Employment Agreement - Biogen Inc. and James C. Mullen
BIOGEN
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FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 617-679-2000 FAX 617-679-2838
Roger H. Morley
Chairman
Compensation and Management Resources Committee
Board of Directors
February 15, 2002
Mr. James C. Mullen
President & Chief Executive Officer
Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Dear Jim:
As Chairman of the Compensation and Management Resources Committee (the
"Committee") of the Board of Directors, I am pleased to confirm certain changes
to your cash compensation and employee benefits that have been approved by the
Committee within the recent past following your appointment as President and
Chief Executive Officer of Biogen on June 16, 2000.
1. Target Bonus: Effective January 1, 2001, your incentive target bonus was
established at 100% of your annual base salary.
2. Change of Control: You are considered a "Designated Employee" for purposes
of Biogen's 1985 Non-Qualified Stock Option Plan (the "Stock Option Plan").
If at any time within two years following a Corporate Transaction (as
defined in the Stock Option Plan), your employment with Biogen is
terminated by Biogen other than for cause, then each outstanding option
held by you will automatically accelerate so that the option immediately
becomes fully exercisable and may be exercised for a period of one year
following the termination of your employment or, if earlier, until the
expiration of the option. Please read the Stock Option Plan for more
details about the rights of a Designated Employee in the event of a
Corporate Transaction and any applicable limitations.
3. Severance Benefits: You are entitled to severance benefits in the event
your employment with Biogen is terminated by Biogen other than for cause.
The severance benefits will be comprised of (i) a lump sum payment and
(ii) upon completion of the appropriate forms, continuation of Biogen's
portion of the expense of your participation in Biogen's group medical and
dental insurance plans. The lump sum payment will be equivalent to 24
months of your annual base salary and your target annual performance bonus,
as adjusted by application of your most recent individual performance
incentive factor. The lump sum payment (less state and federal income and
welfare taxes and other mandatory deductions under applicable laws) will be
paid to you promptly following the termination of your employment with
Biogen. Your
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Mr. James C. Mullen
February 15, 2002
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participation in Biogen's group medical and dental insurance plans will continue
until the earlier of the date you become eligible to participate in the medical
and dental insurance plans of a third party employer or 24 months following the
termination of your employment with Biogen; and only to the same extent such
insurance is then provided to regular employees of Biogen.
For purposes of this paragraph no. 3, "cause" means (i) your engagement in
misconduct that is injurious to Biogen monetarily or otherwise, (ii) your
conviction of a felony by a court of competent jurisdiction, (iii) your
commission of any act of fraud or embezzlement relating to the property of
Biogen, or (iv) your material violation of any obligations of confidentiality
and nondisclosure owed to Biogen.
Payment and provision of the severance benefits described above are conditioned
on your execution of a general release in favor of Biogen, in form and substance
reasonably acceptable to Biogen, in respect of any and all claims relating to
your employment and the termination of your employment with Biogen. If you
retire or terminate your employment with Biogen or Biogen terminates your
employment for cause or you do not provide the requisite general release, then
you shall not be entitled to receive the severance benefits described above.
4. Vacation: You are entitled to five weeks of vacation each year.
5. Life Insurance: You will have life insurance coverage equivalent to three
times your annual base salary, subject to our satisfaction of normal
medical standards of the issuer of the life insurance policy.
6. Tax Preparation: You are entitled to the preparation and/or review
(including review of estimated taxes) of your annual Federal and state
income tax returns, which currently is administered through
PricewaterhouseCoopers LLC. The cost of this service is covered by Biogen.
In addition to the above changes, the Committee recently approved executive
ownership guidelines for Biogen Common Stock. As President and Chief Executive
Officer, and pursuant to the guidelines, you are required to acquire and
maintain ownership in Biogen Common Stock equivalent in value to eight times
your annual base salary. Ownership is defined as shares of Biogen Common Stock
held outright, held for your account under Biogen's 401(k) savings plan, and
held in the Biogen employee stock purchase plan. In addition, ownership is also
defined to include shares of Biogen Common Stock underlying unexercised vested
stock options granted to you under the Stock Option Plan. You have a five-year
period from the date of your appointment as President and Chief Executive
Officer to comply with the ownership guidelines.
The enhanced cash compensation and employee benefits described above are
provided in lieu of
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Mr. James C. Mullen
February 15, 2002
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the benefits described in a letter dated March 18, 1993 addressed to you from
Frank A. Burke, Jr. and, therefore, this letter supersedes and replaces the
letter of March 18, 1993.
Sincerely,
/s/Roger H. Morley
Roger H. Morley
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