and circumstances as the Audit and Finance Committee, determines in good faith to be necessary. These facts and circumstances will typically include, but not be limited to, the benefits of the transaction to Myriad; the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, stockholder or executive officer; the availability of other sources for comparable products or services; the terms of the transaction; and the terms of comparable transactions that would be available to unrelated third parties or to employees generally. No member of the Audit and Finance Committee shall participate in any review, consideration or approval of any related person transaction with respect to which the member or any of his or her immediate family members is the related person.

In reviewing and approving these transactions, the Audit and Finance Committee will obtain, or will direct management to obtain on its behalf, all information that the Audit and Finance Committee believes to be relevant and important to a review of the transaction prior to its approval. Following receipt of the necessary information, a discussion of the relevant factors will be held if it is deemed to be necessary by the Audit and Finance Committee prior to approval. If a discussion is not deemed to be necessary, approval may be given by written consent of the Audit and Finance Committee. This approval authority may also be delegated to the Chairperson of the Audit and Finance Committee in some circumstances. It is contemplated that no related person transaction will be entered into prior to the completion of these procedures; however, where permitted, a related person transaction may be ratified upon completion of these procedures.

The Audit and Finance Committee may adopt any further policies and procedures relating to the approval of related person transactions that it deems necessary or advisable from time to time. A copy of our Policy on Related Person Transactions is publicly available in the Investor Information — Understanding Myriad/Corporate Governance section of our website at www.myriad.com.

 

 

66

  

 

LOGO


Table of Contents

PROPOSAL 1:

ELECTION OF DIRECTORS

 

The Board of Directors currently consists of twelve members, classified as follows: John T. Henderson, M.D., S. Louise Phanstiel, Daniel M. Skovronsky M.D., Ph.D, and Daniel K. Spiegelman constitute a class with a term ending at the 2021 Annual Meeting (the “Class I Directors”); Paul J. Diaz, Heiner Dreismann, Ph.D., and Colleen F. Reitan constitute a class with a term ending at the 2022 Annual Meeting (the “Class II Directors”); and Walter Gilbert, Ph.D., Dennis H. Langer, M.D., J.D., Lawrence C. Best, Lee N. Newcomer, M.D., and Rashmi Kumar constitute a class with a term ending at the 2020 Annual Meeting (the “Class III Directors”). At each Annual Meeting, directors are elected for a term to expire at the third succeeding Annual Meeting after their election to succeed those directors whose terms are expiring at the Annual Meeting.

At the Annual Meeting, Mr. Larry Best, Dr. Walter Gilbert, and Dr. John Henderson will step down from the Board, after distinguished service and innumerable contributions to the Company, and will not seek re-election. Effective as of the Annual Meeting, the size of the Board of Directors will be reduced to nine members.

On September 24, 2020, the Board of Directors accepted the recommendation of the Nominating and Governance Committee and unanimously resolved to nominate Rashmi Kumar, Dennis H. Langer, M.D., J.D., and Lee N. Newcomer, M.D. for election at the Annual Meeting for a term to serve until the 2023 Annual Meeting, and until their successors have been elected and qualified, or until their earlier death, resignation, retirement or removal. Unless the authority to vote for any of these nominees is withheld, the shares represented by a valid proxy will be voted FOR the election of Rashmi Kumar, Dennis H. Langer, M.D., J.D., and Lee N. Newcomer, M.D. as directors. In the event that any nominee should become unable or unwilling to serve, the shares represented by a valid proxy will be voted for the election of another person who the Board of Directors recommends, unless the Board chooses to reduce the number of directors serving on the Board. We have no reason to believe that any nominee will be unable or unwilling to serve as a director.

An affirmative vote of the majority of the shares voted affirmatively or negatively on each nominee at the Annual Meeting is required to elect each nominee as a director.

We recently adopted amendments to our Restated By-Laws to require that, in a non-contested election, each director be elected by a stockholder vote constituting a majority of the votes cast with respect to that director’s election. The Restated By-Laws, as amended, provide that if, in an election that is not a contested election, an incumbent director does not receive a majority of the votes cast, such director must submit an irrevocable resignation to the Nominating and Governance Committee. The Nominating and Governance Committee will make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board of Directors must act on the resignation, taking into account the Nominating and Governance Committee’s recommendation, and publicly disclose (by filing an appropriate disclosure with the SEC) its decision regarding the resignation within ninety (90) days following certification of the election results. The Nominating and Governance Committee in making its recommendation and the Board of Directors in making its decision each may consider any factors and other information that they consider appropriate and relevant.

 

         

 

THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF RASHMI KUMAR, DENNIS H. LANGER, M.D., J.D., AND LEE N. NEWCOMER, M.D. AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.

 

 

 

LOGO

  

 

67


Table of Contents

PROPOSAL 2:

APPROVAL TO AMEND OUR 2017 EMPLOYEE, DIRECTOR AND

CONSULTANT EQUITY INCENTIVE PLAN, AS AMENDED

 

General

As of October 7, 2020, we had 2,310,502 remaining shares of common stock available for issuance under our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2017 Plan”). Accordingly, we are seeking an approval to be able to award up to 3,500,000 additional restricted stock units by increasing the aggregate number of shares of common stock available for the grant of awards under the 2017 Plan by an additional 3,500,000 shares. An approval of an additional 3,500,000 shares will allow us to award up to 3,500,000 additional restricted stock units which we expect will provide us with enough shares to grant restricted stock units to our employees, executive officers and directors pursuant to our compensation programs for approximately the next three years. Without approval of this amendment to increase the shares authorized under the 2017 Plan, we will not have enough authorized shares under the 2017 Plan to compensate our employees with equity and we will need to substantially revise our compensation programs.

Our 2017 Plan was approved by our Board of Directors and stockholders in 2017, amended by our Board of Directors and stockholders in 2018, amended by our Board of Directors and stockholders in 2019, and further amended by our Board in 2020. We anticipate the need to continue requesting approximately every two or three years additional shares for authorization under the 2017 Plan to fund our equity compensation programs. As of October 7, 2020, restricted stock units representing 1,322,339 shares of common stock are outstanding under the 2017 plan. As of October 7, 2020, options to purchase 4,590,966 shares of common stock and restricted stock units representing 138,996 shares of common stock are outstanding under the 2010 Plan. As of October 7, 2020, options to purchase 90,000 shares of common stock are outstanding under the 2003 Plan. No further shares are available for issuance under the 2003 Plan or the 2010 Plan. Shares may be transferred back into the 2017 Plan from previously issued options and RSUs which are cancelled or expire under the 2003 Plan and the 2010 Plan. By its terms, the 2017 Plan may be amended by the Board of Directors, provided that any amendment that the Board determines requires stockholder approval is subject to receiving such approval.

On October 9, 2020, the Board of Directors voted to approve an amendment to the 2017 Plan to allow for the award of up to 3,500,000 additional RSUs by increasing the aggregate number of shares of common stock available for the grant of awards under the 2017 Plan by an additional 3,500,000 shares. This amendment to increase the number of shares available for grant under the 2017 Plan is being submitted for approval at the Annual Meeting in order to ensure that we have an adequate number of shares available for issuance in order to grant equity incentive compensation awards to our employees, executive officers and directors pursuant to our compensation programs. Approval by our stockholders of this amendment to the 2017 Plan is also required by the listing rules of Nasdaq. In connection with entering into the new Severance and Change in Control Agreements with each of our executive officers other than our Chief Executive Officer, on October 9, 2020, the Board of Directors also approved an amendment to the 2017 Plan for which approval by our stockholders was not required, to provide for an exception to the limitations on acceleration of vesting from the original grant vesting schedule when acceleration is otherwise provided for in an employment or other agreement with the Company, in addition to the cases of death, disability or change in control as previously provided. See “Executive Compensation — Compensation Discussion and Analysis — Fiscal Year 2020 Named Executive Officer Compensation — Termination and Change-in-Control-Based Compensation.”

Our Board, the Compensation Committee and management believe that the effective use of stock-based, long-term incentive compensation is vital to our ability to achieve strong performance in the future. The 2017 Plan maintains and enhances the key policies and practices adopted by our management and Board of Directors to align employee and stockholder interests. In addition, our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining and motivating key personnel. We believe the authorization of an additional 3,500,000 shares for issuance under our 2017 Plan is essential to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and directors. Additionally, in continued response to recommendations from our stockholders, we intend to continue to issue restricted stock unit awards to reduce the dilutive effect on

 

 

68

  

 

LOGO


Table of Contents

        PROPOSAL 2

 

 

stockholders from our equity incentive compensation program. Accordingly, our Board of Directors believes approval of the amendment to our 2017 Plan is in our best interests and those of the stockholders and recommends a vote ‘‘FOR’’ the approval of the amendment to the 2017 Plan.

The 2017 Plan includes the following provisions:

 

     

Types of Awards — any stock right awarded under the 2017 Plan must be in the form of a restricted stock unit or a restricted stock grant;

 

     

No Liberal Share Recycling — shares that are withheld to satisfy any tax withholding obligation related to any award will not again become available for issuance under the 2017 Plan;

 

     

Cap on the number of shares to be issued per year — no participant may receive awards for more than 500,000 shares of common stock in any fiscal year and non-employee directors may not receive awards that exceed $500,000 in aggregate grant date fair value in any calendar year (other than pursuant to an election to receive equity in lieu of cash for all or a portion of fees received for service on the Board of Directors or any committee thereof);

 

     

Minimum Vesting Period — all stock rights awarded must have a minimum vesting period of at least one year (we have historically provided for a four year vesting period for our equity incentive awards to employees, one year for directors, and intend to continue that practice);

 

     

Limited Acceleration of Vesting — the vesting of any stock right awarded under the 2017 Plan cannot be accelerated from the original grant vesting schedule except in the case of death, disability or change in control or as otherwise provided in an employment or other agreement with the Company;

 

     

No Dividends — we may not pay dividends or dividend equivalents before the vesting of the underlying award; and

 

     

Clawback Policy — awards will be subject to recoupment in accordance with the Company’s clawback policy then in effect.

A complete copy of the 2017 Plan, as it is proposed to be amended, is attached as Appendix B. The following summary description of the 2017 Plan is qualified in its entirety by reference to Appendix B.

Additional Equity Plan Information for Stock Options Previously Issued

As of October 7, 2020, there were 4,680,966 stock options outstanding with a weighted average exercise price of $24.62 and a weighted average remaining life of 1.24 years. All options granted vested 25 percent per year on the anniversary of the grant date. The following table provides additional information regarding vested stock options outstanding as of that date:

 

      Vested Options
Outstanding
   Weighted Average
Exercise Price
  

Weighted Average

Remaining Years of

Contractual Life

Substantially in-the-money options outstanding in excess of four years

                    

Other options outstanding in excess of four years

       4,680,966        $24.62        1.24

All options outstanding less than four years

                    
    

 

 

      

 

 

      

 

 

 

Total vested options outstanding

       4,680,966        $24.62        1.24

Material Features of the 2017 Plan

Eligibility. The 2017 Plan allows us, under the direction of our Compensation Committee, to make grants of restricted stock units and restricted stock awards, to employees, consultants and directors who, in the opinion of the Compensation Committee, are in a position to make a significant contribution to our long-term success. The purpose of these awards is to attract and retain key individuals, further align employee and stockholder interests and to closely link compensation with Company performance. The 2017 Plan provides an essential component of the total compensation package, reflecting the importance that we place on aligning the interests

 

 

LOGO

  

 

69


Table of Contents

PROPOSAL 2

 

 

 

of key individuals with those of our stockholders. All employees, members of the Board of Directors and consultants of the Company and its affiliates are eligible to participate in the 2017 Plan. As of October 7, 2020 we had approximately 2,663 individuals eligible to participate.

Limitations on Grants. As of October 7, 2020, we had 2,310,502 remaining shares of Common Stock available for issuance under the 2017 Plan. If this Proposal 2 is approved by our stockholders, the 2017 Plan will provide for the issuance of up to 3,500,000 additional shares. Additionally, up to 90,000 additional shares may be issued under the 2017 Plan if options outstanding under our 2003 Plan are cancelled or expire in the future without the issuance of shares of common stock, and up to 4,729,962 additional shares may be issued under the 2017 Plan if options and RSUs outstanding under our 2010 Plan are cancelled or expire in the future without the issuance of shares of common stock. No additional shares may be issued under our 2003 Plan or 2010 Plan. Under the 2017 Plan, each share of common stock issued as a restricted stock unit, counts against the number of total shares available for issuance under the 2017 Plan as one share. In addition, shares of common stock reserved for awards under the 2017 Plan that lapse or are canceled will be added back to the share reserve available for future awards on a one-to-one basis. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes will not be available again for grant. The 2017 Plan provides that no participant may receive awards for more than 500,000 shares of common stock in any fiscal year. Additionally, for non-employee directors, the 2017 Plan provides that the aggregate grant date fair value of any stock rights granted in any calendar year cannot exceed $500,000 other than pursuant to an election to receive equity in lieu of cash for all or a portion of fees received for service on the Board of Directors or any committee thereof.

Restricted Stock Units and Restricted Stock. Restricted stock is common stock, and a restricted stock unit is a right to receive common stock, that is subject to restrictions, including a prohibition against transfer and a substantial risk of forfeiture, until the end of a “restricted period” during which the grantee must satisfy certain vesting conditions. If the grantee does not satisfy the vesting conditions by the end of the restricted period, the restricted stock is forfeited.

During the restricted period, the holder of restricted stock has the rights and privileges of a regular stockholder, except that the restrictions set forth in the applicable award agreement apply. For example, the holder of restricted stock may vote; but he or she may not sell the shares until the restrictions are lifted. During the restricted period, the holder of a restricted stock unit does not have the rights and privileges of a regular stockholder until all restrictions set forth in the applicable award agreement have lapsed and the RSU is converted into common stock. With respect to any dividends which the Company may pay, no dividend payment will be made with respect to any restricted stock or restricted stock unit until the end of the applicable restricted period when the underlying vesting conditions have been met.

Plan Administration. In accordance with the terms of the 2017 Plan, our Board of Directors has authorized our Compensation Committee to administer the 2017 Plan. The Compensation Committee may delegate part of its authority and powers under the 2017 Plan to one or more of our directors and/or officers, but only the Compensation Committee can make awards to participants who are directors or executive officers of the Company. In accordance with the provisions of the 2017 Plan, our Compensation Committee determines the terms of awards, including:

 

   

Which employees, directors and consultants will be granted awards;

 

   

The number of shares subject to each award;

 

   

The vesting provisions of each award with a minimum one-year vesting;

 

   

The termination or cancellation provisions applicable to awards; and

 

   

All other terms and conditions upon which each award may be granted in accordance with the 2017 Plan.

All equity grants must have a minimum of a one-year vesting period. Historically, our equity grants to employees have been granted under a four-year plus vesting schedule. The 2017 Plan specifically prohibits the acceleration of vesting except in the case of death, disability or change in control or as otherwise provided in an employment or other agreement with the Company.

 

 

70

  

 

LOGO


Table of Contents

PROPOSAL 2

 

 

 

Stock Dividends and Stock Splits. If our common stock is subdivided or combined into a greater or smaller number of shares or if we issue any shares of common stock as a stock dividend, the number of shares of our common stock deliverable upon issuance of an award will be appropriately increased or decreased proportionately, and adjustments will be made, including in the purchase price per share, if any, to reflect the subdivision, combination or stock dividend.

Corporate Transactions. Upon a merger or other reorganization event, our Board of Directors or an authorized committee, may, in its sole discretion, take any one or more of the following actions pursuant to the 2017 Plan, as to some or all outstanding awards:

 

   

Provide that all outstanding awards will be assumed or substituted by the successor corporation, become realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon the merger or reorganization event; and

 

   

With respect to stock grants and in lieu of any of the foregoing policy, the Board of Directors or an authorized committee may provide that, upon consummation of the transaction, each outstanding stock grant will be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such transaction to a holder of the number of shares of common stock comprising such award (to the extent the stock grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Board of Directors or an authorized committee, all forfeiture and repurchase rights being waived upon such transaction).

Amendments and Termination. The 2017 Plan may be amended by our stockholders. It may also be amended by our Board of Directors or Compensation Committee, provided that any amendment that is of a scope that requires stockholder approval as required by the rules of Nasdaq, or for any other reason is subject to obtaining such stockholder approval. However, no such action may adversely affect any rights under an outstanding award without the holder’s consent.

Duration of 2017 Stock Plan. The 2017 Plan will expire on September 14, 2027.

New Plan Benefits

Other than grants to our nonemployee directors as described above under ‘‘Executive Compensation, Director Compensation, Restricted and Unrestricted Stock Grants,’’ the amounts of future awards under the 2017 Plan are not determinable and will be granted at the sole discretion of the Board of Directors or authorized committee, including grants to our named executive officers, our current executive officers, our current directors who are not executive officers, associates of directors and executive officers and employees who are not executive officers although we anticipate that most of our grants will be in the form of RSUs and we will use most of the additional 3,500,000 shares proposed to be authorized to make grants in calendar year 2021 and beyond.

 

 

LOGO

  

 

71


Table of Contents

PROPOSAL 2

 

 

 

Existing Plan Benefits

The following is a list of restricted stock unit awards issued as of October 7, 2020 to our executives, directors and employees since the initial approval of the 2017 Plan.

 

  Name and Position, or Group

Number of Shares

Underlying RSUs 

  Named Executive Officers:

  R. Bryan Riggsbee, CFO and Treasurer

  213,787

  Mark C. Capone, Former President and CEO

  300,000

  Jerry S. Lanchbury, Ph.D., Chief Scientific Officer*

  90,068

  Alexander Ford, President, Chief Operating Officer

  111,525

  Nicole Lambert, President of Myriad Women’s Health, Oncology, and International

  56,358

  Bernard J. Tobin, Former President of Myriad Autoimmune

  70,000

  Gary A. King, Former Executive Vice President of International

  54,000

  All current and former executive officers as a group

  895,738

  All current directors who are not executive officers as a group

  262,496

  Nominees for Director:

  Dennis H. Langer M.D., J.D.

  28,266

  Lee N. Newcomer, M.D.

  11,687

  Rashmi Kumar

  23,923

  Each associate of directors, executive officers, or nominees

 

  All employees, including all current officers who are not executive officers, as a group

  1,489,049

 

*

Mr. Capone has received greater than 5 percent of the total awards granted to date under the 2017 Plan.

As of October 7, 2020 the closing price per share of our common stock was $13.07 as reported on the Nasdaq Global Select Market.

Federal Income Tax Considerations

The material Federal income tax consequences of the issuance and vesting of restricted stock and restricted stock units under the 2017 Plan, based on the current provisions of the Code and regulations, are as follows. Changes to these laws could alter the tax consequences described below. This summary assumes that all awards granted under the 2017 Plan are exempt from or comply with, the rules under Section 409A of the Code related to nonqualified deferred compensation.

 

Stock Grants:       With respect to stock grants involving the issuance of shares that are restricted as to transferability and subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of the shares received at the first time the shares become transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier. A grantee may elect to be taxed at the time of receipt of shares rather than upon lapse of restrictions on transferability or substantial risk of forfeiture, but if the grantee subsequently forfeits the shares, the grantee would not be entitled to any tax deduction, including as a capital loss, for the value of the shares on which he or she previously paid tax. The grantee must file such election with the Internal Revenue Service within 30 days of the receipt of the shares. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.
Stock Units:   The grantee recognizes no income until the issuance of unrestricted shares. At that time, the grantee must generally recognize ordinary income equal to the fair market value of the shares received. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.

 

 

72

  

 

LOGO


Table of Contents

PROPOSAL 2

 

 

 

The affirmative vote of a majority of the shares voted affirmatively or negatively for the proposal at the Annual Meeting is required to approve the amendment of the 2017 Plan.

 

  

 

THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE AMENDMENT OF THE 2017 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN, AS AMENDED. PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE APPROVAL OF THE AMENDMENT OF THE 2017 PLAN UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.

 

 

 

LOGO

  

 

73


Table of Contents

PROPOSAL 3:

SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

The Audit and Finance Committee has appointed Ernst & Young LLP (‘‘EY’’) as our independent registered public accounting firm, to audit our financial statements for the six-month transition period ending December 31, 2020. The Board proposes that the stockholders ratify this selection, although such ratification is not required under Delaware law or our Restated Certificate of Incorporation, as amended, or our Restated By-Laws. EY has audited our financial statements since our fiscal year ended June 30, 2007. We expect that representatives of EY will be present at the Annual Meeting, will be able to make a statement if they so desire, and will be available to respond to appropriate questions.

In deciding to appoint EY, the Audit and Finance Committee reviewed auditor independence issues and existing commercial relationships with EY and concluded that EY has no commercial relationship with Myriad that would impair its independence for the six-month transition period ending December 31, 2020.

The following table presents fees for professional audit services provided by EY with respect to the last two fiscal years:

 

  Type of Fee

Fiscal Year Ended

June 30, 2020

Fiscal Year Ended

June 30, 2019

  Audit Fees

  $1,701,921   $1,605,317

  Audit Related Fees

   

  Tax Fees

   

  All Other Fees

  $   197,000  

 

 

 

 

 

 

  Total

 

 

 

$1,898,921

 

 

 

 

$1,605,317

 

 

Audit Fees — Fees include audits of consolidated financial statements, quarterly reviews, reviews of registration statement filings, and consents related to SEC filings.

Audit-Related Fees — Fees include services for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that are not reported under “audit fees.” We did not engage Ernst and Young to perform any audit-related services.

Tax Fees — We did not engage EY to perform any tax related services.

All Other Fees — Fees include permitted advisory services and subscription to Ernst and Young accounting research.

Policy on Audit and Finance Committee Preapproval of Audit and Permissible Non-Audit Services of Independent Public Accountant

Consistent with SEC policies regarding auditor independence, the Audit and Finance Committee has responsibility for appointing, setting compensation and overseeing the work of the independent public accounting firm. In recognition of this responsibility, the Audit and Finance Committee has established a policy to preapprove all audit and permissible non-audit services provided by our independent public accounting firm.

Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit and Finance Committee for approval.

1. Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.

2. Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.

 

 

74

  

 

LOGO


Table of Contents

PROPOSAL 3

 

 

 

3. Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.

4. Other Fees are those associated with services not captured in the other categories. The Company generally does not request such services from our independent registered public accounting firm.

Prior to engagement of the independent registered public accounting firm, engagement letters describing the scope of service and the anticipated fees are negotiated and approved by the Audit and Finance Committee. During the year, circumstances may arise in which it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original preapproval. In those instances, the Audit and Finance Committee requires specific preapproval before engaging our independent registered public accounting firm. The Audit and Finance Committee may delegate preapproval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit and Finance Committee at its next scheduled meeting.

The affirmative vote of a majority of the shares voted affirmatively or negatively at the Annual Meeting is required to ratify the selection of our independent registered public accounting firm.

If our stockholders ratify the selection of EY, the Audit and Finance Committee may still, in its discretion, decide to select a different independent auditor at any time during the six-month transition period ending December 31, 2020, if it concludes that such a change would be in the best interests of Myriad and our stockholders. If our stockholders fail to ratify the selection, the Audit and Finance Committee will reconsider, but not necessarily rescind, the selection.

 

  

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH RATIFICATION UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.

 

 

 

LOGO

  

 

75


Table of Contents

PROPOSAL 4:

APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR

NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT

 

We are seeking your approval, on advisory basis, as required by Section 14A of the Securities Exchange Act of 1934, as amended, of the compensation of our named executive officers, as disclosed in this proxy statement. More specifically, we ask that you support the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis section, the compensation tables and any related material contained in this proxy statement with respect to our executive officers named in the Summary Compensation Table. Because your vote is advisory, it will not be binding on our Compensation Committee or our Board of Directors. However, the Compensation Committee and our Board will review the voting results and take them into consideration when making future decisions regarding the compensation of our named executive officers.

Our compensation philosophy is designed to align each executive’s compensation with our short- and long-term performance and to provide the compensation and incentives needed to attract, motivate and retain key executives who are crucial to our long-term success. Consistent with this philosophy, a significant portion of the total compensation opportunity for each of our named executive officers is directly related to performance factors that measure our progress against the goals of our strategic and operating plans, as well as our performance against that of our peer companies.

Stockholders are urged to read the Compensation Discussion and Analysis section of this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. The Compensation Committee and the Board of Directors believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals.

As discussed in the Compensation Discussion and Analysis section, we believe the compensation paid to our President and CEO and other named executive officers is appropriate as supported by our performance in fiscal 2020. Two significant headwinds including the COVID-19 global pandemic and a transition in hereditary cancer current procedural terminology codes meaningfully detrimentally impacted our financial performance in fiscal year 2020. However, the Company successfully navigated these headwinds in fiscal year 2020, generated positive cash flow from operations through aggressive cost cutting measures in the second half of the fiscal year, and achieved our strategic objectives that we believe position the Company for long-term growth. These include:

 

  -

Received reimbursement for GeneSight from UnitedHealthcare, the largest commercial payer in the United States.

 

  -

Signed a master service agreement with a large pharmacy benefit manager in the United States to offer GeneSight to its commercial payer and self-funded employer customers.