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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT /X/
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Biogen, Inc.
(Name of Registrant as Specified In Its Charter)
Biogen, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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Notice of 1995 Annual Meeting
and Proxy Statement
[COVER ARTWORK]
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- --------------------------------------------------------------------------------
April 30, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Biogen, Inc. to be held at 10:00 a.m. on Friday, June 23, 1995, at the
Company's offices located at 12 Cambridge Center, Cambridge, Massachusetts.
At the Annual Meeting, three persons will be elected to the Board of
Directors. The Board of Directors recommends the re-election of the nominees
named in the Proxy Statement. In addition, the Company will ask the stockholders
to ratify the selection of Price Waterhouse LLP as the Company's independent
accountants for the fiscal year ending December 31, 1995, and to approve certain
amendments to the Company's stock option plans, including an increase in the
total number of shares available for issuance under the plans.
Whether you plan to attend the Annual Meeting or not, it is important that
you promptly fill out, sign, date and return the enclosed proxy card in
accordance with the instructions set forth on the card. This will ensure your
proper representation at the Annual Meeting.
Sincerely,
James L. Vincent
Chairman and Chief Executive Officer
YOUR VOTE IS IMPORTANT. PLEASE REMEMBER TO RETURN YOUR PROXY PROMPTLY.
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BIOGEN, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 1995
TO THE STOCKHOLDERS OF BIOGEN, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Biogen,
Inc., a Massachusetts corporation, will be held at 10:00 a.m. on Friday, June
23, 1995, at Biogen's offices located at 12 Cambridge Center, Cambridge,
Massachusetts 02142, for the following purposes:
1. To elect three members to the Board of Directors to serve for a
three-year term ending at the Annual Meeting of Stockholders in 1998 and
until their successors are duly elected and qualified or their earlier
resignation or removal.
2. To ratify the selection of Price Waterhouse LLP as the Company's
independent accountants for the fiscal year ending December 31, 1995.
3. To approve an increase of 2,000,000 in the aggregate number of
shares available for the grant of options under the 1985 Non-Qualified
Stock Option Plan and the 1982 Incentive Stock Option Plan (the "Plans")
and amendments to the Plans to limit to 600,000 the number of shares with
respect to which options may be granted under each Plan to any person in
any year.
4. To transact such other business as may be properly brought before
the Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on April 25, 1995 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting and at any adjournments thereof.
All stockholders are cordially invited to attend the Meeting. However, to
ensure your representation you are requested to complete, sign, date and return
the enclosed proxy as soon as possible in accordance with the instructions on
the proxy card. A return addressed envelope is enclosed for your convenience.
BY ORDER OF THE BOARD OF DIRECTORS
JAMES L. VINCENT
Chairman of the Board
Cambridge, Massachusetts
April 30, 1995
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BIOGEN, INC.
14 CAMBRIDGE CENTER
CAMBRIDGE, MASSACHUSETTS 02142
(617) 679-2000
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 1995
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Biogen, Inc. (the "Company") of proxies to be voted at
the Annual Meeting of Stockholders which will be held at the Company's offices
located at 12 Cambridge Center, Cambridge, Massachusetts on Friday, June 23,
1995 at 10:00 a.m., and any adjournments thereof (the "Meeting") for the
purposes stated in the accompanying Notice of Annual Meeting of Stockholders.
Shares represented by valid proxies in the form enclosed, received in time for
use at the Meeting and not revoked prior to the Meeting, will be voted at the
Meeting. A stockholder may revoke a proxy at any time before the proxy is voted
by delivering to the Secretary of the Company a signed statement of revocation
or a duly executed proxy bearing a later date. Any stockholder at the Meeting
who has executed a proxy but is present may vote in person by revoking the
proxy. This Proxy Statement and the accompanying proxy are being mailed on or
about May 5, 1995 to all stockholders entitled to notice of and to vote at the
Meeting.
The close of business on April 25, 1995 is the record date for determining
the stockholders entitled to notice of and to vote at the Meeting. On that date,
the Company had 33,186,930 shares of Common Stock outstanding and entitled to
vote.
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of nine members,
divided into three equal classes serving staggered three-year terms. The term of
one class of Directors expires at the Meeting. Three directors are to be elected
to the class whose term expires at the Meeting, to hold office until the Annual
Meeting of Stockholders in 1998 and until their successors are duly elected and
qualified.
VOTE
A plurality of the votes cast at the Meeting is required to elect each
nominee as a Director. If any nominee is unable or unwilling to accept
nomination or election, the shares represented by the enclosed proxy will be
voted for the election of such other person as the Board of Directors may
recommend. THE BOARD OF DIRECTORS RECOMMENDS ELECTION OF MESSRS. BELZER AND
STEVENS AND DR. MURRAY AS DIRECTORS.
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INFORMATION ABOUT THE DIRECTORS
- ---------------- Director since 1991; Member of the class of Directors with term
ending in 1997; Visiting Physician, Adjunct Professor at the
Photo Rockefeller University in New York since 1966 and Trustee of the
Rockefeller University since 1970; Trustee of Howard Hughes Medical
- ---------------- Institute since 1987; from 1979 to 1988 Senior Vice President for
Alexander G. Bearn, M.D. Medical and Scientific Affairs of the International Division of
(age 72) Merck & Co.; Director of Future Medical Products, Inc.; member of
the Scientific Board of the Company and nominated as a Director
pursuant to designation by the Scientific Board.
- ---------------- Director since 1990; President, Chief Operating Officer and
Director, Allied-Signal, Inc. from 1988 to 1993; from 1983 to 1988,
Photo Executive Vice President and President, Engineered Materials Sector,
Allied-Signal, Inc.
- ----------------
Alan Belzer
(age 62)
NOMINEE FOR RE-ELECTION
- ---------------- Director since 1986; Member of class of Directors with term ending
in 1997; Managing Director, The Henley Group, Inc. from 1986 to
Photo 1990; from 1983 to 1985, Executive Vice President, Finance and
Planning, Allied Corporation (now Allied-Signal, Inc.)
- ----------------
Harold W. Buirkle
(age 74)
- ---------------- Director since 1987; Member of class of Directors with term ending
in 1996; Vice President, Schiller International University,
Photo Heidelberg, Germany since 1983; Director of Artal, S.A., Luxembourg;
Director of Lorraine Investments Luxembourg S.A.; Co-Managing
- ---------------- Director, R&R Inventions Ltd., Birmingham, U.K; Advisory Director of
Roger H. Morley Bank of America, Illinois.
(age 63)
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- ---------------- Director since 1980; Biogen Professor of Molecular Biology,
University of Edinburgh, Scotland since 1984; during 1985 and 1986,
Photo Interim Research Director of Biogen S.A; Fellow of the Royal
Society; Vice Chairman of the Scientific Board of the Company and
- ---------------- nominated as a Director pursuant to designation by the Scientific
Sir Kenneth Murray, Ph.D. Board.
(age 64)
NOMINEE FOR RE-ELECTION
- ---------------- Director since 1982; Member of class of Directors with term ending
in 1996; Salvador E. Luria Professor and Head of the Department of
Photo Biology, Center for Cancer Research, Massachusetts Institute of
Technology since 1991; Director of the Center for Cancer Research at
- ---------------- MIT from 1985 to 1991; Chairman of the Scientific Board of the
Phillip A. Sharp, Ph.D Company and nominated as a Director pursuant to designation by the
(age 50) Scientific Board; Nobel Laureate.
- ---------------- Director since 1986; Chairman, Prudential Asset Management Group
from 1993 to January 1995; Executive Vice President, The Prudential
Photo Insurance Company of America and Prudential Investment Corporation
from 1987 to January 1995; Managing Director, Dillon, Read & Company
- ---------------- Inc. from 1985 until 1987; from 1984 until 1985, Group Executive of
James W. Stevens Citicorp and Citibank N.A. and Chairman of Citicorp Venture Capital,
(age 58) Ltd; Director of Prudential Equity Investors, Inc.
NOMINEE FOR RE-ELECTION
- ---------------- Director since 1994; Member of class of Directors with term ending
in 1996; President and Chief Operating Officer of Biogen, Inc. since
Photo February 1994; from 1992 to 1993, President and Chief Operating
Officer of Baxter International; from 1988 to 1992, Executive Vice
- ---------------- President of Baxter International; Director of Creative
James R. Tobin BioMolecules, Inc. and Medisense, Inc.
(age 50)
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- ---------------- Director since 1985; Member of class of Directors with term ending
in 1997; Chief Executive Officer and Chairman of the Board of
Photo Directors of Biogen, Inc. since 1985 and President from 1985 to
February 1994; from 1982 to 1985, Group Vice President, Allied
- ---------------- Corporation (now Allied-Signal, Inc.) and President, Allied Health
James L. Vincent and Scientific Products Company.
(age 55)
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
The Board has a Compensation and Management Resources Committee, a Finance
and Audit Committee, a Stock and Option Plan Administration Committee and a
Project Share Committee. The Company has no standing nominating committee. The
Compensation and Management Resources Committee, whose members are James W.
Stevens (Chairman), Roger H. Morley, Phillip A. Sharp and James L. Vincent,
makes recommendations to the Board concerning remuneration and benefits for
senior executives, and reviews executive development and succession. The Finance
and Audit Committee, whose members are Harold W. Buirkle (Chairman), Alan
Belzer, Roger H. Morley and James R. Tobin, reviews the Company's quarterly and
annual financial statements and Annual Report on Form 10-K, considers matters
relating to accounting policy and internal controls, reviews the scope of annual
audits, recommends independent public accountants to the Board and makes
recommendations concerning financial, investment and taxation policies. The
Project Share Committee, whose members are Phillip A. Sharp (Chairman), Kenneth
Murray and James L. Vincent, recommends to the Board stock and stock option
awards for scientific consultants. The Stock and Option Plan Administration
Committee, whose members are Roger H. Morley and James W. Stevens, administers
certain stock and stock option plans.
The Board of Directors and each of the Committees, except for the Project
Share Committee, met four times in 1994. The Project Share Committee did not
meet in 1994. No Director attended fewer than 75% of the total number of
meetings of the Board and of Committees of the Board on which he served during
1994.
Non-employee members of the Company's Board of Directors receive a $20,000
per year retainer, $1,500 for each Board meeting attended and $500 for attending
each meeting of Committees of the Board on which they serve, except for
Committee chairmen, who receive $1,000 per Committee meeting attended. Those
Directors who are members of the Company's Scientific Board and who are not
Company employees also receive an annual consulting fee of $15,000, $1,500 per
day for Scientific Board meetings, and $500 per day for each full working day
spent in the Company's laboratories, except for the Chairman of the Scientific
Board whose annual consulting fee is $60,000. Directors who are not members of
the Company's Scientific Board are eligible to participate in the Company's 1985
Non-Qualified Stock Option Plan (the "1985 Plan"). Directors who are members of
the Scientific Board are eligible to participate in the Company's 1987
Scientific Board Stock Option Plan. Directors may defer all or part of their
cash compensation pursuant to the Company's Voluntary Board of Directors Savings
Plan.
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RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP, independent
accountants, to examine the financial statements of the Company for the year
ending December 31, 1995. Price Waterhouse examined the Company's financial
statements for the year ended December 31, 1994. If the stockholders do not
ratify the selection of Price Waterhouse as the Company's independent
accountants, the Board of Directors will reconsider its selection. The Company
expects that representatives of Price Waterhouse will attend the Meeting, with
the opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS RATIFICATION OF THE SELECTION OF PRICE
WATERHOUSE AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1995.
SHARE OWNERSHIP
The following table sets forth information as of April 3, 1995 concerning
the ownership of Common Stock by each stockholder known by the Company to be the
beneficial owner of more than 5% of its outstanding shares of Common Stock, each
current member of the Board of Directors, each of the executive officers named
in the Summary Compensation Table included in this Proxy Statement and all
current Directors and executive officers as a group. Except as otherwise noted,
the persons or entities identified have sole voting and investment power with
respect to their shares.
SHARES BENEFICIALLY
OWNED
------------------------
NAME AND ADDRESS** NUMBER(1) PERCENT(1)
- -------------------------------------------------------------------- --------- ----------
Alexander G. Bearn.................................................. 30,100(2) *
Alan Belzer......................................................... 28,000(3) *
Harold W. Buirkle................................................... 86,000(4) *
Roger H. Morley..................................................... 31,000(3) *
Kenneth Murray...................................................... 257,000(5) *
Phillip A. Sharp.................................................... 263,000(6) *
James W. Stevens.................................................... 64,000(7) *
James R. Tobin...................................................... 67,413(8) *
James L. Vincent.................................................... 722,280(9) 2.13%
Joseph M. Davie..................................................... 71,428(3) *
Kenneth M. Bate..................................................... 162,764(10) *
Irvin D. Smith...................................................... 107,843(11) *
All executive officers and Directors as a group (19 persons)........ 2,340,857(12) 6.69%
New York Life Insurance Company..................................... 1,800,000(13) 5.14%
51 Madison Avenue
New York, NY 10010
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SHARES BENEFICIALLY
OWNED
------------------------
NAME AND ADDRESS** NUMBER(1) PERCENT(1)
- -------------------------------------------------------------------- --------- ----------
Jundt Associates, Inc............................................... 2,610,500(14) 7.87%
1550 Utica Avenue South
Suite 950
Minneapolis, MN 55416
BB Biotech AG....................................................... 2,840,000(15) 8.56%
Vordergasse 3
8200 Schaffhausen
CH/Switzerland
FMR Corp............................................................ 4,306,500(16) 12.99%
82 Devonshire Street
Boston, MA 02109
- ---------------
* Represents beneficial ownership of less than 1% of the Company's
outstanding shares of Common Stock.
** Addresses are given for beneficial owners of more than 5% of the
outstanding Common Stock only.
(1) All references to options in these notes mean those options which are held
by the respective person on April 3, 1995 and which are exercisable on
April 3, 1995 or become exercisable on or before sixty days after April 3,
1995. The calculation of percentages is based upon the number of shares
issued and outstanding at April 3, 1995, plus shares subject to options
held by the respective person at April 3, 1995, which are exercisable on
April 3, 1995 or become exercisable on or before sixty days after April 3,
1995.
(2) Includes 30,000 shares which may be acquired pursuant to options.
(3) Represents shares which may be acquired pursuant to options.
(4) Includes 44,000 shares which may be acquired pursuant to options.
(5) Includes 35,000 shares which may be acquired pursuant to options.
(6) Includes 35,000 shares which may be acquired pursuant to options.
(7) Includes 54,000 shares which may be acquired pursuant to options.
(8) Includes 57,142 shares which may be acquired pursuant to options and 67
shares acquired as matching contributions under the Company's 401(k) plan.
(9) Includes 719,000 shares which may be acquired pursuant to options. Certain
of the shares acquired upon exercise of such options are subject to
repurchase by the Company under certain circumstances. Includes 1,030
shares acquired as matching contributions under the Company's 401(k) plan.
See "Executive Compensation-Summary Compensation Table." Includes 1,500
shares held by Mr. Vincent's wife and 750 shares held by one of his
children.
(10) Includes 162,500 shares which may be acquired pursuant to options, and 264
shares acquired as matching contributions under the Company's 401(k) plan.
(11) Includes 107,500 shares which may be acquired pursuant to options, and 87
shares acquired as matching contributions under the Company's 401(k) plan.
(12) Includes 1,816,302 shares which may be acquired pursuant to options. Does
not include shares which may be purchased in 1995 by executive officers who
are currently participants in the 1983 Employee Stock Purchase Plan.
Includes 3,085 shares acquired as matching contributions under the
Company's 401(k) plan.
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(13) Represents shares that may be acquired upon exercise of currently
exercisable warrants.
(14) Jundt Associates, Inc. ("Jundt") manages accounts for the benefit of its
clients. Jundt exercises sole dispositive power over 2,545,600 shares and
shares dispositive power with respect to 64,900 shares. Jundt has sole
voting power over 1,793,700 of these shares. The above information was
reported on a Schedule 13G as of February 8, 1995.
(15) BB Biotech is an investment fund which makes investments through its
wholly-owned subsidiaries, Biotech Invest SA, Biotech Focus SA and Biotech
Target SA. BB Biotech may be deemed the indirect beneficial owner of the
1,080,000 shares beneficially owned by Biotech Invest, the 800,000 shares
beneficially owned by Biotech Focus and the 960,000 shares beneficially
owned by Biotech Target. The above information was reported on an Amendment
No. 1 to Schedule 13D as of July 6, 1994.
(16) FMR Corp. ("FMR") is a holding company. Fidelity Management & Research
Company ("Fidelity"), a wholly-owned subsidiary of FMR, is the beneficial
owner of 4,040,800 shares as a result of acting as an investment adviser to
several investment companies. Fidelity Management Trust Company ("FMTC"), a
wholly owned subsidiary of FMR, is the beneficial owner of 240,700 shares
as a result of its serving as an investment manager of institutional
accounts. Also included are 25,000 shares held by Fidelity International
Limited, of which FMR disclaims beneficial ownership. FMR and Edward C.
Johnson 3d, through their control of Fidelity and FMTC, have sole power to
dispose of the shares beneficially owned by Fidelity and FMTC and sole
power to vote 44,900 of the shares beneficially owned by FMTC. The above
information was reported on Schedule 13G as of December 31, 1994.
EXECUTIVE COMPENSATION
The following table sets forth the compensation of the Company's Chief
Executive Officer and the four other most highly compensated executive officers
(the "Named Executive Officers") during the three fiscal years ended December
31, 1994.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
-------------------------------------- SHARES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS(#) COMPENSATION(2)
- ------------------------- ---- -------- -------- --------------- ------------ ---------------
James L. Vincent......... 1994 $700,000 $350,000 $ 0 0 $25,431
Chairman and Chief 1993 635,000 310,000 0 0 21,139
Executive Officer 1992 570,000 285,000 0 200,000 19,746
James R. Tobin........... 1994 338,470(3) 235,000 150,098 440,000 3,217
President and Chief 1993 N/A N/A N/A N/A N/A
Operating Officer 1992 N/A N/A N/A N/A N/A
Joseph M. Davie.......... 1994 260,000 73,000 47,805 0 1,783
Vice President-- 1993 190,000(3) 75,000 99,987 250,000 892
Research 1992 N/A N/A N/A N/A N/A
Kenneth M. Bate.......... 1994 242,000 63,000 20,000 25,000 3,335
Vice President-- 1993 220,000 72,000 25,640 25,000 3,207
Marketing and Sales 1992 196,000 59,000 28,835 25,000 3,207
Irvin D. Smith........... 1994 225,000 61,000 81,323 0 2,310
Vice President-- 1993 144,324(3) 70,000 98,241 25,000 909
Development Operations 1992 N/A N/A N/A N/A N/A
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- ---------------
(1) Other Annual Compensation in 1994 for Mr. Tobin, Dr. Davie and Mr. Bate
includes the portion of payments made under a contingent bonus and mortgage
loan forgiveness program in connection with their hiring which became
vested during the last fiscal year in the amount of $76,586, $25,000 and
$20,000, respectively. Other Annual Compensation for Mr. Tobin and Dr.
Davie includes $40,886 and $21,322, respectively, in relocation expense
payments and $32,626 and $1,483, respectively, in payments to cover taxes
on relocation expense reimbursement. Other Annual Compensation for 1994 for
Dr. Smith consists of tax equalization payments made to him in connection
with his past service as Managing Director of Bioferon, a former German
joint venture of the Company.
(2) All Other Compensation for Mr. Vincent, Mr. Tobin, Mr. Bate and Dr. Smith
includes the dollar value of matching contributions made in shares of the
Company's Common Stock during the last fiscal year under the Company's
401(k) plan in the amount of $1,442, $2,250, $2,250 and $2,250,
respectively, and matching amounts of less than $100 per officer made by
the Company under its non-qualified Voluntary Executive Supplemental
Savings Plan for compensation in excess of the amount that may be taken
into account under the 401(k) plan. All Other Compensation also includes
for each of the named individuals, except Dr. Smith, the dollar value of
premiums paid by the Company during the last fiscal year with respect to
term life insurance for their benefit under an executive life insurance
program in the amount of $23,929 for Mr. Vincent, $907 for Mr. Tobin,
$1,783 for Dr. Davie and $1,025 for Mr. Bate.
(3) Includes compensation only for the period of the year during which the
individual was employed by the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding options granted to the
Named Executive Officers in 1994.
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- ------------------------------------------------------------------------------------- ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL
SHARES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED OPTION TERM(2)
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION ------------------------
NAME GRANTED(1) IN FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ------------------------------ --------- -------------- ----------- ---------- ---------- ----------
James L. Vincent.............. 0 0 N/A N/A N/A N/A
James R. Tobin................ 400,000 33.03 47.75 1/17/04 12,011,887 30,440,481
40,000 3.30 33.625 12/9/04 845,863 2,143,584
Joseph M. Davie............... 0 0 N/A N/A N/A N/A
Kenneth M. Bate............... 25,000 2.06 33.625 12/9/04 528,664 1,339,740
Irvin D. Smith................ 0 0 N/A N/A N/A N/A
- ---------------
(1) All options listed were granted pursuant to the 1985 Plan at the market
price on the date of grant. The options have a ten-year term and vest
annually in six installments commencing one year from the date of grant
with the exception of the initial grant to Mr. Tobin which vests over seven
years.
(2) The potential realizable values for all stockholders at the assumed annual
rates of stock price appreciation of 5% and 10% would be $856,853,978 and
$2,171,436,213, respectively. These values assume increases in the value of
the shares of Common Stock outstanding at December 30, 1994 at the stated
percentages over a ten-year period from an initial value of $41.125, the
average of the high and low sales prices of the Company's Common Stock on
December 30, 1994.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table sets forth information regarding options held by the
Named Executive Officers of the Company in 1994.
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT YEAR-END AT YEAR-END(1)
SHARES ACQUIRED VALUE --------------------------- ----------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- --------------- ----------- ----------- ------------- ----------- -------------
James L. Vincent..... 0 0 719,000 0 $13,878,660(2) $ 0
James R. Tobin....... 0 0 0 440,000 0 300,000
Joseph M. Davie...... 0 0 32,714 214,286 504,460 3,026,790
Kenneth M. Bate...... 0 0 162,500 72,500 2,713,125 210,938
Irvin D. Smith....... 0 0 107,500 12,500 1,595,625 146,875
- ---------------
(1) The value of unexercised in-the-money options at year-end assumes a fair
market value for the Company's Common Stock of $41.125, the average of the
high and low sales prices of the Company's Common Stock on December 30,
1994.
(2) Options granted to Mr. Vincent vest immediately, but the shares issuable
upon exercise of options are subject to repurchase by the Company under
certain conditions and for a specified period.
PENSION PLAN
Biogen has a defined benefit pension plan in which all permanent U.S.
employees participate as of the first day of the quarter following date of hire.
The current pension formula provides for each year of service after 1988 a
benefit accrual of 1.6% of compensation during the year up to the participant's
Social Security-covered compensation level and 2.2% of compensation during the
year in excess of this level. For 1988 and earlier years, the benefit formula
provided at different times varying amounts of benefit accrual. The total
accrued pension amount is payable as a monthly pension for life starting at age
65. Each person who was a participant on or before October 31, 1986, (the date
at which the plan changed from a defined contribution to a defined benefit plan)
will receive a pension of not less than the value of his or her account balance
as of such date, plus interest at the rate of 8%. A participant's interest in
the plan is subject to a graded vesting schedule based on years of service with
Biogen and is fully vested after completing seven years of service.
Biogen also maintains the Biogen Supplemental Executive Retirement Plan
("SERP"). For certain executive officers, the SERP benefit formula provides for
each year of participation 1.5% of compensation during the year up to the Social
Security taxable wage base for such year and 2.5% of compensation above the wage
base. This benefit formula preserves for SERP participants the level of
retirement benefits provided under the pension plan's benefit formula before its
amendment effective in 1989 to comply with the Tax Reform Act of 1986. The SERP
also provides benefits that, due to certain tax law limits on the amount of
compensation and benefits under the pension plan, cannot be paid from the
pension plan.
The following table shows estimated annual benefits payable upon retirement
(age 65) for life under the pension plan and the SERP. These estimates are based
on the assumptions that an employee will work for Biogen until normal retirement
age with no change in current 1994 compensation and that the Social Security
taxable wage base in 1995 of $61,200 will not change.
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CURRENT
SALARY
PLUS BONUS 15 20 25 30 35
---------- -------- -------- -------- ---------- ----------
$ 200,000 ...................... $ 67,000 $ 89,000 $111,000 $ 133,000 $ 155,000
300,000 ...................... 104,000 139,000 173,000 208,000 242,000
400,000 ...................... 142,000 189,000 236,000 283,000 330,000
500,000 ...................... 179,000 239,000 299,000 358,000 417,000
600,000 ...................... 217,000 289,000 361,000 433,000 505,000
700,000 ...................... 254,000 339,000 423,000 508,000 592,000
800,000 ...................... 292,000 389,000 486,000 583,000 680,000
900,000 ...................... 329,000 439,000 548,000 658,000 767,000
1,000,000 ...................... 367,000 489,000 611,000 733,000 855,000
1,100,000 ...................... 404,000 539,000 673,000 808,000 942,000
1,200,000 ...................... 442,000 589,000 736,000 883,000 1,030,000
1,300,000 ...................... 480,000 639,000 798,000 958,000 1,118,000
1,400,000 ...................... 517,000 689,000 861,000 1,033,000 1,205,000
The (i) current pensionable earnings (salary and bonus), (ii) current years
of service, and (iii) projected total service at age 65 are as follows for each
of the executive officers named in the compensation and option tables: Mr.
Vincent ($592,306, 9.5 years, 19 years (projected)); Mr. Tobin ($455,970, 1.0
years, 16.0 years (projected)); Dr. Davie ($260,000, 2.0 years, 11.5 years
(projected)); Mr. Bate $286,090, 4.5 years, 26 years (projected)); and Dr. Smith
($306,323, 3.5 years, 5.5 years (projected)).
EMPLOYMENT ARRANGEMENTS WITH THE COMPANY AND CERTAIN TRANSACTIONS
Each of Mr. Tobin, Dr. Davie, Mr. Bate and Dr. Smith has an employment
agreement with the Company under which he receives executive life insurance and
tax preparation services. Dr. Davie's, Mr. Bate's and Dr. Smith's employment
agreements each further provides for compensation in the event of termination by
the Company, other than for cause, in the amount of base salary and certain
medical benefits, for twelve months or until alternative employment is obtained,
if earlier. Mr. Tobin's agreement provides for payment of $2.5 million, reduced
by any profit from his exercise of vested stock options, in the event his
employment terminates under certain circumstances. Mr. Vincent has an agreement
under which he receives term life, disability, and personal liability insurance,
personal income tax return preparation and tax audit services. Mr. Vincent's
agreement also provides for a minimum bonus of 25% of base salary if his
performance is satisfactory. In addition, Mr. Vincent will be entitled to
receive the discounted present value of an amount equal to compensation for 30
months following non-cause termination (whether by the Company, or in certain
cases, by Mr. Vincent) based on his last annual salary and bonus, together with
the amount of certain excise taxes imposed on such termination payments.
In connection with the hiring of certain executives, the Company has
granted bonuses contingent upon the executive's continued employment over a
period of years. In addition, the Company has also, in the ordinary course of
its business, made loans to certain executive officers and other key employees
in connection with their hiring to facilitate their relocation to the area.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Management Resources Committee, which
determines cash remuneration and benefits for senior executives and reviews
executive development and succession, are James W. Stevens (Chairman), Roger H.
Morley, Phillip A. Sharp and James L. Vincent, the Chairman of the Board and
Chief Executive Officer of the Company.
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JOINT REPORT ON COMPENSATION PHILOSOPHY
BY THE COMPENSATION AND MANAGEMENT
RESOURCES COMMITTEE AND STOCK AND
OPTION PLAN ADMINISTRATION COMMITTEE
The success of Biogen's mission, to move from a development-stage company
to a fully-integrated pharmaceutical company, will depend heavily on its ability
to recruit, motivate and retain senior executives with demonstrated talent and
managerial leadership skills typically gained from successful experiences in
positions of greater scope and responsibility in pharmaceutical and other
industry settings. A competitive compensation program is a crucial part of the
Company's effort to fulfill its mission. The Biogen executive compensation
program consists of three parts: base salary and benefits, annual bonus and
stock options. The Company's target for total compensation is to be competitive
with Fortune 500 pharmaceutical companies, which typically results in Biogen pay
levels at or above the 75th percentile of the biotechnology industry. In 1994,
the total compensation package paid to executive officers, other than the Chief
Executive Officer and Chief Operating Officer, was slightly above average
compared to the major biotechnology companies with respect to cash compensation,
and above average with respect to the value of stock options granted. Individual
compensation decisions are made with reference to progress toward goals tailored
for Biogen's stage of development, rather than traditional measures of a
company's performance, such as short-term earnings per share, which often do not
relate to the successful execution of the strategy which Biogen is pursuing.
BASE SALARY AND BENEFITS
Company philosophy is to maintain executive base salary at a competitive
level sufficient to recruit individuals possessing the skills and values
necessary to achieve the Company's vision and mission over the long term.
Determinations of appropriate base salary levels and other compensation elements
are generally made through participation in a variety of industry surveys and
studies, as well as by monitoring developments in key industries such as
pharmaceuticals. Periodic adjustments in base salary relate to competitive
factors and to individual performance evaluated against pre-established
objectives. Executive officers are also entitled to participate in benefit plans
generally available to employees and receive executive life insurance and other
benefits as described elsewhere in this Proxy Statement.
ANNUAL BONUS
The Compensation and Management Resources Committee of the Board, in its
discretion, may award bonuses to executive officers, and the Company pays
bonuses based on each executive officer's performance goals. The intent of the
annual bonus is to motivate and reward performance of senior executives measured
against distinct and clearly articulated goals in light of the competitive
compensation practices of the biotechnology industry. The goals vary with
responsibilities and are based on individual milestones rather than overall
measures of the Company's performance. In 1994, these goals included achievement
of certain clinical milestones with respect to late stage product candidates,
accomplishment of key steps in preparation for certain key regulatory filings,
closing of certain manufacturing-related agreements and arrangements and
progress on development of sales and marketing structure and other systems
necessary for the Company to achieve its goal of becoming a fully-integrated
pharmaceutical company.
STOCK OPTIONS
Stock options are a fundamental element in the total compensation program
because they emphasize long-term Company performance as measured by creation of
stockholder value and foster a community of interest between stockholders and
employees. Accordingly, the Company believes that the use of stock options
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is preferable to other forms of stock compensation such as restricted stock.
Options are granted to all permanent full-time employees, and particularly to
key employees likely to contribute significantly to the Company. In determining
the size of an option grant to an executive officer, the Company considers not
only competitive factors, changes in responsibility and the executive officer's
achievement of individual pre-established goals, but also the number and terms
of options previously granted to the officer. In addition, the Company usually
makes a significant grant of options when an executive officer joins the Company
(as it did with Mr. Tobin in 1994). The size of option grants to executive
officers is determined by the Stock and Option Plan Administration Committee.
Options are granted, as a matter of Company policy, at 100% of the fair
market value on the date of grant. The Company generally awards options to
officers on employment and at regular intervals, but other awards may be made.
Some of the Company's stock option plans also provide for granting options to
members of the Board of Directors and the Scientific Board. Options granted to
employees generally vest over periods ranging from six to seven years after
grant.
CEO COMPENSATION
The compensation of Biogen's Chief Executive Officer reflects the Company's
philosophy. Mr. Vincent has extensive pharmaceutical industry experience and was
hired in 1985 from one of the nation's largest corporations at a time when
Biogen's financial condition and prospects were considerably weaker. The terms
of his employment, which included his initial stock option grants, were
structured to provide significant incentives to contribute to the Company's
success. Under those terms, he receives a base salary that increases based on
inflation and his performance, and an annual bonus computed as a percentage of
base salary based on a minimum bonus of 25% of base salary when his performance
is satisfactory, with a significantly higher bonus when his performance is more
than satisfactory.
Mr. Vincent's compensation is not formula-based but rather is determined by
the Board based upon the recommendation of the Compensation and Management
Resources Committee and the Stock and Option Plan Administration Committee based
on the Committees' assessment of Mr. Vincent's performance and review of data
showing the compensation of Mr. Vincent's peers in the pharmaceutical industry.
Mr. Vincent's performance is evaluated by the Committees by considering various
factors, including the breadth of Mr. Vincent's responsibilities and progress
made by the Company toward becoming a fully-integrated pharmaceutical company as
measured by the Committees' assessment of the performance of the key
departments. In 1994, the Company's progress and the quality of Mr. Vincent's
performance were reflected in achievements in areas such as product development,
facilities expansion, financial management and executive recruitment.
In determining whether to grant Mr. Vincent options, the Board and the
Committees consider not only competitive factors and Mr. Vincent's performance
but also the number and terms of options previously granted. In recognition of
his performance, and as an additional incentive for the future, Mr. Vincent was
granted a significant number of stock options in late 1992, with the
understanding that, barring unforeseen circumstances, no further options would
be granted to Mr. Vincent for the next three years.
IMPACT OF INTERNAL REVENUE CODE SECTION 162(M)
Internal Revenue Code Section 162(m) ("Section 162(m)") precludes a public
corporation from taking a deduction for compensation in excess of $1 million
paid to its chief executive officer or any of its four other highest paid
officers. At such time as this provision would impact the Company, the Board and
Committees will assess the practical effect on executive compensation and
determine what action, if any, is appropriate.
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COMMITTEES' ROLES
The stock option plans for senior executives are administered by the Stock
and Option Plan Administration Committee ("Stock Plan Committee") (Messrs.
Morley and Stevens) of the Board of Directors. Other compensation decisions for
senior executives are made by the Compensation and Management Resources
Committee or, in the case of the Chief Executive Officer, by the Board based on
recommendations from that Committee.
James W. Stevens, Chairman, Compensation
and Management Resources Committee
Roger H. Morley
Phillip A. Sharp
James L. Vincent
TRADING REPORTS
The Company's officers, directors and greater than ten percent stockholders
are required to file reports of ownership and change of ownership with the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
Based solely on information provided to the Company by the individual directors,
officers and ten percent stockholder, the Company believes that, during the
fiscal year ended December 31, 1994, all such parties complied with all
applicable filing requirements except for a late reporting of the acquisition of
250 shares of which James L. Vincent may be deemed to be the beneficial owner.
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PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return on its Common Stock during a period
commencing on December 31, 1989 and ending December 31, 1994 (as measured by
dividing (i) the sum of (A) the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment, and (B) the difference
between the Company's share price at the end and the beginning of the period; by
(ii) the share price at the beginning of the period) with the cumulative return
of the Standard & Poor's 500 Stock Index and the NASDAQ Pharmaceutical Stocks
Total Return Index. The NASDAQ Pharmaceutical Stocks Total Return Index, which
is calculated and supplied by NASDAQ, represents all companies trading on NASDAQ
under the Standard Industrial Classification (SIC) Code for pharmaceutical,
including biotechnology, companies. Biogen has not paid dividends on its Common
Stock, and no dividends are included in the representation of the Company's
performance. The stock price performance on the graph below is not necessarily
indicative of future price performance.
Measurement Period Pharmaceutical
(Fiscal Year Covered) BIOGEN S&P 500 NASDAQ Index
1989 100 100 100
1990 173 97 120
1991 239 126 319
1992 281 136 265
1993 238 150 237
1994 249 152 178
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AMENDMENTS TO 1985 NON-QUALIFIED STOCK OPTION
PLAN AND 1982 INCENTIVE STOCK OPTION PLAN
GENERAL
On April 25, 1995, the Board of Directors of the Company adopted amendments
to the 1985 Non-Qualified Stock Option Plan (the "1985 Plan") and the 1982
Incentive Stock Option Plan (the "ISO Plan") which increase the aggregate number
of shares available for issuance under the 1985 Plan and the ISO Plan
(collectively, the "Plans") from 7,227,000 shares to 9,227,000 shares, as
described below. These amendments are being submitted for stockholder approval
at the Meeting. The Board of Directors also voted to approve an amendment to
each of the Plans to provide for a limit on the number of shares with respect to
which options may be granted or awarded to any employee in any calendar year.
The limit in the proposed amendment is 600,000 shares per employee per year. If
approved, the amendment would be made by adding the language set forth below at
the end of Paragraph V of the 1985 Plan, and Paragraph IV of the ISO Plan:
"In no event shall any employee be granted in any calendar year options to
purchase or receive more than 600,000 shares of the Company's Common Stock
pursuant to this Plan."
In the past, the Plans did not impose a limit on the number of shares for which
options may be granted or awarded to any employee. This amendment is necessary
to avoid limitations under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"), on the tax deductibility of compensation expense
relating to options granted or awarded pursuant to each of the Plans. Further
actions may be required after the promulgation of final regulations under
Section 162(m). These amendments are being submitted for stockholder approval at
the Meeting (i) to ensure continued qualification of the Plans under Rule 16b-3,
(ii) to qualify options issued under the ISO Plan as incentive stock options,
and (iii) to avoid disallowance of compensation expense under Section 162(m).
MATERIAL FEATURES OF THE PLANS
The purpose of the Plans is to attract, retain and motivate employees and
Directors through the issuance of stock options and to encourage ownership of
shares of the Company's Common Stock by all employees and Directors of the
Company. The Plans are administered by the Stock Plan Committee. Non-qualified
stock options under the 1985 Plan are granted to each employee who is deserving
by reason of performance, merit, promotion or having newly joined the Company,
and may also be granted to members of the Board of Directors. Directors who are
not employees or Scientific Board members, and who were not elected pursuant to
an agreement with stockholders, are entitled to be granted options, upon first
being elected to the Board, and on every third anniversary of their previous
grant, to purchase 15,000 shares of Common Stock. All employees of the Company
(approximately 438 persons) and the members of the Board of Directors are
eligible to participate in the 1985 Plan. Stock options under the ISO Plan may
be granted to key employees as determined by the Stock Plan Committee. All of
the Company's employees are eligible to participate in the ISO Plan.
The aggregate fair market value at the time of grant of shares of Common
Stock for which incentive stock options become exercisable for the first time in
any calendar year (under the ISO Plan) may not exceed $100,000. Incentive stock
options granted under the ISO Plan may not be granted at a price less than the
fair market value of the Common Stock on the date of grant (or 110% of fair
market value in the case of employees holding 10% or more of the voting stock of
the Company). Non-qualified stock options under the 1985 Plan are granted with
an exercise price equal to fair market value, except as otherwise determined by
the Stock Plan Committee, but in no event less than the par value per share of
the Common Stock. Options
15
20
granted under the ISO Plan expire on dates determined by the Stock Plan
Committee but in no event later than 10 years after the date of grant (5 years
in the case of employees holding 10 percent or more of the voting stock of the
Company). Options granted under the 1985 Plan expire not more than 10 years from
the date of grant.
The Stock Plan Committee determines, subject to the provisions of the
Plans, the number of options granted and the terms of the options including
vesting, expiration and price. Options generally are exercisable cumulatively,
typically vest from six to seven years following a date set by the Stock Plan
Committee and have a ten-year term. If the optionee terminates employment (or
ceases to be a Director in the case of the 1985 Plan) due to total and permanent
disability (as determined by the Stock Plan Committee), the option becomes fully
vested and the optionee may exercise the option within one year after the Stock
Plan Committee's determination of disability, or, in the case of the 1985 Plan,
within a different period determined by the Stock Plan Committee (but in no
event later than the expiration of the option). If the optionee dies while he or
she is employed by the Company (or is a Director of the Company, in the case of
the 1985 Plan), the optionee's option becomes fully vested on the date of death
and the optionee's legal representative may exercise such option within one year
of the date of death (but in no event later than the expiration of the option).
Options granted under the Plans are non-transferable, other than by will or by
the laws of descent and distribution. Options may be exercised during the
optionee's lifetime solely by the optionee.
Under each of the Plans, the Company will make appropriate adjustments in
the event that the Common Stock of the Company is changed into or exchanged for
a different number or kind of shares or other securities of the Company or of
another corporation by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, change in par value, stock split,
combination of shares, stock dividend, or the like. The options granted under
the Plans terminate upon the dissolution or liquidation of the Company (other
than in connection with a reorganization, merger or consolidation). Under the
Plans, the optionee (or the optionee's survivors) has the right, immediately
prior to any dissolution or liquidation, to exercise the option to the extent
vested as of the date immediately prior to the date of the dissolution or
liquidation.
The Plans terminate on December 31, 2002. The Plans may be amended by the
Stock Plan Committee or the Board of Directors except that stockholder approval
is required to the extent necessary to preserve incentive stock option treatment
under the ISO Plan for Federal tax purposes or to comply with Rule 16b-3 under
the Securities Exchange Act of 1934.
As of April 3, 1995, an aggregate of 7,034,464 shares had been issued upon
the exercise of options or are issuable upon the exercise of outstanding options
under the ISO Plan and the 1985 Plan. On April 3, 1995, the closing market price
per share of the Company's Common Stock was 38 15/16, as reported in the NASDAQ
National Market System.
FEDERAL INCOME TAX CONSIDERATIONS
Incentive Stock Options (ISO Plan). An incentive stock option does not
result in taxable income to the option holder or deduction to the Company at the
time it is granted or exercised, provided that no disposition is made by the
optionee of the shares acquired pursuant to the option within two years after
the date of granting of the option nor within one year after the date of
issuance of shares (the "ISO holding period"). However, the difference between
the fair market value of the stock on the date of exercise and the option price
will be an item of tax preference included in "alternative minimum taxable
income." Upon disposition of the stock after the expiration of the ISO holding
period, the optionee will generally recognize long term capital gain or loss
based on the difference between the disposition proceeds and the option price
paid for the stock. If the stock is disposed of prior to the expiration of the
ISO holding period, the optionee generally will recognize
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taxable compensation (and the Company will have a corresponding deduction) in
the year of the disposition, equal to the excess of the fair market value of the
stock on the date of exercise of the option over the option price. Any
additional gain realized on the disposition will normally constitute capital
gain. If the amount realized upon such a disqualifying disposition is less than
fair market value of the stock on the date of exercise, the amount of
compensation income will be limited to the excess of the amount realized over
the optionee's adjusted basis in the stock.
Non-Qualified Stock Options (1985 Plan). The grant of a non-qualified
option will not result in taxable income to the optionee or deduction to the
Company at the time of grant. The optionee will recognize taxable compensation,
and the Company will have a corresponding deduction, at the time of exercise in
the amount of the excess of the then fair market value of the shares acquired
over the option price. Upon disposition of the shares, the optionee will
generally realize capital gain or loss, and his or her basis for determining
gain or loss will be the sum of the option price paid for the stock plus the
amount of compensation income recognized on exercise of the option.
VOTE
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Meeting is required to approve the increase in the
aggregate number of shares available under the Plans and the amendments to limit
the number of options which may be issued under the Plans to any person in any
year. The Board of Directors believes that these amendments are advisable to
give the Company the flexibility needed to attract and retain skilled and
motivated employees and Directors and to provide for the deductibility of this
form of compensation. THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE INCREASE
IN THE AGGREGATE NUMBER OF SHARES AVAILABLE FOR THE GRANT OF OPTIONS UNDER THE
PLANS AND THE AMENDMENTS TO LIMIT THE NUMBER OF OPTIONS WHICH MAY BE ISSUED
UNDER THE PLANS TO ANY PERSON IN ANY YEAR.
MISCELLANEOUS
PROPOSALS OF STOCKHOLDERS
To be included in the Company's 1996 Proxy Statement for consideration at
the Annual Meeting of Stockholders to be held in 1996, stockholder proposals
must be received by the Company, marked for the attention of the "Vice
President-General Counsel," not later than January 2, 1996. A stockholder
proposal calling for increased diversity of Board membership was received by the
Company for inclusion in this Proxy Statement, but was withdrawn by the
stockholder in light of adoption by the Board of Directors of the following
statement: "The Board expects a number of vacancies on the Board in the next
five years. Consistent with the past practices of Biogen, the Board is committed
to a strong and diverse membership and going through a careful process to
identify those individuals who can best contribute to Biogen's continued
success. As a part of that process, the Board will continue to take all
reasonable steps to identify and consider for the Board all candidates,
including women and minorities, who satisfy the business needs of Biogen at the
time of appointment."
SOLICITATION AND VOTING OF PROXIES
The proxy accompanying this Proxy Statement is solicited by the Board of
Directors of the Company. Directors, officers and other employees of the Company
may also solicit proxies by telephone, telegram, telex and personal
solicitation. No additional compensation will be paid to any Director, officer
or employee for such
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solicitation. The cost of soliciting proxies, including expenses in connection
with preparing and mailing this Proxy Statement, will be borne by the Company.
The Company will reimburse brokerage firms and other persons representing
beneficial owners of Common Stock of the Company for their expenses in
forwarding proxy material to such beneficial owners. In addition, at the cost of
approximately $5,000, the Company has hired D.F. King & Co., Inc. to act as its
proxy solicitation agent to assist in the solicitation of proxies for the
Meeting.
Stockholders of record on April 25, 1995, will be entitled to vote at the
meeting on the basis of one vote for each share held. If a stockholder specifies
a choice on the proxy as to how his or her shares are to be voted on a
particular matter, the shares will be voted accordingly. Unless authority to
vote for any of the proposals contained herein is withheld, the shares
represented by the enclosed proxy will be voted for such proposals. With respect
to the proposed Plan amendments, pursuant to Rule 16b-3, abstentions are treated
as votes against the proposal while broker non-votes have no effect on the vote.
With respect to any other matter to be acted on at the Meeting, abstentions and
broker non-votes will neither count for nor against the proposal to be voted
upon. With respect to all proposals, abstentions and broker non-votes will be
counted toward determination of a quorum.
INCORPORATION BY REFERENCE
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the securities laws that might incorporate future
filings, including this Proxy Statement, in whole or in part, the reports of the
compensation and stock option committees and the performance graph included in
this Proxy Statement shall not be incorporated by reference into any such
filings.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
to the Meeting. If any other business is properly brought before the Meeting, it
is intended that proxies in the enclosed form will be voted in respect thereof
in accordance with the judgment of the persons voting the proxies.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
FILL OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.
By order of the Board of Directors:
Michael J. Astrue
Clerk
Cambridge, Massachusetts
April 30, 1995
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[Map]
DIRECTIONS TO BIOGEN
FROM LOGAN AIRPORT & BOSTON FROM NORTH OR SOUTH
Take Sumner Tunnel to Expressway (Rte. Rte. 93 to Storrow Drive. Take Storrow
93). Go up ramp for 1/4 mile following Drive to exit marked Kendall Square. Go
signs for Storrow Drive. Take Storrow across Longfellow Bridge over Charles
Drive to left exit marked Kendall Square. River and follow straight...
Go across Longfellow Bridge over Charles FROM WALTHAM AND RTE. 2
River and follow straight. Marriott Hotel Rte. 2 to memorial Drive eastbound. (You
will be 1 1/2 blocks down on left... will pass Harvard University, The B.U.
FROM "T" Bridge, The Mass Ave. Bridge and MIT.)
Take "T" to Kendall Square/MIT stop. Walk After passing MIT, STAY TO THE RIGHT. Take
straight up stairs... left at lights (Kendall Square) onto
Binney Street. Take left at 2nd light onto
Third St. Proceed to end and turn right
onto Broadway...
FROM LOGAN AIRPORT & BOSTON FROM MASS AVE.,
Take Sumner Tunnel to Expressway (Rte. Follow Mass Ave. onto Main Street. Take
93). Go up ramp for 1/4 mile following left onto Ames Street at Legal Seafood...
signs for Storrow Drive. Take Storrow FROM WEST AND MASS PIKE
Drive to left exit marked Kendall Square. Take Mass Pike to exit 18 (Cambridge/
Go across Longfellow Bridge over Charles Allston/Brighton exit). After toll, bear
River and follow straight. Marriott Hotel right (Cambridge/Somerville). Go straight
will be 1 1/2 blocks down on left... across Rive Street Bridge. Turn right onto
FROM "T" Memorial Drive eastbound. After passing
Take "T" to Kendall Square/MIT stop. Walk MIT, STAY TO THE RIGHT. Take left at first
straight up stairs... set of lights (2nd Kendall Square sign)
onto Binney Street. Take left at 2nd light
onto Third Street. Proceed to end and turn
right onto Broadway...
NOTE: UPON REACHING KENDALL SQUARE, PLEASE REFER TO KENDALL SQUARE CAMBRIDGE
CENTER DETAIL MAP FOR BIOGEN BUILDING LOCATIONS AND PARKING INSTRUCTIONS.
24
14 CAMBRIDGE CENTER
CAMBRIDGE, MA 02142
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
MEETING DATE
JUNE 23, 1995
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APPENDIX
BIOGEN, INC.
1985 NON-QUALIFIED STOCK OPTION PLAN
(AS AMENDED THROUGH APRIL 25, 1995 AND RESTATED)
I. PURPOSE OF THE PLAN
The Plan is intended to encourage ownership of shares of Common Stock of
the Company by certain employees and Directors of the Company and its
Affiliates and to provide an additional incentive to those employees and
Directors to promote the success of the Company and its Affiliates.
II. DEFINITIONS
1. "Company" means Biogen, Inc., a Massachusetts corporation.
2. "Affiliate" means a corporation in respect of which the Company owns
directly or indirectly fifty percent (50%) or more of the voting shares thereof
or which is otherwise controlled by the Company.
3. "Committee" means the Stock and Option Plan Administration Committee of
the Board of Directors of the Company.
4. "Option" means a stock option granted under this Plan.
III. SHARES SUBJECT TO THE PLAN
The aggregate number of shares as to which Options may be granted from
time to time shall be 9,227,000 of the shares of Common Stock of the Company
(par value $.01); provided, however that such aggregate number shall be reduced
by the number of shares which has been sold under, or may be sold pursuant to
options granted from time to time under, the Company's 1982 Incentive Stock
Option Plan (the "ISO Plan"), to the same extent as if such sales had been made
or options granted pursuant to this Plan.
If any option granted under this Plan or the ISO Plan ceases to be
"outstanding", in whole or in part, other than by reason of the exercise of
such option, the shares which were subject to such option shall be available
for the granting of other Options. Any option shall be treated as "outstanding"
until such option is exercised in full, terminates under the provisions of this
Plan or the ISO Plan, as the case may be, or expires by reason of lapse of
time.
The aggregate number of shares as to which Options may be granted shall be
subject to change only by means of an amendment adopted in accordance with
Article XI below, subject
26
to the provisions of Article VIII.
IV. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The membership of the
Committee shall be determined, and shall be subject to change without cause and
without notice from time to time, by the Board of Directors of the Company.
The Committee is authorized to interpret the provisions of the Plan or of
any Option and to make all rules and determinations necessary or advisable for
the administration of the Plan. Subject to the provisions of the Plan, Options
may be granted upon such terms and conditions as the Committee may prescribe.
This Plan is intended to comply in all respects with Rule 16b-3 or its
successors promulgated under the Securities Exchange Act of 1934 ("1934 Act")
with respect to participants who are subject to Section 16 of the 1934 Act, and
any provision in this Plan with respect to such persons contrary to Rule 16b-3
shall be deemed null and void to the extent permissible by law and deemed
appropriate by the Committee.
V. ELIGIBILITY FOR PARTICIPATION
The Committee shall determine which employees and Directors shall be
eligible to participate in the Plan. Without limiting the generality of the
foregoing, Options may be awarded for reasons of performance, merit, promotion,
bonus or upon new employees joining the Company or any Affiliate.
The Committee may grant to one or more such employees or Directors one or
more Options, and shall designate the number of shares to be optioned under
each Option so granted; provided, however, that no Options shall be granted
after December 31, 2002. In no event shall any employee be granted in any
calendar year options to purchase or receive more than 600,000 shares of the
Company's Common Stock pursuant to this Plan.
VI. TERMS AND CONDITIONS OF OPTIONS
No Option issued pursuant to this Plan shall be an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as amended. Each Option
shall be set forth in writing in an Option agreement, duly executed on behalf
of the Company and by the person to whom such Option is granted. No Option
shall be deemed to have been granted and no purported grant of any Option shall
be effective until such Option shall have been approved by the Committee. The
Committee may provide that Options be granted subject to such conditions as the
Committee may deem appropriate, including without limitation, subsequent
approval by the shareholders of the Company of this Plan or any amendments
thereto. Each such Option agreement shall be subject to at least the following
terms and conditions:
27
A. Option Price: Except as otherwise determined by the Committee, the
Option price per share for Options granted under the Plan shall be equal to the
fair market value per share of Common Stock on the date of grant of the Option;
provided, however, that in no event shall the Option price be less than the par
value per share of Common Stock. Fair market value shall be the average of the
"high" and "low" sale prices as reported in the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") for the date of grant
of the Option or, if none, for the most recent trading date thirty (30) days or
less prior to the date of grant of the Option on which the Common Stock was
traded.
B. Term of Option: Each Option shall terminate not more than ten (10)
years from the date of the grant thereof, or at such earlier or later time as
the Committee shall expressly resolve.
C. Date of Exercise: The Committee may prescribe the date or dates on
which the Option becomes exercisable, and may provide that the Option rights
accrue or become exercisable in installments over a period of months or years,
or upon the attainment of stated goals.
D. Cancellation and Repurchase Rights: The Committee may stipulate that
any Option which becomes exercisable shall be subject to cancellation or that
shares purchased upon the exercise of such Option shall be subject to
repurchase rights in favor of the Company. In such event the Committee shall
determine the date or dates, or event or events, upon which such cancellation
or repurchase rights shall become effective or shall lapse, as the case may be.
E. Medium of Payment: The Option price shall be payable upon the exercise
of the Option. It shall be payable in cash, or, if permitted by the Committee,
in shares or other consideration.
F. Termination of Employment: An Option holder who ceases (for any reason
other than death or total and permanent disability or termination of employment
for cause) to be an employee or Director of the Company or of an Affiliate may
exercise any Option granted to the extent that the right to purchase shares
thereunder has accrued on the date of such termination. Such Option shall be
exercisable only within three (3) months after such date of termination, or, if
earlier, within the originally prescribed term of the Option, unless the
Committee shall authorize a different period. Employment shall not be deemed
terminated by reason of a transfer to another employer which is the Company or
an Affiliate.
An Option holder whose employment with the Company or an Affiliate is
terminated by his/her employer for cause or a Director who is removed from the
Board of Directors for cause shall forthwith upon such termination cease to
have any right to exercise any Option. For purposes of this paragraph, "cause"
shall be deemed to include dishonesty with respect to the employer,
insubordination, substantial malfeasance or non-feasance of duty, unauthorized
disclosure of confidential information, and conduct substantially prejudicial
to the business of the Company or any Affiliate. The determination of the
Committee as to the existence of cause shall be conclusive.
An Option holder to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of temporary
disability, or who is on a permitted leave of absence for any purpose, shall
not, during the period of any such absence, be
28
deemed by virtue of such absence alone, to have terminated his employment with
the Company or with an Affiliate except as the Committee may otherwise
expressly provide.
G. Total and Permanent Disability: If an Option holder ceases to be an
employee or Director of the Company or of an Affiliate by reason of total and
permanent disability, as determined by the Committee, any Option held by him or
her on the date of disability shall be exercisable as to all or any part of the
shares subject to the Option, all of which shares shall be fully vested as of
the date of such disability. A disabled Option holder may exercise such Option
only within a period of one (1) year after the date as of which the Committee
determines that he or she became disabled or within such different period as
may be determined by the Committee, or, if earlier, within the originally
prescribed term of the Option.
H. Death: If an Option holder dies while the Option holder is an employee
or Director of the Company or of an Affiliate, any Option held by him or her at
the date of death shall be exercisable as to all or any part of the shares
subject to the Option, all of which shares shall be fully vested as of the date
of the Option holder's death. A deceased Option holder's legal representatives
or one who acquires the Option by will or by the laws of descent and
distribution may exercise such Option only within a period of one (1) year
after the date of death or within such different period as may be determined by
the Committee, or, if earlier, within the originally prescribed term of the
Option.
I. Exercise of Option and Issue of Shares: Options shall be exercised by
giving written notice to the Company, addressed to the Company at the address
specified in the Option agreement, with which the Option holder shall tender
the Option price. Such written notice shall be signed by the person exercising
the Option, shall state the number of shares with respect to which the Option
is being exercised, and shall contain any warranty required by Article VII of
the Plan. The issuance of the Option shares may be delayed by the Company if
any law or regulation requires the Company to take any action with respect to
the Option shares prior to the issuance thereof. Without limiting the
generality of the foregoing, nothing contained herein shall be deemed to
require the Company to issue any Option shares if prohibited by law or
applicable regulation.
The shares shall, upon issuance, be evidenced by an appropriate
certificate or certificates in respect of paid-up, non-assessable shares.
J. Assignability and Transferability of Option: By its terms, an Option
granted to an Option holder shall not be transferable by him/her otherwise than
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as interpreted under Rule 16b-3(a)(2), and shall be
exercisable, during an Option holder's lifetime, only by the Option holder.
Such Option shall not be assigned, pledged, or hypothecated in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process. Any attempted transfer, assignment, pledge,
hypothecation, or other disposition of such Option or of any rights granted
thereunder contrary to the provisions of this Paragraph, or the levy of any
attachment or similar process upon an Option or such rights, shall be null and
void.
29
K. Other Provisions: The Option agreements authorized under the Plan shall
be subject to such other terms and conditions, including, without limitation,
restrictions upon the exercise of the Option, as the Committee shall deem
advisable.
L. Non-Employee, Non-Scientific Board Directors' Options: Each Director
who is not (i) an employee of the Company or any of its Affiliates, or (ii) a
member of the Scientific Board of the Company, or (iii) elected pursuant to an
agreement or arrangement between shareholders of the Company or between the
Company and its shareholders, upon first being appointed or elected to the
Board of Directors, and upon every third anniversary thereof, shall be granted
an Option to purchase 15,000 shares of Common Stock. Each such Option shall
have an exercise price equal to the fair market value per share of Common Stock
on the date of grant, as determined under Section VI.A. above, and a term of
ten (10) years, and shall be exercisable as to one-third (1/3) of the shares
subject thereto upon completion of one full year of service on the Board of
Directors after the date of grant, and as to an additional one-third (1/3) upon
completion of each full year of service thereafter. For any such Director
serving in office on December 6, 1991, the first such Option shall be granted
on the date on which the most recent Option previously granted to him, the
vesting of which is contingent upon continued service on the Board of
Directors, becomes fully vested, and subsequent Options under this Paragraph
shall be granted on every third anniversary of such date. Notwithstanding the
provision of Section XI concerning amendment of the Plan, the provisions of
this Section VI.L. shall not be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code of 1986, as amended,
the Employee Retirement Income Security Act, or the rules thereunder. The
grants of options under this Paragraph L are intended to be non-discretionary
formula awards within the meaning of Rule 16b-3(c)(2)(ii). Paragraph F of
Article VI, which cancels the Options of any Participant determined by the
Committee to have been terminated for cause, shall not apply to the awards
under this Paragraph L.
M. Tax Withholding: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.")
withholdings or other amounts are required by applicable law or governmental
regulation to be withheld from the Option holder's salary in connection with
the exercise of an Option, the Option holder shall advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Option holder, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock, is
authorized by the Committee (and permitted by law), provided, however, that
with respect to persons subject to Section 16 of the 1934 Act, any such
withholding arrangement shall be in compliance with any applicable provisions
of Rule 16b-3 promulgated under Section 16 of the 1934 Act. For purposes
hereof, the fair market value of the shares withheld for purposes of payroll
withholding shall be determined in the manner provided in Section VI.A. above,
as of the most recent practicable date prior to the date of exercise. If the
fair market value of the shares withheld is less than the amount of payroll
withholdings required, the Option holder may be required to advance the
difference in cash to the Company or the Affiliate employer.
N. Reload Options: The Committee may authorize reload options ("Reload
Options") to purchase for cash or shares a number of shares of Common Stock.
The number of Reload Options shall equal (i) the number of shares of Common
Stock used to exercise the underlying
30
Options and (ii) to the extent authorized by the Committee, the number of
shares of Common Stock used to satisfy any tax withholding requirement incident
to the exercise of the underlying Options. The grant of a Reload Option will
become effective upon the exercise of underlying Options through the use of
shares of Common Stock held by the optionee for at least 6 months. Reload
Options must be evidenced in Option agreements or amendments to those
agreements. The Option price per share of Common Stock deliverable upon the
exercise of a Reload Option shall be the fair market value of a share of Common
Stock on the date the grant of the Reload Option becomes effective. The term of
each Reload Option shall be equal to the remaining option term of the
underlying Option. No additional Reload Options shall be granted to Option
holders when Options and/or Reload Options are exercised pursuant to the terms
of this Plan following termination of the Option holder's employment or on
account of death or total and permanent disability. All other provisions of
this Plan with respect to Options shall apply equally to Reload Options.
O. Rights as a Shareholder: No Option holder shall have rights as a
shareholder with respect to any shares covered by such Option except as to such
shares as have been registered in the Company's share register in the name of
such person upon the due exercise of the Option.
VII. PURCHASE FOR INVESTMENT
If and to the extent that the issuance of shares pursuant to the exercise
of Options is deemed by the Company to be subject to the United States
Securities Act of 1933, as now in force or hereafter amended ("1933 Act"), or
to the securities law of any other jurisdiction, the Company shall be under no
obligation to issue shares covered by such exercise unless the person or
persons who exercises or who exercise such Option shall make such warranty or
take such action as may be required by any applicable securities law of any
applicable jurisdiction and shall, in the case of the applicability of the 1933
Act, in the absence of an effective registration under such Act with respect to
such shares, warrant to the Company, at the time of such exercise, that such
person is or that they are acquiring the shares to be issued to such person or
to them, pursuant to such exercise of the Option, for investment and not with a
view to, or for sale in connection with, the distribution of any such shares;
and in such events the person or persons acquiring such shares shall be bound
by the provisions of a legend endorsed upon any share certificates expressing
the requirements of any applicable non-United States securities law, or, in
cases deemed governed by the 1933 Act, substantially the following legend,
which shall be endorsed upon the certificate or certificates evidencing the
shares issued by the Company pursuant to such exercise:
"The shares have not been registered under the securities laws of any
country, including the United States Securities Act of 1933, as amended, and
the Company may refuse to permit the sale or transfer of all or any of the
shares until (1) the Company has received an opinion of Counsel satisfactory
to the Company that any such transfer is exempt from registration under all
applicable securities laws or (2) in the case of sales or transfers to which
the United States Securities Act of 1933 is applicable, unless a registration
statement with respect to such shares shall be effective under such Act, as
amended."
31
Without limiting the generality of the foregoing, the Company may delay
issuance of the shares until completion of any action or obtaining of any
consent which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).
VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the outstanding Common Stock, $.01 par value, of the
Company is changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification,
change in par value, stock split-up, combination of shares or dividend payable
in capital stock, or the like, appropriate adjustment shall be made in the
number and kind of shares for the purchase of which Options may be granted
under the Plan, including Options to be granted pursuant to Article VI L
hereof, and, in addition, appropriate adjustment shall be made in the number
and kind of shares and in the Option price per share subject to outstanding
Options so that each Option holder shall be in a position equivalent to the
position the Option holder would have been in had the Option holder exercised
the Options immediately prior to the applicable event.
IX. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in
connection with transactions to which the preceding Article VIII is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights hereunder of an Option holder or one who
acquired an Option by will or by the laws of descent and distribution have not
otherwise terminated and expired, the Option holder or such person shall have
the right immediately prior to such dissolution or liquidation to exercise any
Option granted hereunder to the extent that the right to purchase shares
thereunder has accrued as of the date of exercise immediately prior to such
dissolution or liquidation.
X. TERMINATION OF THE PLAN
Unless the Committee shall decide to reduce or, subject to shareholder
approval, if required under Article XI, to extend the duration of the Plan, the
Plan shall terminate on December 31, 2002. Termination of the Plan shall not
affect any Options granted or any Option agreements executed prior to the
effective date of termination.
XI. AMENDMENT OF THE PLAN
The Plan may be amended by the Committee or the Board of Directors of the
Company provided, however, that if the scope of any amendment is such as to
require shareholder approval in order to comply with Rule 16b-3 under the 1934
Act such amendment shall require approval by the shareholders. Any amendment
shall not affect any Options theretofore granted and any Option agreements
theretofore executed by the Company and any Option holder unless such amendment
shall expressly so provide. No amendment shall adversely affect any Option
holder with respect to an outstanding Option without the written consent of
such Option holder. With
32
the consent of the Option holder affected, the Committee may amend any
outstanding Option agreement in a manner not inconsistent with the Plan,
including, without limitation, to accelerate the date of exercise of any
installment of any Option.
XII. EMPLOYMENT RELATIONSHIP
Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of any employee, nor to prevent any
employee from terminating his/her employment with the Company or an Affiliate.
XIII. EFFECTIVE DATE
This Plan first became effective on January 2, 1985.
33
BIOGEN, INC.
1982 INCENTIVE STOCK OPTION PLAN
(AS AMENDED THROUGH APRIL 25, 1995 AND RESTATED)
I. DEFINITIONS AND PURPOSE
A. Definitions: References in this document to the "Company" are to
Biogen, Inc., a Massachusetts corporation; reference to the "Plan" are to the
Biogen, Inc. 1982 Incentive Stock Option Plan; references to the "Code" are to
the United States Internal Revenue Code of 1986, as amended. Unless otherwise
specified or unless the context otherwise requires, the following terms, as
used in the Plan, have the following meanings:
1. "Affiliate" means a corporation which, for purposes of Section 422 of
the Code, is a parent or subsidiary of the Company, direct or indirect.
2. "Disability" means permanent and total disability as defined in Section
105(d)(4) of the Code.
3. "Key Employee" means an employee of the Company or of an Affiliate
(including, without limitation, an employee who is also serving as an officer
of the Company or of an Affiliate), designated by the Committee to be eligible
to be granted one or more Options under the Plan.
4. "Option" means a right or option granted under the Plan.
5. "Participant" means a Key Employee to whom one or more Options are
granted under the Plan. As used herein, "Participant" shall include
"Participant's Survivors" where the context requires.
6. "Participant's Survivors" means a deceased Participant's legal
representatives and/or any person or persons who acquired the Participant's
rights to an Option by will or by the laws of descent and distribution.
7. "Shares" mean those shares of the Common Stock, $.01 par value, of the
Company as to which Options have been or may be granted under the Plan.
B. Purposes Of The Plan: The Plan is intended to encourage ownership of
the Shares of the Company by Key Employees in order to attract such Key
Employees, to induce such Key Employees to remain in the employ of the Company
or of an Affiliate and to provide additional incentive for such Key Employees
to promote the success of the Company or its Affiliates. It is further intended
that Options issued pursuant to the Plan shall be eligible to constitute
"incentive stock options" within the meaning of Section 422 of the Code.
34
II. SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Options may be granted from
time to time shall be 9,227,000; provided, however that such aggregate number
shall be reduced by the number of shares which have been sold under, or may be
sold pursuant to options granted from time to time under the Company's 1985
Non-Qualified Stock Option Plan (the "1985 Plan"), to the same extent as if
such sales had been made or options granted pursuant to this Plan.
If any option granted under this Plan or the 1985 Plan ceases to be
"outstanding", in whole or in part, other than by reason of the exercise of
such option, the shares which were subject to such option shall be available
for the granting of other Options. Any option shall be treated as "outstanding"
until such option is exercised in full, terminates under the provisions of this
Plan or the 1985 Plan, as the case may be, or expires by reason of lapse of
time.
The aggregate number of Shares as to which Options may be granted shall be
subject to change only by means of an amendment of the Plan duly adopted by the
Company and approved by the Shareholders of the Company within one year before
or after the date of the adoption of any such amendment, subject to the
provisions of Article VII.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Stock and Option Plan Administration
Committee of the Company (the "Committee"). The membership of the Committee
shall be determined and shall be subject to change without cause and without
notice from time to time, by the Company.
The Committee is authorized to interpret the provisions of the Plan or of
any Option and to make all rules and determinations necessary or advisable for
the administration of the Plan. It may from time to time determine which
employees of the Company or of any Affiliate shall be designated as Key
Employees and which of the Key Employees shall be granted Options and, subject
to the other provisions of the Plan, the number of Shares for which an Option
or Options shall be granted. Subject to the provisions of the Plan, Options may
be granted upon such terms and conditions as the Committee may prescribe;
provided, however, that such terms and conditions shall be prescribed in the
context of preserving, to the extent reasonably possible, the United States tax
status of the Options as incentive stock options.
This Plan is intended to comply in all respects with Rule 16b-3 or its
successors promulgated under the Securities Exchange Act of 1934 ("1934 Act")
with respect to participants who are subject to Section 16 of the 1934 Act,and
any provision in this Plan with respect to such persons contrary to Rule 16b-3
shall be deemed null and void to the extent permissible by law and deemed
appropriate by the Committee.
2
35
IV. ELIGIBILITY FOR PARTICIPATION
Each Participant must be a Key Employee of the Company or of an Affiliate
at the time an Option is granted.
The Committee may grant to one or more Key Employees one or more Options,
and shall designate the number of Shares to be optioned under each Option so
granted; provided, however, that no Options shall be granted after December 31,
2002, and provided further, that the fair market value (determined as of the
date the Options are granted) of the Shares as to which incentive stock options
granted on or after January 1, 1987 by the Company or its Affiliates to any
individual employee under the Plan and/or under any other incentive stock
option plans are exercisable for the first time in any one calendar year shall
not exceed $100,000.
Notwithstanding any of the foregoing provisions, the Committee may
authorize the grant of an Option to a person not then in the employ of the
Company or of an Affiliate, conditioned upon such person becoming eligible to
be a Participant at or prior to the execution of the Option agreement
evidencing such Option.
In no event shall any employee be granted in any calendar year options to
purchase or receive more than 600,000 shares of the Company's Common Stock
pursuant to this Plan.
V. TERMS AND CONDITIONS
Each Option shall be set forth in writing in an Option agreement, duly
executed on behalf of the Company and by the Participant to whom such Option is
granted. No Option shall be deemed to have been granted and no purported grant
of any Option shall be effective, until such Option shall have been approved by
the Committee. The Committee may provide that Options be granted subject to
such conditions as the Committee may deem appropriate, including without
limitation, subsequent approval by the shareholders of the Company of this Plan
or any amendments thereto. Each such Option agreement shall be subject to at
least the following terms and conditions:
A. Option Price: If, including for this purpose the Shares which are the
subject of Options previously granted and outstanding or proposed to be granted
hereunder, the optionee owns 10% or less of the total combined voting power of
all classes of share capital of the Company, the Option price (per share) of
the Shares covered by each Option granted hereunder shall be not less than the
fair market value (per share) of the Shares on the date of the grant of the
Option; provided, however, that in no event shall the Option price be less than
the par value per share of Common Stock. In all other cases, the Option price
shall be not less than 110% of the said fair market value. For purposes hereof,
the fair market value shall be the average between the high and low sale
prices, as reported in the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") for the date of the grant of the Option or, if
none, for the most recent trading date thirty (30)days or less prior to the
date of the grant of the Option on which
3
36
the Common Stock was traded. If the fair market value cannot be determined
under the preceding sentence, it shall be determined in good faith by the
Committee.
B. Number of Shares: Each Option shall state the number of Shares to which
it pertains.
C. Term of Option: Each Option shall terminate at such date as the
Committee, at the time it authorizes the grant of the Option, shall determine,
and shall be subject to earlier termination as herein provided, except that if
the option price is required under Paragraph A of this Article V to be at least
110% fair market value, each such Option shall terminate not more than five (5)
years from the date of the grant hereof; and provided that in no case may the
term of any Option exceed ten (10) years.
D. Date of Exercise: The Committee may prescribe the date or dates on
which the Option becomes exercisable, and may provide that the Option rights
accrue or become exercisable in installments over a period of months or years,
or upon the attainment of stated goals. The Committee may stipulate that any
Option which becomes exercisable shall be subject to cancellation or that
Shares purchased upon the exercise of such Option shall be subject to
repurchase rights in favor of the Company. In such event, the Committee shall
determine the date or dates, or event or events, upon which such cancellation
or repurchase rights shall become effective or shall lapse, as the case maybe.
E. Medium of Payment: The option price shall be payable upon the exercise
of the Option. It shall be payable in cash, or, if permitted by the Committee
and by Section 422 of the Code, in shares or other consideration.
F. Prior Options: By its terms, each Option granted prior to January 1,
1987 under the Plan to a Participant, shall not be exercisable while there
is"outstanding" any other incentive stock option (as defined in the predecessor
to Section 422 of the Code), which was granted before the grant of such Option,
to such Participant to purchase Shares in the Company or in an Affiliate or in
a predecessor of the Company or of an Affiliate.
G. Termination of Employment: A Participant who ceases (for any reason
other than death or disability or termination by the Participant's employer for
cause) to be an employee of the Company or of an Affiliate, may exercise any
Option granted to such Participant, to the extent that the right to purchase
Shares thereunder has accrued on the date of such termination of employment,
but only within three (3) months, or such shorter period as may be determined
by the Committee, after such date, or, if earlier, within the originally
prescribed term of the Option. A Participant's employment shall not be deemed
terminated by reason of a transfer to another employer which is the Company or
an Affiliate.
A Participant whose employment is terminated by the Participant's employer
for cause shall forthwith upon such termination cease to have any right to
exercise any Option. For purposes of this paragraph, "cause" shall be deemed to
include dishonesty with respect to the employer, insubordination,substantial
malfeasance or non-feasance of duty, unauthorized
4
37
disclosure of confidential information, and conduct substantially prejudicial
to the business of the Company or any Affiliate. The determination of the
Committee as to the existence of cause shall be conclusive on the Participant
and Company.
A Participant to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of temporary
disability, or who is on leave of absence for any purpose permitted by any
authoritative interpretation of Section 422, shall not, during the period of
any such absence, be deemed, by virtue of such absence alone, to have
terminated his employment with the Company or with an Affiliate, except as the
Committee may otherwise expressly provide.
H. Disability: If a Participant ceases to be an employee of the Company or
of an Affiliate by reason of Disability, any Option held by him or her on the
date of Disability shall be exercisable as to all or any part of the Shares
subject to the Option, all of which shares shall be fully vested as of the date
of such Disability. A Disabled Participant may exercise such Option only within
a period of one (1) year after the date as of which the Committee determines
that he or she became Disabled, or, if earlier, within the originally
prescribed term of the Option.
I. Death: If a Participant dies while the Participant is an employee of
the Company or of an Affiliate, any Option held by him or her at the date of
death shall be exercisable as to all or any part of the Shares subject to the
Option, all of which shares shall be fully vested as of the date of the
Participant's death. A deceased Participant's Survivors may exercise such
Option only within a period of one (1) year after the date of death, or, if
earlier, within the originally prescribed term of the Option.
J. Exercise of Option and Issue of Shares: Options shall be exercised by
giving written notice to the Company, addressed to the Company at the address
specified in the Option agreement, with which the Participant shall tender the
Option price. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised, and shall contain any warranty required by Article VI. The
issuance of the Shares may be delayed by the Company if any law or regulation
requires the Company to take any action with respect to the shares prior to the
issuance thereof. Without limiting the generality of the foregoing, nothing
contained herein shall be deemed to require the Company to issue any Shares if
prohibited by law or applicable regulation.
The Shares shall, upon delivery, be evidenced by an appropriate
certificate or certificates in respect of paid-up, non-assessable Shares.
K. Rights as a Shareholder: No Participant to whom an Option has been
granted shall have rights as a shareholder with respect to any Shares covered
by such Option except as to such Shares as have been registered in the
Company's share register in the name of such Participant upon the due exercise
of the Option.
5
38
L. Assignability and Transferability of Options: By its terms, an Option
granted to a Participant shall not be transferable by the Participant otherwise
than by will or by the laws of descent and distribution and shall be
exercisable, during the Participant's lifetime, only by such Participant. Such
Option shall not be assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment, or similar process. Any attempted transfer, assignment, pledge,
hypothecation, or other disposition of any Option or of any rights granted
thereunder contrary to the provisions of this Paragraph L, or the levy of any
attachment or similar process upon an Option or such rights, shall be null and
void.
M. Tax Withholding: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.")
withholdings or other amounts are required by applicable law or governmental
regulation to be withheld from the Option holder's salary in connection with
the exercise of an Option, the Option holder shall advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Option holder, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock, is
authorized by the Committee (and permitted by law), provided, however, that
with respect to persons subject to Section 16 of the 1934 Act, any such
withholding arrangement shall be in compliance with any applicable provisions
of Rule 16b-3 promulgated under Section 16 of the 1934 Act. For purposes
hereof, the fair market value of the shares withheld for purposes of payroll
withholding shall be determined in the manner provided in Section V.A. above,
as of the most recent practicable date prior to the date of exercise. If the
fair market value of the shares withheld is less than the amount of payroll
withholdings required, the Option holder may be required to advance the
difference in cash to the Company or the Affiliate employer.
N. Reload Options: Concurrently with the award of Options under the Plan,
the Committee may authorize reload options ("Reload Options") to purchase for
cash or shares a number of shares of Common Stock. The number of Reload Options
shall equal (i) the number of shares of Common Stock used to exercise the
underlying Options and (ii) to the extent authorized by the Committee, the
number of shares of Common Stock used to satisfy any tax withholding
requirement incident to the exercise of the underlying Options. The grant of a
Reload Option will become effective upon the exercise of underlying Options or
Reload Options through the use of shares of Common Stock held by the optionee
for at least 6 months. Reload Options must be evidenced in Option
agreements.The Option price per share of Common Stock deliverable upon the
exercise of a Reload Option shall be determined in accordance with Paragraph
V.A. hereof on the date the grant of the Reload Option becomes effective. The
term of each Reload Option shall be equal to the remaining option term of the
underlying Option. No additional Reload Options shall be granted to Option
holders when Options and/or Reload Options are exercised pursuant to the terms
of this Plan following termination of the Option holder's employment or on
account of death or total and permanent disability. All other provisions of
this Plan with respect to Options shall apply equally to Reload Options.
O. Other provisions: The Option agreements authorized under the Plan
shall be subject to such other terms and conditions, including, without
limitation, restrictions upon the
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39
exercise of the Option, as the Committee shall deem advisable. Any such Option
agreement shall contain such limitations and restrictions upon the exercise of
the Option as shall be necessary in order that such Option can be an "incentive
stock option" within the meaning of the Section 442 of the Code.
VI. PURCHASE FOR INVESTMENT
If, and to the extent that, the issuance of Shares pursuant to the
exercise of Options is deemed by the Company to be subject to the United States
Securities Act of 1933, as now in force or hereafter amended, ("1993 Act"), or
to the securities laws of any other jurisdiction, the Company shall be under no
obligation to issue the Shares covered by such exercise unless the person or
persons who exercises or who exercise such Option shall make such warranty as
may be required by any applicable securities law of any applicable jurisdiction
and shall, in the case of the applicability of the 1933 Act, in the absence of
an effective registration under such Act with respect to such Shares, warrant
to the Company, at the time of such exercise, that such person is or that they
are acquiring the Shares to be issued to such person or to them, pursuant to
such exercise of the Option, for investment and not with a view to, or for sale
in connection with, the distribution of any such Shares; and in such events the
person or persons acquiring such Shares shall be bound by the provisions of a
legend endorsed upon any share certificates expressing the requirements of any
applicable non-United States securities law, or, in cases deemed governed by
the 1933 Act substantially the following legend, which shall be endorsed upon
the certificate or certificates evidencing the Shares issued by the Company
pursuant to such exercise:
"The shares have not been registered under the securities laws of any
country including the United States Securities Act of 1933, as
amended, and the Company may refuse to permit the sale or transfer of
all or any of the shares until (1) the Company has received an
opinion of Counsel satisfactory to the Company that any such transfer
is exempt from registration under all applicable securities laws or
(2) in the case of sales or transfer to which the United States
Securities Act of 1933 is applicable, unless a registration statement
with respect to such shares shall be effective under such Act, as
amended."
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent which the Company deems necessary under any applicable law (including,
without limitation, state securities or "blue sky" laws).
VII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the outstanding Common Stock, $.01 par value, of the
Company is changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification,
change in par value, stock split-up, combination of shares or
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40
dividend payable in capital stock, or the like, appropriate adjustment shall be
made in the number and kind of Shares for the purchase of which Options may be
granted under the Plan, and, in addition, appropriate adjustment shall be made
in the number and kind of Shares and in the Option price per share subject to
outstanding Options so that each Option holder shall be in a position
equivalent to the position the Option holder would have been in had the Option
holder exercised the Options immediately prior to the applicable event. No
such adjustment shall be made which shall, within the meaning of Section 424 of
the Code, constitute such a modification, extension or renewal of any Option as
to cause it to be considered as the grant of a new Option.
VIII. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the company other than in
connection with a transaction to which the preceding Article VII is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights of a Participant or the Participant's
Survivors hereunder have not otherwise terminated and expired, the Participant
or the Participant's Survivors shall have the right immediately prior to such
dissolution or liquidation to exercise any Option granted hereunder to the
extent that the right to purchase Shares thereunder has accrued as of the date
of exercise immediately prior to such dissolution or liquidation.
IX. TERMINATION OF THE PLAN
The Plan shall terminate on December 31, 2002. The Plan may be terminated
at an earlier date by vote of the Shareholders; provided, however, that
expiration or any such earlier termination shall not affect any Option granted
or Option agreements executed prior to expiration or the effective date of such
termination.
X. AMENDMENT OF THE PLAN
The Plan may be amended by action of the Committee or the Board of
Directors of the Company; provided, however, that if the scope of any amendment
is such as to require shareholder approval in order to preserve incentive stock
option treatment, then such amendments shall also require approval, within one
(1) year before or after the adoption thereof, by the shareholders, and
provided further that if the scope of any amendment is such as to require
shareholder approval in order to comply with Rule 16b-3 under the 1934 Act,
then such amendment shall also require approval by the shareholders. Any
amendment shall not affect any Options theretofore granted and any Option
agreements theretofore executed by the Company and a Participant, unless such
amendment shall expressly so provide. No amendment shall adversely affect any
Participant with respect to an outstanding Option without the written consent
of such Participant. With the consent of the Option holder affected, the
Committee may amend any outstanding Option agreement in a manner not
inconsistent with the plan, including, without limitation, to accelerate the
date of exercise of any installment of any Option.
XI. EMPLOYMENT RELATIONSHIP
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Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of a Participant, nor to prevent a
Participant from terminating the Participant's employment with the Company or
an Affiliate.
XII. EFFECTIVE DATE
This Plan first became effective as of January 8, 1982, subject to the
approval, within one (1) year after such adoption, of the shareholders of the
Company.
[COOK]STOCK\i982iso.pln
9
42
BIOGEN, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF BIOGEN, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 1995
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, dated April 30, 1995, and does hereby appoint
James L. Vincent and Michael J. Astrue, and each of them, proxies of the
undersigned with all the powers the undersigned would possess if personally
present and with full power of substitution in each of them, to appear and vote
all shares of Common Stock of Biogen, Inc., a Massachusetts corporation, which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held at the offices of Biogen, Inc., located at
12 Cambridge Center, Cambridge, Massachusetts on Friday, June 23, 1995 at 10:00
a.m. and at any adjournment thereof.
The shares represented hereby will be voted as directed herein. IN EACH CASE IF
NO DIRECTION IS INDICATED, SUCH SHARES WILL BE VOTED FOR THE ELECTION OF EACH
OF THE NAMED NOMINEES AS A DIRECTOR AND FOR PROPOSALS 2 AND 3. AS TO ANY OTHER
MATTER, SAID PROXY HOLDERS WILL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTING THEREOF.
In their discretion, the proxies are also authorized to vote upon such other
matters as may properly come before the meeting.
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PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the reverse side. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
43
/ X / PLEASE MARK VOTES
AS IN THIS EXAMPLE
BIOGEN, INC.
RECORD DATE SHARES:
---------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Stockholder sign here Co-owner sign here
With- For All
For hold Except
1.) ELECTION OF DIRECTORS. / / / / / /
NOMINEES: Alan Belzer, Kenneth Murray and James W. Stevens for a three year
term ending at the Annual Meeting of Stockholders in 1998 and until their
successors are duly elected and qualified or their earlier resignation or
removal.
ALAN BELZER, KENNETH MURRAY AND JAMES W. STEVENS
If you do not wish your shares voted "FOR" a particular nominee, mark the "For
All Except" box and strike a line through the nominee's name. Your shares will
be voted for the remaining nominees.
FOR AGAINST ABSTAIN
2.) To ratify the selection by the Company's / / / / / /
Board of Directors of Price Waterhouse
LLP as the Company's independent
accountants for the fiscal year ending
December, 31, 1995.
FOR AGAINST ABSTAIN
3.) To approve an increase of 2,000,000 in / / / / / /
the aggregate number of shares available
for the grant of options under the 1985
Non-Qualified Stock Option Plan and the 1982 Incentive Stock Option
Plan (the "Plans") and amendments to the Plans to limit to 600,000
the number of shares with respect to which options may be granted
under each Plan to any person in any year.
Mark box at right if comments or address change have / /
been noted on the reverse side of the card.
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DETACH CARD
BIOGEN, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and
operation of your Company that require your immediate attention and
approval. These are discussed in detail in the enclosed proxy
materials.
Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your proxy
vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
June 23, 1995.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Biogen, Inc.