The final CSPU performance multiplier was determined by our Compensation Committee and
applied to the target units granted to determine the actual units earned and eligible to vest. The following chart shows the
pre-established
corporate performance goals and the actual results that determined
the final CSPU Multiplier for 2016:
(1) See Notes to 2016 Annual Bonus Plan Company Targets and Results Table above for definitions and adjustments related to
revenue goals and results. Adjusted free cash flow was decreased to reflect the delay in Swiss large scale manufacturing capital spending.
a waiting period following the establishment of a trading plan before any trades may be executed. Our policy is designed to provide safeguards that will allow our executives an opportunity to
realize the value intended by the Company in granting equity-based LTI awards.
Our NEOs are also subject to the share ownership guidelines described above in the
subsection titled “Share Ownership Guidelines.”
The following table shows information regarding vesting of stock awards for each NEO during the year ended
December 31, 2016. None of the NEOs exercised stock options during the year ended December 31, 2016.
The following table summarizes the potential payments to each NEO under various termination events. The table assumes that the event occurred on December 31, 2016.
The calculations use the closing price of our common stock as reported by NASDAQ on December 30, 2016, the last business day of 2016, which was $283.58 per share. Amounts for Mr. Vounatsos are determined under our executive severance plans
described above, since his employment agreement did not become effective until January 2017. Amounts for Dr. Scangos assume a termination on December 31, 2016 in accordance with SEC rules. On January 6, 2017, Dr. Scangos ceased
to be our Chief Executive Officer and received the benefits described in the CD&A under the heading “2016 and 2017 Hiring- and Transition-Related Compensation Decisions — Dr. Scangos’ Arrangements.”
The table below includes aggregated information regarding awards outstanding under the 2008 Plan, the 2005 Plan, and the Directors Plan, the number of shares available
for future awards under each of the 2008 Plan and the Directors Plan as of March 31, 2017, and the proposed number of shares issuable under the 2017 Plan. We also maintain a
tax-qualified
employee stock
purchase plan, pursuant to which 6,008,140 shares remain outstanding as of March 31, 2017.
The following
table and accompanying notes provide information about the beneficial ownership of our common stock by:
Except as otherwise noted, the persons identified have sole
voting and investment power with respect to the shares of our common stock beneficially owned. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to the shares. Except as
otherwise noted, the information below is as of April 13, 2017 (Ownership Date).
Unless otherwise indicated in the footnotes, the address of each of the
individuals named below is: c/o Biogen Inc., 225 Binney Street, Cambridge, Massachusetts 02142.
Section 16(a) of the Securities Exchange Act requires our executive officers, directors, and greater than 10% stockholders to file initial reports of ownership and
changes of ownership of our common stock. As a practical matter, we assist our directors and executive officers by monitoring transactions and completing and filing Section 16 forms on their behalf. Based solely on information provided to us by
our directors and executive officers, we believe that during 2016 all such parties complied with all applicable filing requirements.
Stockholder Proposals
Stockholder proposals submitted pursuant to Securities Exchange Act Rule
14a-8
and intended to be presented at our 2018 annual
meeting of stockholders must be received by our Secretary no later than December 27, 2017 to be eligible for inclusion in our proxy statement and form of proxy relating to that meeting.
A stockholder proposal submitted outside the processes of Rule
14a-8
and not for inclusion in our proxy statement for the 2018
annual meeting of stockholders will be ineligible for presentation at the meeting unless the stockholder gives timely notice of the proposal in writing to our Secretary at our principal executive offices and otherwise complies with the provisions of
our Bylaws. To be timely, our Bylaws provide that we must have received the stockholder’s notice not less than 90 days and not more than 120 days in advance of the first anniversary of the date this Proxy Statement was released to our
stockholders in connection with the Annual Meeting. However, if the date of the 2018 annual meeting of stockholders is more than 30 days before or more than 60 days after the first anniversary of the Annual Meeting, we must receive the
stockholder’s notice not earlier than the close of business on the 120
th
day before the 2018 annual meeting of stockholders and not later than the close of business on the later of
(1) the 90
th
day before the 2018 annual meeting of stockholders and (2) the 10
th
day following the day on which public announcement
of the date of the 2018 annual meeting of stockholders is first made.
All stockholder proposals for our 2018 annual meeting of stockholders should be sent to our
Secretary, Biogen Inc., 225 Binney Street, Cambridge, Massachusetts 02142.
Other Stockholder Communications
Generally, stockholders who have questions or concerns should contact our Investor Relations department at
(781) 464-2442.
However, stockholders who wish to communicate directly with our Board of Directors, or any individual director, should direct questions in writing to our Secretary, Biogen Inc., 225 Binney
Street, Cambridge, Massachusetts 02142. Communications addressed in this manner will be forwarded directly to our Board of Directors or named individual director(s).
Incorporation by Reference
Notwithstanding anything to the contrary set forth in any of our previous filings under the securities laws that might incorporate future filings, including this Proxy
Statement, in whole or in part, the Compensation Committee Report, the Audit Committee Report, the content of
www.biogen.com
, including the charters of the committees of our Board of Directors, Corporate Governance Principles, Related Person
Transaction Policy, Conflicts of Interest Policy, and Code of Business Conduct, included or referenced in this Proxy Statement shall not be incorporated by reference into any such filings.
Copies of Annual Meeting Materials
Some banks, brokers, and other nominee record holders may be participating in the practice of householding proxy statements and annual reports. This means that, unless
you have instructed otherwise, only one copy of this Proxy Statement, annual report, or Notice of Internet Availability of Proxy Materials, as applicable, may have been sent to multiple stockholders in your household.
We will promptly deliver a
separate copy of any of these documents without charge to you if you write or call Investor Relations, Biogen Inc., 225 Binney Street, Cambridge, Massachusetts 02142, (781)
464-2442.
If
you want to receive separate copies of our proxy statement, annual report, or Notice of Internet Availability of Proxy Materials, as applicable, in the future, or if you are receiving multiple copies and would like to receive only one copy for your
household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address or phone number.
Manner and Cost of Proxy Solicitation
Biogen pays the cost of soliciting proxies. In addition to solicitation by mail, our directors, officers, and employees may contact you in person, by telephone, or by
email or other electronic means. None of our directors, officers, or employees will receive additional compensation for soliciting you. We will reimburse brokerage houses, banks, custodians, and other nominees and fiduciaries for
out-of-pocket
expenses incurred in forwarding our proxy solicitation materials to, and obtaining instructions relating to such materials from, beneficial owners of our common
stock. Georgeson LLC, New York, New York, has been retained to assist us in the solicitation of proxies at a fee estimated not to exceed $11,000.
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66
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APPENDIX A
GAAP to
Non-GAAP
Reconciliation
Diluted Earnings Per Share and Net Income Attributable to Biogen Inc.
(Unaudited, $ in millions, except per share amounts)
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For the Twelve Months Ended
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December 31,
2016
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December 31,
2015
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GAAP earnings per share – Diluted
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$
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16.93
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$
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15.34
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Adjustments to GAAP net income attributable to Biogen Inc. (as detailed below)
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3.29
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1.67
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Non-GAAP
earnings per
share – Diluted
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$
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20.22
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$
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17.01
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For the Twelve Months Ended
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December 31,
2016
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December 31,
2015
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GAAP net income attributable to Biogen Inc.
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$
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3,702.8
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$
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3,547.0
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Adjustments:
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TECFIDERA litigation settlement and license charges
A
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454.8
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—
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Amortization of acquired intangible assets
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373.6
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365.3
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(Gain) loss on fair value remeasurement of contingent consideration
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14.8
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30.5
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(Gain) loss on deconsolidation of variable interest entities
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(4.4)
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—
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Hemophilia business separation costs
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18.1
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—
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Restructuring, business transformation and other cost saving initiatives:
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Restructuring
charges
B
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33.1
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93.4
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Cambridge manufacturing facility rationalization costs
C
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54.8
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—
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Income tax effect related to reconciling items
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(224.9)
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(104.3)
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Non-GAAP
net income attributable to Biogen
Inc.
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$
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4,422.7
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$
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3,931.9
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(A)
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Under our settlement and license agreement with Forward Pharma A/S (Forward Pharma),
we paid Forward Pharma $1.25 billion in cash. The $455 million
pre-tax
charge recognized during the twelve months ended December 31, 2016 represents the portion of the $1.25 billion cash
payment that is attributable to our sales of TECFIDERA during the period April 2014 through December 31, 2016.
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(B)
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Restructuring charges for the twelve months ended December 31, 2016 and 2015
include $8.0 million and $93.4 million, respectively, of costs incurred in connection with our 2015 corporate restructuring. Restructuring charges for the twelve months ended December 31, 2016 include charges of $17.7 million
incurred in connection with additional cost savings measures primarily intended to realign our organizational structure in anticipation of the changes in roles and workforce resulting from our decision to spin off our hemophilia business, and to
achieve further targeted cost reductions. Restructuring charges for the twelve months ended December 31, 2016 also include severance charges of $7.4 million related to employee separation costs as a result of our decision to vacate and
cease manufacturing in Cambridge, MA and vacate our warehouse in Somerville, MA.
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(C)
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Cambridge manufacturing facility rationalization costs reflect additional
depreciation, the write-down of excess inventory and other direct costs associated with our decision to vacate and cease manufacturing in Cambridge, MA and vacate our warehouse in Somerville, MA. Additional depreciation expense, which totaled
$45.5 million for the twelve months ended December 31, 2016, is included in cost of sales, excluding amortization of acquired intangible assets in our condensed consolidated statements of income. Also reflected in this amount for the
twelve months ended December 31, 2016 are charges of $6.9 million for the write-down of excess inventory, which are included in cost of sales, excluding amortization of acquired intangible assets in our condensed consolidated statements of
income.
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Use of
Non-GAAP
Financial Measures
We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered
“Non-GAAP”
financial measures under applicable SEC rules. We believe that the disclosure of these
Non-GAAP
financial measures provides additional insight into the
ongoing economics of our business and reflects how we manage our business internally, set operational goals, and forms the basis of our management incentive programs. These
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A-1
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Appendix A
(continued)
Non-GAAP
financial measures are not in
accordance with generally accepted accounting principles in the United States and should not be viewed in isolation or as a substitute for reported, or GAAP, net income attributable to Biogen Inc. and diluted earnings per share.
Our
“Non-GAAP
net income attributable to Biogen Inc.” and
“Non-GAAP
earnings per share – Diluted” financial measures exclude the following items from “GAAP net income attributable to Biogen Inc.” and “GAAP earnings per share – Diluted”:
1. Purchase accounting and merger-related adjustments.
We exclude certain purchase accounting related items associated with the acquisition of businesses, assets, and amounts in relation to the consolidation of variable interest entities for which we are the primary
beneficiary. These adjustments include, but are not limited to, charges for
in-process
research and development, the amortization of certain acquired intangible assets, and charges or credits from the fair
value remeasurement of our contingent consideration obligations.
2. Hemophilia business separation costs.
We have excluded costs that are directly associated with the set up and spin off of our hemophilia business into an independent, publicly-traded company. These
costs represent incremental third party costs attributable solely to hemophilia separation and set up activities.
3. Restructuring,
business transformation, and other cost saving initiatives.
We exclude costs associated with the company’s execution of certain strategies and
initiatives to streamline operations, achieve targeted cost reductions, rationalize manufacturing facilities, or refocus R&D activities. These costs may include employee separation costs, retention bonuses, facility closing and exit costs, asset
impairment charges or additional depreciation when the expected useful life of certain assets have been shortened due to changes in anticipated usage, and other costs or credits that management believes do not have a direct correlation to our
on-going
or future business operations.
4. Other items.
We evaluate other items of income and expense on an individual basis, and consider both the quantitative and qualitative aspects of the item, including (i) its
size and nature, (ii) whether or not it relates to our ongoing business operations, and (iii) whether or not we expect it to occur as part of our normal business on a regular basis, including in the fourth quarter of 2016, TECFIDERA
litigation settlement and license charges. We also include an adjustment to reflect the related tax effect of all reconciling items within our reconciliation of our GAAP to
Non-GAAP
net income attributable to
Biogen Inc.
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A-2
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APPENDIX B
Biogen Inc. 2017 Omnibus Equity Plan
BIOGEN INC.
2017 OMNIBUS EQUITY PLAN
1.
Defined Terms
Exhibit A, which is
incorporated by reference, defines certain capitalized terms used in the Plan and sets forth certain operational rules related to those terms.
2.
Purpose; Term
The Plan provides for the grant of Awards consisting of or based on
the Stock of the Company. The purpose of the Plan is to attract and retain employees of the Company and its Affiliates, to provide an incentive for them to generate stockholder value by contributing to the appreciation of the Company’s Stock
price and to enable them to participate in the growth of the Company by granting Awards with respect to the Company’s Stock. No Awards may be granted under the Plan more than ten (10) years after the Effective Date, but Awards granted
prior to that date may continue in accordance with their terms.
3.
Administration
The Plan shall be administered by the Committee. The Board may in any instance perform any of the functions of the Committee hereunder and the Committee may
delegate such of its duties, powers and responsibilities as it may determine in accordance with applicable legal requirements, including Section 157(c) of the Delaware General Corporation Law (references herein to the Committee shall include the
Board or the person or persons so delegated to the extent of such delegation, as applicable).
The Committee shall select the Participants to receive
Awards and shall determine the terms and conditions of the Awards. The Committee has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or
waive the terms and conditions of any Award; determine the form of settlement of Awards (whether in cash, shares of Stock or other property); prescribe forms, rules and procedures and otherwise do all things necessary or desirable to carry out the
purposes of the Plan. Determinations of the Committee made under the Plan will be conclusive and will bind all parties.
4.
Eligibility
All employees of the Company (or of any Affiliate) are eligible to be Participants in the Plan.
5.
Stock Available for Awards
A.
Shares Available
.
Subject to the other subsections of this Section 5 and subject to adjustment as provided in Section 10, no more than 8,000,000 shares of Stock in
the aggregate may be delivered under or in satisfaction of Awards, plus the number of shares of Stock that, as of the date of adoption of the Plan, either: (i) remain available for grant under the 2008 Plan (including shares available under
such plan by reason of a predecessor plan) or (ii) are subject to awards under 2008 Plan and on or after the date of adoption are cancelled, surrendered, exchanged, terminated or forfeited for any reason whatsoever in accordance with the terms
of such plan. Shares issued under the Plan may consist of authorized but unissued shares or treasury shares. No fractional shares will be issued under the Plan.
B.
Fungible Share Plan
.
Each share of Stock subject to an Award consisting of Options and/or SARs shall be counted against the
limits set forth in Section 5.A as one (1) share. Each share of Stock subject to any Award other than an Award consisting of Options and/or SARs shall be counted against the limits set forth in Section 5.A as one and
one-half
(1.5) shares.
C.
Reversion to the
Plan
.
For the avoidance of doubt, if (i) an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full, (ii) if shares of Stock acquired pursuant to an Award
subject to
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B-1
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Appendix B
(continued)
forfeiture or repurchase are forfeited or repurchased by the Company or (iii) on
or after the date of adoption of the Plan, an outstanding award under the 2008 Plan is cancelled, surrendered, exchanged, terminated or forfeited in accordance with the terms of the 2008 Plan, the shares of Stock allocable to such expired,
terminated, cancelled, exchanged or forfeited, as applicable, portion of such Award or such forfeited or repurchased shares of Stock, shall again be available for delivery under the Plan in an amount determined in accordance with Section 5.B. Shares
of Stock shall not be deemed to have been delivered in satisfaction of Awards under the Plan to the extent that any portion of an Award is settled in cash or other property (other than shares of Stock). Upon delivery of shares of Stock in settlement
of a SAR, the full number of shares of Stock covered by such SAR shall be treated as delivered under the Plan (and not only the number of shares of Stock delivered in settlement of such Award). Shares of Stock withheld from an Award in satisfaction
of withholding taxes as described in Section 9.I or in payment of the exercise price or purchase price of any Award shall not again be available for delivery under the Plan.
D.
Certain Other Company Awards
.
To the extent consistent with the requirements of Section 422 and the regulations
thereunder, and other applicable legal requirements (including applicable stock exchange requirements), Stock issued under awards granted by another company (“other company awards”) and assumed by the Company in connection with a merger,
consolidation, stock purchase or similar transaction, or issued by the Company under awards substituted for other company awards in connection with a merger, consolidation, stock purchase or similar transaction, shall not reduce the shares of Stock
available for Awards under the Plan and such other company awards shall not be subject to the individual limits described in Section 5.E. Such awards may have terms inconsistent with the terms of the Plan.
E.
Limit on Individual Grants
.
The maximum number of shares of Stock subject to
Options, SARs, RSUs, RSAs and Other Awards that may be granted to any Participant in any calendar year is 1,500,000 shares of Stock in the aggregate, subject to adjustment as provided in Section 10. The foregoing limit refers to the maximum
number of shares of Stock that may be delivered, or the value of which may be paid in cash or other property (based on the fair market value of the shares of Stock or such other property on the date of payment), under Awards granted during the
calendar year. The foregoing limit will be construed in a manner consistent with Section 162(m), including, without limitation, where applicable, the rules under Section 162(m) pertaining to permissible deferrals of exempt awards.
6.
Options
A.
Grant of Options
.
Subject to the provisions of the Plan, the Committee may grant both (i) Options to purchase up to a maximum of 1,000,000 shares of Stock that are
intended to comply with the requirements of Section 422 (“ISOs”) and (ii) Options that are not intended to comply with such requirements (“NQSOs”). Eligibility for ISOs is limited to employees of the Company or of a
“parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Each Option shall be clearly identified in the applicable Award agreement as either an ISO or an NQSO,
but if no such identification is made, the Option shall be treated as an NQSO. The Committee shall determine the number of shares subject to each Option and the exercise price therefor, which shall not be less than 100% of the Fair Market Value of
the Stock on the date of grant. An ISO granted to an employee described in Section 422(b)(6) of the Code must have an exercise price that is not less than 110% of such Fair Market Value.
B.
Terms and Conditions
.
Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee
may specify in the Award agreement or thereafter. An ISO may not be exercisable after the period provided in Section
1.422-2(d)
of the Treasury Regulations. The Committee may impose such conditions with
respect to the exercise of Options, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. At the time of the grant of an Option, the Committee may impose such restrictions or conditions
to the vesting of such Option as it, in its absolute discretion, deems appropriate, including requiring the achievement of Performance Criteria. The Expiration Date of each Option shall be ten (10) years from the date of grant thereof, or at
such earlier time as the Committee shall state in the Award agreement.
C.
Payment
.
No shares of Stock shall be delivered pursuant to any exercise of an Option until payment in full of the exercise price therefor is received by the
Company. Such payment may be made in whole or in part in cash or, to the extent
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B-2
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Appendix B
(continued)
legally permissible and expressly permitted by the Committee at or after the grant of
the Option, by delivery of other property such as shares of Stock (for which the Committee may require a holding period), valued at their Fair Market Value on the date of delivery or such other lawful consideration, including in accordance with a
cashless exercise, as the Committee may determine or any combination of the foregoing permitted forms of payment.
7.
SARs
A.
Grant of SARs
.
Subject to the provisions of the Plan, the
Committee may grant SARs. The Committee shall determine at the time of grant or thereafter whether SARs are settled in cash, Stock or other securities of the Company, Awards or other property, and may define the manner of determining the excess in
value of the shares of Stock over the base value of the SAR. The Committee shall fix the base value of each SAR, which shall not be less than 100% of the Fair Market Value of the Stock on the date of grant.
B.
Terms and Conditions
.
Each SAR shall be exercisable at such times and
subject to such terms and conditions as the Committee may specify in the Award agreement or thereafter. The Committee may impose such conditions with respect to the exercise of SARs, including conditions relating to applicable federal or state
securities laws, as it considers necessary or advisable. At the time of the grant of a SAR, the Committee may impose such restrictions or conditions to the vesting of such SAR as it, in its absolute discretion, deems appropriate, including requiring
the achievement of Performance Criteria. The Expiration Date of each SAR shall be ten (10) years from the date of grant thereof, or at such earlier time as the Committee shall state in the Award agreement.
8.
RSUs, RSAs and Other Awards
A.
RSUs
.
Subject to the provisions of the Plan, the Committee may grant RSUs. Each RSU shall represent the unfunded and unsecured commitment of the Company to deliver
to the Participant at a specified future date or dates one or more shares of Stock or, if specified in the Award, cash equal to the Fair Market Value of the Stock subject to the Award, in any case subject to the satisfaction of any vesting or other
terms and conditions established with respect to the Award as the Committee may determine. The Committee may make Awards of RSUs that are subject to restrictions or forfeiture on such terms and conditions as the Committee may determine from time to
time.
B.
RSAs
.
Subject to the provisions of the Plan, the Committee
may grant RSAs and determine the duration of the period (the “Restricted Period”) during which, and the conditions under which, the shares of Stock may be forfeited to the Company and the other terms and conditions of such Awards. RSAs may
not be sold, assigned, transferred, pledged or otherwise encumbered during the Restricted Period. RSAs shall be evidenced in such manner as the Committee may determine. Any certificates issued in respect of RSAs shall be registered in the name of
the Participant and, unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company. Upon the expiration of the Restricted Period, the Company shall deliver such shares of
Stock, along with any certificates, to the Participant or if the Participant has died, to the Participant’s Designated Beneficiary.
C.
Other Awards
.
Subject to the provisions of the Plan, the Committee may grant Awards (including Performance Awards) other than
Options, SARs, RSUs or RSAs (“Other Awards”). Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the persons to whom and the time or times at which such Other Awards shall be granted,
the number of shares of Stock to be granted pursuant to such Other Awards, whether such Awards are to be settled in cash, Stock, other property or a combination of the foregoing, and all other conditions of such Other Awards.
D.
Terms and Conditions
.
At the time of the grant of RSUs, RSAs or Other
Awards, the Committee shall determine the price, if any, to be paid by the Participant for each share of Stock subject to the Award. At the time of the grant of RSUs, RSAs or Other Awards, as applicable, the Committee may impose such restrictions or
conditions to the vesting of such Award as it, in its absolute discretion, deems appropriate, including requiring the achievement of Performance Criteria.
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B-3
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Appendix B
(continued)
9.
General Provisions Applicable to Awards
A.
Documentation and Legal Conditions on Delivery of Stock
.
Each Award shall be
evidenced by a written or electronic document delivered or made available to the Participant or an agreement executed by the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with
the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable tax or other laws or accounting principles. The Company will not be obligated to deliver any shares of
Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company’s counsel has approved all legal matters in connection with the issuance and delivery of such shares;
(ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance
and (iii) all conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, or if the Company determines that the registration statement covering the sale of
Stock is not available, the Company may defer the sale until such time as it determines that the registration statement is available and may delay the applicability of any provisions of the Award during any period of unavailability. The Company may
require, as a condition to the exercise of an Award or the delivery of shares of Stock under an Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act of 1933, as
amended, or any applicable state or
non-U.S.
securities law. The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer
applicable to such Stock and the Company may hold the certificates pending lapse of the applicable restrictions.
B.
Performance Criteria
.
The Committee may establish Performance Criteria on which the granting of Performance Awards, or the vesting of Performance Awards, will be subject.
The Committee shall determine whether any Performance Criteria so established have been achieved, and if so to what extent, and its determination shall be binding on all persons.
C.
Minimum Vesting Period
. To the extent an Award is to vest based solely upon the continued employment of the Participant, such Award
shall vest pursuant to a schedule that provides for vesting in three equal increments on each of the first three anniversaries of the date of grant, or such longer period as the Committee may determine; provided, however, that up to 500,000 shares
of Stock may be made subject to Awards with a time-based vesting schedule that provides for vesting sooner than the default schedule set forth in this Section 9.C; and, provided, further, that Awards shall be subject to accelerated vesting as set
forth in Section 9.G, Section 10 or in a Participant’s Award agreement.
D.
Committee Discretion
.
Awards may be made alone or in combination with other Awards, including Awards of other types. The terms of Awards of the same type need not
be identical, and the Committee need not treat Participants uniformly (subject to the requirements of applicable law). Except as otherwise expressly provided by the Plan or a particular Award agreement, any determination with respect to an Award may
be made by the Committee at the time of grant or at any time thereafter.
E.
Dividends and
Cash Payments
.
In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividends or dividend equivalents payable (in cash, property or other Awards under the Plan) currently or
deferred with or without interest and (ii) cash payments in lieu of or in addition to an Award. Any entitlement to such dividends, dividend equivalents, cash payments or similar entitlements will be established and administered either
consistent with an exemption from, or in compliance with, the requirements of Section 409A and shall subject to such limits or restrictions as the Committee may impose.
F.
Leaves of Absence
.
Awards held by a Participant on an approved leave of absence shall continue to vest in accordance with
their terms during the leave of absence as if the Participant was an active employee unless otherwise agreed to in writing between the Company and the Participant or otherwise set forth in the Award agreement; provided, however, in the event of an
ISO, such leave of absence shall not exceed ninety (90) days unless reemployment is guaranteed by law or contract.
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Appendix B
(continued)
G.
Termination of
Employment
.
Unless the Committee expressly provides otherwise in an Award agreement, the following rules shall apply in connection with the termination of a Participant’s employment with the Company and its Affiliates.
Immediately upon the termination of the Participant’s employment with the Company and its Affiliates, each Award requiring exercise will cease to be exercisable and each Award to the extent not then vested will be forfeited, except that:
(1) In the event of a termination of the Participant’s employment by reason of death or as a result of Disability, each Award held
by a Participant immediately prior to his or her death or termination of employment as a result of Disability shall, to the extent not vested previously, become fully vested, and each Option, SAR and other Award requiring exercise, to the extent
then exercisable, will remain exercisable by the Participant or the Participant’s executor or administrator or the person or persons to whom the Option or SAR is transferred by will or the applicable laws of descent and distribution, in each
case for the lesser of: (i) the
one-year
period ending with the first anniversary of the Participant’s death or Disability, as applicable, or (ii) the period ending on the latest date on which
such Option or SAR could have been exercised without regard to this subsection G, and shall thereupon terminate;
(2) In the event of the
Participant’s Retirement, each Award, to the extent not vested previously, shall become vested as to 50% of the number of shares covered by such unvested Award and for an additional 10% of the number of shares covered by such unvested Award for
every full year of consecutive employment by the Company or any of its Affiliates beyond ten (10) years, up to the remaining amount of the unvested Award; provided, however, that: (i) the applicable grants with respect to such Awards shall
provide for payment terms that comply with, or are exempt from, the requirements of Section 409A and (ii) Awards subject to Performance Criteria intended to comply with Section 162(m) will vest according to the schedule contemplated
in this Section 9.G(2) only to the extent consistent with the requirements of Section 162(m). In the event of the Participant’s Retirement, each Option, SAR and other Award requiring exercise, to the extent then exercisable (after
giving effect to the accelerated vesting provided for herein), will remain exercisable for the lesser of: (a) the three-year period ending with the third anniversary of the Participant’s Retirement or (b) the period ending on the
latest date on which such Option or SAR could have been exercised without regard to this subsection G, and shall thereupon terminate;
(3) In the event of the Participant’s termination of employment For Cause, each Award held by a Participant or a Participant’s permitted
transferees, if any, immediately prior to such termination of employment (including any portion of the Award that is then exercisable) shall terminate at the commencement of business on the date of such termination; and
(4) In the event of the Participant’s termination of employment for any reason other than death, Disability, Retirement or For Cause, each
Option, SAR and other Award requiring exercise held by a Participant immediately prior to such termination of employment, to the extent then exercisable, will remain exercisable for the lesser of: (i) the period ending six (6) months from
the Participant’s termination date or (ii) the period ending on the latest date on which such Option or SAR could have been exercised without regard to this subsection G, and shall thereupon terminate; and each other Award shall terminate
at the close of business on the date of such termination.
Subject to Section 9.O, unless the Committee expressly provides otherwise, a
Participant’s employment with the Company and its Affiliates will be deemed to have ceased upon termination of the Participant’s employment with the Company and its Affiliates (whether or not the Participant continues in the service of the
Company or its Affiliates in some capacity other than that of an employee of the Company or its Affiliates).
H.
Transferability
.
No Award may be transferred other than by will or the laws of descent and distribution and may be exercised during the life of a Participant only by the
Participant, except that, as to Options other than ISOs, the Committee may in its sole discretion permit certain transfers to the Participant’s family members or to certain entities controlled by the Participant or his or her family members.
I.
Withholding Taxes
.
The Participant shall pay to the Company, or
make provision satisfactory to the Committee for payment of, any taxes or social insurance contributions required by law to be withheld with respect to Awards under the Plan no later than the date of the event creating the tax liability. The Company
and its Affiliates will, to the extent permitted by law, deduct any such tax or social insurance contributions from any payment of any kind due to the Participant hereunder or
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Appendix B
(continued)
otherwise. In the Committee’s discretion, tax and social insurance contributions
required by law to be withheld in respect of Awards may be paid in whole or in part in shares of Stock, including shares retained by the Company from the Award creating the obligation, valued at their Fair Market Value on the date of retention or
delivery, but not in excess of the maximum withholding amount consistent with the Award being subject to equity accounting treatment under applicable accounting rules (including FASB ASC Topic 718 (or any successor provision)).
J.
Option or SAR Repricing
.
Except in connection with a corporate transaction
involving the Company (which term includes, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,
split-up,
spin-off,
combination or exchange of shares) or as otherwise contemplated by Section 10 below, the Company may not, without obtaining stockholder approval, (i) amend the terms of outstanding Options or
SARs to reduce the exercise price or base value of such Options or SARs, (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise price or base value that is less than the exercise price or base value of the
original Options or SARs or (iii) cancel outstanding Options or SARs that have an exercise price or base value greater than the Fair Market Value of a share of Stock on the date of such cancellation in exchange for cash or other consideration.
K.
Amendment of Award
.
Except as otherwise expressly provided in
the Plan, the Committee may amend, modify or terminate any outstanding Award, including substituting therefor another Award of the same or a different type, changing the date of exercise or realization and converting an ISO to an NQSO; provided,
however, that if stockholder approval is required by law or the rules of the applicable stock exchange on which the Stock of the Company is then publicly-traded, such amendment shall not become effective until such stockholder approval is obtained.
Any such action shall require the Participant’s consent unless the Committee determines that the action would not materially and adversely affect the Participant.
L.
Recovery of Compensation
.
The Committee may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if
the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan or if the Participant engages in any Detrimental Activity. In addition, the Committee may provide that Awards and the proceeds from Awards or
Stock acquired thereunder will be subject to forfeiture and disgorgement to the Company to the extent required or permitted by applicable Company policy, law or stock exchange listing standards. Each Participant, by accepting or being deemed to have
accepted an Award under the Plan, agrees to cooperate fully with the Committee to effectuate any forfeiture or disgorgement required hereunder. The Participant (and neither the Committee nor the Company) will be solely responsible for any adverse
tax or other consequences to a Participant that may arise in connection with this Section 9.L.
M.
Foreign Nationals
.
The Committee may take any action consistent with the terms of the Plan, either before or after an Award has been granted, which the Committee deems
necessary or advisable to comply with government laws or regulatory requirements of any foreign jurisdiction, including but not limited to modifying or amending the terms and conditions governing any Awards, establishing
sub-plans
under the Plan or adopting such procedures as the Committee may determine to be appropriate in response to differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to
tax, securities, currency, employment, accounting or other matters.
N.
Deemed Exercise of
Awards
.
On the Expiration Date on which a vested Award (or portion thereof) requiring exercise is scheduled to terminate in accordance with the Plan and the terms of the Award, if the per share exercise price or base value, as
the case may be, of the Award is less than the Fair Market Value of a share of Stock on that date, the vested portion of the Award will be deemed to have been exercised at the close of business on that date. As promptly as practicable thereafter,
the Company will deliver to the Participant the shares of Stock subject to the vested portion of the Award less that number of shares with a value that is equal to the aggregate Fair Market Value of: (i) the aggregate exercise price or base
value, as the case may be, of the vested portion of the Award and (ii) the amount withheld, as determined by the Committee in accordance with Section 9.I, in satisfaction of any federal, state and local withholding of taxes or social insurance
contributions related to the exercise.
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Appendix B
(continued)
O.
Section
409A
.
Notwithstanding any other provision of the Plan or any Award agreement to the contrary:
(1) Awards under the
Plan are intended either to be exempt from the rules of Section 409A or to satisfy those rules, and shall be construed accordingly.
(2)
To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, a Participant shall not be considered to have terminated employment with the Company and its Affiliates until the Participant would be considered
to have incurred a “separation from service” from the Company and its Affiliates within the meaning of Section 409A (after giving effect to the presumptions contained therein).
(3) If a Participant is deemed on the date of the Participant’s termination of Employment to be a “specified employee” within the
meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment that is considered nonqualified deferred compensation under Section 409A, to the extent applicable, payable on account of a “separation from
service”, such payment will be made or provided on the date that is the earlier of (i) the expiration of the
six-month
period measured from the date of such “separation from service” and
(ii) the date of the Participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 9.O(3) (whether they would have otherwise been payable in a single lump sum or
in installments in the absence of such delay) will be paid on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the Award will be paid in accordance with the normal payment dates
specified for them in the applicable Award agreement.
(4) For purposes of Section 409A, each payment made under the Plan shall be
treated as a separate payment.
P.
Section 162(m)
. In the case of any
Performance Award (other than an Option or SAR) intended to qualify for the performance-based compensation exception under Section 162(m), the Committee shall establish the Performance Criterion (or Criteria) applicable to the Award within the time
period required under Section 162(m) and the grant, vesting or payment, as the case may be, of the Award will be conditioned upon the satisfaction of the Performance Criterion (or Criteria) as certified by the Committee. The Committee may, subject
to the terms of the Plan, amend a previously granted Performance Award or take any other action that disqualifies such Award from the performance-based compensation exception under Section 162(m).
10.
Effect of Certain Transactions
A.
Covered Transactions
Except as otherwise expressly provided in an Award agreement:
(1) If the Covered Transaction is one
in which there is an acquiring or surviving entity other than the Company or its Affiliate, the Committee shall provide for the assumption of some or all outstanding Awards or for the grant of new Awards in substitution therefor or the continuation
of some or all of the Awards by the acquiror or survivor or an affiliate of the acquiror or survivor, except to the extent that the Committee pays out the Award pursuant to the provisions of Section 10.A(2).
(2) If the Covered Transaction is one in which holders of Stock will receive upon consummation a payment (whether cash,
non-cash
or a combination of the foregoing), the Committee may provide for payment (a
cash-out),
with respect to some or all Awards or any portion thereof (whether or not
vested), equal in the case of each affected Award or portion thereof to the excess, if any, of (i) the Fair Market Value of one share of Stock times the number of shares of Stock subject to the Award or such portion, over (ii) the
aggregate exercise or purchase price, if any, under the Award or such portion (in the case of a SAR, the aggregate base value above which appreciation is measured), in each case on such payment terms (which need not be the same as the terms of
payment to holders of Stock) and other terms, and subject to such conditions, as the Committee determines; provided, that the Committee shall not exercise its discretion under this Section 10.A(2) with respect to an Award or portion thereof
providing for nonqualified deferred compensation subject to Section 409A in a manner that would constitute an extension or acceleration of, or other change in, payment terms if such change would be inconsistent with the applicable requirements of
Section 409A. For avoidance of doubt, in the event that the aggregate
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Appendix B
(continued)
exercise or purchase price of the Award exceeds the aggregate Fair Market Value of the
Stock subject to the Award, the Award will be deemed to be cashed out for a payment of zero.
(3) Each Award will terminate upon
consummation of the Covered Transaction, other than Awards assumed, substituted or continued pursuant to Section 10.A(1). For avoidance of doubt, in the event that the Awards are not cashed out (or deemed cashed out) as provided in Section 10.A(2),
such Awards shall be assumed, substituted or continued as provided in Section 10.A(1).
B.
Corporate Transaction
.
Except as otherwise provided in the Award agreement, if at any time within two (2) years after the effective date of a Corporate
Transaction there is an Involuntary Employment Action with respect to any Designated Employee, each then outstanding Award assumed, substituted or continued under Section 10.A(1) and held by such Designated Employee (or a permitted transferee
of such person) shall, upon the occurrence of such Involuntary Employment Action, automatically accelerate so that each such Award shall become fully vested or exercisable, as applicable, immediately prior to such Involuntary Employment Action. Upon
the occurrence of an Involuntary Employment Action with respect to a Designated Employee, any outstanding Options or SARs held by such Designated Employee (and a permitted transferee of such person) shall be exercisable for one (1) year
following the Involuntary Employment Action or, if earlier, within the originally prescribed term of the Option or SAR.
C.
Corporate Change in Control
.
Except as otherwise provided in the Award agreement, if at any time within two (2) years after the effective date of a Corporate Change in
Control there is an Involuntary Employment Action with respect to any Designated Employee, each then outstanding Award assumed, substituted or continued under Section 10.A(1) and held by such Designated Employee (or a permitted transferee of such
person) shall, upon the occurrence of such Involuntary Employment Action, automatically accelerate so that each such Award shall become fully vested or exercisable, as applicable, immediately prior to such Involuntary Employment Action. Upon the
occurrence of an Involuntary Employment Action with respect to a Designated Employee, any outstanding Options or SARs held by such Designated Employee (and a permitted transferee of such person) shall be exercisable for one (1) year following
the Involuntary Employment Action or, if earlier, within the originally prescribed term of the Option or SAR.
D.
Changes In, Distributions With Respect To and Redemptions of the Stock
.
(1) In the event of any stock dividend or other similar distribution of stock or other securities of the Company, stock split or combination of shares (including a reverse stock split), recapitalization,
conversion, reorganization, consolidation,
split-up,
spin-off,
combination, merger, exchange of stock, redemption or repurchase of all or part of the shares of any class
of stock or any change in the capital structure of the Company or an Affiliate or other transaction or event that constitutes an equity restructuring within the meaning of FASB ASC Topic 718 (or any successor provision), the following shall be
equitably adjusted (i) the number of shares that may be delivered as per Section 5, (ii) the individual limits described in Section 5.E, (iii) the number and kind of shares of stock or securities subject to Awards then outstanding or
subsequently granted, (iv) exercise prices or base values, as the case may be, relating to outstanding Awards and (v) any other provision of Awards affected by such change.
(2) The Committee may also make equitable or proportionate adjustments of the type described in Section 10.D(1) to take into account distributions
to stockholders other than stock dividends or normal cash dividends, material changes in accounting practices or principles, extraordinary dividends, mergers, consolidations, acquisitions, dispositions or similar transactions involving Stock or any
other event other than those described in Section 10.D(1), if the Committee determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value and equity of Awards made hereunder, having due regard
for: (i) the qualification of ISOs under Section 422; (ii) the continued exemption of the Awards from (or satisfaction by the Awards of the rules of) Section 409A, where applicable and (iii) in the case of Awards intended to qualify
for the performance-based compensation exception Section 162(m), the continued qualification for that exception (unless otherwise determined by the Committee).
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Appendix B
(continued)
(3) References in the Plan to shares of Stock will be construed to
include any stock or securities resulting from an adjustment pursuant to this Section 10.
11.
Miscellaneous
A.
No Right to
Employment
.
No person shall have any claim or right to be granted an Award. Neither the adoption, maintenance, nor operation of the Plan nor any Award hereunder shall constitute a
contract of employment or confer upon any employee of the Company or of any Affiliate any right with respect to the continuance of his/her employment by or other service with the Company or any such Affiliate nor shall it or they be construed as
affecting the rights of the Company (or Affiliate) to terminate the service of any person at any time or otherwise change the terms of such service, including, without limitation, the right to promote, demote or otherwise
re-assign
any employee from one position to another within the Company or any Affiliate.
B.
No Rights as a Stockholder
.
Subject to the provisions of the applicable Award, no Participant or other person shall have any
rights as a stockholder with respect to any shares of Stock to be issued under the Plan until he or she becomes the holder thereof. A Participant to whom an RSA is awarded shall be considered a stockholder of the Company at the time the Award is
granted except as otherwise expressly provided in the applicable Award agreement.
C.
Effective Date
.
The Plan became effective on the Effective Date.
D.
Amendment of the Plan
.
The
Committee may amend, suspend or terminate the Plan or any portion thereof at any time, subject to such stockholder approval as the Committee determines to be necessary or advisable. Further, under all circumstances, the Committee may, but shall not
be required to, make
non-substantive
administrative changes to the Plan in order to conform with or take advantage of governmental requirements, statutes or regulations. Except as provided in Section 9.L, no
such amendment, modification or termination will adversely affect the rights of any Participant (without his or her consent) under any Award previously granted and no amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required under applicable law or relevant stock exchange listing standards.
E.
Governing Law
.
The provisions of the Plan shall be governed by and interpreted in accordance with the laws of the State of
Delaware.
F.
Limitation of Liability
.
Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Committee, nor any person acting on behalf of the Company, any Affiliate or the Committee, will be
liable to any Participant, to any permitted transferee, to the estate or beneficiary of any Participant or any permitted transferee or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any
interest and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to the Award.
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Appendix B
(continued)
EXHIBIT A
Definition of Terms
The
following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:
“2008 Plan”
means the
Company’s 2008 Amended and Restated Omnibus Equity Plan.
“Affiliate”
means any corporation or other entity that stands in a
relationship to the Company that would result in the Company and such corporation or other entity being treated as a single employer under Sections 414(b) or 414(c) of the Code, except that such Sections shall be applied by substituting “at
least 50%” for “at least 80%” wherever applicable; provided, however, that in determining eligibility for the grant of an Option or SAR by reason of service for an Affiliate, “Affiliate” shall mean any corporation or other
entity in a chain of corporations all of which have a controlling interest in another corporation or other entity in the chain, beginning with the parent entity and ending with the entity for which the Award recipient was providing services on the
grant date of the Award (defining the term “controlling interest” based on “at least 50%” rather than “at least 80%”). The Company may at any time by amendment provide that different ownership thresholds apply
(consistent with Section 409A, where applicable).
“Award”
means any Option, SAR, RSA, RSU and any Other Award convertible into or
otherwise based on Stock (including a Performance Award payable in cash), granted under the Plan.
“Board”
means the Board of Directors
of the Company.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any successor law.
“Committee”
means the Compensation and Management Development Committee of the Board.
“Company”
means Biogen Inc., a Delaware corporation.
“Competitive Activity”
shall
include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company’s business, without prior written
authorization from the Company, of any confidential information or material relating to the business of the Company, acquired by the Participant either during or after employment with the Company or (iii) any attempt directly or indirectly to
induce any employee of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company.
“
Continuing Director
” shall mean, as of any date of determination, any member of the Board who (i) was a member of the Board on March 24,
2017 or (ii) becomes a member of the Board subsequent to March 24, 2017 and was appointed, nominated for election or elected to the Board with the approval of a majority of the Continuing Directors who were members of the Board at the time
of such appointment, nomination or election, provided that a director whose initial assumption of office is in connection with an actual or threatened election contest will not be considered a Continuing Director unless and until (a) such
director has served on the Board for at least two (2) years and (b) the most recent reelection of such director has been approved by a majority of the Continuing Directors in office at the time of such approval.
“Corporate Change in Control”
shall be deemed to have occurred upon the first of the following events:
(1) an event in which any Person, is or becomes the “beneficial owner” (as defined in Section 13(d) of the Exchange Act), together
with all affiliates and associates (as such terms are used in Rule
12b-2
under the Exchange Act) of such Person, directly or indirectly, of securities of the Company representing 50% or more of the combined
voting power of the Company’s then outstanding securities;
(2) the consummation of the merger or consolidation of the Company with
any other company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to
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Appendix B
(continued)
represent (either by remaining outstanding or by being converted into voting securities
of the surviving entity), more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger; or
(3) at any time the Continuing Directors do not constitute a majority of the Board (or, if applicable, the board of directors of a successor to the
Company).
Notwithstanding the foregoing, in any case where the occurrence of a Corporate Change in Control could affect the vesting of or payment under
an Award subject to the requirements of Section 409A, to the extent required to comply with Section 409A, the term “Corporate Change in Control” shall mean an occurrence that both (i) satisfies the requirements set forth above in this
definition and (ii) is a “change in control event” as that term is defined in the regulations under Section 409A.
“Corporate
Transaction”
means any of: (i) a consolidation, merger or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company (or an Affiliate) is not the surviving corporation or
which results in the acquisition of all or substantially all of the then outstanding Stock by a single person or entity or by a group of persons and/or entities acting in concert; (iii) a sale or transfer of all or substantially all of the
Company’s assets or (iv) a dissolution or liquidation of the Company. Where a Corporate Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) as determined by the Committee,
the Corporate Transaction shall be deemed to have occurred upon consummation of the tender offer.
Notwithstanding the foregoing, in any case where the
occurrence of a Corporate Transaction could affect the vesting of or payment under an Award subject to the requirements of Section 409A, to the extent required to comply with Section 409A, the term “Corporate Transaction” shall mean an
occurrence that both (a) satisfies the requirements set forth above in this definition and (b) is a “change in control event” as that term is defined in the regulations under Section 409A.
“Covered Transaction”
means a Corporate Change in Control or a Corporate Transaction.
“Delay Period”
has the meaning set forth in Section 9.O(3).
“Designated Beneficiary”
means the Participant’s estate.
“Designated Employee”
means an employee designated by the Committee, in its sole discretion,
as a “Designated Employee” for purposes of the Plan at any time prior to the effective date of a Corporate Transaction or Corporate Change in Control, as applicable.
“Detrimental Activity”
shall include any action or failure to act that, in the sole determination of the Committee: (i)(a) constitutes financial malfeasance that is materially injurious to the
Company, (b) violates the Company’s Code of Conduct, (c) results in the Company’s restatement of its earnings, financial results or financial statements or (d) results in a violation or breach of law or contract that is
materially injurious to the Company or (ii) violates any
non-competition,
non-disclosure
or
non-solicitation
agreement with
the Company, or in the event that the Participant has not entered into any such agreement with the Company, the Participant engages in any Competitive Activity.
“Disability”
shall exist for purposes of the Plan if the Company determines in its sole discretion that the Participant has been terminated as a result of the employee having become totally and
permanently disabled. For this purpose, totally and permanently disabled means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less than 12 months.
“Effective Date”
means the date the Plan
was approved by the Company’s stockholders.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to
time, or any successor law.
“Expiration Date”
means the latest date on which an Option, SAR or Other Award requiring exercise may be
exercised pursuant to the Award agreement.
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Appendix B
(continued)
“Fair Market Value”
means, with respect to Stock, for so long as such
Stock is readily tradable on an established securities market (within the meaning of Section 409A), the closing price on the day of the grant or measurement or, if the applicable date is not a trading day, on the most recent trading day immediately
prior to the applicable date, and otherwise, the fair market value of such Stock determined by the Committee by a reasonable application of a reasonable valuation method (within the meaning of Section 409A).
“For Cause”
shall be deemed to include, but is not limited to, dishonesty with respect to the Company or any Affiliate, insubordination,
substantial malfeasance or
non-feasance
of duty, unauthorized disclosure of confidential information, breach of, or a failure to comply with, the Company’s policies, procedures or codes of ethics or
business conduct, breach by a Participant of any provision of any employment, nondisclosure,
non-competition
or similar agreement between the Participant and the Company or any Affiliate, the
Participant’s commission of, or plea of nolo contendere to, a felony and other conduct that is, or could reasonably be expected to be, harmful or prejudicial to the business of the Company or an Affiliate. The determination of the Committee or
its designee as to the existence of circumstances warranting a termination For Cause shall be conclusive. Notwithstanding the foregoing, in the event that the Participant is a party to an effective employment or similar agreement with the Company or
an Affiliate which contains a “cause” definition, such definition shall be controlling for purposes of the Plan for so long as such agreement is in effect.
“Involuntary Employment Action”
as to a Participant means the involuntary termination of a Participant’s employment with the Company following a Corporate Transaction or Corporate Change in
Control, as applicable, (i) other than For Cause or (ii) upon the occurrence of any of the following circumstances: (a) any adverse and/or material alteration and diminution in the Participant’s authority, duties or
responsibilities (other than a mere change in title or reporting relationship) as they existed immediately prior to the Corporate Transaction or Corporate Change in Control, as applicable, or as the same may be increased from time to time
thereafter, (b) a reduction of the Participant’s base salary or a reduction in targeted bonus opportunity, in each case as in effect on the date prior to the Corporate Transaction or Corporate Change in Control, as applicable, or as the
same may be increased from time to time thereafter or (c) relocation of the offices at which the Participant is employed which increases his or her daily commute by more than 100 miles on a round trip basis; provided, however, that in any case
the Participant notifies the Chief Legal Officer or the Head of Human Resources of the Company in writing of the basis for his or her involuntary termination within ninety (90) days of the occurrence of the circumstances and the Company does
not cure such circumstance within thirty (30) days thereafter.
“ISOs”
has the meaning set forth in Section 6.A.
“NQSOs”
has the meaning set forth in Section 6.A.
“Option”
means the right to purchase shares of Stock of the Company for a specified period of time at a specified price.
“Other Award”
has the meaning set forth in Section 8.C.
“other company award”
has the meaning set forth in Section 5.D.
“Participant”
means
a person selected by the Committee to receive an Award under the Plan.
“Performance Award”
means an Award subject to Performance
Criteria. The Committee in its discretion may grant Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and Performance Awards that are not intended to so qualify.
“Performance Criteria”
means specified criteria, other than the mere continuation of employment or passage of time, the satisfaction of which is a
condition for the grant, exercisability, vesting, payment or full enjoyment of an Award. For purposes of Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m), a Performance Criterion
shall be based on objectively determinable measures of performance relating to any of, or to any combination of, the following (measured either absolutely or comparatively (including, without limitation, by reference to an index or indices or the
performance of one or more companies) and determined either on a consolidated basis or, as the context permits, on a divisional, functional, subsidiary, line of business, project or geographical basis or in
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B-12
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Appendix B
(continued)
combinations thereof and subject to such adjustments, if any, as the Committee
specifies, consistent with the requirements of Section 162(m)): sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization or other items, whether or not on a
continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price;
stockholder return; sales of particular products or services; customer acquisition, expansion or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs,
split-ups
and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings; or achievement of clinical trials or measurable research objectives. A
Performance Criteria and any targets with respect thereto determined by the Committee shall be based on achievement of an objectively determinable performance goal. A Performance Criteria and any targets with respect thereto determined by the
Committee need not be based upon an increase, a positive or improved result or avoidance of loss and may be based on GAAP,
non-GAAP
or other metrics as provided for herein. To the extent consistent with the
requirements for satisfying the performance-based compensation exception under Section 162(m), the Committee may provide in the case of any Award intended to qualify for such exception that one or more of the Performance Criteria applicable to such
Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.
“Person”
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include: (i) the Company or any of its Affiliates; (ii) a trustee or other fiduciary holding securities under an employee benefits plan of the Company or any of its Affiliates; (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities or (iv) a corporation or other business entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership
of stock of the Company.
“Plan”
means the Biogen 2017 Omnibus Equity Plan, as from time to time amended and in effect.
“Restricted Period”
has the meaning set forth in Section 8.B.
“Retirement”
as to any employee of the Company or any of its Affiliates shall mean such person’s leaving the employment of the Company and its Affiliates after reaching age 55 with ten
(10) consecutive years of service with the Company or its Affiliates, but not including pursuant to any termination For Cause or pursuant to any termination for insufficient performance, as determined by the Company.
“RSA”
means Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified service or
performance-based conditions are not satisfied.
“RSU”
means an unfunded and unsecured promise, denominated in shares of Stock, to
deliver Stock or cash measured by the value of Stock in the future, subject to the satisfaction of specified performance or other vesting conditions.
“SAR”
means the right to receive upon exercise an amount (payable in cash or in shares of Stock of equivalent value) equal to any excess in value
of shares of Stock subject to the right over the base value from which appreciation is measured.
“Section 162(m)”
means Section 162(m)
of the Code, including the Treasury Regulations thereunder and other applicable Internal Revenue Service guidance.
“Section 409A”
means
Section 409A of the Code, including the Treasury Regulations thereunder and other applicable Internal Revenue Service guidance.
“Section
422”
means Section 422 of the Code, including the Treasury Regulations thereunder and other applicable Internal
Revenue Service guidance.
“Stock”
means the common stock, $0.0005 par value, of the Company.
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B-13
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BIOGEN INC.
225 BINNEY STREET
CAMBRIDGE, MA 02142
VOTE BY INTERNET
Before The Meeting
- Go to
www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting
date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting
- Go to
www.virtualshareholdermeeting.com/BIIB2017
You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and
follow the instructions.
VOTE BY PHONE -
1-800-690-6903
Use any
touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return
it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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E25472-P92180 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY