Employment Agreement - Biogen Inc. and James L. Vincent
BIOGEN, INC.
14 Cambridge Center
Cambridge, MA 02142
July 15, 2002
Mr. James L. Vincent
7 Audubon Road
Weston, MA 02193
Dear Jim:
You and Biogen, Inc., as successor by merger to Biogen Research Corp.
("Biogen" or the "Company"), are parties to an Employment Agreement dated
September 23, 1985 (the "Original Employment Agreement"), as amended by letter
agreements dated November 21, 1996 (the "November 21st Letter Agreement"),
March 10, 2000 and September 26, 2000 (as so amended and including all exhibits
to any of the foregoing, "the Employment Agreement"), pursuant to which you
currently serve as Chairman and a member of the Board of Directors of the
Company (the "Board").
You have indicated your desire to retire from the Company, and thus
to resign as Chairman and a member of the Board and as an employee of the
Company. You and the Company are entering into this letter agreement to provide
for such resignation, and to confirm and clarify our mutual agreement with
respect thereto as set forth in the Employment Agreement.
The terms and provisions of the Employment Agreement applicable after
your resignation as provided in paragraph 1 below (and for purposes of such
terms and provisions, treating such resignation as provided in such paragraph
1) shall remain in full force and effect. All references in the Employment
Agreement to the "Company" and "Biogen" shall refer to Biogen, Inc., and all
references in the Employment Agreement to the "Agreement" shall refer to the
Employment Agreement, as supplemented by this letter agreement. Capitalized
terms used in this letter agreement and not defined herein shall have the
meaning provided in the Employment Agreement.
<PAGE>
1. Resignation; Constructive Termination. By your execution hereof,
you hereby resign effective immediately (i) as Chairman and a member of the
Board (and as a member of any and all committees thereof), (ii) as an employee
of the Company and (iii) as an employee, officer and member of the board of
directors (and as a member of any and all committees thereof) of any subsidiary
or Affiliate (as defined herein) of the Company, in each case effective on the
date hereof. Such resignation shall be deemed a Constructive Termination for
purposes of the Employment Agreement.
2. Severance. The Company and you acknowledge and agree that the lump
sum amount payable to you under subparagraph 11(c)(v) of the November 21st
Letter Agreement is $4,647,791.50, which amount (less any applicable withholding
as provided in paragraph 6 hereof) shall be paid to you by the Company, by wire
transfer of funds to an account previously designated by you to the Company,
within thirty days after the date hereof.
3. Stock Options. The Company and you acknowledge that, as of the
date hereof, you hold options to purchase shares of the Company's common stock
as set forth on Exhibit A hereto ("Options"), which Options are governed by the
Biogen, Inc. 1985 Non-Qualified Stock Option Plan, as amended and restated
effective as of December 14, 2001 (the "Non-Qualified Plan"), and the respective
stock option agreements between you and the Company listed on such Exhibit A
("Stock Option Agreements"). The Company and you further acknowledge and agree
that (i), the Stock Option Agreements are and shall remain in full force and
effect in accordance with their respective terms and, effective on the date
hereof, and without any requirement of further action by you or the Company, the
Options granted to you on December 15, 2000 and December 14, 2001, respectively,
shall automatically and irrevocably cease to be exercisable with respect to
33,333 and 33,333 shares, respectively, and (ii) such Options granted to you on
December 15, 2000 and December 14, 2001 shall remain exercisable with respect to
66,667 and 16,667 shares, respectively, upon the terms and conditions set forth
in the Non-Qualified Plan and the respective Option Agreements governing such
Options.
4. No Support Obligation. For the avoidance of doubt, you acknowledge
and agree that, in light of your resignation as provided in paragraph 1 hereof,
the Company has no obligations whatsoever to you under subparagraph 6(e) of the
Original Employment Agreement, subparagraph 5(c) of the November 21st Letter
Agreement or any other agreement or purported agreement with respect to the
matters referred to in such subparagraphs 6(e) or 5(c).
5. Confidentiality Agreement. You acknowledge and agree that you
shall continue to be bound by the terms and provisions of the Employee's
Proprietary Information and Inventions Agreement between you and the Company, a
<PAGE>
copy of which is attached hereto as Exhibit B (the "Confidentiality Agreement"),
which agreement shall remain in full force and effect, provided that in the
event of any conflict or inconsistency between any provision of the
Confidentiality Agreement and any provision of the Employment Agreement, the
provision most favorable to the Company shall govern.
6. Tax Withholding. All amounts payable and benefits provided to you
under the Employment Agreement shall be subject to applicable withholding of
income, wage and other taxes.
7. Miscellaneous.
(a) Entire Agreement. You represent, warrant, acknowledge and
agree that, immediately prior to your entering into this agreement, there are no
agreements, arrangements or understandings of any kind, written or oral, between
you and the Company which are in effect, other than the Employment Agreement
(including the Company sponsored benefit plans in which you participate as
provided in the Employment Agreement and including the Company Voluntary
Executive Supplemental Savings Plan (the "Supplemental Savings Plan")), the
Stock Option Agreements, the Indemnification Agreement dated as of October 1,
1988 between Biogen and you (the "Indemnification Agreement"), and the
Confidentiality Agreement. It is agreed that the Employment Agreement and this
letter agreement (including Exhibits A, B and C hereto), together with the
Confidentiality Agreement, the Stock Option Agreements, the Indemnification
Agreement, and the Biogen, Inc. Supplemental Executive Retirement Plan (the
"SERP"), the Biogen Retirement Plan and the Supplemental Savings Plan (to the
extent amounts are payable to you under the SERP, the Biogen Retirement Plan and
the Supplemental Savings Plan, respectively) (i) constitute the entire agreement
and understanding between the parties hereto in relation to the subject matter
hereof, and there are no promises, representations, conditions, provisions or
terms related thereto other than those set forth in the Employment Agreement and
this letter agreement (including Exhibits A, B and C hereto), the
Confidentiality Agreement, the Stock Option Agreements, the Indemnification
Agreement, and the SERP, the Biogen Retirement Plan and the Supplemental Savings
Plan (to the extent amounts are payable to you under the SERP, the Biogen
Retirement Plan and the Supplemental Savings Plan) and (ii) supersede all other
previous understandings, agreements and representations, written or oral,
between the Company (including any predecessor) and you regarding your
employment by, and any other position or relationship which you have had or now
have with, the Company or any of its Affiliates, or the cessation thereof. If
there is any conflict or inconsistency between this letter agreement and any of
the foregoing agreements or plans, including the Stock Option Agreements, this
letter agreement shall govern.
<PAGE>
(b) Pension. The annual benefit and basis of payment under the SERP
are set forth in Exhibit C hereto.
(c) Company Affiliates. As used in paragraph 1 hereof and in the
Employment Agreement, the term "Affiliate" of the Company shall be deemed to
include the entities listed on Exhibit 21 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2001, together with any other
entities directly or indirectly controlling, controlled by or under common
control with the Company. For purposes of this definition, an entity shall be
deemed to "control", be "controlled by" or be "under common control with" the
Company if such entity possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the Company, whether
through the ownership of voting securities or interests, by contract or
otherwise.
(d) Governing Law. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the internal laws of the
Commonwealth of Massachusetts, without reference to its conflicts of laws
principles.
(e) Amendment. This letter agreement may not be amended, except in
writing, in a document duly signed on behalf of the Company and by you.
(f) Counterparts. This letter agreement may be executed in
counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
If you agree with the terms of this letter agreement, please execute the
duplicate copies hereof in the space provided below whereupon this letter
agreement shall take effect as an instrument under seal as of the date hereof.
Very truly yours,
BIOGEN, INC.
By: /s/ Frank A. Burke, Jr.
-----------------------
Accepted and Agreed:
/s/ James L. Vincent
--------------------
James L. Vincent
<PAGE>
EXHIBIT A
(Referred to in Paragraph 3)
Options Held By James L. Vincent
as of the date of the
agreement dated July 15, 2002
between James L. Vincent and Biogen, Inc.
SHARES SUBJECT TO
OPTION IMMEDIATELY
PRIOR TO EXECUTION OF
STOCK OPTION AGREEMENT: GRANT DATE GRANT PRICE AGREEMENT
Stock Option Agreement dated
as of December 12, 1997 12/12/1997 17.875 50,000
Stock Option Agreement dated
as of December 12, 1997 12/12/1997 17.875 150,000
Stock Option Agreement dated
as of December 11, 1998 12/11/1998 40.73 120,000
Stock Option Agreement dated
as of January 4, 1999 01/04/1999 41.50 440,000
Stock Option Agreement dated
as of December 9, 1999 12/09/1999 71.625 300,000
Stock Option Agreement dated
as of December 15, 2000 12/15/2000 52.2813 100,000
Stock Option Agreement dated
as of December 14, 2001 12/14/2001 56.39 50,000
<PAGE>
EXHIBIT B
(Referred to in Paragraph 5)
Employee's Proprietary Information
and Inventions Agreement
------------------------
<PAGE>
EMPLOYEE'S PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
I understand that:
1. Biogen, Inc., a Massachusetts corporation, together with its subsidiaries
(hereinafter collectively called the "Company") is engaged in a continuous
program of research, development, and production.
2. As part of my employment by the Company I am expected to make new
contributions and inventions of value to the Company.
3. My employment creates a relationship of confidence and trust between me and
the Company with respect to any nonpublic information applicable to or
related to the business of the Company or applicable to or related to the
business of any client or customer of the Company, which may be made known to
me by the Company or by a client or customer of the Company, or created or
learned by me during the period of my employment.
4. The Company possesses and will possess information that has been created,
discovered, developed, or otherwise become known to the Company (including
without limitation information created, discovered, developed, or made known
by me) and/or in which property rights have been assigned or otherwise
conveyed to the Company, which information has commercial value in the
business in which the Company is engaged or will engage. All of the
aforementioned information is hereinafter called "Proprietary Information."
By way of illustration, but not limitation, Proprietary Information includes
trade secrets, processes, nonpublic patent applications, formulas, data,
know-how, improvements, inventions, techniques, biological materials,
marketing plans, strategies, forecasts, and customer lists.
In consideration of my employment or continued employment, as the case may be,
and the compensation received by me from the Company from time to time, I
hereby agree as follows:
1. All Proprietary Information shall be the sole and exclusive property of the
Company and its assigns, and the Company and its assigns shall be the sole
and exclusive owner of all patents and other rights in connection therewith.
I hereby assign to the Company any rights I may have or acquire in such
Proprietary Information.
2. At all times, both during my employment by the Company and after its
termination, I will keep in confidence and trust all Proprietary Information,
and I will not use or disclose any Proprietary Information or anything
relating to it without the written consent of the Company, except as may be
necessary in the ordinary course of performing my duties as an employee of
the Company.
3. I agree that all documents, records, apparatus, equipment and other physical
property, whether or not pertaining to Proprietary Information, furnished to
me by the Company or produced by me or others in connection with my
employment by the Company shall be and remain the sole property of the
Company. I will return and deliver such property and any copies to the
Company as and when requested by the Company. Should the Company not so
request, I shall return and deliver all such property upon termination of my
employment with the Company and I will not take with me any such property or
any reproduction of such property upon such termination. If I wish to take
copies of any documents, such as laboratory notebooks, I will first request
the Company's consent and will not do so without such consent.
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4. I agree that during the period of my employment by the Company, I will not,
without the Company's express written consent, engage in any employment or
activity other than for the Company in any business in which the Company is
now or may during the course of my employment become engaged.
5. I will promptly disclose to the Company, or any persons designated by it,
all improvements, inventions, formulas, biological materials, processes,
techniques, know-how, and data, whether or not patentable, which are made
or conceived or reduced to practice or learned by me, either alone or
jointly with others, during the period of my employment and which are
related to or useful in the business of the Company, or result from tasks
assigned me by the Company or result from use of premises, or equipment or
materials, possessed, owned, leased, or contracted for by the Company (all
said improvements, inventions, formulas, biological materials, processes,
techniques, know-how, and data shall be collectively hereinafter called
"Inventions").
6. I agree that all Inventions and all patents, copyrights and the like
relating thereto shall be the sole and exclusive property of the Company
and its assigns, and the Company and its assigns shall be the sole and
exclusive owner of all patents and other rights in connection therewith. I
hereby assign to the Company any rights I may have or acquire in such
Inventions. I further agree as to all such Inventions to assist the Company
in every proper way (but at the Company's expense) to obtain and from time
to time enforce patents on said Inventions in any and all countries. To
that end I will execute all documents for use in applying for and for
obtaining and maintaining such patents thereon and enforcing same, as the
Company may desire, together with any assignments thereof to the Company or
person designated by it. My obligation to assist the Company in obtaining
and enforcing patents for such Inventions in any and all countries shall
continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after such termination for time actually
spent by me at the Company's request on such assistance. In the event that
the Company is unable for any reason whatsoever to secure my signature to
any lawful and necessary document required to apply for any patent or to
prosecute any patent application with respect to such an Invention
(including renewals, extensions, continuations, divisions or continuations
in part thereof), I hereby irrevocably designate and appoint the Company
and its duly authorized officers and agents, as my agents and
attorney-in-fact to act for and in my behalf and instead of me, to execute
and file any such application and to do all other lawfully permitted acts
to further the prosecution and issuance of patents thereon with the same
legal force and effect as if executed by me.
7. I will not bring with me to the Company or use in the performance of my
responsibilities at the Company any confidential or proprietary materials
or documents of a former employer unless I have obtained written
authorization from the former employer for their possession and use.
8. I represent that my performance of all the terms of this Agreement and as
an employee of the Company does not and will not breach any agreement to
keep in confidence proprietary information acquired by me in confidence or
in trust prior to my employment by the Company. I have not entered into,
and I agree I will not enter into, any agreement either written or oral in
conflict herewith.
I also understand that, in my employment with the Company, I am not to
breach any obligation of confidentiality that I may have to former
employers.
<PAGE>
9. I agree that for a period of two (2) years following the termination of my
employment with the Company I will not knowingly solicit, entice or
persuade any other employee of the Company to leave the services of the
Company for any reason, and in connection therewith I will not directly, or
indirectly, employ, or be involved in any business venture with, any such
employee within one year of termination of employment with Biogen.
10. This Agreement shall be effective as of the first day of my employment by
the Company, namely: 10/85
11. This Agreement shall be binding upon me, my heirs, executors, assigns, and
administrators and shall inure to the benefit of the Company, its
successors, and assigns. This Agreement shall be governed by the laws of
the Commonwealth of Massachusetts.
NAME: /s/ James L. Vincent
--------------------------------
DATED: 5/30/91
-------------------------------
ACCEPTED AND AGREED TO:
BIOGEN, INC.
-------------------------
BY: /s/ Sharon Bird
----------------------------------
DATED: 9/26/91
-------------------------------
<PAGE>
EXHIBIT C
(REFERRED TO IN PARAGRAPH 7)
(ESTIMATE)
PAY HISTORY(1) MONTHLY SUPPLEMENTAL PLAN BENEFIT
-------------- ---------------------------------
Year Earnings Year Earnings
---- -------- ---- ---------- Monthly Benefit Payable at Age 65
1986 $430,000 1994 $1,050,000 Career Pay Benefit $37,189
1987 $470,000 1995 $1,140,000 Qualified Plan Offset -$3,914(2)
-------
1988 $525,000 1996 $1,610,000 Supplemental Benefit $33,275(3)
1989 $595,000 1997 $ 975,000
1990 $685,000 1998 $1,014,000 Optional Forms of Payment
1991 $765,000 1999 $2,525,988 Single Life Annuity $33,275(4)
1992 $855,000 2000 $1,483,068 50% Joint & Survivor $29,708(5)
1993 $945,000 2001 $1,024,324 100% Joint and Survivor $26,830(6)
NOTES
-----
(1) Pay history was used to calculate the career pay benefit. Mr. Vincent's
supplemental benefit was calculated as if he were to work until age 65 at
his current pay level. Pay for 2002 through age 65 is assumed for these
purposes to be $1.2 million.
(2) Qualified plan offset calculated assuming cash balance account grows with
interest at 5.12% per year until age 65. Final Supplemental Plan Benefit
will be calculated based on the actual qualified plan benefit. As such,
final qualified plan offset and Supplemental Plan Benefit may differ from
the amounts shown above.
(3) The Supplemental Benefit is determined by applying the career pay benefit
formula specified in the Supplemental Plan, and then subtracting the
benefit payable from the Biogen qualified Retirement Plan. The qualified
plan offset includes the benefit payable to Mr. Vincent's former wife under
the Qualified Domestic Relations Order.
(4) Under the Single Life Annuity form of payment, Mr. Vincent will receive
monthly payments for his lifetime. When he dies, payments stop.
(5) Under the 50% Joint and Survivor form of payment, Mr. Vincent will receive
$29,708 per month. When he dies, his surviving spouse will receive 50% of
this amount, or $14,854. Calculation based on spouse date of birth of
6/5/1947.
(6) Under the 100% Joint and Survivor form of payment, Mr. Vincent will receive
$26,830 per month. When he dies, his surviving spouse will receive 100% of
this amount, or $26,830. Calculation based on spouse date of birth of
6/5/1947.