Employment Agreement - Biogen Inc. and James R. Tobin
January 12, 1994
Mr. James R. Tobin
12 Briarwood Lane
Lincolnshire, IL 60069
Dear Jim:
This letter sets forth the terms of your employment by Biogen, Inc.
(the "Company"), subject to your agreement with the terms as
indicated by your execution of this letter on the final page. As
executed this letter will constitute the agreement (the
"Agreement") between you and the Company with respect to your
employment by the Company.
Position and Base Salary: You will serve as President and
Chief Operating Officer of the Company, reporting to me, with
an annual salary of $400,000. You will be eligible for a merit
salary review at year-end 1994 and annually thereafter,
consistent with the Company's compensation policy for executive
officers. Your name will be placed in nomination for election
to the Company's Board of Directors at the March 1994 regular
meeting of the Board of Directors.
Employment Bonus: Upon employment you will receive $250,000 as
a special cash bonus with a three year forgiveness plan. Under
this plan, 1/36th of the total amount is forgiven monthly over
the 36 month time period. In the event you terminate your
employment prior to three years from your employment date, the
unforgiven portion would be repayable to the Company.
Performance Bonus: Based upon performance and achievement of
mutually agreed goals, you will be eligible to receive a target
bonus of 70 percent of base salary, first payable at year-end
1994. It is agreed your 1994 performance bonus will be
prorated and guaranteed. For future years, and consistent with
the Company's performance bonus policy for executive officers,
you will continue to be eligible for a performance bonus based
on a target bonus of 70 percent of your then base salary.
Stock Options: Upon employment you will be granted an option
to purchase up to 400,000 shares of the Company's Common Stock.
The stock option grant has been approved by the Stock and
Option Plan Committee of the Board of Directors. The stock
option has a ten-year term and a seven-year, straight-line
vesting provision on each of your first seven employment
anniversary dates. Furthermore, the exercise price per share
is equal to the average of the high and low as reported by the
NASDAQ exchange on the date you agree to the terms and
conditions of the Agreement.
In the future, you will be next eligible for additional stock
option grants by no later than year-end 1996 based on your
performance and based on the Company's merit stock option
policy for executive officers.
Succession: It is agreed that if within three years of your
employment date your employment with the Company is terminated
for any reason by the Company, or you die, or if you do not
become Chief Executive Officer by that time and choose to leave
the Company, the Company will pay you the difference between
$2,500,000 and the gross profit from the exercise of your
vested stock options. If your employment is terminated, it is
agreed you will also resign from the Board of Directors.
Employee Benefits: You will be entitled to the full range of
the Company's employee benefits. At present these include
fully paid medical, life, dental, and disability insurances
starting from your date of employment. In the next calendar
quarter following your employment, you will be enrolled in the
Biogen Retirement Plan, including the Supplemental Executive
Retirement Plan, and you will be eligible to participate in
Biogen's 401(k) Savings Plan. You will be entitled to four
weeks' pro-rated vacation. In addition, in the event of long-
term disability you will receive 60 percent of your salary and
will not be subject to any cap on those payments.
Life Insurance: You will be provided the Company's Executive
Term Life Insurance coverage for a total of $1,000,000, such
coverage to be based on your successfully meeting the medical
standards provided for in the Executive Term insurance policy.
Relocation: You will be provided a relocation package which
includes reimbursement for all reasonable expenses associated
with your move from Lincolnshire to Boston, including moving
your household and personal effects; real estate agent, legal
and other fees associated with the sale of your residence in
Lincolnshire, and legal and other closing costs (including two
mortgage points) with the purchase of your new residence in the
Boston area; a house hunting trip of up to seven days for you
and Janet; and a period of sixty days' temporary living pending
your move to the Boston area.
If you have the need, the Company will provide you with an
interest-free bridge loan, representing up to 90 percent of the
equity in your Lincolnshire residence, for the purposes of the
timely purchase of your new residence in the Boston area. It
is understood that you will repay this bridge loan immediately
upon receiving the proceeds from the sale of your home in
Lincolnshire.
After the closing on the purchase of your home in the Boston
area, and for a period of up to six months pending the sale of
your residence in Lincolnshire, the Company will reimburse the
carrying expenses of your residence in Lincolnshire, including
mortgage principle and interest, real estate taxes, home owners
insurance, and reasonable maintenance and utility expenses.
Mortgage Loan: In addition to the relocation package described
above, and on the condition that in order for you to be able to
purchase a residence in the Boston area which is essentially
similar to your current residence in Lincolnshire and the
purchase price of the new residence in the Boston area is
greater than the selling price of your current residence in
Lincolnshire ("the price differential"), the Company will
provide you a mortgage loan ("the loan") equivalent to the
price differential but not to exceed $200,000. The following
additional terms and conditions will apply:
a. The total amount of the loan will be secured by the Company
as a second mortgage on your residence in the Boston area;
b. One half of the loan will be forgiven over a five-year,
straight-line schedule (10 percent of the entire loan per
year). In the event of your termination of employment from
the Company prior to five years from the date of the loan,
the unforgiven portion of the loan would be subject to six
percent per annum simple interest and would be payable to
the Company within six months of your termination date;
c. The remaining one half of the loan will be subject to six
percent per annum simple interest, with the principal due
at the earlier of the following events:
i) Five years following the date of the loan; or
ii) Six months following your termination of employment.
Personal Tax Return Preparation: During your employment with
the Company you will be entitled to the preparation or review,
including a review of estimated taxes, of your annual Federal
and State tax returns, to be made by the company's outside
public accountants. The cost of this preparation or review
will be borne by the Company. Any additional cost incurred by
you for tax consultation, etc. will be your responsibility.
Identification: The Federal Government requires that on your
first day of employment you provide proper identification to
verify your eligibility to work in the United States. Please
refer to the enclosure for more details.
Health and Safety: It is the Company's policy to comply with
federal, state and local guidelines applicable to its
facilities and to take all reasonable steps to ensure the
health and safety of the Company's employees. Consistent with
this policy and within the scope of your normal duties, from
time to time you may be required to work in any of the
Company's facilities.
Physical Exam: We require all new employees to undergo an
employment physical examination, which we will schedule at your
earliest convenience.
Jim, on behalf of the other members of our senior management team
and Board of Directors who have met and talked with you over these
past several weeks, we are very excited with the prospect of your
joining us. I know you will find Biogen the type of organization
which will be challenging yet responsive to your very impressive
background and skills.
Sincerely,
James L. Vincent
Chairman & Chief Executive Officer
Enclosures
Accepted and Agreed:
Mr. James R. Tobin Date January 17, 1994