Biogen Idec Inc. 14 Cambridge Center Cambridge, Massachusetts 02142
December 16,
2005
Dear Xx. Xxxxxxxxx:
Reference is made to the
Employment Agreement (the
“Employment Agreement”) dated
July 20, 2003 between you and Biogen
Idec Inc. (the “Company”). This letter
(the “Letter
Agreement”) will set forth our mutual
understanding as to the rights
and obligations of you
and the Company in connection with your
retiring as the Executive Chairman and
Chairman of the Board of
Directors of the Company, effective as
of December 30, 2005,
and your resignation from the Board of
Directors of the Company and from all
other
positions which you hold with the
Company and its affiliates, which will
also become
effective as of December 30, 2005.
Capitalized terms that are
used but not defined herein
shall have the meaning set
forth in the Employment Agreement
1. Retirement. Effective as of December 30, 2005, you will no longer be
serving as Executive Chairman and Chairman of the Board of Directors of the Company.
You also hereby resign from the Board of Directors of the Company and from all other
positions which you hold with the Company and its affiliates effective as of December 30,
2005.
2. Good Reason. The parties hereby agree that your retirement from your
position as Executive Chairman and Chairman of the Board of Directors of the Company
constitutes a termination for “Good Reason” for purposes of the Employment Agreement and
that December 30, 2005 will be treated as the Date of Termination for all purposes of
the Employment Agreement. The parties further agree that as a result of the termination
for Good Reason described in the preceding sentence, you will be entitled to the payments
and benefits described in Section 5(a) of the Employment Agreement (which total
$6,000,000), provided, however, that the payments due to you pursuant to Section 5(a) of
the Employment Agreement shall be made on December 30, 2005 and shall be paid in
accordance with the payment instructions you have delivered to the Company.
3. Other Payments and Benefits.
3.1 Bonus Payment. You have earned your $1 million target annual
bonus with respect to the Company’s 2005 fiscal year, and that bonus shall also be paid on
December 30, 2005 — with the funds to be deposited into your existing Supplemental
Savings Plan Account in accordance with your existing deferral election. Such target
annual bonus is in full satisfaction of your rights to an annual bonus with respect to
the Company’s 2005 fiscal year.
3.2 Equity Awards.
(a) In accordance with the terms of the Employment Agreement,
all outstanding options to acquire Company stock shall become fully vested and
exercisable as of December 30, 2005. In all other respects, such options
shall continue to be governed by the terms of the applicable agreements and plans, it being
understood that you are “retiring” (as such term is defined in the Company’s 2003 Omnibus Equity
Plan) for purposes of options granted under the Company’s 2003 Omnibus Equity Plan. A
schedule of such outstanding options and the date(s) by which they must be
exercised is set forth on the attached schedule which is incorporated herein by reference.
The Company agrees, for your benefit, (i) to cooperate fully with you in
connection with the exercise of such options, and, after such exercise, to cooperate fully
with you in connection with the unrestricted resale of the underlying shares after the
release (the “Release”) by the Company to the public, in accordance with the Company’s
customary past practices (which historically have consisted of conference calls in which
the public can participate), of appropriate year-end financial information as at and for the
year ended December 31, 2005; (ii) to use commercially reasonable best efforts to effect
such Release to the public no later than February 28, 2006; and (iii) until all of the options
are exercised or expire, to use best efforts to continue the effectiveness of a registration
statement on Form S-8 filed with the Securities and Exchange Commission covering the
exercise of such options (except for temporary suspensions thereof which the Company,
acting in a commercially reasonable manner, deems necessary under all the
circumstances).
It is acknowledged and agreed that the only other outstanding equity or
equity-based award granted or awarded to you by the Company as of
December 30, 2005
is your February 2004 restricted stock award, which involves 50,000 shares. This award
shall continue to be govemed by the terms of the 2003 Omnibus Equity Plan and all
applicable agreements, it being understood that you are “retiring” (as such term is defined
in the Company’s 2003 Omnibus Equity Plan) for purposes
of this award and, as a result, this award is scheduled to vest in
its entirety on December 30, 2005. You agree
that, with respect to the vesting of this award, the Company shall reduce the amount of Company
stock delivered to you by the amount necessary to satisfy the tax withholding
required in
connection with such vesting. In the event that the reduction results
in a fractional share
being deliverable to you, the Company shall pay you an amount in cash equal
to the fair
market value on December 31, 2005 of the fractional share. The
after-tax amount of stock
shall be delivered in accordance with your instructions.
3.3 Earned and Unpaid Salary; Employee Benefits. On December
30, 2005, the Company shall pay to you, in a cash lump sum, any portion of your Annual
Base Salary that is earned and unpaid as of December 30, 2005, as well a cash payment in
respect of accrued and unused vacation pay in accordance with the Company’s policy.
The Company shall also pay or provide to you all compensation and benefits
payable to you under the terms of the Company’s compensation and benefit plans, programs or
arrangements as in effect on December 30, 2005.
3.4 Business Expense Reimbursement and Related Matters. The
Company shall reimburse you for all reasonable travel, entertainment or other
expenses incurred by you prior to December 30, 2005, in accordance with the Company’s expense
reimbursement policy. The parties acknowledge that, effective as of
December 30, 2005,
you will no longer be entitled to use the Company-owned condominium under the
provisions of the letter agreement between you and the Company dated January 5, 2005
and further acknowledge that the obligations of the parties with respect to your usage prior
to such date will continue to be governed by the terms of such letter agreement. You
hereby agree to sell to the Company, and the Company agrees to purchase from you,
certain fiunishings which you have purchased and which are located in such condominium,
at a purchase price (equal to your cost) of $134,682.82. Such sum shall be wire
transferred in accordance with your instructions.
You further agree that you will return to the Company, no later than December 30,
2005,the Company-owned automobile which has been provided to you.
4. Survival of Employment Agreement. Except as expressly set forth
herein, the provisions of this Letter Agreement do not supersede the provisions of the
Employment Agreement which in order to be effectuated must survive the Date of
Termination, including, without limitation, Sections 6, 7 and 8 thereof.
5. Waiver. You hereby irrevocably waive any claim against any person or
entity in connection with any alleged non-compliance with the provisions of Section 4(b)
of the Employment Agreement or Section 4.3 or Article 9 of the Company’s Amended and
Restated Bylaws. You further waive your rights under the last sentence of Section
2(a) of the Employment Agreement.
6. General Provisions.
6.1 Governing Law; Captions; Amendment; Counterparts. This
Letter Agreement shall be governed by, and construed in accordance with, the laws of the
State of California, with venue in San Diego County, California,
without reference to
principles of conflict of laws. The captions of this Letter Agreement are not part
of the
provisions hereof and shall have no force or effect. This Letter
Agreement may not be
amended or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives. This Letter Agreement may be
executed in several counterparts, each of which shall be deemed an original and
which together shall constitute but one and the same instrument.
6.2 Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from amounts payable under this Letter
Agreement or the Employment Agreement all federal, state, local and foreign taxes
that are required to be withheld by applicable laws or regulations.
To indicate your understanding and acceptance of the terms set
forth in this
Letter Agreement, please sign and date this
Letter Agreement in the space provided below
and return it to me.
Sincerely,
| By: | /s/ Xxxxxxx X. Xxxxx |
| Print Name: | Xxxxxxx X. Xxxxx, Secretary |
ACCEPTED AND AGREED:
/s/ Xxxxxxx X. Xxxxxxxxx, Ph.D.
Xxxxxxx X. Xxxxxxxxx, Ph.D.
LETTER AGREEMENT BETWEEN XXXXXXX X. XXXXXXXXX AND
BIOGEN IDEC INC. — DATED 12/16/05
BIOGEN IDEC INC. — DATED 12/16/05
SCHEDULE OF OUTSTANDING OPTIONS
(REQUIRED BY SECTION 3.2(a) OF THE LETTER AGREEMENT)
(REQUIRED BY SECTION 3.2(a) OF THE LETTER AGREEMENT)
| Number | Option Date | Exercise Period* | Outstanding | |||
| Options as of | ||||||
| 12/16/05** | ||||||
001365 (R001365) 001893 (R001893) 001980 (R001980) 002485 (1002485/R002485) 002976 (1002976/R002976) 003697 (1003697/R003697) 004698 (1004698/R004698) 006878 020000 032970 |
1/15/1997 11/19/1997 2/5/1998 1/13/1999 1/12/2000 1/16/2001 1/23/2002 1/21/2003 2/6/2004 2/17/2005 |
Three (3) months Three (3) months Three (3) months Three (3) months Three (3) months Three (3) months Three (3) months Three (3) months Three (3) years Three years |
125389 300 177201 192574 199631 138017 129740 178000 150000 325000 |
* For all grants that have post-termination exercise periods of three (3) months, the last day to
exercise the options is March 30, 2006. For all option grants that have post-termination exercise
periods of three (3) years, the last day to exercise the options
is December 30, 2008.
** Any unvested portion of the options listed in this column fully vest on December 30, 2005.
** Any unvested portion of the options listed in this column fully vest on December 30, 2005.
