10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001

OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-12042

BIOGEN, INC.

(Exact name of Registrant as specified in its charter)

Massachusetts
(State or other jurisdiction
of incorporation or organization) 04-3002117
(I.R.S. Employer
Identification No.)

14 Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (617) 679-2000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of class)

         Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes         No        

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.       

         Aggregate market value of Common Stock held by non-affiliates of the Registrant at March 26, 2002 (excludes shares held by affiliates): $7,324,113,016. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, direct or indirect, to direct or cause the direction of management or policies of the Registrant, or that such person is controlled by or under common control with the Registrant. Common Stock outstanding at March 26, 2002: 148,511,993 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive Proxy Statement for its 2002 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report, and portions of the Registrant’s 2001 Annual Report to Shareholders are incorporated by reference into Parts II and IV of this Report.

TABLE OF CONTENTS

PART I
	ITEM 1 — BUSINESS
	ITEM 2 — PROPERTIES
	ITEM 3 — LEGAL PROCEEDINGS
	ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
	ITEM 6 — SELECTED FINANCIAL DATA
	ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
	ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11 — EXECUTIVE COMPENSATION
	ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
	ITEM 14 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
Ex-10.20 1983 Employee Stock Purchase Plan
Ex-10.23 1987 Scientific Board Stock Option Plan
Ex-10.24 Voluntary Executive Supplemental Savings
Ex-10.27 Voluntary Board of Directors Savings Plan
Ex-10.42 Letter agreement regarding Peter Kellogg
Ex-10.43 Letter agreement amending ... Kellogg
Ex-10.44 Letter agreement amending ... Adelman
Ex-10.45 Renewal of Independent Consulting Agmnt
Ex-10.46 Biogen Savings Plan, as amended
Ex-10.47 Executive Severance
Ex-10.48 Letter agreement dated May 19, 1998
Ex-10.49 Letter agreement dated August 8, 2001
Ex-10.50 Letter agreement dated October 19, 2001
Ex-13 Financial Statements from 2001 Annual Report
Ex-21 Subsidiaries of the Registrant
Ex-23 Consent of PricewaterhouseCoopers LLP

PART I

ITEM 1 — BUSINESS

OVERVIEW

         Biogen, Inc. (“Biogen” or the “Company”) is a biopharmaceutical company principally engaged in the business of developing, manufacturing and marketing drugs for human health care. The Company, which was founded in 1978, currently derives revenues from sales of its AVONEX® (Interferon beta-1a) product for the treatment of relapsing forms of multiple sclerosis (MS) and from royalties on worldwide sales by the Company’s licensees of a number of products covered under patents controlled by the Company. In addition, Biogen has a significant number of ongoing research programs and a pipeline of development stage products, the furthest along of which, AMEVIVE® (alefacept), is currently being considered for approval by the United States Food and Drug Administration (“FDA”) and regulatory authorities in the European Union (“EU”) and Canada for the treatment of moderate to severe psoriasis.

         Over 118,000 patients worldwide have chosen AVONEX as the treatment of choice for relapsing MS. In 2001, Biogen focused its efforts on continuing to drive AVONEX growth in the United States and Europe. As a result of these efforts, the Company achieved revenues from sales of AVONEX of approximately $971.6 million in 2001, as compared to $761.1 million in AVONEX revenues in 2000.

         Biogen expects that its next product on the market will be AMEVIVE® (alefacept) for the treatment of moderate-to-severe psoriasis. In the second quarter of 2001, the Company completed Phase 3 clinical studies of both the intramuscular (“IM”) and intravenous (“IV”) formulations of AMEVIVE in this indication. In August of 2001, Biogen completed a simultaneous filing for regulatory approval of AMEVIVE in the United States and Europe, with submission of data from the clinical studies. The applications are currently under review by both the FDA and regulatory authorities in the EU.

         Biogen also continues to devote significant resources to its other ongoing development efforts. In January 2001, the Company announced positive results from two large Phase 2 studies of the use of ANTEGREN® (natalizumab) in the treatment of MS and Crohn’s disease. ANTEGREN is being developed in collaboration with Elan Corporation, plc (“Elan”). Based on the Phase 2 results, Biogen and Elan initiated Phase 3 clinical studies of ANTEGREN in both MS and Crohn’s disease in the fourth quarter of 2001.

         In 2001, Biogen also announced positive results from a Phase 2 study of the first generation of its small molecule adenosine receptor antagonist being studied as a treatment for congestive heart failure. Biogen has since moved forward with a second generation small molecule ADENTRI™ adenosine receptor antagonist, in both oral and IV forms. The new molecule is intended to have comparable pharmacological properties to the first generation molecule but with improved commercial potential. During 2001, Biogen completed a Phase 1 clinical study of the oral form of the new molecule with positive results. Based on these results, in November 2001, Biogen initiated a Phase 2a clinical study of the new molecule in the treatment of stable congestive heart failure.

         Biogen has several other products in early stage clinical trials. Among these is IC747, an oral small molecule being developed in collaboration with ICOS Corporation as a potential therapeutic for certain inflammatory diseases including psoriasis. Other products in early stage clinical trials include a beta interferon gene therapy product with potential as a treatment for various forms of cancer.

         In addition to its development programs, Biogen has many preclinical and earlier-stage research programs. Biogen’s research strategy is to direct its effort toward finding therapeutics in four major research focus areas: fibrosis, oncology, immunomodulation, and neurodegeneration. Biogen is supplementing its internal research efforts to find novel therapeutics with genomics tools and technologies and through collaborations. Biogen believes that its biologically-focused research effort, along with the leveraging of its strengths in protein and bio-organic chemistry, will allow the Company to be in a position to capitalize on the potential of the post-genomics era.

AVONEX® (INTERFERON BETA-1A)

         Biogen currently markets and sells AVONEX for the treatment of relapsing forms of MS. MS is a progressive neurological disease in which the body loses the ability to transmit messages along nerve cells, leading to a loss of muscle control, paralysis and, in some cases, death. Patients with active relapsing MS experience an uneven pattern of disease progression characterized by periods of stability interrupted by flareups of the disease after which the patient returns to a new baseline of functioning. AVONEX is a recombinant form of a protein produced in the body by fibroblast cells in response to viral

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infection. AVONEX has been shown in clinical trials both to slow the accumulation of disability and to reduce the frequency of exacerbations in patients with relapsing forms of MS. Biogen began selling AVONEX in the United States in 1996, and in the EU in 1997. Currently AVONEX is on the market in more than 50 countries. Over 118,000 patients worldwide have chosen AVONEX as their treatment of choice.

         In 2001, Biogen focused its efforts on continuing to drive AVONEX growth in the United States and in Europe. The result was revenues from sales of AVONEX in 2001 of $971.6 million as compared to revenues from sales of AVONEX of $761.1 million in 2000 and $620.6 million in 1999. Of these AVONEX revenues, approximately 73% in 2001, 73% in 2000 and 71% in 1999 were generated in the United States.

          The Company’s efforts in 2001 also included the filing of applications with the FDA and regulatory authorities in the EU for a broadened prescribing label based on data from the Company’s CHAMPS (Controlled High Risk AVONEX Multiple Sclerosis Prevention Study) study in which AVONEX was shown to have a highly statistically significant beneficial effect on delaying the development of clinically definite MS in patients who had experienced a single neurological event consistent with MS. In January 2002, the regulatory authorities in the EU issued a final positive opinion on expansion of the label to include those patients who experience a single demyelinating event with an active inflammatory process if the event is severe enough to treat with corticosteroids, and where alternative diagnoses have been excluded and the patients are determined to be at high-risk of developing clinically definite MS. The final positive opinion is subject to final approval. The Company expects approval of the broadened prescribing label in the EU in April 2002. The FDA is currently reviewing the Company’s application. The Company expects FDA approval of a new label reflecting the CHAMPS data in the first half of 2002.

          Biogen is currently conducting additional clinical studies of AVONEX. These include an open-label follow-up study initiated in 1995 to obtain long-term safety and antigenicity data and CHAMPIONS, an open label follow-up study initiated in 2000 to study the long-term effect of AVONEX on patients who participated in the CHAMPS study. In 2001, the Company completed a randomized, double-blind, placebo controlled study initiated in 1998 to evaluate the efficacy of a higher dose of AVONEX IM formulation delivered once a week in the treatment of secondary progressive MS. The Company is currently discussing the outcome and endpoints of the study with the FDA and regulatory authorities in the EU.

         Biogen is also exploring new ways to improve the formulation and delivery of AVONEX. For example, the Company has developed a pre-filled syringe formulation of AVONEX and expects to file a license application for this formulation with the FDA in April 2002. The Company expects to file a license application for this formulation with the regulatory authorities in the EU in May 2002. Biogen has decided not to proceed with further development of a dry powder formulation of AVONEX for pulmonary delivery because the product profile was not comparable to that of the current IM formulation.

         In March 2001, Biogen launched MSActiveSource.com, a comprehensive Internet site for people living with MS, their caregivers and healthcare professionals. Registrants on the site are provided a broad selection of resources, including disease information, comprehensive news and the latest research studies about MS. In connection with the launch of MSActiveSource.com, Biogen also launched an enhanced version of AVONEX.com that is designed for people taking AVONEX to incorporate the personalized information and customizable features of MSActiveSource.com for managing therapy programs.

         In the United States, Canada, Australia and most of the major countries of the EU, Biogen uses its own sales force to market and sell AVONEX. In those countries, Biogen distributes AVONEX principally through wholesale distributors of pharmaceutical products, mail order, specialty distributors or shipping service providers. Sales to three major wholesale distributors and a specialty distributor in the United States accounted for 21%, 16%, 14% and 14%, respectively, of total revenues in 2001. In countries outside the United States, Canada, Australia and the major countries of the EU, Biogen sells AVONEX to distribution partners who are then responsible for most marketing and distribution activities.

MAJOR RESEARCH AND DEVELOPMENT PROGRAMS

         AMEVIVE® (ALEFACEPT)

         Inflammation is the result of the body’s immune response to infection and injury. In many autoimmune diseases, the inflammation process is directed inappropriately against the body’s own tissues, causing temporary or permanent damage. Biogen has focused the efforts of its inflammation programs on developing drugs to inhibit specific cellular interactions critical to the inflammation process. Central to inflammation is the activation of T-cells, specialized white blood cells which initiate and control the immune response. One of the cellular pathways which is important for the activation of T-cells is the LFA-3/CD2 pathway. AMEVIVE is a recombinantly engineered protein designed to modulate immune responses by binding to the CD2 receptor. Biogen has initially developed AMEVIVE as a treatment for moderate-to-severe psoriasis. Psoriasis is a chronic autoimmune disease that is characterized by inflammation and thickening of the skin. An estimated 400,000 to 600,000 psoriasis

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patients in the United States have a severe enough form of the disease to need systemic therapies. In mid 2001, Biogen completed Phase 3 studies of both the IM and IV formulations of AMEVIVE in patients with moderate-to-severe chronic plaque psoriasis. The Phase 3 studies involved over 1,100 patients at more than 100 clinical sites. In each of the studies, AMEVIVE achieved positive and statistically significant results. Based on these results, in August 2001, Biogen completed a simultaneous filing in the United States and Europe for regulatory approval of AMEVIVE for the treatment of moderate-to-severe psoriasis. The applications are currently being reviewed by both the FDA and regulatory authorities in the EU. Biogen has also filed for regulatory approval in Canada.

         ANTEGREN® (NATALIZUMAB)

         ANTEGREN is a humanized monoclonal antibody, the first of a new class of potential therapeutics known as alpha 4 integrin inhibitors. ANTEGREN is designed to block cell adhesion to blood vessel walls and subsequent migration of white blood cells into tissue, by binding to the cell surface receptors known as alpha-4-beta-1 (VLA-4) and alpha-4-beta-7 which are found on most types of white blood cells. The migration of white blood cells into tissue is part of the body’s normal response during inflammation. This inflammatory response can be severely damaging or even life threatening when it is directed against the body’s own tissue in autoimmune diseases and may cause serious collateral injury in chronic immune inflammatory diseases.

          In August of 2000, Biogen entered into a collaboration with Elan Corporation, plc (“Elan”) under which Biogen and Elan are working together to develop, manufacture and commercialize ANTEGREN worldwide. In January of 2001, Biogen and Elan announced positive results from two large Phase 2 clinical studies of ANTEGREN in MS and Crohn’s disease, a chronic inflammatory disease of the gastrointestinal tract. The companies began enrolling patients in Phase 3 clinical studies of ANTEGREN for both of these diseases in late 2001.

         ADENTRI™ (ADENOSINE RECEPTOR ANTAGONIST)

          In March 1997, Biogen entered into an agreement with CV Therapeutics, Inc. (“CVT”) pursuant to which the Company obtained rights under CVT’s patents and know-how to develop and market small molecules that act as highly selective antagonists of the adenosine A1 receptor. The adenosine A1 receptor is expressed principally in the heart, brain and kidney, and in the kidney mediates vasoconstriction, renal function and reabsorption of fluids. Biogen is developing small molecule adenosine receptor antagonists as a potential treatment for congestive heart failure. Congestive heart failure is a chronic progressive disease that affects four to five million people in the United States. Patients with the disease experience both a chronic course as well as acute episodes of heart failure that usually require hospitalization. Reduction in kidney function and the formation of edema, or fluid retention, in lungs and extremities are significant symptoms of chronic heart failure, leading to increased morbidity, hospitalization and death. In March 2001, Biogen announced positive results from a Phase 2 trial on the first generation of its small molecule adenosine receptor antagonist molecules. Biogen has moved forward with a second generation ADENTRI™ adenosine receptor antagonist. The new molecule is designed to have comparable pharmacological properties to the first generation, but with greater commercial potential. During 2001, Biogen completed a Phase 1 clinical study of the new molecule in oral formulation with positive results. Based on these results, in November 2001, Biogen initiated a Phase 2a clinical study of the molecule in patients with stable congestive heart failure. Biogen has also initiated a Phase 1 clinical study of the IV formulation of the second generation molecule that Biogen expects to complete in the fourth quarter of 2002.

         SMALL MOLECULE LFA-1 ANTAGONISTS

         In July 2001, Biogen entered into a development and marketing collaboration agreement with ICOS Corporation (“ICOS”), pursuant to which Biogen and ICOS agreed to collaborate on the development and commercialization of small molecule antagonists to a cell adhesion molecule called Leukocyte function – Associated Antigen-1 (LFA-1). LFA-1 promotes T-cell migration and activation that can lead to inflammatory diseases such as psoriasis, rheumatoid arthritis and MS. Biogen and ICOS are developing antagonists to LFA-1 designed to interfere with T-cell migration and activation by blocking LFA-1 activity as a means of potentially treating these inflammatory diseases. Biogen and ICOS are currently conducting Phase 1 clinical studies of

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IC747, an orally available LFA-1 antagonist. If the results of the Phase 1 studies are positive, Biogen and ICOS plan to initiate Phase 2a clinical studies of IC747 the third quarter of 2002 in patients with moderate-to-severe psoriasis.

         GENE THERAPY

          Biogen is developing a gene therapy-based therapeutic that delivers interferon beta genes into tumors as a potential treatment for certain cancers. The interferon beta gene triggers mechanisms of action that may help to inhibit tumor cell growth and kill tumor cells. Biogen has initiated a Phase 1 study of a modified adenovirus vector-based beta interferon gene therapy product as a potential treatment for malignant glioma, and is exploring the use of the product in other cancer indications. Biogen has also entered into a collaborative research agreement with Targeted Genetics Corporation for the development of human gene therapy treatments.

         PRE-CLINICAL PROGRAMS

          Biogen has several programs in preclinical development. Biogen is, for example, developing a humanized monoclonal antibody directed against alpha-1/beta-1 integrin (VLA-1). VLA-1 is found on a variety of cells associated with tissue inflammation and fibrosis, including activated T cells, macrophages and myofibroblasts. Loss of VLA-1 activity is associated with sharply reduced inflammation and fibrosis in experimental models of disease. Biogen is also developing a humanized monoclonal antibody directed against the LT Beta Receptor. The LT Beta Receptor is found on many human tumors of epithelial origin. By blocking the LT Beta Receptor, the antibody may slow or kill certain human tumor cell lines.

         OTHER RESEARCH PROGRAMS

          Biogen has a significant number of ongoing research programs. Biogen’s research strategy is to direct its effort toward finding therapeutics in four major research focus areas: fibrosis, oncology, immunomodulation, and neurodegeneration. Biogen is supplementing its internal research efforts to find novel therapeutics with the use of genomics tools and technologies and through collaborations with Eos Biotechnology, Inc., Lexicon Genetics Incorporated, MorphoSys AG, Gene Logic, Inc., Incyte Genomics, Inc. and Genetica Incorporated, among others. Biogen believes that its biologically-focused research effort, along with the leveraging of its strengths in protein and bio-organic chemistry, will allow the Company to be in a position to capitalize on the potential of the post-genomics era.

         RESEARCH AND DEVELOPMENT COSTS

         For the years ended December 31, 2001, 2000 and 1999, Biogen’s research and development costs were approximately $314.6 million, $302.8 million and $221.2 million, respectively.

         RISKS ASSOCIATED WITH DRUG DEVELOPMENT AND COMMERCIALIZATION

         Certain of the statements set forth in this document regarding Biogen’s research and development programs, such as statements regarding the anticipated commencement or completion of clinical trials of drugs in development, statements regarding the potential for such drugs as therapeutics and the Company’s predictions as to the timing and result of deliberations by regulatory authorities are forward-looking, and are based upon Biogen’s current belief as to the outcome and timing of such future events. These events are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Many important factors affect Biogen’s ability to successfully develop and commercialize drugs, including the need to demonstrate the safety and efficacy of drug candidates at each stage of the clinical trial process, to overcome technical hurdles that may arise, to meet applicable regulatory standards, to receive required regulatory approvals, to be capable of producing drug candidates in commercial quantities at reasonable costs, to obtain and maintain all necessary patents or licenses, to compete successfully against other products, to market products successfully, and to effectively and efficiently work with collaborators. Success in early stage clinical trials or preclinical work does not ensure that later stage or larger scale clinical trials will be successful. Even if later stage clinical trials are successful, the risk exists that unexpected concerns may arise from analysis of data or from additional data or that obstacles may arise or issues be identified in connection with review of clinical data with regulatory authorities or that regulatory authorities may disagree with the Company’s view of the data or require additional data or information or additional studies. There can be no assurance that any of the products described in this section or resulting from Biogen’s research and development programs will be successfully developed and commercialized, overcome technical hurdles that may arise, prove to be safe and efficacious at each stage of clinical trials, meet applicable regulatory standards, receive required regulatory approvals, survive challenges based on patents, be capable of being produced in commercial quantities at reasonable costs, be successfully marketed or successfully meet challenges from competitive products. There also can be no assurance that the Company will be able to work effectively with collaborators or that it will be able to obtain licenses necessary to market and develop the products described in this section on terms acceptable to the Company.

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         For a detailed discussion of the risks associated with the Company’s drug development and commercialization program, see “Business — Patents and Other Proprietary Rights — Third Party Patents,” “Business — Competition,” and Biogen’s 2001 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Outlook,” which is incorporated herein by reference under Item 7 hereof.

PRINCIPAL PRODUCTS BEING MARKETED OR DEVELOPED BY BIOGEN’S LICENSEES

         ALPHA INTERFERON

         Alpha interferon is a naturally occurring protein produced by normal white blood cells. Biogen has been granted patents covering the production of alpha interferon through recombinant DNA techniques. See “Patents and Other Proprietary Rights.” Biogen’s worldwide licensee for recombinant alpha interferon, Schering-Plough Corporation (“Schering-Plough”) sells its INTRON® A (interferon alfa-2b) brand of alpha interferon in various countries, including the United States, for a number of indications, including the treatment of chronic hepatitis B and hepatitis C, hairy-cell leukemia, AIDS-related Kaposi’s sarcoma, condylomata acuminata, for injection as an adjuvant treatment to surgery in patients at high risk for systemic recurrence of malignant melanoma, and for use in conjunction with anthracycline-containing combination chemotherapy for the initial treatment of patients with clinically aggressive non-Hodgkin’s lymphoma. Schering-Plough also sells alpha interferon in other forms for the treatment of hepatitis C, including REBETRON™ Combination Therapy containing INTRON A and REBETOL® (ribavirin, USP), PEG-INTRON® (peginterferon alfa-2b), a pegylated form of alpha interferon, and PEG-INTRON in combination with REBETOL.

         Royalties from Schering-Plough on sales of INTRON A accounted for approximately 2%, 10% and 13% of Biogen’s revenues in 2001, 2000 and 1999, respectively. Royalties from Schering-Plough on sales of alpha interferon products have declined significantly in 2001 as compared to prior years as the result of patent expirations in the European Union and Japan and a royalty dispute with Schering-Plough related to royalties on sales in the United States. For a discussion of the royalty dispute with Schering-Plough and other issues related to the payment of royalties by Schering-Plough, see “Patents and Other Proprietary Rights — Recombinant Alpha Interferon.”

         HEPATITIS B VACCINES AND DIAGNOSTICS

         Hepatitis B is a blood-borne disease which causes a serious infection of the liver and substantially increases the risk of liver cancer. More than 250 million people worldwide have chronic hepatitis B virus infections. Biogen holds several important patents related to hepatitis B antigens produced by genetic engineering techniques. See “Patents and Other Proprietary Rights - Recombinant Hepatitis B Antigens.” These antigens are used in recombinant hepatitis B vaccines and in diagnostic test kits used to detect hepatitis B infection.

         GlaxoSmithKline plc (“Glaxo”) and Merck and Co, Inc. (“Merck”) are the two major worldwide marketers of hepatitis B vaccines. Biogen has licensed to Glaxo exclusive rights under Biogen’s hepatitis B patents to market hepatitis B vaccines in the major countries of the world, excluding Japan. Glaxo currently pays Biogen royalties based on sales of Glaxo’s vaccine in the United States and in several other countries. In 1990, Glaxo and Biogen entered into a sublicense arrangement with Merck under which Biogen also currently receives royalties.

         Biogen has also licensed its proprietary hepatitis B rights, on an antigen-by-antigen and nonexclusive basis, to diagnostic kit manufacturers. Biogen currently has hepatitis B license or license and supply agreements for diagnostic use with more than 15 companies, including Abbott Laboratories, the major worldwide marketer of hepatitis B diagnostic kits, Ortho-Clinical Diagnostics, Organon Teknika B.V. and Roche Diagnostic Systems, Inc.

         For a discussion of the length of the royalty obligation of Glaxo and Merck on sales of hepatitis B vaccines and the obligation of Biogen’s other licensees on sales of hepatitis B-related diagnostic products, see “Patents and Other Proprietary Rights — Recombinant Hepatitis B Antigens.”

         OTHER PRODUCTS

         In 1996, Biogen granted a sublicense to Pharmacia & Upjohn AB (“Pharmacia & Upjohn”) under certain patent rights to proprietary protein secretion technology exclusively licensed to Biogen by Harvard University. Under the terms of the license agreement, Biogen receives ongoing royalties on sales of Pharmacia & Upjohn’s recombinant human growth hormone product, Genotropin®, in the United States, Canada and Japan.

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         In March 1997, Biogen granted to The Medicines Company (“TMC”) exclusive worldwide rights to develop and market Biogen’s bivalirudin products, including a direct thrombin inhibitor now known as ANGIOMAX® (bivalirudin). In January 2001, TMC began selling ANGIOMAX in the United States for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing coronary balloon angioplasty. TMC currently markets ANGIOMAX in New Zealand for this use and is seeking approval in other countries. Biogen receives royalty payments from TMC on sales of ANGIOMAX.

         Financial information about foreign operations and export sales is included in Biogen’s 2001 Annual Report to Shareholders — Notes to Consolidated Financial Statements — Note 11, incorporated herein by reference under Item 8 hereof.

PATENTS AND OTHER PROPRIETARY RIGHTS

         Biogen has filed numerous patent applications in the United States and various other countries seeking protection of a number of its processes and products. Patents have been issued on many of these applications. The Company has also obtained rights to various patents and patent applications under licenses with third parties which provide for the payment of royalties by the Company. The ultimate degree of patent protection that will be afforded to biotechnology products and processes, including those of Biogen, in the United States and in other important markets remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts and lawmakers in these countries. There is no certainty that Biogen’s existing patents or others, if obtained, will afford substantial protection or commercial benefit to Biogen. Similarly, there is no assurance that the Company’s pending patent applications or patent applications licensed from third parties will ultimately be granted as patents or that those patents that have been issued or are issued in the future will prevail if they are challenged in court. There has been, and Biogen expects that there may continue to be, significant litigation in the industry regarding patents and other intellectual property rights. Intellectual property litigation could therefore create uncertainty and consume substantial resources.

         RECOMBINANT ALPHA INTERFERON

         In 1979, Biogen granted an exclusive worldwide license to Schering-Plough under Biogen’s alpha interferon patents. Many of Biogen’s alpha interferon patents have since expired, including expiration in January 2001 of patents in Japan and all countries of Europe other than France, Italy and Spain. Biogen has obtained supplementary protection certificates in France and Italy extending the coverage (in France until 2003 and in Italy until 2007). In Spain, Biogen’s alpha interferon patents expire in 2003.

          Royalties from Schering-Plough on its alpha interferon products significantly declined in 2001 as compared to prior years as a result of the patent expirations described above and as the result of a dispute with Schering-Plough over royalties on United States sales. Schering-Plough discontinued payment to Biogen of royalties on sales of Schering-Plough’s alpha interferon products in the United States based on a Court of Appeal’s decision narrowing the scope of claims of Biogen’s United States alpha interferon patent (the “901 Patent”). The Court of Appeals decision came as part of a suit filed by Schering-Plough, as Biogen’s exclusive licensee, against Amgen, Inc. to enforce the 901 Patent which Schering-Plough claimed was infringed by Amgen’s consensus interferon product. Biogen disagrees with Schering-Plough’s position and has filed for arbitration to compel payment of unpaid past royalties and to ensure payment of royalties due in the future under the license agreement. Given Schering-Plough’s history of taking aggressive positions in contract interpretation, Biogen has included in the arbitration claims which would resolve issues related to future royalty payments to pre-empt any potential challenges by Schering-Plough. These claims include asking the arbitration panel to confirm Schering-Plough’s obligation to commence royalty payments in July 2002 (the expiration date of the 901 Patent) based on a patent application owned by F. Hoffman-LaRoche (“Roche”) and Genentech, Inc. (“Genentech”). The agreement between Biogen and Schering-Plough extending Schering-Plough’s royalty obligation beyond the expiration date of the 901 Patent was part of the settlement of a lawsuit between Biogen and Roche/Genentech. In return for Schering-Plough’s agreement to extend its royalty obligation, Biogen settled the lawsuit with Roche/Genentech and Roche granted Schering-Plough an exclusive license for Schering-Plough to sell its products under the Roche/Genentech patent rights that were the subject of the dispute. Biogen intends to vigorously pursue its claims against Schering-Plough, but there is no guarantee that Biogen will be successful in its efforts.

         RECOMBINANT HEPATITIS B ANTIGENS

         Biogen has obtained numerous patents in countries around the world, including in the United States and in European countries, covering the recombinant production of hepatitis B surface, core and “e” antigens. Biogen has licensed its recombinant hepatitis B antigen patent rights to manufacturers and marketers of hepatitis B vaccines and diagnostic test kits, and receives royalties on sales of the vaccines and test kits by its licensees. See “Principal Products Being Marketed or Developed by Biogen’s Licensees — Hepatitis B Vaccines and Diagnostics.” The obligation of Glaxo and Merck to pay royalties on sales of hepatitis B vaccines and the obligation of Biogen’s other licensees under its hepatitis B patents to pay royalties on sales of diagnostic products will terminate upon expiration of Biogen’s hepatitis B patents in each licensed country. Following the conclusion of a successful interference proceeding in the United States, Biogen was granted patents in the United States expiring in 2018 which broadly claim hepatitis B virus polypeptides and vaccines and diagnostics containing such polypeptides. Biogen’s European

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hepatitis B patents expired at the end of 1999, except in those countries in which Biogen has obtained supplementary protection certificates. Coverage under supplementary protection certificates still exists in Austria, France, Italy, Luxembourg and Sweden. The additional coverage afforded by the supplementary protection certificates ranges from one to five years.

         RECOMBINANT BETA INTERFERON

         Third parties have pending patent applications or issued patents in the United States, Europe and other countries with claims to key intermediates in the production of beta interferon (the “Taniguchi patents”) and to beta interferon itself (the “Roche patents”). Biogen has obtained non-exclusive rights in various countries of the world, including the United States, Japan and most European countries, to manufacture, use and sell AVONEX, Biogen’s brand of recombinant beta interferon, under the Taniguchi patents and has obtained worldwide, non-exclusive rights under the Roche patents.

         On July 3, 1996, Berlex Laboratories, Inc. (“Berlex”) filed suit against Biogen in the United States District Court for the District of New Jersey alleging infringement by Biogen of Berlex’s “McCormick” patent (U.S. Patent No. 5,376,567) in the United States in the production of Biogen’s AVONEX product. In November 1996, Berlex’s New Jersey action was transferred to the United States District Court in Massachusetts and consolidated for pre-trial purposes with a related declaratory judgment action previously filed by Biogen. On August 18, 1998, Berlex filed a second suit against Biogen alleging infringement by Biogen of a patent which was issued to Berlex in August 1998 and which is related to the McCormick patent (U.S. Patent No. 5,795,779). On September 23, 1998, the cases were consolidated for pre-trial and trial purposes. Berlex sought a judgment granting it damages, a trebling of any damages awarded and a permanent injunction restraining Biogen from the alleged infringement. A hearing on the parties’ summary judgment motions in the case was completed in March 2000. In September 2000, the District Court rendered final judgment in favor of Biogen and against Berlex determining that Biogen’s production of AVONEX did not infringe any of the claims of the Berlex patents. Berlex has appealed this decision to the Court of Appeals for the Federal Circuit. Oral arguments were presented by the parties to the Court of Appeals on November 7, 2001 and a decision is expected in the first half of 2002. In January 2002, Biogen and Berlex reached a settlement of the litigation, pursuant to which the parties agreed to end the dispute in return for a payment of $20 million from Biogen to Berlex, and the possibility of a second and final payment from Biogen to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in favor of Biogen. If the Court of Appeals were to rule against Biogen and return the case to the District Court, Biogen believes that the most likely decision would require it to make a second and final payment of $55 million to Berlex. In the event the ruling is significantly adverse to Biogen, the second and final payment to Berlex would be $230 million. Biogen believes that the possibility of a significantly adverse decision against Biogen is remote. Biogen believes the lower court’s determination of non-infringement is sound and that it has a strong case for the Court of Appeals to affirm the lower court’s ruling. As part of the settlement, Biogen and Berlex agreed not to pursue further litigation about these patents. Because the substantive terms of the settlement arrangement were agreed to in the fourth quarter of 2001, the Company recorded a charge of $20 million in “Other Income and Expense” in the fourth quarter of 2001. See also Item 3 hereof — “Legal Proceedings”, the Company's 2001 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Legal Matters” incorporated herein by reference under Item 7 hereof, the Company’s 2001 Annual Report to Shareholders — “Consolidated Statements of Income”, incorporated herein by reference under Item 8 hereof, and the Company’s 2001 Annual Report to Shareholders — “Notes to Consolidated Financial Statements” — Note 9, incorporated herein by reference under Item 8 hereof.

         In 1995, the Company filed an opposition with the Opposition Division of the European Patent Office opposing a European patent (the “Rentschler I Patent”) issued to Dr. Rentschler Biotechnologie GmbH (“Rentschler”) relating to compositions of matter of beta interferon. In 1997, the European Patent Office issued a decision revoking the Rentschler I Patent. Rentschler appealed that decision. An oral hearing on the appeal took place in December 2000. At the oral hearing in order to gain reinstatment of the patent, Rentschler narrowed the patent claims so as to claim only a specific cell line. Biogen does not use the specific cell line now claimed to produce AVONEX. On October 13, 1998, the Company filed another opposition with the Opposition Division of the European Patent Office to oppose a second European patent issued to Rentschler (the “Rentschler II Patent”) with certain claims regarding compositions of matter of beta interferon with specific regard to the structure of the glycosylated molecule. The parties are in the process of filing further evidence and arguments with the European Oppositon Division. A decision on the Rentschler II Patent has not been issued to date. See also the Company’s 2001 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Legal Matters” incorporated herein by reference under Item 7 hereof.

         OTHER PATENTS

         In March 1995, Biogen filed suit in the U.S. District Court for the District of Massachusetts claiming that Amgen’s manufacture and sale of its Neupogen® human granulocyte colony stimulating factor in the United States infringed certain of Biogen’s gene expression patents and asking for damages for infringing activities. Also, in July 1997, Biogen filed suit in the U.S. District Court for the District of Massachusetts to enjoin Amgen from manufacturing and selling its Infergen® consensus

8

interferon in the United States and asking for damages for infringing activities. Biogen’s request to have the case consolidated with the Neupogen suit was denied by the court. Biogen and Amgen reached a settlement of these cases in 2001 and all of the claims have been dismissed with prejudice by the District Court which also, upon motion by Biogen, vacated its prior orders in the Neupogen case.

         THIRD-PARTY PATENTS

         Biogen is aware that others, including various universities and companies working in the biotechnology field, have filed patent applications and have been granted patents in the United States and in other countries claiming subject matter potentially useful or necessary to Biogen’s business. Some of those patents and patent applications claim only specific products or methods of making such products, while others claim more general processes or techniques useful or now used in the biotechnology industry. For example, Genentech has been granted patents and is prosecuting other patent applications in the United States and certain other countries which it may allege are currently used by Biogen and the rest of the biotechnology industry to produce recombinant proteins in host cells. Genentech has offered to Biogen and others in the industry non-exclusive licenses under some of those patents and patent applications for various proteins and in various fields of use, but not for others. Biogen is also aware of certain patents held by Genentech relating to immunoadhesion technology that Genentech may take the position are valid and infringed by Biogen’s future commercial activities with AMEVIVE. Biogen is evaluating these patents to determine if a license should be taken. The ultimate scope and validity of Genentech’s patents, of other existing patents, or of patents which may be granted to third parties in the future, and the extent to which Biogen may wish or be required to acquire rights under such patents and the availability and cost of acquiring such rights, currently cannot be determined by Biogen.

         TRADE SECRETS AND CONFIDENTIAL KNOW-HOW

         Trade secrets and confidential know-how are important to Biogen’s scientific and commercial success. Although Biogen seeks to protect its proprietary information by generally requiring its employees, consultants, advisors and corporate partners to sign confidentiality agreements, there can be no assurance that third parties will not either independently develop the same or similar information or obtain access to Biogen’s proprietary information.

COMPETITION

         IN GENERAL

         Competition in the biotechnology and pharmaceutical industries is intense and comes from many and varied sources. Biogen does not believe that it or any of the other industry leaders can be considered dominant in view of the rapid technological change in the industry. Biogen experiences significant competition from specialized biotechnology firms in the United States, Europe and elsewhere and from many large pharmaceutical, chemical and other companies. Certain of these companies have substantially greater financial, marketing, research and development and human resources than Biogen. Most large pharmaceutical companies have considerable experience in undertaking clinical trials and in obtaining regulatory approval to market pharmaceutical products.

         Biogen believes that competition and leadership in the industry will be based on managerial and technological superiority and establishing proprietary positions through research and development. Leadership in the industry may also be influenced significantly by patents and other forms of protection of proprietary information. See “Patents and Other Proprietary Rights”. A key aspect of such competition is recruiting and retaining qualified scientists and technicians. Biogen believes that it has been successful in attracting skilled and experienced scientific personnel. The achievement of a leadership position depends largely upon Biogen’s continued ability to attract and retain skilled and experienced personnel, its ability to identify and exploit commercially the products resulting from research and the availability of adequate financial resources to fund facilities, equipment, personnel, clinical testing, manufacturing and marketing.

         Many of Biogen’s competitors are working to develop products similar to those under development by Biogen. The timing of the entry of a new pharmaceutical product into the market can be an important factor in determining the product’s eventual success and profitability. Early entry may have important advantages in gaining product acceptance and market share. Moreover, for certain diseases with limited patient populations, the FDA is prevented under the Orphan Drug Act, for a period of seven years, from approving more than one application for the “same” product for a single orphan drug designation, unless a later product is considered clinically superior. The EU and other jurisdictions have or are considering similar laws. Accordingly, the relative speed with which Biogen can develop products, complete the testing and approval process and supply commercial quantities of the product to the market will have an important impact on Biogen’s competitive position. In addition, competition among products approved for sale may be based, among other things, on patent position, product efficacy, safety, reliability, availability and price.

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         AVONEX® (INTERFERON BETA-1a)

         In 2001, AVONEX competed in the United States as a treatment for MS with three other products: an interferon beta-1b product sold under the brand name BETASERON® by Berlex Laboratories, a product known as COPAXONE® glatiramer acetate marketed by Teva Neuroscience, Inc. and Aventis Pharmaceuticals, Inc., and NOVANTRONE® (mitoxantrone for injection) marketed by Immunex Corporation for patients with clinically worsening forms of relapsing-remitting and secondary progressive MS. Biogen expects that competition in the United States will increase significantly with the March 2002 launch of REBIF®, an interferon beta-1a product marketed by Serono, Inc. (“Serono”). The FDA approved REBIF for sale in the United States over a year earlier than the expiration of AVONEX’s orphan drug marketing exclusivity based on the 24 week results of a head-to-head study of AVONEX and REBIF conducted by Serono. Biogen expects Serono to compete aggressively in the United States market. In most countries outside of the United States, AVONEX competes with REBIF, BETASERON (sold in the EU by Schering A.G. under the name BETAFERON®), and COPAXONE.

         A number of companies, including Biogen, are working to develop products to treat MS which may in the future compete with AVONEX. AVONEX may also in the future face competition from off-label uses of drugs approved for other indications. Some of Biogen’s current competitors are also working to develop alternative formulations for delivery of their products which may in the future compete with AVONEX. Biogen believes that competition among treatments for MS will be based on product performance, service and price.

         AMEVIVE® (ALEFACEPT)

         As a potential treatment for moderate-to-severe plaque psoriasis, AMEVIVE will compete with existing therapies such as oral retinoids, steroids, methotrexate and cyclosporin, as well as new drugs currently in development and drugs approved for other indications. Genentech and Xoma Corporation are co-developing XANELIM® (efalizumab), an antibody designed to block certain immune cells as a potential treatment for moderate-to-severe psoriasis. The companies have completed Phase 3 trials for XANELIM and expect to complete a one-year Phase 3 extension trial in early 2002. Centocor, Inc. sells REMICADE® (Infliximab) worldwide as a treatment for other indications and has initiated a Phase 2 proof of concept study for REMICADE as a potential treatment for psoriasis. ENBREL® (etanercept), a drug co-developed by Immunex Corporation and Wyeth (formerly known as American Home Products Corporation), has been approved by the FDA as a treatment for psoriatic arthritis, a disease that has skin plaque systems associated with moderate-to-severe plaque psoriasis. In addition, a number of other companies are working to develop products to treat psoriasis which may ultimately compete with AMEVIVE.

REGULATION

         Biogen’s current and contemplated activities and the products and processes that will result from such activities are, and will be, subject to substantial government regulation.

         Before new pharmaceutical products may be sold in the United States and other countries, clinical trials of the products must be conducted and the results submitted to appropriate regulatory agencies for approval. These clinical trial programs generally involve a three-phase process. Typically, in Phase 1, trials are conducted in volunteers or patients to determine the early side effect profile and, perhaps, the pattern of drug distribution and metabolism. In Phase 2, trials are conducted in groups of patients with a specific disease in order to determine appropriate dosages, expand evidence of the safety profile and, perhaps, determine preliminary efficacy. In Phase 3, large scale, comparative trials are conducted on patients with a target disease in order to generate enough data to provide the statistical proof of efficacy and safety required by national regulatory agencies. The receipt of regulatory approvals often takes a number of years, involving the expenditure of substantial resources and depends on a number of factors, including the severity of the disease in question, the availability of alternative treatments and the risks and benefits demonstrated in clinical trials. On occasion, regulatory authorities may require larger or additional studies, leading to unanticipated delay or expense.

         In connection with the commercialization of products resulting from Biogen’s research and development projects, it is necessary, in a number of countries, to comply with certain regulations relating to the manufacturing and marketing of such products and to the products themselves. For example, the commercial manufacturing, marketing and exporting of pharmaceutical products require the approval of the FDA in the United States and of comparable agencies in other countries. The FDA has established mandatory procedures and safety standards which apply to the manufacture, clinical testing and marketing of pharmaceutical products in the United States. The regulatory requirements and approval processes for new products in the EU operate under similar principles as those applied in the United States. The process of seeking and obtaining approval of the FDA or regulatory authorities in the EU or other regulatory authorities worldwide for a new product and licensing of the facilities in which the product is produced takes a number of years and involves the expenditure of substantial resources. In addition, the regulatory approval processes for products in the United States, the countries of the EU and other countries around the world are

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undergoing or may undergo changes. Biogen cannot determine what effect any changes in regulatory approval processes may have on its business.

         In the United States, the federal government regularly considers reforming health care coverage and costs. Resulting legislation or regulatory actions may have a significant effect on the Company’s business. Biogen’s ability to successfully commercialize human pharmaceutical products also may depend in part on the extent to which reimbursement for the costs of such products and related treatments will be available worldwide from government health administration authorities, private health insurers and other organizations. Currently, substantial uncertainty exists as to the reimbursement status of newly approved health care products by third-party payors.

         Biogen conducts relevant research in compliance with the current United States National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (the “NIH Guidelines”) and all other applicable federal and state regulations. By local ordinance, Biogen is required, among other things, to comply with the NIH Guidelines in relation to its facilities in Cambridge, Massachusetts, and is required to operate pursuant to certain permits.

         Various laws, regulations and recommendations relating to safe working conditions, laboratory practices, the experimental use of animals, and the purchase, storage, movement, import and export and use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with Biogen’s research work are or may be applicable to its activities. The extent of government regulation which might result from future legislation or administrative action cannot accurately be predicted. Certain agreements entered into by Biogen involving exclusive license rights may be subject to national or supranational antitrust regulatory control, the effect of which also cannot be predicted.

EMPLOYEES

         At December 31, 2001, Biogen employed 1,992 full-time employees worldwide, of whom 1,630 were located in the United States. Of the 1,992 employees, 527 were engaged in, or directly supported, research, including medical research, 642 were involved in, or directly supported, manufacturing, product and process development, and quality assurance/quality control, and 421 were involved in sales and marketing. In addition, Biogen maintains consulting arrangements with a number of scientists at various universities and other research institutions in Europe and the United States, including the nine outside members of its Scientific Board.

ITEM 2 — PROPERTIES

         Biogen’s principal executive offices and a majority of its administrative, manufacturing and research and development facilities are located in Cambridge, Massachusetts. Biogen owns approximately 475,000 square feet of real estate space in Cambridge, consisting of a 150,000 square foot building that houses laboratories and office space; an approximately 259,000 square foot building that primarily contains research and development and process development operations; and two other buildings, consisting of approximately 65,792 square feet, containing laboratories, purification and aseptic bottling facilities, and office space. Biogen also has development options for additional property in Cambridge. Biogen leases a total of approximately 417,195 square feet, consisting of additional office, manufacturing, and research and development space, in all or part of six other buildings in Cambridge. The lease expiration dates for the leased sites range from 2002 to 2015.

         In addition to its Cambridge facilities, Biogen owns a 100,000 square foot biologics manufacturing facility in Research Triangle Park, North Carolina (“RTP”). Biogen is in the process of expanding the RTP facility to add a laboratory office building and additional manufacturing capacity. The projects are expected to be completed by the summer of 2003. Biogen is also building a 250,000 square foot large scale manufacturing plant in RTP. Biogen expects that construction will be completed early in 2002. Biogen signed an agreement to purchase a 60-acre site with an option for an additional 36 acres in Hillerod, Denmark. The purchase of the Denmark property is subject to certain conditions that need to be satisfied prior to the completion of the purchase. Biogen is completing plans to build a filling and finishing plant at the Denmark site and also expects to build a large scale manufacturing facility at the site. Biogen expects that construction will commence on the filling and finishing plant in 2002. Biogen expects that all or a major portion of AVONEX supplies will eventually be filled and finished at the Danish facility. See also the Company’s 2001 Annual Report to Shareholders — “Note 9 – Notes to Consolidated Financial Statements.”

         Biogen financed construction of the buildings it owns in Cambridge, Massachusetts and the 100,000 square foot biologics manufacturing facility in RTP with term loans. The term loans are collateralized by the buildings. Biogen has financed the construction of the other two facilities at RTP with operating cash. In the event that Biogen completes the purchase of the Hillerod, Denmark property, it expects to finance the purchase of the property and the construction of the manufacturing facility with operating cash. See the Company’s 2001 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated herein by reference under Item 7 hereof.

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         The Company’s European headquarters consists of approximately 17,000 square feet of office space in a multi-tenant building in Nanterre, France. The lease for the Nanterre space terminates in 2008 with Biogen having the right to terminate the lease earlier under specified circumstances. Biogen also leases office space in several other countries, including The Netherlands, Germany, England, Denmark, Austria, Belgium, Finland, Norway, Sweden, Canada, Australia and Japan.

         Biogen believes that its existing manufacturing facilities, including those in Cambridge, Massachusetts and RTP, and existing outside sources will allow it to meet, in the near term, manufacturing needs for AVONEX, AMEVIVE and other products in clinical trials. Biogen’s existing manufacturing facilities operate under multiple licenses from the FDA, regulatory authorities in the EU and other regulatory authorities. Biogen believes that its existing manufacturing facilities comply in all material respects with applicable regulatory standards. Biogen expects that additional manufacturing facilities and outside sources will be required to meet its future research, development and commercial production needs.

ITEM 3 — LEGAL PROCEEDINGS

         On July 3, 1996, Berlex Laboratories, Inc. (“Berlex”) filed suit against Biogen in the United States District Court for the District of New Jersey alleging infringement by Biogen of Berlex’s “McCormick” patent (U.S. Patent No. 5,376,567) in the United States in the production AVONEX. In November 1996, Berlex’s New Jersey action was transferred to the United States District Court in Massachusetts and consolidated for pre-trial purposes with a related declaratory judgment action previously filed by Biogen. On August 18, 1998, Berlex filed a second suit against Biogen alleging infringement by Biogen of a patent which was issued to Berlex in August 1998 and which is related to the McCormick patent (U.S. Patent No. 5,795,779). On September 23, 1998, the cases were consolidated for pre-trial and trial purposes. Berlex sought a judgment granting it damages, a trebling of any damages awarded and a permanent injunction restraining Biogen from the alleged infringement. A hearing on the parties’ summary judgment motions in the case was completed in March 2000. In September 2000, the District Court rendered final judgment in favor of Biogen and against Berlex determining that Biogen’s production of AVONEX did not infringe any of the claims of the Berlex patents. Berlex has appealed this decision to the Court of Appeals for the Federal Circuit. Oral arguments were presented by the parties to the Court of Appeals on November 7, 2001 and a decision is expected in the first half of 2002. In January 2002, Biogen and Berlex reached a settlement of the litigation, pursuant to which the parties agreed to end the dispute in return for a payment of $20 million from Biogen to Berlex, and the possibility of a second and final payment from Biogen to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in favor of Biogen. If the Court of Appeals were to rule against Biogen and return the case to the District Court, Biogen believes that the most likely decision would require it to make a second and final payment of $55 million to Berlex. In the event the ruling is significantly adverse to Biogen, the second and final payment to Berlex would be $230 million. Biogen believes that the possibility of a significantly adverse decision against Biogen is remote. Biogen believes the lower court’s determination of non-infringement is sound and that it has a strong case for the Court of Appeals to affirm the lower court’s ruling. As part of the settlement, Biogen and Berlex agreed not to pursue further litigation about these patents, Because the substantive terms of the settlement arrangement were agreed to in the fourth quarter of 2001, the Company recorded a charge of $20 million in “Other Income and Expense” in the fourth quarter of 2001. See also the Company’s 2001 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Legal Matters” incorporated herein by reference under Item 7 hereof, the Company’s 2001 Annual Report to Shareholders — “Consolidated Statements of Income”, incorporated herein by reference under Item 8 hereof, and the Company’s 2001 Annual Report to Shareholders — “Notes to Consolidated Financial Statements” — Note 9, incorporated herein by reference under Item 8 hereof.

         For a description of legal proceedings relating to certain patent rights, see Item 1 hereof, “Business — Patents and Other Proprietary Rights.”

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not Applicable

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         EXECUTIVE OFFICERS OF THE COMPANY

         The following is a list of each executive officer of the Company, their respective age as of March 26, 2002 and their principal positions with the Company. Officers are elected and may be removed by the Board of Directors.

Name	Age		Positions
James L. Vincent		62	Chairman of the Board of Directors
James C. Mullen		43	President, Chief Executive Officer and Director
Burt A. Adelman		49	Executive Vice President — Research and Development
Cornelis “Kees” Been		43	Senior Vice President — Oncology Business Unit
Thomas J. Bucknum		56	Executive Vice President — General Counsel, Secretary and Clerk
Frank A. Burke, Jr.		58	Executive Vice President — Human Resources
Nadine D. Cohen		52	Senior Vice President — Regulatory Affairs
Michael Gilman		46	Senior Vice President — Research
Sylvie L. Gregoire		40	Executive Vice President — Technical Operations
Robert A. Hamm		50	Senior Vice President — Europe, Africa, Canada and Middle East
Hans Peter Hasler		46	Executive Vice President – Commercial Operations
Peter N. Kellogg		45	Executive Vice President — Finance and Chief Financial Officer
Toshio Nakata		58	President — Biogen Japan, Ltd., Senior Vice President — Biogen, Inc.
John W. Palmer		50	Senior Vice President — Corporate Development
Patrick J. Purcell		41	Senior Vice President — Chief Information Officer
Craig Schneier		54	Senior Vice President — Strategic Organization, Design and Effectiveness

The background of these officers is as follows:

         James L. Vincent has been Chairman of the Board of Directors since October 1985. Mr. Vincent served as Chief Executive Officer from December 1998 to June 2000. He previously served as Chief Executive Officer of the Company from October 1985 until February 1997. He served in the additional capacities of Chief Operating Officer and President from April 1988 until February 1994. Before joining Biogen, Mr. Vincent served as Group Vice President, Allied Corporation and as President, Allied Health & Scientific Products Company, a subsidiary of Allied Corporation. Before joining Allied Corporation, Mr. Vincent was with Abbott Laboratories, Inc. where he served in various capacities, including Executive Vice President, Chief Operating Officer and Director of the parent corporation.

         James C. Mullen was appointed President and Chief Executive Officer in June 2000 after serving as President and Chief Operating Officer since January 1999. He was appointed as a Director of the Company in April 1999. Mr. Mullen previously served as Vice President — International from August 1996 until January 1999, and Vice President — Operations from December 1991 until August 1996 and served as Senior Director — Operations from February 1991 to December 1991. Mr. Mullen joined the Company in 1989. Before coming to Biogen, Mr. Mullen held various positions of responsibility from 1984 through 1988 at SmithKline-Beckman Corporation (now known as GlaxoSmithKline plc), including Director, Engineering, SmithKline and French Laboratories, Worldwide.

         Burt A. Adelman, M.D. was appointed Executive Vice President — Research and Development in October 2001 after

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serving as Vice President — Medical Research since January 1999. Dr. Adelman previously served as Vice President — Development Operations from August 1996 to January 1999 and Vice President — Regulatory Affairs from May 1995 until August 1996. From 1991 until May 1995, Dr. Adelman was Director of Medical Research at Biogen. Dr. Adelman has served as Lecturer of Medicine at Harvard Medical School and Brigham and Women’s Hospital since 1992.

         Cornelis “Kees” Been was appointed Senior Vice President – Oncology Business Unit in February 2002 after serving as Senior Vice, President Business Development since October 2001 and Vice President — Business and Market Development from August 1999 to October 2001. Prior to joining the Company, Mr. Been held a variety of management positions from 1996 until April 1999 with Monsanto Life Sciences, most recently as Vice President — Global Strategy. From 1988 through 1995, Mr. Been worked at Gemini Consulting, where his positions included Vice President, responsible for building Gemini’s pharmaceuticals practice. Mr. Been began his career in 1983 as a Trade and Licensing Manager with Biogen, based in Geneva, Switzerland.

         Thomas J. Bucknum was appointed Executive Vice President – General Counsel, Secretary and Clerk in October 2001 after serving as Vice President — General Counsel, Secretary and Clerk since July 1999. Mr. Bucknum previously served as the Company’s Chief Corporate Counsel since 1996. Prior to joining the Company, Mr. Bucknum was Senior Vice President and General Counsel of DuPont Merck Pharmaceutical Company from 1990 to 1995 with responsibility for legal, government and public affairs matters. Prior to joining DuPont Merck, Mr. Bucknum held a number of domestic and international positions with E.I. DuPont de Nemours & Company, Inc in the legal, marketing and regulatory affairs departments.

         Frank A. Burke, Jr., was appointed Executive Vice President – Human Resources in October 2001 after serving as Vice President — Human Resources since May 1986. Mr. Burke previously served for 12 years in various human resource management positions at Allied-Signal, Inc., (now Honeywell International Inc.) including Director of Compensation and Employee Benefits of the Engineered Materials Sector. Prior to that, Mr. Burke served as Employee Relations Officer with the Chase Manhattan Bank (now JP Morgan Chase).

         Nadine D. Cohen, Ph.D., was appointed Senior Vice President – Regulatory Affairs in October 2001 after serving as Vice President — Regulatory Affairs since October 2000. Dr. Cohen previously served as Director of Regulatory Affairs since September 1999. Dr. Cohen joined Biogen in 1999 from the Massachusetts Biologics Laboratories, where she was Senior Director of Quality Control and Technical Services from March 1999 to September 1999. From June 1994 to January 1999, Dr. Cohen was Vice President of Regulatory Affairs and Quality at Alpha Beta Technology, Inc., which went into receivership in 1999.

         Michael Gilman, Ph.D., was appointed Senior Vice President – Research in October 2001 after serving as Vice President — Research since April 2000. Dr. Gilman joined Biogen in 1999 as Director, Molecular Biology from ARIAD Pharmaceuticals, Inc., where he served as Executive Vice President and Chief Scientific Officer. From 1986 to 1994, Dr. Gilman worked at Cold Spring Harbor Laboratory.

         Sylvie L. Gregoire, Pharm.D., was appointed Executive Vice President – Technical Operations in August 2001 after serving as Vice President — Manufacturing since October 2000. Dr. Gregoire previously served as Vice President — Regulatory Affairs from January 1999 to October 2000. From July 1998 to January 1999, Dr. Gregoire was the Program Executive for the Company’s LT-Beta Receptor program and from 1995 until July 1998, served as Director, European Regulatory Affairs of the Company. Prior to joining Biogen, Dr. Gregoire was Associate Director of European Regulatory Affairs for Merck Sharp and Dohme (Europe) Inc. from 1991 until the end of 1994.

         Robert A. Hamm was appointed Executive Vice President – Europe, Africa, Canada and Middle East in October 2001 after serving as Vice President — Sales and Marketing since October 2000. Mr. Hamm previously served as Vice President — Manufacturing from June 1999 to October 2000, Director, Northern Europe and Distributors from November 1996 until June 1999 and Associate Director, Logistics from April 1994 until November 1996. From 1987 until April 1994, Mr. Hamm held a variety of management positions at Syntex Laboratories Corporation, including Director of Operations and New Product Planning, and Manager of Materials, Logistics and Contract Manufacturing.

         Hans Peter Hasler was appointed Executive Vice President – Commercial Operations in August 2001. Mr. Hasler joined Biogen from Wyeth Pharmaceuticals, Inc. (formerly known as Wyeth-Ayerst Pharmaceuticals, Inc.), a subsidiary of Wyeth (formerly known as American Home Products Corporation), where he served as Senior Vice President, Head of Global Strategic Marketing since 1998. Mr. Hasler was a member of the Wyeth/AHP Executive Committee and was chairman of the Commercial Council. From 1993 to 1998, Mr. Hasler served in a variety of senior management capacities for Wyeth-Ayerst Pharmaceuticals, including Managing Director of Wyeth Group, Germany, and General Manager of AHP/Wyeth in Switzerland and Central Eastern Europe. Prior to joining Wyeth-Ayerst Pharmaceuticals, Mr. Hasler served as the Head of Pharma Division at Abbott AG.

         Peter N. Kellogg was appointed Executive Vice President – Finance and Chief Financial Officer in October 2001 after

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serving as Vice President — Finance and Chief Financial Officer since July 2000. Mr. Kellogg joined Biogen from PepsiCo where from 1987 to 2000, he served in a variety of senior financial, international and general management positions, including Senior Vice President, PepsiCo. E-Commerce from March to July 2000. From March 1998 to March 2000, Mr. Kellogg served as Senior Vice President and Chief Financial Officer, Frito-Lay International; from November 1996 to March 1998 as Vice President and Chief Financial Officer, Frito-Lay Latin America; from March 1994 to November 1996 as Vice President and Chief Financial Officer, Central/Eastern Europe and Russia, Pepsi-Cola International; and from February 1993 through March 1994 as Vice President and General Manager-Pepsi, South Franchise Business Unit. Prior to joining PepsiCo, Mr. Kellogg was a senior consultant with Booz Allen & Hamilton and Arthur Andersen & Co.

         Toshio Nakata, D. Sc., was appointed President – Biogen Japan, Ltd. In October 2000. He also serves as Senior Vice President – Biogen, Inc., a position to which he was promoted in October 2001 after serving as Vice President, Biogen, Inc. Mr. Nakata joined Biogen from Mitsui & Co., Ltd. where he served as: Associate Director and General Manager of the Global Environment Department, Corporate Planning Division, from January 2000 to October 2000; General Manager of New Business and Technology Development Department and Global Environment Department, Corporate Planning Division, from April 1997 to January 2000; and General Manager of Technology Planning and Development Department and Global Environment Department, Corporate Planning Division, from May 1994 to April 1997.

         John W. Palmer was appointed Senior Vice President – Corporate Development in March 2002 after serving as Senior Vice President — Program Management since October 2001. Mr. Palmer previously served as Vice President — Program Management since May 2000. Prior to that, Mr. Palmer served as Program Executive for Biogen’s Adenosine A1 antagonist program since 1997. From 1993 until 1997, Mr. Palmer was the Company’s Director of Operations, and from 1989 to 1993 served as Director of Marketing and Business Development. Prior to joining Biogen, Mr. Palmer was a Marketing and Business Development Director at General Foods Corporation. He was also previously Founder, President and Chief Operating Officer of Caribbean Emergency Medical Air Transport, Inc., a novel air ambulance service operating throughout the Caribbean market, and a managing consultant with Strategic Planning Associates in Washington, D.C.

         Patrick J. Purcell was appointed Senior Vice President – Chief Information Officer in October 2001 after serving as Vice President — Information Systems and Chief Information Officer since February 2000. Mr. Purcell joined Biogen from Sprint PCS, where he worked from 1992 to 2000 in a variety of finance and information technology management capacities, most recently serving as Vice President, IT Planning, Resource & Performance Management. Prior to joining Sprint, Mr. Purcell worked at Deloitte & Touche Management Consulting from 1988 to 1992, as a consulting manager with primary focus on business and financial planning, financing and operations analysis, and change management in a variety of industries.

         Craig E. Schneier, Ph.D., was appointed Senior Vice President – Strategic Organization, Design and Effectiveness in October 2001. Prior to joining Biogen, Dr. Schneier was president of Craig Eric Schneier Associates, a management consulting firm in Princeton, New Jersey from 1991 to 2001. Prior to that, Dr. Schneier was managing partner of Sibson & Company, a consulting firm in Princeton, New Jersey from 1987 to 1991. Dr. Schneier was a tenured professor at the University of Maryland from 1975 to 1987, and has also held faculty positions at the University of Michigan and Columbia University. Dr. Schneier has been an adjunct professor at the Tuck School of Business at Dartmouth University since 1997.

PART II

ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The section entitled "Market for Securities" in Biogen’s 2001 Annual Report to Shareholders is hereby incoporated herein by reference.

15

ITEM 6 — SELECTED FINANCIAL DATA

         The section entitled “Selected Financial Data” in Biogen’s 2001 Annual Report to Shareholders is hereby incorporated herein by reference.

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Biogen’s 2001 Annual Report to Shareholders is hereby incorporated herein by reference.

ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Outlook — Market Risk” in Biogen’s 2001 Annual Report to Shareholders is hereby incorporated herein by reference.

ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The sections entitled “Consolidated Statements of Income,” “Consolidated Balance Sheets,” “Consolidated Statements of Cash Flows,” “Consolidated Statements of Shareholders’ Equity,” “Notes to Consolidated Financial Statements” and “Report of Independent Accountants” in Biogen’s 2001 Annual Report to Shareholders are hereby incorporated herein by reference.

ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         Not Applicable.

PART III

ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The sections entitled “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in Biogen’s definitive proxy statement for its 2002 Annual Meeting of Stockholders, which the Company intends to file with the Commission no later than April 30, 2002, are hereby incorporated herein by reference.

         Information concerning Biogen’s Executive Officers is set forth in Item 4 of Part I of this Annual Report on Form 10-K.

ITEM 11 — EXECUTIVE COMPENSATION

         The sections entitled “Election of Directors” and “Executive Compensation” in Biogen’s definitive proxy statement for its 2002 Annual Meeting of Stockholders, which Biogen intends to file with the Commission no later than April 30, 2002, are hereby incorporated herein by reference.

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The section entitled “Share Ownership” in Biogen’s definitive proxy statement for its 2002 Annual Meeting of Stockholders, which Biogen intends to file with the Commission no later than April 30, 2002, is hereby incorporated herein by reference.

ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

16

         The section entitled “Executive Compensation — Employment Arrangements with the Company and Certain Transactions” and “Related Party Transactions” in Biogen’s definitive proxy statement for its 2002 Annual Meeting of Stockholders, which Biogen intends to file with the Commission no later than April 30, 2002, is hereby incorporated herein by reference.

17

PART IV

ITEM 14 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

(1) The Company’s Financial Statements are incorporated herein by reference from Biogen’s 2001 Annual Report to Shareholders attached hereto as Exhibit 13. The specific items and the locations of such items are set forth below:

Item	Location
Consolidated Statements of Income	Annual Report under the caption “Biogen, Inc. and Subsidiaries Consolidated Statements of Income.”
Consolidated Balance Sheets	Annual Report under the caption “Biogen, Inc. and Subsidiaries Consolidated Balance Sheets.”
Consolidated Statements of Cash Flows	Annual Report under the caption “Biogen, Inc. and Subsidiaries Consolidated Statements of Cash Flows.”
Consolidated Statements of Shareholders’ Equity	Annual Report under the caption “Biogen, Inc. and Subsidiaries Consolidated Statements of Shareholders’ Equity.”
Notes to Consolidated Financial Statements	Annual Report under the caption “Biogen, Inc. and Subsidiaries Notes to Consolidated Financial Statements.”
Report of Independent Accountants	Annual Report under the caption “Report of Independent Accountants.”

         With the exception of the portions of Biogen’s 2001 Annual Report to Shareholders specifically incorporated herein by reference, such report shall not be deemed filed as part of this Annual Report on Form 10-K.

(2) The Company’s Financial Statement Schedules, as required by Item 8 of this Form 10-K, are incorporated herein by reference from Biogen’s 2001 Annual Report to Shareholders attached hereto as Exhibit 13. A list of such Financial Statement Schedules is set forth below:

Report of Independent Accountants on Financial Statement Schedule. Schedule II — Valuation and Qualifying Accounts and Reserves

(3) Exhibits

18

Exhibit No.	Description
(3.1)	Articles of Organization, as amended (i)
(3.2)	Articles of Amendment to Articles of Organization, as amended (n)
(3.2)	By-Laws, as amended (d)
(4.1)	Form of Common Stock Share Certificate (e)
(4.2)	Rights Agreement, dated as of May 8, 1999, between the Registrant and First National Bank of Boston as the Rights Agent, including Certificate of Elimination of Series A Junior Participating Preferred Stock and Certificate of Designation of Series A-1 Junior Participating Preferred Stock (o)
(10.1)	Independent Consulting and Project Agreement dated as of June 29, 1979 between the Registrant and Kenneth Murray (a)#
(10.2)	Minute of Agreement dated February 5, 1981 among the Registrant, The University Court of the University of Edinburgh and Kenneth Murray (a)#
(10.3)	Independent Consulting Agreement dated as of June 29, 1979 between the Registrant and Phillip A. Sharp (a)#
(10.4)	Project Agreement dated as of December 15, 1979 between the Registrant and Phillip A. Sharp (a)#
(10.5)	Share Restriction and Repurchase Agreement dated as of December15, 1979 between the Registrant and Phillip A. Sharp (a)#
(10.6)	Form of Amendment dated July 1, 1988 to Independent Consulting Agreement between the Registrant and Scientific Board Members (c)#
(10.7)	Letter agreement regarding employment of James L. Vincent dated September 23, 1985 (b)#
(10.8)	Letter agreement amending employment arrangement between the Registrant and James L. Vincent dated as of November 21, 1996 (j)#
(10.9)	Form of Stock Option Agreement with James L. Vincent under 1985 Non-Qualified Stock Option Plan (d)#
(10.10)	Form of Stock Option Agreement with James L. Vincent under 1985 Non-Qualified Stock Option Plan (1995) (h)#
(10.11)	Form of Stock Option Agreement with James L. Vincent under 1985 Non-Qualified Stock Option Plan (1997 and subsequent grant) (k)#
(10.12)	Form of Indemnification Agreement between the Registrant and each Director and Executive Officer (c)#
(10.13)	Cambridge Center Lease dated October 4, 1982 between Mortimer Zuckerman, Edward H. Linde and David Barrett, as Trustees of Fourteen Cambridge Center Trust, and B. Leasing, Inc. (a)
(10.14)	First Amendment to Lease dated January 19, 1989, amending Cambridge Center Lease dated October 4, 1982 (d)
(10.15)	Second Amendment to Lease dated March 8, 1990, amending Cambridge Center Lease dated October 4, 1982 (d)
(10.16)	Third Amendment to Lease dated September 25, 1991, amending Cambridge Center Lease dated October 4, 1982 (d)
(10.17)	Fourth Amendment to Lease dated October 6, 1993, amending Cambridge Center Lease dated October 4, 1982 (k)

19

Exhibit No.	Description
(10.18)	Fifth Amendment to Lease dated October 9, 1997, amending Cambridge Center Lease dated October 4, 1982 (k)
(10.19)	Lease dated October 6, 1993 between North Parcel Limited Partnership and Biogen Realty Limited Partnership (f)
(10.20)	1983 Employee Stock Purchase Plan, as amended and restated through December 14, 2001, effective as of December 31, 2001*#
(10.21)	1982 Incentive Stock Option Plan, as amended through June 15, 2000 and restated, with form of Option Agreement (p)#
(10.22)	1985 Non-Qualified Stock Option Plan, as amended and restated through December 14, 2001 (r)#
(10.23)	1987 Scientific Board Stock Option Plan, as amended and restated through December 14, 2001, effective as of December 31, 2001*#
(10.24)	Voluntary Executive Supplemental Savings Plan (as amended and restated through December 14, 2001)*#
(10.25)	Amended and Restated Supplemental Executive Retirement Plan (k)#
(10.26)	Amendment No. 1 dated September 27, 1999 to Amended and Restated Supplemental Executive Retirement Plan (m)#
(10.27)	Voluntary Board of Directors Savings Plan (as amended and restated through December 14, 2001)*#
(10.28)	Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation (a)
(10.29)	Amendatory Agreement dated May 14, 1985 to Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation (b)
(10.30)	Amendment and Settlement Agreement dated September 29, 1988 to Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation (d)
(10.31)	Amendment dated March 20, 1989 to Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation (d)
(10.32)	License Agreement (United States) dated March 28, 1988 between the Registrant and SmithKline Beecham Biologicals, S.A. (as successor to Smith Kline-R.I.T, S.A.) (d)
(10.33)	License Agreement (International) dated March 28, 1988 between the Registrant and SmithKline Beecham Biologicals, S.A. (as successor to Smith Kline-R.I.T., S.A.) (d)
(10.34)	Sublicense Agreement dated as of February 15, 1990 among the Registrant, SmithKline Beecham Biologicals, S.S (as successor to SmithKline Biologicals, S.A.) and Merck and Co., Inc. (d)
(10.35)	Supplemental Amendment and Agreement dated as of March 1, 1994 between the Registrant and Schering Corporation (g)
(10.36)	Agreement and Amendment between the Registrant and Schering Corporation dated May 1, 1998 (l)
(10.37)	Letter agreement amending employment arrangement between the Registrant and James L. Vincent dated March 10, 2000 (q)#
(10.38)	Letter agreement regarding employment of James C. Mullen dated March 18, 1993 (m)#
(10.39)	Letter agreement amending employment arrangement between the Registrant and James C. Mullen dated January 7, 1999 (m)#

20

Exhibit No.	Description
(10.40)	Letter agreement regarding employment of Burt Adelman, M.D. dated April 2, 1996 (m)#
(10.41)	Letter agreement amending employment arrangement between the Registrant and James C. Mullen dated May 3, 2000 (q)#
(10.42)	Letter agreement regarding employment of Peter Kellogg dated June 21, 2000*#
(10.43)	Letter agreement amending employment arrangement between the Registrant and Peter Kellogg dated October 19, 2001*#
(10.44)	Letter agreement amending employment arrangement between the Registrant and Burt Adelman, M.D. dated September 5, 2001*#
(10.45)	Renewal of Independent Consulting Agreement of Kenneth Murray dated September 27, 2001*#
(10.46)	Biogen Savings Plan, as amended and restated by the Thirteenth Amendment, dated as of December 31, 2001*#
(10.47)	Executive Severance — Senior/Executive Vice President*#
(10.48)	Letter agreement regarding employment arrangement between the Company and Sylvie Gregoire, Pharm.D. dated May 19, 1998*#
(10.49)	Letter agreement regarding employment arrangement between the Company and Sylvie Gregoire, Pharm.D. dated August 8, 2001*#
(10.50)	Letter agreement regarding employment arrangement between the Company and Sylvie Gregoire, Pharm.D. dated October 19, 2001*#
(13)	Incorporated portions of the Registrant’s Financial Statements from its 2001 Annual Report to Shareholders *
(21)	Subsidiaries of the Registrant *
(23)	Consent of PricewaterhouseCoopers LLP *

(a)	Previously filed with the Commission as an exhibit to the Registrant’s Registration Statement on Form S-1, File No. 2-81689, and incorporated herein by reference.
(b)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1985, as amended, File No. 0-12042, and incorporated herein by reference.
(c)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 0-12042, and incorporated herein by reference.
(d)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992, File No. 0-12042, and incorporated herein by reference.
(e)	Previously filed with the Commission as an exhibit to the Registrant’s Registration Statement on Form S-3, File No. 33-51639 filed December 21, 1993, and incorporated herein by reference.
(f)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993, File No. 0-12042, and incorporated herein by reference.
(g)	Previously filed with the Commission as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, File No. 0-12042, and incorporated herein by reference.
(h)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 0-12042, and incorporated herein by reference.
(i)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996, File No. 0-12042, and incorporated herein by reference.

21

(j)	Previously filed with the Commission as an exhibit to an amendment to the Registrant’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 1996, File No. 0-12042, and incorporated herein by reference.
(k)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 0-12042, and incorporated herein by reference.
(l)	Previously filed with the Commission as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998, File No. 0-12042, and incorporated herein by reference.
(m)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 0-12042, and incorporated herein by reference.
(n)	Previously filed with the Commission as an exhibit to the Registrant’s Registration Statement on Form S-8 filed on January 12, 2001, File No. 333-53598, and incorporated herein by reference.
(o)	Previously filed with the Commission as an exhibit to the Registrant’s Current Report on Form 8-K dated April 27, 1999, and incorporated herein by reference.
(p)	Previously filed with the Commission as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, File No. 0-12042, and incorporated herein by reference.
(q)	Previously filed with the Commission as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 0-12042, and incorporated herein by reference.
(r)	Previously filed with the Commission as an exhibit to the Registrant’s Registration Statement on Form S-8 filed on January 30, 2002, File No. 333-81668, and incorporated herein by reference.
*	Filed herewith
#	Management contract or compensatory plan or arrangement

(b) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the fourth quarter of 2001.

22

SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIOGEN, INC.
By:	/s/ James C. Mullen
	James C. Mullen President and Chief Executive Officer
Dated March 29, 2002

         Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

SIGNATURES	TITLE	DATE
/s/ James C. Mullen James C. Mullen	President, Chief Executive Officer and Director (principal executive officer)	March 29, 2002
/s/ James L. Vincent James L. Vincent	Chairman of the Board of Directors	March 29, 2002
/s/ Peter N. Kellogg Peter N. Kellogg	Executive Vice President — Finance and Chief Financial Officer (principal financial and accounting officer)	March 29, 2002
/s/ Alan Belzer Alan Belzer	Director	March 29, 2002
/s/ Harold W. Buirkle Harold W. Buirkle	Director	March 29, 2002
/s/ Mary L. Good Mary L. Good	Director	March 29, 2002
/s/ Thomas F. Keller Thomas F. Keller	Director	March 29, 2002
/s/ Roger H. Morley Roger H. Morley	Director	March 29, 2002
/s/ Kenneth Murray Kenneth Murray	Director	March 29, 2002
/s/ Phillip A. Sharp Phillip A. Sharp	Director	March 29, 2002
/s/ Alan K. Simpson Alan K. Simpson	Director	March 29, 2002
James W. Stevens	Director	March 29, 2002

23

EXHIBIT INDEX

Exhibit No.	Description
(10.20)	1983 Employee Stock Purchase Plan, as amended and restated through December 14, 2001, effective as of December 31, 2001
(10.23)	1987 Scientific Board Stock Option Plan, as amended and restated through December 14, 2001, effective as of December 31, 2001
(10.24)	Voluntary Executive Supplemental Savings Plan (as amended and restated through December 14, 2001)
(10.27)	Voluntary Board of Directors Savings Plan (as amended and restated through December 14, 2001)
(10.42)	Letter agreement regarding employment of Peter Kellogg dated June 21, 2000
(10.43)	Letter agreement amending employment arrangement between the Registrant and Peter Kellogg dated October 19, 2001
(10.44)	Letter amending employment arrangement between the Registrant and Burt Adelman, M.D. dated September 5, 2001
(10.45)	Renewal of Independent Consulting Agreement of Kenneth Murray dated September 27, 2001
(10.46)	Biogen Savings Plan, as amended and restated by the Thirteenth Amendment, dated as of December 31, 2001
(10.47)	Executive Severance — Senior/Executive Vice President
(10.48)	Letter agreement regarding employment arrangement between the Company and Sylvie Gregoire, Pharm.D. dated May 19, 1998
(10.49)	Letter agreement regarding employment arrangement between the Company and Sylvie Gregoire, Pharm.D. dated August 8, 2001
(10.50)	Letter agreement regarding employment arrangement between the Company and Sylvie Gregoire, Pharm.D. dated October 19, 2001
(13)	Incorporated portions of the Registrant’s Financial Statements from its 2001 Annual Report to Shareholders
(21)	Subsidiaries of the Registrant
(23)	Consent of PricewaterhouseCoopers LLP

EX-10.20 3 b45372biexv10w20.txt EX-10.20 1983 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 10.20 BIOGEN, INC. 1983 EMPLOYEE STOCK PURCHASE PLAN (As amended and restated through December 14, 2001, effective as of December 31, 2001) I. PURPOSE AND DEFINITIONS A. Purpose of the Plan: The Plan is intended to encourage ownership of Shares by all employees of the Company and its Affiliates. B. Definitions: Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Employee Stock Purchase Plan, have the following meanings: 1. "Affiliate" means (a) a corporation in respect of which the Company owns directly or indirectly fifty percent (50%) or more of the voting securities thereof or which is otherwise controlled by the Company; or (b) to the extent not inconsistent with Section 423(a) of the Code, an unincorporated trade or business controlled by the Company which has elected, for federal income tax purposes, to be either (i) classified as an association taxable as a corporation or (ii) disregarded as an entity separate from its owner (as provided in Section 301.7701-3 of the federal income tax regulations). For purposes of this definition, the Company shall be deemed to control another entity if the Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise. 2. "Board" means the Board of Directors of the Company. 3. "Code" means the United States Internal Revenue Code of 1986, as amended from time to time. 4. "Committee" means the Stock and Option Plan Administration Committee of the Board or, if such committee ceases to exist, the Board or a committee thereof to which responsibility for administering the Plan shall have been delegated. 5. "Company" means Biogen, Inc., a Massachusetts Corporation. 6. "Compensation" means salary and wages, including overtime pay, received by an Employee before any salary reduction by the employee under Code Sections 401(k) or 125, but excluding bonus, incentive and similar payments and all other forms of non-cash remuneration. 7. "Custodian" shall have the meaning set forth in Section IV.C. Page 1 of 10 8. "Employee" means an individual employed by the Company or an Affiliate as a common law employee (determined under the regular personnel policies, practices and classifications of the Company or the Affiliate, as applicable) whose customary employment is 20 hours or more per week and who resides or performs his principal duties within the United States, except as is otherwise determined by the Committee (ii) employees of non-U.S. Affiliates, except as is otherwise determined by the Committee. An individual is not considered an Employee for purposes of the Plan if the individual is classified as a consultant or contractor under the Company or an Affiliate's regular personnel classifications and practices, or if the individual is a party to an agreement to provide services to the Company or an Affiliate without participating in the Plan, notwithstanding that such individual may be treated as a common law employee for payroll tax, coverage requirements under Section 410(b) of the Code, nondiscrimination requirements under Section 401(a)(4) of the Code or other legal purposes. 9. "Employee Share Price" shall have the meaning set forth in Section V.A. 10. "Enrollment Dates" are the earliest date participation is permitted hereunder by the Committee when the Plan is first made operative and each successive January 1 and July 1 thereafter. 11. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended from time to time. 12. "Fair Market Value" (i) If Shares are purchased by the Plan on a U.S. securities exchange or the Nasdaq National Market or the Nasdaq SmallCap Market, the actual purchase price of such Shares shall be such Shares' Fair Market Value. (ii) In all other circumstances including if Shares are purchased by the Plan from the Company, in determining such Shares' Fair Market Value, if the Shares are then listed on any U.S. securities exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market AND sale prices are regularly reported for the Shares, then the Fair Market Value shall be the arithmetic mean between the "high" and "low" sale prices for the Shares reported on the applicable composite tape or other comparable reporting system on the applicable date, or if the applicable date is not a trading day, on the most recent trading day immediately prior to the applicable date. If sale prices are not regularly reported for the Shares as described in the immediately preceding sentence but bid and asked prices for the Shares are regularly reported, then the Fair Market Value shall be the mean between the closing or last bid and asked prices for the Shares on the applicable date or, if the applicable date is not a trading day, on the most recent trading day immediately prior to the applicable date. If sale prices are not regularly reported for the Shares as described in two Page 2 of 10 immediately preceding sentences, then the Fair Market Value shall be such value as the Committee in good faith determines. 13. "Monthly Share Purchase Date" shall have the meaning set forth in Section IV.C. 14. "Option" means a right or option granted under the Plan. 15. "Participant" means an Employee who is enrolled in the Plan, provided however that no Employee may be granted an Option under the Plan if, immediately after the Option is granted, such Employee owns stock possessing five percent (5%) or more of the total combined voting power (or in the case of non-voting stock, value) of all classes of issued and outstanding stock of the Company or Affiliate(s) (other than wholly owned subsidiaries of the Company.) For purposes of determining stock ownership the applicable rules of the Code (including attribution) shall control. 16. "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 including where appropriate his/her estate. 17. "Plan" means this Employee Stock Purchase Plan, as amended and restated from time to time. 18. "Shares" means the Common Stock of the Company, par value $0.01 per share, as to which Options have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Article VI of the Plan. II. SHARES SUBJECT TO THE PLAN A. Subject to the terms of Article VI, the maximum aggregate number of Shares which may be optioned and purchased from time to time shall be One Million (1,000,000) Shares. If an Option ceases to be "outstanding", in whole or in part, the Shares which were subject to such Option but not purchased shall be available for the granting of the other Options. An Option shall be treated as "outstanding" until such Option is exercised in full, or terminates or expires under the provisions of the Plan. B. No options shall be granted after December 31, 2007. III. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee is authorized to interpret the provisions of the Plan and each Option, and to make any Page 3 of 10 rules and determinations which it deems necessary or advisable for the administration of the Plan provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of preserving the tax status of the Options under the Plan granted to Employees subject to United States federal income taxation and the Plan within the meaning of Section 423 of the Code. In addition, the Plan is intended to comply in all respects with Rule 16b-3 or its successors promulgated under the Exchange Act, with respect to Participants who are subject to Section 16 of the Exchange Act. The Plan will be interpreted in a manner which comports with this intention. IV. ELIGIBILITY FOR PARTICIPATION A. Subject to the limits in Article II, on the January 1 Enrollment Date of each year in the case of an Employee who is a Participant on such January 1 Enrollment Date and on the July 1 Enrollment Date of each year in the case of an Employee who is a Participant on such July 1 Enrollment Date, the Company will be deemed to have granted to each such Participant an Option to purchase, during a six-month period commencing on the Enrollment Date on which such Option is granted and in the manner provided hereunder, such number of Shares as have an aggregate Employee Share Price (as determined under Section V.A) equal to $2,500.00. If, on any Enrollment Date, an insufficient number of Shares remains available under the Plan to grant to each Participant an Option to purchase such number of Shares, then the number of Shares subject to each Option to be granted on such Enrollment Date shall be reduced equally so that the aggregate number of Share subject to all Options granted on such Enrollment Date shall not exceed the number of Shares then available under the Plan. B. Employee Contributions: Each eligible Employee may, on an enrollment application and payroll withholding form approved by the Committee and filed with his/her employer's payroll department no later than thirty (30) days prior to a January or July Enrollment Date, elect to participate and make contributions by payroll deduction of any whole percentage form 1% to 10% of such Employee's Compensation payable on each payroll period. In the event that the amount contributed by a Participant during an Option exercise period (i.e., the six-month periods commencing on an Enrollment Date) is in excess of the maximum amount which may be applied to purchase shares for such Participant, such excess shall be returned to the Participant. No interest shall accrue or be payable to any Participant with respect to any amount contributed by the Participant, whether such sums are applied to purchase Shares or are returned to the Participant. Payroll deductions may only be increased by a Participant effective as of an Enrollment Date, but may be decreased effective with respect to any payroll period, provided written election on a change authorization and payroll withholding form approved by the Committee is received by the Participant's employer's payroll department no later than thirty (30) days prior thereto. C. Application of Payroll Contributions: Page 4 of 10 1. The employer will remit to a bank, stock brokerage firm or other custodian (the "Custodian") selected by the Company, the accumulated withheld funds of all electing Participants together with employer contributions pursuant to Section IV.G, if any, as soon as reasonably possible following the end of the month in which the deductions were made. Prior to such remittance, Participant contributions may be commingled with other Company funds. Not less frequently than monthly, the Custodian shall buy from the Company or, if the Committee prior thereto approves, give an order to the stock broker selected by the Company to purchase (or if the Custodian shall be such stock broker, shall itself purchase) in the open market, the total number of Shares purchasable with the monies available from such remittance. The date on which Shares are so acquired shall be referred to as the "Monthly Share Purchase Date." The Committee shall instruct the Custodian whether to purchase Shares from the Company or on the open market, after giving due consideration to any applicable securities laws and the advice of the chief financial officer of the Company. A Participant shall be deemed to have exercised his/her Options on the Monthly Share Purchase Date to the extent of such purchase unless prior thereto the Participant shall have effectively withdrawn pursuant to the terms hereof. The Company may, in its sole and absolute discretion, refuse to sell Shares to the Custodian under the Plan if to do so would be violative of any commitment or restriction (whether legally binding or otherwise) not to issue or sell its own shares, as from time to time exists, and whether such commitment or restriction existed prior to or subsequent to the adoption of the Plan or for any other reason the Company deems appropriate. The refusal of the Company to sell Shares to the Custodian under the Plan shall not adversely affect the Plan's right and power to acquire such Shares from any other source the Committee deems appropriate. 2. The certificates representing the Shares so purchased shall be issued in the name of and delivered to the Custodian and the account of each electing Participant shall be credited with the number of Shares to which he/she shall be entitled on the basis of his/her proportion of the aggregate remittance. 3. Any cash dividends paid on Shares shall automatically be used to purchase additional shares of the Common Stock of the Company, unless a Participant in writing instructs the Custodian to the contrary. The purchases described in the preceding sentence, whether purchased by the Custodian from the Company or in the open market, shall be in addition to the number of Shares purchasable pursuant to Section II.A and Section IV.A and shall not be of Shares optioned under the Plan. Section IV.G with respect to employer's contribution shall be inapplicable with respect to shares of the Common Stock of the Company acquired under this Paragraph IV.C.3. 4. By enrolling in the Plan, each Participant is deemed to have authorized the establishment of a brokerage account in his/her name at a securities brokerage firm selected Page 5 of 10 by or approved of by the Committee. D. Transfer of Certificates to Electing Participants: 1. Upon request by a Participant and receipt by the Custodian of written notice to such effect from the Company, all or any portion of the Shares in the Participant's account shall be transferred by the Custodian out of its name into the name of the Participant and a certificate evidencing them shall be issued in the name of and delivered to the Participant. 2. In order to preserve the intended purposes of the Plan as set forth in Section 1.A, Employees who become Participants in the Plan agree not to transfer or otherwise dispose of Shares acquired on their behalf under the Plan (other than in the case of an Employee's death or total and permanent disability as determined by the Committee) prior to one year from the date of acquisition of such Shares on their behalf. E. Shares Retained by the Custodian: Accumulation of Shares not transferred to Participants under Section IV.D shall be held by the Custodian for the account of the Participant entitled thereto, but all rights accruing to an owner of record on such Shares shall belong to and be vested in the Participant for whose account it is being held, including the right to receive any and all dividend payable in respect of such Shares whether in cash, shares of the Company's Common Stock or otherwise, and the right to receive all notices of stockholders' meetings (which shall be forwarded to the Participant by the Custodian without delay) and to direct the Custodian how to vote thereat to the same extent as if such Shares were held in street name by a brokerage firm or otherwise. F. Withdrawal: 1. An electing Participant may discontinue his/her election and withdraw from the Plan as of the payroll period next following 30 days from the date written notice on a change authorization and payroll withholding form approved by the Committee is received by his/her employer's payroll department; provided, however, that an electing Participant who shall have discontinued his/her election and withdrawn from the Plan may not resubscribe to the Plan prior to the Enrollment Date coincident with or next following twelve (12) months from the effective date of such discontinuance. 2. A Participant shall be deemed to have discontinued his/her election and withdrawn from the Plan immediately upon the occurrence of any of the following: a. The termination for any reason of the Participant's employment with the Company or with an Affiliate. 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 who has elected participation under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a permanent or total disability) or who is on leave of absence for any Page 6 of 10 purpose authorized by his/her employer and permitted by an authoritative interpretation (e.g., regulation, ruling, case law, etc.) of Section 423 of the Code, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated his/her employment with the Company or with an Affiliate, except as the Committee may otherwise expressly provide or determine. b. Death of the Participant. c. The filing with or levying upon the Company or the Custodian of any judgment, attachment, garnishment, or other court order affecting either the Participant's earnings or his/her account under the Plan. d. Termination of the Plan prior to its expiration. e. Expiration of the Plan. 3. Upon the discontinuance of an election and withdrawal from the Plan by a Participant, all Shares in the account of the Participant shall be transferred out of the Custodian's name and into the name of the Participant and a certificate evidencing such Shares shall be issued in the name of and delivered to the Participant; and all dividends and remaining cash if any credited to his/her account shall be paid to the Participant. G. Employer Contribution: Each Participant's employer will, as frequently as is necessary contribute an amount equal to the difference between the Employee Share Price as determined at Section V.A and the cost per share to the Custodian if the Shares are not acquired from the Company. If the Shares are acquired from the Company, the Company shall sell such Shares to the Custodian at a price equal to the Employee Share Price. V. TERMS AND CONDITIONS OF OPTIONS AND ISSUANCE OF SHARES No Option shall be granted to a Participant, and no purported grant of any Option shall be effective, until an enrollment application and payroll withholding form approved by the Committee shall have been duly executed on behalf of the Company and by the Participant. Such enrollment application and payroll withholding form and the agreement constituted thereby shall be subject to at least the following terms and conditions: A. Employee Share Price: The "Employee Share Price" as of a Monthly Share Purchase Date shall be eighty-five percent (85%) of the lower of the: 1. Fair Market Value of the Shares at the date of grant of the Option (i.e., the applicable January 1 or July 1 Enrollment Date); or 2. Fair Market Value of the Shares at the Monthly Share Purchase Date. Page 7 of 10 B. Effect of Death and Participant's Survivors: In the event that a Participant to whom an Option has been granted ceases to be an employee of the Company or of an Affiliate by reason of such Participant's death, such Option to the extent exercisable but not exercised on the date of death shall be deemed exercised by the Participant's Survivors to the extent of any monies contributed by the Participant and his/her employer prior to the Participant's death. A Participant may determine that a designated person shall become the Participant's Survivor either by selecting a joint account (with a right of survivorship running to such designated joint owner), or by so designating in his/her will or otherwise as controlled under the applicable law with respect to testamentary dispositions. In the absence of a valid disposition the applicable laws of descent and distribution shall control. The Custodian may require such proof and indemnification (documentary or otherwise) as it deems necessary and appropriate before releasing any Shares and/or funds in a Participant's account to a person other than the Participant. C. 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 or pursuant to a qualified domestic relations order as interpreted under Rule 16b-3 promulgated under the Exchange Act, 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). Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Option or of any rights granted hereunder contrary to the provisions of this Section V.C shall be null and void. D. All Participants to Have Equal Rights and Privileges: All Participants shall have equal rights and privileges under the Plan. The fact that the maximum number of Shares which may be acquired by Participants bears a uniform relationship to compensation or is limited by a maximum purchase restriction shall not be deemed to be violative of the foregoing sentence. VI. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION In the event that the outstanding shares of the Company's Common Stock are 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 and, in addition, appropriate adjustment to prevent dilution or enlargement of the rights granted to or available for Participants shall be made in the number and kind of Shares and in the Employee Share Price of 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 the applicable provisions of the Code, constitute such a modification, extension or renewal of an Option as to cause Page 8 of 10 it to be considered as the grant of a new Option. VII. EFFECT OF 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 VI is applicable, all Options granted hereunder shall terminate and become null and void; provided, however, that if the rights of a Participant or a Participant's Survivors hereunder have not otherwise terminated and expired, the Participant or the Participant's Survivors shall be deemed to have exercised such Options to the extent of any monies contributed by the Participant or his/her employer as of the date immediately prior to such dissolution or liquidation. VIII. TERMINATION OF THE PLAN No Options shall be granted after December 31, 2007. The Plan may be terminated at an earlier date by vote of either the stockholders of the Company or the Board. The termination of the Plan shall not affect any Options granted or Shares acquired prior to the effective date of such termination. IX. AMENDMENT OF THE PLAN Except as provided in the following sentence, the Plan may be amended by the stockholders of the Company, the Board, or the Committee, including amendment of the Plan from time to time to designate corporations whose employees may be offered Options under the Plan from among a group consisting of the Company and Affiliates. Amendments effecting: (i) any increase in the aggregate number of Shares which may be issued under the Plan (other than an increase merely reflecting a change in capitalization such as stock dividend or stock split) or (ii) changing the designation of corporations whose employees may be offered options under the Plan, except designations described in the preceding sentence, must be approved by the stockholders within twelve (12) months after such amendment is adopted by the Board or by the Committee or such amendment is void ab initio. In addition, if the scope of any amendment is such as to require stockholder approval in order to comply with Rule 16b-3 under the Exchange Act, such amendment shall also require approval by the stockholders. No amendment shall affect any Options theretofore granted or any Shares theretofore acquired by a Participant, unless such amendment shall expressly so provide and unless any Participant to whom an Option has been granted who would be adversely affected by such amendment consents in writing thereto. X. EMPLOYMENT RELATIONSHIP 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 his/her employment with the Company or an Affiliate. Page 9 of 10 XI. OPTION HOLDERS NOT STOCKHOLDERS Neither the granting of an Option nor the deduction from payroll shall constitute an Employee the owner of Shares covered by an Option until such Shares have been purchased on his/her behalf pursuant to Article IV. XII. WITHHOLDING TAXES Any taxes subject to withholding payable with respect to the amounts to be paid to the Custodian pursuant to the provisions hereof will be deducted by a Participant's employer from the balance of the Participant's salary, and not reduce the amounts so to be paid to the Custodian. XIII. USE OF FUNDS BY THE COMPANY The proceeds received by the Company from the sale of Shares pursuant to Options granted under the Plan will be used for general corporate purposes. XIV. STATEMENT OF ACCOUNT Following each purchase of Shares on behalf of a Participant, such Participant will receive from the Custodian a statement of his/her account showing (i) the respective total amounts of payments (by the Participant and, if applicable, his/her employer) made to the Custodian on behalf of such Participant under Paragraph IV.C.1, (ii) the Participant's share of any cash dividends and other cash distributions and of the amount and proceeds of sale of any other distributions or rights received by the Custodian, (iii) the total cost of all Shares purchased by the Custodian for the account of such Participant, (iv) such Participant's share of any stock dividends on the Shares, and (v) the number of Shares delivered, or to be delivered, to such Participant with respect to the period since the last statement. XI. BROKERAGE COMMISSIONS AND OTHER COSTS Brokerage commissions, if any, payable in connection with the purchase of Shares hereunder (and shares acquired through dividend reinvestment, if any) and transfer taxes payable in connection with the delivery to Participants of Shares acquired hereunder (and shares acquired through dividend reinvestment, if any) together with the other costs and expenses incurred in administering the Plan, including the fees and expenses of the Custodian, will be borne by the Company and Affiliates. XIV. EFFECTIVE DATE The Plan became effective on October 1, 1983. Page 10 of 10 EX-10.23 4 b45372biexv10w23.txt EX-10.23 1987 SCIENTIFIC BOARD STOCK OPTION PLAN EXHIBIT 10.23 BIOGEN, INC. 1987 SCIENTIFIC BOARD STOCK OPTION PLAN (As amended and restated through December 14, 2001, effective as of December 31, 2001) I. PURPOSE OF THE PLAN The Plan is intended to encourage ownership of shares of the Common Stock by members of the Scientific Board of the Company and to provide an additional incentive to those Scientific Board members to promote the success of the Company and its Affiliates. II. DEFINITIONS 1. "Affiliate" means (a) 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; or (b) to the extent not inconsistent with Section 424 of the Code, an unincorporated trade or business controlled by the Company which has elected, for federal income tax purposes, to be either (i) classified as an association taxable as a corporation or (ii) disregarded as an entity separate from its owner (as provided in Section 301.7701-3 of the federal income tax regulations). For purposes of this definition, the Company shall be deemed to control another entity if the Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise. 2. "Code" means the Internal Revenue Code of 1986, as amended from time to time. 3. "Committee" means the Stock and Option Plan Administration Committee of the Board of Directors of the Company or, if such committee ceases to exist, the Board of Directors of the Company or a committee thereof to which responsibility for administering the Plan shall have been delegated. 4. "Common Stock" means the common stock of the Company, par value $0.01 per share. 5. "Company" means Biogen, Inc., a Massachusetts corporation. 6. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended from time to time. 7. "Fair Market Value" shall have the meaning set forth in Section VI.A. 8. "Member" means a member of the Scientific Board of the Company. 9. "Option" means a stock option granted under the Plan. 10. "Option Certificate" means a certificate delivered to an Option holder by the Page 1 of 7 Company pursuant to the Plan, in such form as the Committee shall approve, which sets forth the terms and conditions of an Option. 11. "Plan" means this 1987 Scientific Board Stock Option Plan, as amended and restated from time to time. 12. "Securities Act" means the United States Securities Act of 1933, as amended from time to time. III SHARES SUBJECT TO THE PLAN The aggregate number of shares as to which Options may be granted from time to time shall be 3,000,000 shares of the Common Stock. If any Option 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 the Plan 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, subject 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. The interpretation and construction by the Committee of any provision of the Plan or of any Option granted under it shall be final. The Committee's determinations under the Plan do not need to be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options under the Plan (whether or not such persons are similarly situated). Subject to the provisions of the Plan, Options may be granted upon such terms and conditions as the Committee may prescribe. V. ELIGIBILITY FOR PARTICIPATION The Committee shall determine which Members shall be eligible to participate in the Plan. Without limited the generality of the foregoing, Options may be awarded for reasons of performance, merit, bonus or upon new Members joining the Scientific Board of the Company. The Committee may grant to one or more such Members one or more Options, and shall Page 2 of 7 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. VI. TERMS AND CONDITIONS OF OPTIONS No Option issued pursuant to the Plan shall be an incentive stock option under Section 422 of the Code. 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 the Plan or any amendments thereto. Each Option shall be subject to at least the following terms and conditions: A. OPTION PRICE: Each Option Certificate shall state the Option price per share of the Common Stock covered by such Option grant. 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 (the "Fair Market Value") 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 the Common Stock. Fair Market Value shall be calculated as follows: (i) if the Common Stock is listed on a national securities exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market AND sale prices are regularly reported for the Common Stock, then the Fair Market Value shall be the arithmetic mean between the "high" and "low" sale prices for the Common Stock reported on the applicable composite tape or other comparable reporting system on the date of grant, or if the date of grant is not a trading day, on the most recent trading day immediately prior to the date of grant; or (ii) if sale prices are not regularly reported for the Common Stock as described in clause (i) above but bid and asked prices for the Common Stock are regularly reported, then the Fair Market Value shall be the arithmetic mean between the closing or last bid and asked prices for the Common Stock on the date of grant or, if the date of grant is not a trading day, on the most recent trading day immediately prior to the date of grant; or (iii) if sale prices are not regularly reported for the Common Stock as described in clause (i) or (ii) above, then the Fair Market Value shall be such value as the Committee in good faith determines. B. NUMBER OF SHARES: Each Option Certificate shall state the number of shares of the Common Stock to which it pertains. C. TERM OF OPTION: Each Option Certificate shall state the term of the Option which shall be ten (10) years from the date of the grant thereof or at such earlier or later time as the Committee shall expressly state in the Option Certificate. D. DATE OF EXERCISE: Each Option Certificate shall state 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 or events or through other circumstances or programs approved by the Committee. The Committee shall have the right to accelerate the date of exercise of any installment of any Option. Page 3 of 7 E. CANCELLATION AND REPURCHASE RIGHTS: An Option Certificate may stipulate that an 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 and those provisions shall be set forth in the Option Certificate. F. MEDIUM OF PAYMENT: The option price shall be payable upon the exercise of the Option. It shall be payable (a) in United States dollars in cash or by check, (b) if permitted by the Committee, in shares of the Common Stock held by the Option holder for at least six months having a fair market value (determined in the manner provided in Section VI.A as of the date of exercise) equal to the cash exercise price of the Option, (c) at the discretion of the Committee, by delivery of the Option holder's personal note, for full, partial or no recourse, bearing interest payable not less than annually at market rate on the date of exercise and no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, with or without the pledge of shares of the Common Stock as collateral, (d) at the discretion of the Committee, in accordance with a cashless exercise program established with a securities brokerage firm, or (e) at the discretion of the Committee, by any combination of (a), (b), (c) and (d) above. G. EXERCISE OF OPTION AND ISSUE OF SHARES: Options shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the Option price in accordance with Section VI.F. Such written notice shall be signed by the person exercising the Option, shall state the number of shares of the Common Stock 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 shares of the Common Stock upon exercise of the Option may be delayed by the Company if any law or regulation 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 of the Common Stock if prohibited by law or applicable regulation. The shares of the Common Stock shall, upon issuance, be paid-up, non-assessable shares. H. ASSIGNABILITY AND TRANSFERABILITY OF OPTION: By its terms, an Option granted to an Option holder shall not be transferable by such Option holder other than (i) by will or by the laws of descent and distribution, or (ii) pursuant to a qualified domestic relations order, as defined by the Code or Title 1 of the Employee Retirement Income Security Act or the rules thereunder, or (iii) as otherwise determined by the Committee. The designation of a beneficiary of an Option by an Option holder shall not be deemed a transfer prohibited by this Section. Except as provided in the preceding sentence, an Option shall be exercisable, during an Option holder's lifetime, only by the Option holder (or his or her legal representative) and 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 Section, or the levy of any attachment or similar process upon an Option or other such rights, shall be null and void. Page 4 of 7 I. OTHER PROVISIONS: The Option Certificates 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. J. TAX WITHHOLDING: In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act 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 Common Stock, is authorized by the Committee (and permitted by law); provided, however, that with respect to persons subject to Section 16 of the Exchange Act, any such withholding arrangement shall be in compliance with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the Exchange Act. If the Committee allows withholding through use of shares of the Common Stock, it shall be only to the statutory minimum amount. 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 as of 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. K. RIGHTS AS A SHAREHOLDER: No Option holder shall have rights as a shareholder with respect to any shares of the Common Stock 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 Securities 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 Securities Act, in the absence of an effective registration under the Securities 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 Securities 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 securities represented by this certificate have not been registered Page 5 of 7 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 Sates Securities Act of 1933, as amended, 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). VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION In the event that outstanding shares of the Common Stock are 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, 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 Option 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 a transaction 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 Certificates or agreements executed prior to the effective date of termination. XI. AMENDMENT OF THE PLAN Page 6 of 7 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 then such amendment shall require approval by the shareholders. Any amendment shall not affect any Options theretofore granted and any Option Certificates or 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 the consent of the Option holder affected, the Committee may amend any outstanding Option Certificate or 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 or consultancy of any Member, nor to present any Member from terminating his employment or consultancy with the Company or an Affiliate. XIII. EFFECTIVE DATE The Plan first became effective on March 6, 1987. XIV. GOVERNING LAW The Plan shall be construed and enforced in accordance with the laws of The Commonwealth of Massachusetts. Page 7 of 7 EX-10.24 5 b45372biexv10w24.txt EX-10.24 VOLUNTARY EXECUTIVE SUPPLEMENTAL SAVINGS EXHIBIT 10.24 BIOGEN, INC. VOLUNTARY EXECUTIVE SUPPLEMENTAL SAVINGS PLAN (As amended and restated through December 14, 2001) TABLE OF CONTENTS Page ARTICLE 1 INTRODUCTION........................................................ 1 1.1 Purpose and Effective Date................................. 1 ARTICLE 2 DEFINITIONS......................................................... 1 2.1 Base salary................................................ 1 2.2 Biogen..................................................... 1 2.3 Board...................................................... 1 2.4 Bonus...................................................... 1 2.5 Committee.................................................. 1 2.6 Participant................................................ 1 2.7 Plan....................................................... 1 2.8 Savings Plan............................................... 1 2.9 Plan Year.................................................. 1 ARTICLE 3 PARTICIPATION....................................................... 1 3.1 Eligibility and Participation.............................. 1 3.2 End of Participation....................................... 2 ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS.................. 2 4.1 Savings Deposits........................................... 2 4.2 Employer Credits........................................... 3 ARTICLE 5 PARTICIPANTS' ACCOUNTS.............................................. 3 5.1 Participant Accounts....................................... 3 5.2 Vesting.................................................... 4 ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT........................................ 4 6.1 Distributions for Financial Hardship....................... 4 6.1A In-Service Distribution(s) at a Time Specified by Participant............................................. 4 6.2 Distribution Upon Participant's Retirement................. 5 6.3 Distribution Upon Death of a Participant................... 5 6.4 Distribution upon Participant's Other Termination of Employment.............................................. 5 6.5 Installment Distributions in Certain Cases................. 5 ARTICLE 7 MISCELLANEOUS....................................................... 6 7.1 Amendment or Termination of Plan........................... 6 7.2 Benefits Not Currently Funded.............................. 6 7.3 No Assignment.............................................. 7 7.4 Responsibilities and Authority of Committee................ 7 7.5 Limitation on Rights Created by Plan....................... 7 7.6 Tax Withholding............................................ 7 7.7 Text Controls.............................................. 7 7.8 Applicable State Law....................................... 8 ARTICLE 1 INTRODUCTION 1.1 PURPOSE AND EFFECTIVE DATE. The purpose of this plan is to provide certain designated key executives of Biogen (or its subsidiaries) with additional tax-deferred savings opportunities supplementing those available under the Savings Plan. This plan allows participants whose compensation exceeds the amount of compensation that may be taken into account by the Savings Plan for any plan year (the Code Section 401(a)(17) limits) to make savings deposits hereunder from such excess compensation with matching Biogen contributions on the same basis as is provided in the Savings Plan, and allows participants to make additional, unmatched savings deposits from base salary or bonus if elected by a participant. The effective date of this plan is April 18, 1994. ARTICLE 2 DEFINITIONS This section contains definitions of terms used in the plan. Where the context so requires, the masculine includes the feminine, the singular includes the plural, and the plural includes the singular. 2.1 BASE SALARY means the base salary established for any participant by his employer as in effect from time to time; the entire amount of a participant's base salary will be taken into account in accordance with the terms of this plan without regard to any dollar limitation on applicable compensation that may be imposed under the Savings Plan. 2.2 BIOGEN means Biogen, Inc., a Massachusetts corporation, or any successor to all or the major portion of its assets or business which assumes the obligations of Biogen, Inc. under this plan. 2.3 BOARD means the Board of Directors of Biogen. 2.4 BONUS means the amount of compensation paid to a participant in addition to his base salary and designated as such participant's bonus by his employer; the entire amount of any such bonus will be taken into account in accordance with the terms of this plan without regard to any dollar limitation on applicable compensation that may be imposed under the Savings Plan. 2.5 COMMITTEE means the Savings Plan Committee constituted under the Savings Plan. 2.6 PARTICIPANT means an employee of Biogen (or a subsidiary or affiliate) who is eligible to participate in this plan in accordance with Section 3.1 hereof and who has made a savings deposit hereunder. 2.7 PLAN means the Biogen, Inc. Voluntary Executive Supplemental Savings Plan, as set forth in this plan instrument, and as it may be amended from time to time. 2.8 SAVINGS PLAN means the Biogen Savings Plan, as amended from time to time. Any term defined in the Savings Plan will have the same meaning when used in this plan unless otherwise defined herein. 2.9 PLAN YEAR means the period commencing April 18, 1994 and ending December 31, 1994, and the 12-month periods commencing on January 1, 1995 and on each subsequent January 1 while the plan remains in effect. ARTICLE 3 PARTICIPATION 3.1 ELIGIBILITY AND PARTICIPATION. A person (a) who is an employee of Biogen (or a subsidiary or affiliate) and (b) who is designated by the committee will be eligible to be a participant in this plan. His eligibility will be effective as of the date specified by the committee. An eligible employee will become a participant hereunder when he makes a savings deposit to this plan. Participation in this plan is voluntary and no eligible employee will be required to participate. An individual will not be considered an employee for purposes of this plan if the individual is classified as a consultant or contractor under Biogen's (or a subsidiary's or affiliate's) regular personnel classifications and practices, or he is a party to an agreement to provide services to Biogen (or a subsidiary or affiliate) without participating in this plan, notwithstanding that such individual may be treated as a common law employee for payroll tax or other legal purposes. 1 3.2 END OF PARTICIPATION. A participant's participation in this plan will end upon the termination of his service as an employee of Biogen (or a subsidiary or affiliate) because of death, retirement, or any other reason. In addition, a participant's participation will end upon the committee's specifying that he is no longer eligible to participate. In such event, his participation will end effective as of the later of the date of the committee's action or the date specified by the committee; provided that no such action will retroactively deprive a participant of any amount credited to his account or any benefit he was entitled to under this plan calculated as of the effective date of his termination of participation. Upon the termination of a participant's participation in this plan in accordance with this section, the participant may make no further savings deposits hereunder and there will be no additional employer matching credits to such participant's account. However, the participant will be entitled to receive any amounts in his accounts in accordance with this plan. Notwithstanding the preceding provisions of this section, if a participant's service as an employee of Biogen (or a subsidiary or affiliate) ends but he continues in the position of Chairman of the Board of Directors of Biogen, his participation in this plan will continue and he will be eligible to continue making savings deposits hereunder in accordance with the plan, and for this purpose his regular remuneration as Chairman will be deemed to be his base salary and any bonus he receives as Chairman will be deemed to be his bonus. However, he will not be eligible to receive any matching employer credits under Section 4.2 based upon such savings deposits. He will not be considered to have retired or terminated employment for purposes of Section 6.2 or Section 6.4 until his termination of service as Chairman. ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS 4.1 SAVINGS DEPOSITS. (a) SAVINGS DEPOSITS. Each eligible employee may make savings deposits to the plan from his base salary in any whole percentage of his base salary from a minimum of 1% to a maximum of 100% by agreeing to reduce his base salary by such amount. In addition, each eligible employee may make savings deposits to the plan from his bonus in any whole percentage of his bonus from a minimum of 1% to a maximum of 100% by agreeing to reduce his bonus by such amount. All amounts by which a participant reduces his base salary or his bonus hereunder are referred to herein as the participant's SAVINGS DEPOSITS. The amount by which a participant's savings deposits for a plan year hereunder do not exceed 6% of his applicable compensation (as defined in the Savings Plan) are referred to herein as his MATCHABLE SAVINGS DEPOSITS; provided, however, that a participant's matchable savings deposits for any plan year hereunder will not exceed the limit on elective deferrals for such year under Code Section 402(g)(1) and (4) reduced by his basic savings deposits for such year under the Savings Plan. (b) SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. An eligible employee who wishes to reduce his base salary and/or bonus with respect to a particular plan year in order to make savings deposits must complete an enrollment form specifying the amount of his savings deposits (with separate percentages for his base salary and bonus if desired), agreeing to reduce his base salary and/or bonus by the amount(s) desired, and providing such other information as the committee may require. A participant's initial enrollment form will also specify the time for payment (or the commencement of installment payments) under Section 6.2 or Section 6.4 and the form of payment (lump sum or installments in accordance with Section 6.5(a) below) of his accounts hereunder. The time specified for payment may be anytime the participant indicates, but not later than the later of the participant's termination of employment or the participant's 55th birthday. In addition, a participant's initial enrollment form may (but is not required to) specify one or more in-service distributions to the participant in accordance with Section 6.1A if desired by the participant. A participant's enrollment form electing savings deposits for any plan year must be filed with the committee at least two weeks before the start of such plan year. A participant may change the amount of his savings deposits (but not the time for payment or the form of payment of his accounts except as provided in subsections (c) and (d) below) with respect to any subsequent plan year by filing a new enrollment form at least two weeks before the start of such subsequent plan year, and the change will become effective as of the first day of such subsequent 2 plan year. Once a participant has elected to defer base salary and/or bonus, his enrollment form will remain in effect for future plan years unless the participant changes or terminates his prior elections by filing a new enrollment form in accordance with the preceding sentence. After a plan year has begun, a participant may not change the amount of savings deposits (if any) he had elected for such plan year. However, if a participant has an unforeseeable financial hardship (as defined in Section 6.1) during a year, the participant may cancel his savings deposits election for the balance of that year. (c) SPECIAL ONE-TIME ELECTION. Notwithstanding any other provisions of this plan, each participant who has an account hereunder as of December 1, 2001 may make a special one-time election to change the time for payment (or the commencement of installment payments) of his account balance to an earlier date specified by him or to elect one or more in-service distributions in accordance with Section 6.1A if desired. Such special election must be made before June 30, 2002. If any participant makes the election provided for in the preceding paragraph, the amount specified by the participant for accelerated payment or in-service distribution under Section6.1A shall be reduced by ten percent. (d) Notwithstanding subsection (b) above, at anytime prior to the date for payment originally elected by the participant, if the participant is still an employee of Biogen (or a subsidiary or affiliate) at such time, the participant may elect to defer the time when his account(s) would otherwise be payable (or installment payments would otherwise begin) to a subsequent date specified by him (not later than the latest time permitted under subsection (b)) or may elect installments (or a greater number of installments). If such election becomes effective as provided below, then the participant's account(s) will be payable at the time specified in his subsequent election. The participant's election under this subsection (d) will become effective if any of the following criteria is satisfied: (i) the participant remains an employee of Biogen (or a subsidiary or affiliate) for at least one year after making such election, (ii) the participant's service as an employee of Biogen (or a subsidiary or affiliate) ends due to disability (which means the participant's inability to perform the material duties of his position because of a physical or mental illness or condition), or (iii) the participant's employment as an employee of Biogen (or a subsidiary or affiliate) is involuntarily terminated without cause. A participant may make only one election under this subsection (d) to further defer payment. 4.2 EMPLOYER CREDITS. (a) AMOUNT OF MATCHING EMPLOYER CREDITS. For each calendar quarter (or a shorter period of time specified by the committee) during a plan year, each employer will credit a matching contribution amount to the account of each participant employed by such employer who makes matchable savings deposits during such calendar quarter (or such shorter period of time). The employer's matching contribution credits will be equal to 25% of the participant's matchable savings deposits during the calendar quarter (or such shorter period of time). (b) TIME FOR MAKING EMPLOYER MATCHING CREDITS. The employer's matching amounts under subsection (a) will be credited to participants' accounts as soon as practicable after each calendar quarter (or such shorter period of time specified by the committee). ARTICLE 5 PARTICIPANTS' ACCOUNTS 5.1 PARTICIPANT ACCOUNTS. (a) SAVINGS DEPOSITS ACCOUNTS. Savings deposits by a participant from his base salary or bonus hereunder will be credited to an account in the name of such participant. Such account will be called his savings deposits account. (b) EMPLOYER MATCHING CREDITS ACCOUNTS. Employer credits on a participant's behalf under Section 2(a) will be credited to an account in the name of such participant. Such account will be called his employer matching credits account. (c) PARTICIPANT'S ACCOUNT VALUE. A participant's accounts will be credited with deemed investment results as if participant savings deposits and employer matching credits on a participant's behalf were invested in one 3 or more designated investment funds and all dividends and distributions on shares of a particular investment fund were reinvested in shares of such fund. The investment funds available for this purpose will be those from time to time available as investment options for participants' accounts under the Savings Plan (other than the Biogen stock fund). Each participant will indicate with his initial enrollment form the investment fund or funds (and the proportion in each fund when the participant designates more than one) he wishes to designate for this purpose. Thereafter, a participant may change his designation either with respect to the deemed investment of future savings deposits and matching credits or the deemed transfer of amounts from a previously designated investment fund to another fund. The committee shall establish the frequency by which such a change may be made, the method of making such a change, and the effective date of such a change and shall prescribe such other rules and procedures as it deems appropriate. Such designation will remain in effect until subsequently changed by the participant in accordance with this paragraph. Deemed investment results under this subsection will be credited to a participant's accounts effective as of the last day in each calendar quarter (or such shorter time specified by the committee). The value of a participant's accounts at any point in time will be his savings deposits and employer matching credits on his behalf, increased or decreased by deemed investment results as provided in this subsection (c) through the most recent calendar quarter (or such shorter time specified by the committee), and reduced by any distributions from the participant's accounts. (d) BOOKKEEPING ACCOUNTS. Participants' accounts and subaccounts (including savings deposits accounts and employer matching credits accounts) will be maintained on the books of the participant's employer for bookkeeping purposes only; such accounts will not represent any interest in any trust or in any segregated asset. In order to facilitate the administration of the plan, the committee may arrange for a participant's savings deposits account and/or employer matching credits account to be divided for record keeping purposes into two or more subaccounts, in accordance with procedures established by the committee. 5.2 VESTING. (a) SAVINGS DEPOSITS ACCOUNT. A participant will have a fully vested interest in his savings deposits account at all times. (b) EMPLOYER MATCHING CREDITS ACCOUNT. A participant will have a fully vested interest in his employer matching credits account at all times. ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT 6.1 DISTRIBUTIONS FOR FINANCIAL HARDSHIP. If a participant has a serious financial hardship, he may apply to the committee for a distribution from the plan prior to his retirement, other termination of service with his employer or other designated time for payment. If such application for a hardship distribution is approved by the committee, the distribution will be made as soon as practicable after the later of the date specified in the participant's application or the date of approval by the committee. The amount of the distribution will be the amount needed to alleviate the participant's financial hardship, as determined by the committee, up to a maximum of the participant's account balances. Such a distribution will be made from the participant's accounts in a single lump-sum payment. If such a participant's account has two or more subaccounts, the committee will determine which subaccounts will be debited to reflect the financial hardship distribution. Financial hardship will be limited to the following: bankruptcy or impending bankruptcy, unexpected and unreimbursed major expenses resulting from illness to person or accident to person or property, and to other types of unforeseeable and unreimbursed expenses of a major nature that normally would not be budgetable. Financial hardship shall not include foreseeable expenses such as down payments on a home or purchase of an auto or college or other educational expenses. 6.1A IN-SERVICE DISTRIBUTION(S) AT A TIME SPECIFIED BY PARTICIPANT. If, in his initial enrollment form (or, if applicable, his one-time election under Section 4.1(c) or (d)), a participant designated payment of his account(s) (or 4 a specified portion thereof) at a specified time(s) and he is still an employee of Biogen (or a subsidiary or affiliate) at such time(s), the participant will receive payment of the amount to be distributed in accordance with such election, payable on or as soon as practicable after the designated date(s). A participant's election for in-service distributions under this Section 6.1A may be for a single payment or up to five annual payments, in each case in an amount or portion specified by the participant in his enrollment or other election form. Each payment will be the amount specified (or the entire balance remaining in the participant's accounts, if less). Any amount in a participant's accounts hereunder not distributed to the participant under this Section 6.1A will be distributed under Section 6.2, 6.3 or 6.4, whichever may be applicable, and Section 6.5, if applicable. If a participant is receiving multiple payments under this Section 6.1A and retires, dies or otherwise terminates employment, payments under this subsection will cease and subsequent payments will be governed by Section 6.2, 6.3 or 6.4, as the case may be. 6.2 DISTRIBUTION UPON PARTICIPANT'S RETIREMENT. Following the later of a participant's retirement from his employer or the date specified by the participant in his payment election (but not later than his 55th birthday), the participant will receive a single sum payment equal to his account balance, payable on a date determined by the committee, but not later than one year after the specified date (or after the committee's receipt of satisfactory evidence of the occurrence of his retirement). 6.3 DISTRIBUTION UPON DEATH OF A PARTICIPANT. (a) IN GENERAL. If a participant dies while still an employee of Biogen (or a subsidiary or affiliate) or after termination of such employment, but before the complete distribution of his accounts hereunder, his beneficiary will receive the total amount remaining in his accounts. Distribution will be made in a single sum payment on a date determined by the committee, but not later than one year after the committee receives such evidence of the participant's death and of the right of any beneficiary to receive payment as it deems necessary. (b) BENEFICIARY. The beneficiary to receive the payment described in subsection (a) above will be the same person or persons who are to receive benefits payable upon the participant's death under the Savings Plan. If more than one person is a beneficiary, death benefits hereunder will be paid to them in the same proportions as under the Savings Plan. In the event that a participant does not participate in the Savings Plan, the participant may designate one or more beneficiaries to receive a distribution payable under subsection (a) above and may revoke or change such a designation at any time. If the participant names two or more beneficiaries, distribution to them will be in such proportions as the participant designates or, if the participant does not so designate, in equal shares. Any designation of beneficiary will be in writing on such form as the committee may prescribe or deem acceptable, and will be effective upon filing with the committee. 6.4 DISTRIBUTION UPON PARTICIPANT'S OTHER TERMINATION OF EMPLOYMENT. Following the later of a participant's termination of employment for any reason other than retirement or death or the date specified by the participant in his payment election (but not later than his 55th birthday), the participant will receive a single sum payment equal to his account balance, payable on a date determined by the committee but not later than one year after the specified date (or after the committee's receipt of satisfactory evidence of the termination of the participant's employment). 6.5 INSTALLMENT DISTRIBUTIONS IN CERTAIN CASES. (a) PARTICIPANT. Notwithstanding the provisions of Sections 6.2 and 6.4, a participant may, at the time of filing his initial enrollment form under Section 4.1 (or, if applicable, in a subsequent election under Section 4.1(c) or (d)), designate that the amount payable to him hereunder will be paid in a number (minimum of two and maximum of ten) of annual installment payments, as specified by the participant. (b) BENEFICIARY. Notwithstanding Section 6.3, a participant may designate that, if the participant dies before receiving the entire amount payable to him hereunder, the beneficiary will receive either: (i) A number of annual installment payments equal to: 5 (A) the number the participant elected for himself under subsection (a) above (if the participant dies before receiving any installment payments), or (B) the number of remaining installment payments due to the participant under subsection (a) above (if the participant dies after receiving one or more installment payments); or (ii) a single payment. Payment to the beneficiary will be made or begin as provided in Section 6.3(a). If the participant fails to designate the form of payment to the beneficiary, the default form will be installments under (i) above. If installment payments are payable to the beneficiary, with the consent of the committee, a participant may subsequently change the form of payment to his beneficiary (but not the form of payment to himself under Section 6.2 or 6.4) to a single payment by filing a written instrument so specifying with the committee. (c) INSTALLMENT PAYMENTS. Where installment payments are due, the first annual installment payment will be paid out on the date specified in Section 6.2, 6.3 or 6.4 (whichever is applicable) and subsequent annual installments will be paid approximately on succeeding anniversaries of the first payment date. The amount of each annual installment payment will be determined by multiplying the total amount to be paid by a fraction whose numerator is one and whose denominator is the number of remaining annual installment payments. (d) DEATH OF BENEFICIARY. If a participant's designated beneficiary is receiving installment payments and dies before receiving payment of all the annual installments, the designated beneficiary's estate will receive a lump-sum payment of the amount remaining to be distributed to such deceased beneficiary. Such payment will be made as soon as practicable after the committee's receipt of satisfactory evidence of the death of the designated beneficiary. ARTICLE 7 MISCELLANEOUS 7.1 AMENDMENT OR TERMINATION OF PLAN. Biogen, by action of the Board (or such committee thereof or officer or officers of Biogen to whom the Board has delegated this authority), at any time and from time to time, may amend or modify any or all of the provisions of this plan or may terminate this plan without the consent of any participant (or beneficiary or other person claiming through a participant). No termination or amendment of the plan may reduce the amounts credited to the accounts of any participant under the plan (including a participant whose employment with the employer was terminated before such termination or amendment). However, Biogen may change the deemed investment options under Section 5.1(c), and Biogen may upon termination of this plan pay participants' account balances to the participants regardless of the times elected for payment (or the start of installment payments) elected by the participants and may pay such amounts in single sum payments regardless of whether participants have elected installment distributions under Section 6.5. 7.2 BENEFITS NOT CURRENTLY FUNDED. (a) Nothing in this plan will be construed to create a trust or to obligate Biogen to segregate a fund, purchase an insurance contract or other investment, or in any other way currently to fund the future payment of any benefits hereunder, nor will anything herein be construed to give any participant or any other person rights to any specific assets of Biogen or any other entity. However, in order to make provision for its obligations hereunder, Biogen may in its discretion purchase an insurance contract or other investment; any such contract or investment will be a general asset belonging to Biogen, and no participant or beneficiary will have any rights to any such asset. The rights of a participant or beneficiary hereunder will be solely those of a general, unsecured creditor of his employer. (b) Notwithstanding subsection (a) above, Biogen in its sole discretion may establish a grantor trust of which it is treated as the owner under Code Section 671 to provide for the payment of benefits hereunder, subject to 6 such terms and conditions as Biogen may deem necessary or advisable to ensure that benefits are not includable, by reason of the trust, in the taxable income of trust beneficiaries before actual distribution and that the existence of the trust does not cause the plan or any other arrangement to be considered funded for purposes of Title I of ERISA. 7.3 NO ASSIGNMENT. No participant or beneficiary will have any power or right to transfer, assign, anticipate or otherwise encumber any benefit or amount payable under this plan, nor shall any such benefit or amount payable be subject to seizure or attachment by any creditor of a participant or a beneficiary, or to any other legal, equitable or other process, or be liable for, or subject to, the debts, liabilities or other obligations of a participant or beneficiary except as otherwise required by law. 7.4 RESPONSIBILITIES AND AUTHORITY OF COMMITTEE. The committee will control and manage the operation and administration of the plan except to the extent that such responsibilities are specifically assigned hereunder to Biogen or the Board. The committee will have all powers and authority necessary or appropriate to carry out its responsibilities for the operation and administration of the plan. It will have discretionary authority to interpret and apply all plan provisions and may correct any defect, supply any omission or reconcile any inconsistency or ambiguity in such manner as it deems advisable. It will make all final determinations concerning eligibility, benefits and rights hereunder, and all other matters concerning plan administration and interpretation. All determinations and actions of the committee will be conclusive and binding upon all persons, except as otherwise provided herein or by law, and except that the committee may revoke or modify a determination or action previously made in error. It is intended that any action or inaction by the committee will be given the maximum possible deference by any reviewing body (whether a court or other reviewing body), and will be reversed by such reviewing court or other body only if found to be arbitrary and capricious. Biogen will be the "plan administrator" and the "named fiduciary" for purposes of the Employee Retirement Income Security Act of 1974, as amended. 7.5 LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the plan will be construed (a) to give any person any benefit, right or interest except as expressly provided herein, or (b) to create a contract of employment or to give any employee the right to continue as an employee or to affect or modify his terms of employment in any way. 7.6 TAX WITHHOLDING. Any payment hereunder to a participant or beneficiary will be subject to withholding of income and other taxes to the extent required by law. 7.7 TEXT CONTROLS. Headings and titles are for convenience only, and the text will control in all matters. 7.8 APPLICABLE STATE LAW. To the extent that state law applies, the provisions of the plan will be construed, enforced and administered according to the laws of the Commonwealth of Massachusetts. 7 EX-10.27 6 b45372biexv10w27.txt EX-10.27 VOLUNTARY BOARD OF DIRECTORS SAVINGS PLAN EXHIBIT 10.27 BIOGEN, INC. VOLUNTARY BOARD OF DIRECTORS SAVINGS PLAN (As amended and restated through December 14, 2001) TABLE OF CONTENTS Page ARTICLE 1 INTRODUCTION....................................................... 1 1.1 Purpose and Effective Date................................. 1 ARTICLE 2 DEFINITIONS........................................................ 1 2.1 Biogen..................................................... 1 2.2 Board...................................................... 1 2.3 Committee.................................................. 1 2.4 Director................................................... 1 2.5 Fees....................................................... 1 2.6 Participant................................................ 1 2.7 Plan....................................................... 1 2.8 Retainer................................................... 1 2.9 Savings Plan............................................... 1 2.10 Plan Year.................................................. 1 ARTICLE 3 PARTICIPATION...................................................... 1 3.1 Eligibility and Participation.............................. 1 3.2 End of Participation....................................... 1 ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS................................... 2 4.1 Savings Deposits........................................... 2 ARTICLE 5 PARTICIPANTS' ACCOUNTS............................................. 3 5.1 Participant Accounts....................................... 3 5.2 Vesting.................................................... 3 ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT....................................... 3 6.1 Distributions for Financial Hardship....................... 3 6.1.A In-Service Distribution(s) at a Time Specified by Participant ............................................ 5 6.2 Distribution Upon Death of a Participant................... 4 6.3 Other Distributions........................................ 4 6.4 Installment Distributions in Certain Cases................. 4 ARTICLE 7 MISCELLANEOUS...................................................... 5 7.1 Amendment or Termination of Plan........................... 5 7.2 Benefits Not Currently Funded.............................. 5 7.3 No Assignment.............................................. 6 7.4 Responsibilities and Authority of Committee................ 6 7.5 Limitation on Rights Created by Plan....................... 6 7.6 Tax Withholding............................................ 6 7.7 Text Controls.............................................. 6 7.8 Applicable State Law....................................... 6 ARTICLE 1 INTRODUCTION 1.1 PURPOSE AND EFFECTIVE DATE. The purpose of this plan is to provide members of the Board of Directors of Biogen with a tax-deferred savings opportunity. This plan allows participants to defer all or a portion of their directors' fees and retainer by so electing before such fees and retainer have been earned. The effective date of this plan is October 1, 1994. ARTICLE 2 DEFINITIONS This section contains definitions of terms used in the plan. Where the context so requires, the masculine includes the feminine, the singular includes the plural, and the plural includes the singular. 2.1 BIOGEN means Biogen, Inc., a Massachusetts corporation, or any successor to all or the major portion of its assets or business which assumes the obligations of Biogen, Inc. under this plan. 2.2 BOARD means the Board of Directors of Biogen. 2.3 COMMITTEE means the Savings Plan Committee constituted under the Savings Plan. 2.4 DIRECTOR means an individual serving as a director of Biogen in accordance with its articles and by-laws. 2.5 FEES means the amounts payable to a director as compensation for his or her attendance at a meeting of the Board or a committee of the Board. 2.6 PARTICIPANT means a director who has made a savings deposit hereunder. 2.7 PLAN means the Biogen, Inc. Voluntary Board of Directors Savings Plan, as set forth in this plan instrument, and as it may be amended from time to time. 2.8 RETAINER means the amount payable to a director as an annual retainer for service in such capacity, as in effect from time to time. 2.9 SAVINGS PLAN means the Biogen Savings Plan, as amended from time to time. Any term defined in the Savings Plan will have the same meaning when used in this plan unless otherwise defined herein. 2.10 PLAN YEAR means the period commencing October 1, 1994 and ending December 31, 1994, and the 12-month periods commencing on January 1, 1995 and on each subsequent January 1 while the plan remains in effect. ARTICLE 3 PARTICIPATION 3.1 ELIGIBILITY AND PARTICIPATION. Each director will be eligible to be a participant in this plan as long as he is a director. However, a director who is also an employee of Biogen (or a subsidiary) will not be eligible to participate in this plan unless he receives fees and/or retainer separate and apart from his compensation as an employee, and in such event he will be eligible to participate in this plan only with respect to such fees and retainer. A director will become a participant hereunder when he makes a savings deposit to this plan. Participation in this plan is voluntary and no director will be required to participate. 3.2 END OF PARTICIPATION. A participant's participation in this plan will end upon the termination of his service as a director of Biogen because of death, retirement, resignation, failure of reelection, or any other reason. Upon the termination of a participant's participation in this plan in accordance with this section, the participant may make no further savings deposits hereunder. However, the participant will be entitled to receive any amounts in his accounts in accordance with this plan. 1 ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS 4.1 SAVINGS DEPOSITS AND ELECTIONS. (a) SAVINGS DEPOSITS. Each director may make savings deposits to the plan from his fees and retainer in any whole percentage of such fees and/or such retainer, from a minimum of 1% to a maximum of 100%, by agreeing to reduce his fees and/or retainer by such amount in accordance with this plan. All amounts by which a participant reduces his fees and/or retainer hereunder are referred to herein as the participant's SAVINGS DEPOSITS. (b) SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. A director who wishes to reduce his fees and/or retainer with respect to a particular plan year in order to make savings deposits must complete an enrollment form specifying the amount of his savings deposits (with separate percentages for his fees and retainer if desired), agreeing to reduce his fees and/or retainer by the amount(s) desired, and providing such other information as the committee may require. A director's initial enrollment form will also specify the time for payment (or the commencement of installment payments) under Section 6.3 and the form of payment (lump sum or installments in accordance with Section 6.4(a) below) of his accounts hereunder. The time specified for payment may be anytime the participant indicates, but not later than the latest of the participant's termination of service as a director, the participant's termination of employment (if the participant is an employee of Biogen or a subsidiary or affiliate in addition to being a director), or the participant's 55th birthday. In addition, a participant's initial enrollment form may (but is not required to) specify one or more in-service distributions to the participant in accordance with Section 6.1A if desired by the participant. A participant's enrollment form electing savings deposits for any plan year must be filed with the committee at least two weeks before the start of such plan year. A participant may change the amount of his savings deposits (but not the time for payment or the form of payment of his account except as provided in subsections (c) and (d) below) with respect to any subsequent plan year by filing a new enrollment form at least two weeks before the start of such subsequent plan year, and the change will become effective as of the first day of such subsequent plan year. Once a participant has elected to defer fees and/or retainer, his enrollment form will remain in effect for future plan years unless the participant changes or terminates his prior elections by filing a new enrollment form in accordance with the preceding sentence. After a plan year has begun, a participant may not change the amount of savings deposits (if any) he had elected for such plan year. However, if a participant has an unforeseeable financial hardship (as defined in Section 6.1) during a year, the participant may cancel his savings deposits election for the balance of that year. (c) SPECIAL ONE-TIME ELECTION. Notwithstanding any other provisions of this plan, each participant who has an account hereunder as of December 1, 2001 may make a special one-time election to change the time for payment (or the commencement of installment payments) of his savings deposit account balance to an earlier date specified by him or to elect one or more in-service distributions in accordance with Section 6.1A if desired. Such special election must be made before June 30, 2002. If any participant makes the election provided for in the preceding paragraph, the amount specified by the participant for accelerated payment or in-service distribution under Section 6.1A shall be reduced by ten percent. (d) Notwithstanding subsection (b) above, at anytime prior to the date for payment originally elected by the participant, if the participant is still a director of Biogen at such time, the participant may elect to defer the time when his account would otherwise be payable (or installment payments would otherwise begin) to a subsequent date specified by him (not later than the latest time permitted under subsection (b)) or may elect installments (or a greater number of installments). If such election becomes effective as provided below, then the participant's account will be payable at the time specified in his subsequent election. The participant's election under this subsection (d) will become effective if any of the following criteria is satisfied: (i) the participant remains a director of Biogen for at least one year after making such election, or (ii) the participant's service as a director of Biogen ends due to failure of reelection or due to disability (which means the participant's inability to perform the material duties of his position because of a physical or mental illness or condition). 2 A participant may make only one election under this subsection (d) to further defer payment. ARTICLE 5 PARTICIPANTS' ACCOUNTS 5.1 PARTICIPANT ACCOUNTS. (a) SAVINGS DEPOSITS ACCOUNTS. Savings deposits by a participant from his fees or retainer hereunder will be credited to an account in the name of such participant. Such account will be called his savings deposits account. (b) PARTICIPANT'S ACCOUNT VALUE. A participant's account will be credited with deemed investment results as if his savings deposits were invested in one or more designated investment funds and all dividends and distributions on shares of a particular investment fund were reinvested in shares of such fund. The investment funds available for this purpose will be those from time to time available as investment options under the Savings Plan (other than the Biogen stock fund). Each participant will indicate with his initial enrollment form the investment fund or funds (and the proportion in each fund when the participant designates more than one) he wishes to designate for this purpose. Thereafter, a participant may change his designation either with respect to the deemed investment of future savings deposits or the deemed transfer of amounts from a previously designated investment fund to another fund. The committee shall establish the frequency by which such a change may be made, the method of making such a change, and the effective date of such a change and shall prescribe such other rules and procedures as it deems appropriate. Such designation will remain in effect until subsequently changed by the participant in accordance with this paragraph. Deemed investment results under this subsection will be credited to a participant's account effective as of the last day in each calendar quarter (or such shorter time specified by the committee). The value of a participant's account at any point in time will be his savings deposits, increased or decreased by deemed investment results as provided in this subsection (b) through the end of the most recently completed calendar quarter (or such shorter time specified by the committee), and reduced by any distributions from the participant's account. (c) BOOKKEEPING ACCOUNTS. Participants' accounts and subaccounts will be maintained on Biogen's books for bookkeeping purposes only; such accounts will not represent any interest in any trust or in any segregated asset. In order to facilitate the administration of the plan, the committee may arrange for a participant's savings deposits account to be divided for recordkeeping purposes into two or more subaccounts, in accordance with procedures established by the committee. 5.2 VESTING. A participant will have a fully vested interest in his savings deposits account at all times. ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT 6.1 DISTRIBUTIONS FOR FINANCIAL HARDSHIP. If a participant has a serious financial hardship, he may apply to the committee for a distribution from the plan prior to his retirement, other termination of service as a director or other designated time for payment. If such application for a hardship distribution is approved by the committee, the distribution will be made as soon as practicable after the later of the date specified in the participant's application or the date of approval by the committee. The amount of the distribution will be the amount needed to alleviate the participant's financial hardship, as determined by the committee, up to a maximum of the participant's account balance. Such a distribution will be made from the participant's account in a single lump-sum payment. If such a participant's account has two or more subaccounts, the committee will determine which subaccount(s) will be debited to reflect the financial hardship distribution. 3 Financial hardship will be limited to the following: bankruptcy or impending bankruptcy, unexpected and unreimbursed major expenses resulting from illness to person or accident to person or property, and to other types of unforeseeable and unreimbursed expenses of a major nature that normally would not be budgetable. Financial hardship shall not include foreseeable expenses such as down payments on a home or purchase of an auto or college or other educational expenses. 6.1A. IN-SERVICE DISTRIBUTION(S) AT A TIME SPECIFIED BY PARTICIPANT. If, in his initial enrollment form (or, if applicable, his one-time election under Section 4.1(c) or (d)), a participant designated payment of his account(s) (or a specified portion thereof) at a specified time(s) and he is still an employee of Biogen (or a subsidiary or affiliate) at such time(s), the participant will receive payment of the amount to be distributed in accordance with such election, payable on or as soon as practicable after the designated date(s). A participant's election for in-service distributions under this Section 6.1A may be for a single payment or up to five annual payments, in each case in an amount or portion specified by the participant in his enrollment or other election form. Each payment will be the amount specified (or the entire balance remaining in the participant's account, if less). Any amount in a participant's account hereunder not distributed to the participant under this Section 6.1A will be distributed under Section 6.2 or 6.3, whichever may be applicable, and Section 6.4 (if applicable). If a participant is receiving multiple payments under this Section 6.1A and retires, dies or otherwise terminates service (or employment if he is also an employee of Biogen or a subsidiary or affiliate), payments under this subsection will cease and subsequent payments will be governed by Section 6.2 or 6.3, as the case may be. 6.2 DISTRIBUTION UPON DEATH OF A PARTICIPANT. (a) IN GENERAL. If a participant dies before his entire account balance has been distributed, his beneficiary will receive the amount remaining in the participant's account. Distribution will be made in a single sum payment on a date determined by the committee, but not later than one year after the committee receives such evidence of the participant's death and of the right of any beneficiary to receive payment as it deems necessary. (b) BENEFICIARY. A participant may designate one or more beneficiaries to receive a distribution payable under subsection (a) above and may revoke or change such a designation at any time. If the participant names two or more beneficiaries, distribution to them will be in such proportions as the participant designates or, if the participant does not so designate, in equal shares. Any designation of beneficiary will be in writing on such form as the committee may prescribe or deem acceptable, and will be effective upon filing with the committee. Any portion of a distribution payable upon the death of a participant that is not disposed of by a designation of beneficiary under the preceding paragraph, for any reason whatsoever, will be paid to the participant's spouse if living at his death, otherwise equally to the participant's natural and adopted children (and the issue of a deceased child by right of representation), otherwise to the participant's estate. The committee may direct payment in accordance with a prior designation of beneficiary (and will be fully protected in so doing) if such direction (i) is given before a later designation is received, or (ii) is due to the committee's inability to verify the authenticity of a later designation. Such a distribution will discharge all liability therefor under the plan. 6.3 OTHER DISTRIBUTIONS. Except in the case of the participant's death (in which case distribution is made in accordance with Section 6.2), distribution of a participant's account will be made at the time elected by the participant in accordance with Section 4.1. In the absence of such an election, distribution of the participant's account will be made following the latest of the participant's termination of service as a director, the participant's termination of employment (if the participant is an employee of Biogen or a subsidiary in addition to being a director) or the participant's 55th birthday. Distribution will be made in a single lump sum payment on a date determined by the committee, but not later than one year after the committee's receipt of satisfactory evidence of the occurrence of the event causing distribution. 6.4 INSTALLMENT DISTRIBUTIONS IN CERTAIN CASES. (a) PARTICIPANT. Notwithstanding the provisions of Section 6.3, a participant may, at the time of filing his initial enrollment form under Section 4.1 (or, if applicable) in a subsequent election under Section 4.1(c) or (d), 4 designate that the amount payable to him hereunder will be paid in a number (minimum of two and maximum of ten) of annual installment payments, as specified by the participant. (b) BENEFICIARY. Notwithstanding Section 6.2, a participant may designate that, if the participant dies before receiving the entire amount payable to him hereunder, the beneficiary will receive either: (i) A number of annual installment payments equal to: (A) the number the participant elected for himself under subsection (a) above (if the participant dies before receiving any installment payments), or (B) the number of remaining installment payments due to the participant under subsection (a) above (if the participant dies after receiving one or more installment payments); or (ii) a single payment. Payment to the beneficiary will be made or begin as provided in Section 6.2(a). If the participant fails to designate the form of payment to the beneficiary, the default form will be installments under (i) above. If installment payments are payable to the beneficiary, with the consent of the committee, a participant may subsequently change the form of payment to his beneficiary (but not the form of payment to himself under Section 6.3), to a single payment by filing a written instrument so specifying with the committee. (c) INSTALLMENT PAYMENTS. Where installment payments are due, the first annual installment payment will be paid out on the date specified in Section 6.2 or 6.3 (whichever is applicable) and subsequent annual installments will be paid approximately on succeeding anniversaries of the first payment date. The amount of each annual installment payment will be determined by multiplying the amount to be paid by a fraction whose numerator is one and whose denominator is the number of remaining annual installment payments. (d) DEATH OF BENEFICIARY. If a participant's designated beneficiary is receiving installment payments and dies before receiving payment of all the annual installments, the designated beneficiary's estate will receive a lump-sum payment of the amount remaining to the distributed to such deceased beneficiary. Such payment will be made as soon as practicable after the committee's receipt of satisfactory evidence of the death of the designated beneficiary. ARTICLE 7 MISCELLANEOUS 7.1 AMENDMENT OR TERMINATION OF PLAN. Biogen, by action of the Board (or such committee thereof or officer or officers of Biogen to whom the Board has delegated this authority), at any time and from time to time, may amend or modify any or all of the provisions of this plan or may terminate this plan without the consent of any participant (or beneficiary or other person claiming through a participant). No termination or amendment of the plan may reduce the amount credited to the account of any participant under the plan (including a participant whose service as a director terminated before such plan termination or amendment). However, Biogen may change the deemed investment options under Section 5.1(c), and Biogen may upon termination of this plan pay participants' account balances to the participants regardless of the times elected for payment (or the start of installment payments) elected by the participants and may pay such amounts in single sum payments regardless of whether participants have elected installment distributions under Section 6.4. 7.2 BENEFITS NOT CURRENTLY FUNDED. (a) Nothing in this plan will be construed to create a trust or to obligate Biogen to segregate a fund, purchase an insurance contract or other investment, or in any other way currently to fund the future payment of any benefits hereunder, nor will anything herein be construed to give any participant or any other person rights to any 5 specific assets of Biogen or any other entity. However, in order to make provision for its obligations hereunder, Biogen may in its discretion purchase an insurance contract or other investment; any such contract or investment will be a general asset belonging to Biogen, and no participant or beneficiary will have any rights to any such asset. The rights of a participant or beneficiary hereunder will be solely those of a general, unsecured creditor of Biogen. (b) Notwithstanding subsection (a) above, Biogen in its sole discretion may establish a grantor trust of which it is treated as the owner under Code Section 671 to provide for the payment of benefits hereunder, subject to such terms and conditions as Biogen may deem necessary or advisable to ensure that benefits are not includable, by reason of the trust, in the taxable income of trust beneficiaries before actual distribution and that the existence of the trust does not cause the plan or any other arrangement to be considered funded for purposes of Title I of ERISA. 7.3 NO ASSIGNMENT. No participant or beneficiary will have any power or right to transfer, assign, anticipate or otherwise encumber any benefit or amount payable under this plan, nor shall any such benefit or amount payable be subject to seizure or attachment by any creditor of a participant or a beneficiary, or to any other legal, equitable or other process, or be liable for, or subject to, the debts, liabilities or other obligations of a participant or beneficiary except as otherwise required by law. 7.4 RESPONSIBILITIES AND AUTHORITY OF COMMITTEE. The committee will control and manage the operation and administration of the plan except to the extent that such responsibilities are specifically assigned hereunder to Biogen or the Board. The committee will have all powers and authority necessary or appropriate to carry out its responsibilities for the operation and administration of the plan. It will have discretionary authority to interpret and apply all plan provisions and to correct any defect, supply any omission or reconcile any inconsistency or ambiguity in such manner as it deems advisable. It will make all final determinations concerning eligibility, benefits and rights hereunder, and all other matters concerning plan administration and interpretation. All determinations and actions of the committee will be conclusive and binding upon all persons, except as otherwise provided herein or by law, and except that the committee may revoke or modify a determination or action previously made in error. It is intended that any action or inaction by the committee will be given the maximum possible deference by any reviewing body (whether a court or other reviewing body), and will be reversed by such reviewing court or other body only if found to be arbitrary and capricious. Biogen will be the "plan administrator" and the "named fiduciary" for purposes of the Employee Retirement Income Security Act of 1974, as amended. 7.5 LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the plan will be construed (a) to give any person any benefit, right or interest except as expressly provided herein, or (b) to create a contract of employment or to give any director the right to continue in such capacity or to affect or modify the terms of his service as a director in any way. 7.6 TAX WITHHOLDING. Any payment hereunder to a participant or beneficiary will be subject to withholding of income and other taxes to the extent required by law. 7.7 TEXT CONTROLS. Headings and titles are for convenience only, and the text will control in all matters. 7.8 APPLICABLE STATE LAW. To the extent that state law applies, the provisions of the plan will be construed, enforced and administered according to the laws of the Commonwealth of Massachusetts. 6 EX-10.42 7 b45372biexv10w42.txt EX-10.42 LETTER AGREEMENT REGARDING PETER KELLOGG EXHIBIT 10.42 [BIOGEN LOGO] VICE PRESIDENT, HUMAN RESOURCES - -------------------------------------------------------------------------------- FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 * 617-679-2000 * FAX 617-679-3595 June 21, 2000 Mr. Peter N. Kellogg 3617 Dartmouth Avenue Dallas, Texas 75205 Dear Peter: This letter supercedes my letter dated June 19 and represents Jim Mullen's offer to you on behalf of Biogen. You are offered the position of Vice President and Chief Financial Officer of Biogen at an annual salary of $325,000. You will report directly to Jim Mullen and you will become a member of the Biogen Operating Team. Consistent with Biogen's compensation policy, you will be eligible for a pro-rated merit salary review at year-end 2000 and annually thereafter. You will also be eligible to participate in Biogen's annual incentive compensation plan with a 50% target bonus and assuming an August 1, 2000 start date, Biogen will guarantee a pro-rated target bonus of $68,250 for year 2000. Your principal place of employment will be at Biogen's headquarters in the Cambridge, Massachusetts area. Upon employment you will receive $200,000 as a one-time special cash bonus, which will be treated as an interest-free forgivable loan. The bonus will be forgiven over a thirty-six month, straight-line schedule. In the event you voluntarily terminate your employment, or Biogen terminates your employment for poor performance or cause, prior to the thirty-six months from the date of the loan, the unforgiven portion of the loan would be payable to Biogen within six months of your termination date. If your employment is involuntarily terminated for non-cause within the first three years, or there is a change of control that results in your termination, the full balance of this loan will be forgiven. As of the date you commence employment, you will be granted an option to purchase 200,000 shares of the common stock of Biogen, Inc. The exercise price per share will be the average of the high and low sale prices as reported in the National Association of Securities Dealers Automated Quotation System ("NASDAQ") on the date you commence employment. The option will have a ten-year term and vest over a five-year period at the rate of 20% per year starting on the anniversary of the date you commence employment. Based on your performance you will be eligible for a merit stock option grant at year-end 2000 pursuant to Biogen's merit stock option policy. This grant will be comparable with awards granted to the three most senior executive officers reporting to Jim Mullen. You will be able to choose from a menu of benefit options through our flexible benefits program, BioChoice. These include health care, life, dependent life, and disability insurance as well as two flexible spending accounts, Med-Flex and D-Flex, for eligible medical or dependent-care expenses. At the beginning of the calendar quarter following your date of hire you will be eligible to participate in Biogen's pension and 401(k) savings plans. Biogen also offers a variety of additional benefits including childcare and elder care referral service, educational matching gifts, credit union, and group [BIOGEN LOGO] VICE PRESIDENT, HUMAN RESOURCES - -------------------------------------------------------------------------------- Mr. Peter N. Kellogg June 21, 2000 Page 2 homeowners and automobile insurance. You will receive more detailed information regarding your benefits on your first day of employment. Biogen will provide relocation benefits to facilitate your move from Dallas, Texas. A relocation counselor will contact you to discuss the relocation program, and will send you a package detailing the relocation policy to you. These benefits will include the reimbursement of many of the costs associated with both the sale of your current house and the purchase of a new house in the Boston area; temporary living; return trips home; home finding; and movement of your household goods. Please read the policy carefully as it will outline the parameters of these benefits and detail the reimbursement process. In addition, Biogen will also provide the following supplemental relocation benefits: - - BRIDGE LOAN: We will provide a bridge loan on the equity of your home in Dallas, which will be in place for up to six months, if necessary. We will consider an extension beyond this period if unusual market conditions do not allow the sale of your home. - - MORTGAGE LOAN: Biogen will also provide you a fully subordinated interest-free mortgage loan of $1,000,000 (secured by real property of your choice and with prompt substitution of security permitted on your reasonable request, providing that the security shall consist of your principal residence in the Boston area once you acquire one). The mortgage loan will be repayable to Biogen the sooner of five years from your date of employment or eighteen months following the point in time the pre-tax profit of your vested stock options exceeds $5,000,000. In the event that the pre-tax profit of your vested options does not exceed $5,000,000 five years from your date of employment, the payment date of the mortgage loan will be extended for up to two years following your fifth anniversary date. - - MORTGAGE REIMBURSEMENT: If necessary, Biogen will reimburse you for the mortgage and other reasonable costs related to your property in Dallas for up to six months. This reimbursement will commence after you have purchased a home in the Boston area and will end on the earlier of (i) six months, or (ii) when you have closed on the sale of your Dallas property. If you voluntarily terminate your employment or if your employment is terminated by Biogen for cause, you will be required to repay Biogen the entire amount of the loan the sooner of six months following the termination of your employment or the closing on the sale of the property by which the loan is then secured. If your employment is involuntarily terminated for non-cause within the first five years, or there is a change of control that results in your termination, your loan will be forgiven. The Company has the right to renegotiate this change of control clause if there is a new change of control provision, but will guarantee that it will be no less favorable than the agreement set forth in this employment letter. [BIOGEN LOGO] VICE PRESIDENT, HUMAN RESOURCES - -------------------------------------------------------------------------------- Mr. Peter N. Kellogg June 21, 2000 Page 3 As an officer of the Company, you will be required to participate in our program for executive stock ownership. We believe it is very important that our key leaders have personal stock ownership. I will outline the program to you. Additionally, in your new role you will be provided the following: - - VACATION: You are entitled, during your employment with Biogen, to four (4) weeks vacation, accrued on a monthly pro-rated basis. - - SUPPLEMENTAL SAVINGS PLAN: You are entitled, during your employment with Biogen, to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows you to defer from your current taxation up to 50% of your base salary and 100% of your bonus, if there is one. I can outline the details of the program if you are interested in participating. - - LIFE INSURANCE: You will be provided, during your employment with Biogen, Biogen's Executive Term Life Insurance coverage for a total of $1,000,000. This coverage is based on your successfully meeting the medical standards as stated in the Executive Term insurance policy. - - TAX REVIEW/PREPARATION: You are entitled, during your employment with Biogen, to the preparation and/or review, including review of estimated taxes of your annual Federal and State tax returns, which is currently administered through Price WaterhouseCoopers. The cost of this service is covered by Biogen. In the event you choose to continue the services provided by your current tax advisor, Biogen will reimburse you the cost of these services up to but not exceeding the amount incurred by Biogen through Price WaterhouseCoopers. - - INVOLUNTARY TERMINATION: If your employment with Biogen is terminated by Biogen without cause, Biogen will protect you by paying you a supplementary amount (the "Supplementary Amount") equal to your then present base salary for a period (the "Extra Period") ending on the earlier of (i) the date twelve months from your termination and (ii) the date you start another job. During such period, Biogen will also pay to continue your health benefits (i.e., health and dental plan coverage), provided such benefits are accorded employees generally and Biogen can obtain the relevant coverage. If you need continued coverage to prevent a gap in health coverage between your Biogen coverage and that at your new job, Biogen will extend such coverage for up to 30 days (to the extent that the Extra Period is less than twelve months) after you start your new job. The Supplementary Amount will be paid on the same schedule as your salary would have been paid. You will not be an employee of Biogen during the time of such payments and will not accrue any benefits or other rights (such as, but not limited to, pension plan vesting or accrual, stock option [BIOGEN LOGO] VICE PRESIDENT, HUMAN RESOURCES - -------------------------------------------------------------------------------- Mr. Peter N. Kellogg June 21, 2000 Page 4 vesting, vacation pay, etc.) during such period except health benefits as described above. You agree to notify us when you accept a new job. Commencement of employment with Biogen is contingent on the satisfactory completion of a pre-employment drug screening test at least five business days prior to your start date. We require all new employees to sign an Intellectual Property/Confidentiality Agreement on the first day of employment. You will also be required to complete a medical history review with our occupational health department, which is scheduled after your first day of employment. It is Biogen'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 Biogen employees. Consistent with this policy, your normal duties may require you from time to time to attend meetings or perform functions in any or all of Biogen's facilities. The Federal Government requires you to provide proper identification verifying your eligibility to work in the United States. Please bring the appropriate identification with you on your first day of employment. On behalf of Jim Mullen, we very much look forward to your positive response and to your joining us as early as practical. We are confident that you will make a significant contribution to Biogen's future success. Please confirm your acceptance by signing this offer letter and noting your preferred start date. I also invite you to complete the enclosed invitation to self-identify. Please complete the employment application and the drug screen authorization forms and then return both signed documents to me in the enclosed self addressed, stamped envelope. The other original offer letter is for your records. Sincerely, /s/ Frank A. Burke, Jr. ------------------------------------ Frank A. Burke, Jr. FAB:bk Attachments cc: Mr. James C. Mullen [BIOGEN LOGO] VICE PRESIDENT, HUMAN RESOURCES - -------------------------------------------------------------------------------- Mr. Peter N. Kellogg June 21, 2000 Page 5 I am pleased to accept the offer of employment described above: ACCEPTED: /s/ Peter N. Kellogg 8/7/00 - -------------------------------------------------------------------------------- Peter N. Kellogg Preferred Start Date EX-10.43 8 b45372biexv10w43.txt EX-10.43 LETTER AGREEMENT AMENDING ... KELLOGG EXHIBIT 10.43 October 19, 2001 Peter Kellogg 14 Scotch Pine Circle Wellesley, MA 02481 Dear Peter: I am pleased to confirm Jim Mullen's conversation appointing you to Executive Vice President & CFO. This appointment recognizes the increasing importance of your role and your leadership capabilities. As an Executive Vice President of Biogen, we know you will continue to be a key contributor to Biogen's mission, vision, and values. I am also pleased to note you are eligible for the following compensation and/or benefits as outlined below. TARGET BONUS: Your incentive target is 50% of your base salary. LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and granting stock options to employees. You will be eligible for an annual merit stock option grant, based on a design which emphasizes the future expected value of the grant. The details of how we will communicate and value options will be outlined in December. CHANGE OF CONTROL: You have been designated as a "Designated Employee" for purposes of Biogen's 1985 Non-Qualified 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. VACATION: You are entitled to an additional week of vacation each year. This week is over and above the company's normal vacation schedule (which is based upon years of service). SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows participants to defer [pretax] base salary and future bonuses. Enrollment in this plan takes place in December each year. You will be provided additional information on the plan at that time. LIFE INSURANCE: You will have life insurance coverage that is the greater of $1,000,000 or three times your annual salary and subject to the normal medical standards of the life insurance policy. SEVERANCE: You will have a minimum severance benefit that is the greater of the severance outlined in your letter dated June 21, 2000 or the severance outlined in the Executive Severance document, which has been included with this letter. EXECUTIVE STOCK OWNERSHIP: You will be expected to acquire and maintain a personal financial interest in BIOGEN. Ownership is defined as stock held outright, stock held in the 401(k) plan and stock held under the Employee Stock Purchase Plan. Vested but unexercised shares would also be counted toward ownership guidelines. You will be required to maintain a financial interest of six times base salary. You will have a five-year period from the date of your appointment to Vice President to obtain this ownership level. TAX PREPARATION: You are eligible to have your federal and state income taxes prepared by PricewaterhouseCoopers. On behalf of Jim Mullen, please accept my sincere congratulations and best wishes for future success with Biogen. Sincerely, /s/ Frank A. Burke, Jr. -------------------------------- Frank A. Burke, Jr. /bk Attachment EX-10.44 9 b45372biexv10w44.txt EX-10.44 LETTER AGREEMENT AMENDING ... ADELMAN EXHIBIT 10.44 September 5, 2001 Burt Adelman, M.D. 210 Old Pickard Road Concord, MA 01742 Dear Burt: I am pleased to advise you that the Compensation and Management Resources Committee has approved your appointment as Executive Vice President, Research and Development, reporting to me. Effective September 1, 2001 your annual base salary is increased to $350,000 and your target bonus is increased to 50% of base salary under Biogen's management incentive plan. Effective August 8, 2001, the Stock and Option Plan Administration Committee has granted you an option to purchase up to 100,000 shares of Biogen's common stock, with a four year, straight-line vesting schedule. You will next be eligible for both a salary adjustment and merit stock option grant at year-end 2002. On behalf of the Board of Directors, please accept our congratulations and best wishes for success in this important new role. I look forward to your significant leadership and contributions as we continue to build Biogen. Best personal regards. Sincerely, /s/ James C. Mullen ------------------------------------- James C. Mullen President and Chief Executive Officer JCM:bk cc: Personnel File EX-10.45 10 b45372biexv10w45.txt EX-10.45 RENEWAL OF INDEPENDENT CONSULTING AGMNT EXHIBIT 10.45 [BIOGEN LOGO] - -------------------------------------------------------------------------------- FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 * 617-679-2000 * FAX 617-679-2838 September 27, 2001 Sir Kenneth Murray 4 Mortonhall Road Edinburgh EH9 2HW Scottland, United Kingdom Re: Renewal of Independent Consulting Agreement ------------------------------------------- Dear Ken: Your Independent Consulting Agreement with Biogen, Inc., dated June 29, 1979, as previously amended, (the "Agreement"), under which you serve as a member of the Scientific Board of the Company expires on September 30, 2001. Biogen greatly values your input on the Scientific Board, and would like to renew the Agreement for an additional one-year period commencing as of October 1, 2001 and ending on September 30, 2002. The terms and conditions of the Agreement will continue to apply during the renewal term except that compensation for your services under the Agreement during the renewal term will be as follows: 1. You will receive (i) a $20,000 per year retainer, (ii) $2,000 per day for attendance at Scientific Board meetings, plus reasonable travel and lodging expenses and (iii) $500 per day for time spent in Biogen's laboratories. As compensation for your service as a member of the Board of Directors you will receive the standard board package and the following stock option grant: 2. Subject to approval by the Stock and Option Plan Administration Committee, on your renewal date, you will be granted an option to purchase 30,000 shares of Biogen Common Stock. The option will vest over three years (33-1/3% per year) and will be exercisable at a price equal to the average of the high and low sales prices on your renewal, as long as on such date you are still a member of the Board of Directors. If you agree to renewal of the Agreement on these terms, please sign both copies of this renewal letter and return one copy to the attention of Stephen McEvoy, Associate General Counsel, Biogen, Inc., 14 Cambridge Center, Cambridge, MA 02142. We look forward to your continued participation on the Scientific Board. Very truly yours, BIOGEN, INC. By: /s/ James C. Mullen ------------------------------------- James C. Mullen President and Chief Executive Officer AGREED TO AND ACCEPTED: /s/ Sir Kenneth Murray ----------------------------------------- Sir Kenneth Murray EX-10.46 11 b45372biexv10w46.txt EX-10.46 BIOGEN SAVINGS PLAN, AS AMENDED EXHIBIT 10.46 BIOGEN SAVINGS PLAN As amended and restated by the Thirteenth Amendment (December 31, 2001) BIOGEN SAVINGS PLAN Table of Contents Page ---- ARTICLE 1 INTRODUCTION.............................................. 1 1.1 Establishment of Plan..................................... 1 1.2 Compliance with Code and ERISA............................ 1 1.3 Exclusive Benefit of Participants......................... 1 1.4 Limitation on Rights Created By Plan...................... 1 1.5 Application of Plan's Terms............................... 1 1.6 Benefits Not Guaranteed................................... 1 ARTICLE 2 DEFINITIONS............................................... 1 2.1 Applicable compensation................................... 1 2.2 Beneficiary............................................... 2 2.3 Biogen.................................................... 2 2.4 Code...................................................... 2 2.5 Employee.................................................. 2 2.6 Employer.................................................. 2 2.7 ERISA..................................................... 2 2.8 Participant............................................... 2 2.9 Plan...................................................... 2 2.10 Plan administrator........................................ 2 2.11 Plan year................................................. 2 2.12 Trust agreement........................................... 2 2.13 Trust fund................................................ 2 2.14 Trustee................................................... 2 ARTICLE 3 PLAN SERVICE.............................................. 2 3.1 Plan Service.............................................. 3 3.2 Employment Defined........................................ 3 3.3 Service with Affiliated Companies......................... 3 3.4 Affiliated Company Defined................................ 3 ARTICLE 4 PARTICIPATION............................................. 3 4.1 Eligible Class............................................ 3 4.2 Participation............................................. 4 4.3 End of Participation...................................... 4 4.4 Reentry of Former Active Participant...................... 4 ARTICLE 5 SAVINGS DEPOSITS BY PARTICIPANTS.......................... 4 5.1 Savings Deposits.......................................... 4 5.2 401(k) Limits............................................. 5 5.3 Changes in Savings Deposits............................... 7 5.4 Collection of Savings Deposits............................ 8 5.5 Rollover Contributions.................................... 8 ARTICLE 6 EMPLOYER CONTRIBUTIONS.................................... 8 6.1 Matching Employer Contributions........................... 9 6.2 401(m) Limits............................................. 9 6.3 Form and Time of Contribution............................. 10 6.4 Biogen Stock Defined...................................... 10 i 6.5 Return of Contribution Made in Error or Not Deductible.... 10 ARTICLE 7 ACCOUNTS AND CREDITS...................................... 10 7.1 Establishment of Accounts................................. 10 7.2 Crediting Participants' Savings Deposits.................. 11 7.3 Crediting Matching Contributions and Forfeitures.......... 11 7.4 Crediting Rollovers....................................... 11 7.5 Charges to Accounts....................................... 11 7.6 Maximum Additions......................................... 11 ARTICLE 8 INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE...... 12 8.1 Investment Funds.......................................... 12 8.2 Investment Directions and Transfers Among Funds........... 12 8.3 Valuation of Assets and Crediting Investment Experience... 13 ARTICLE 9 LOANS TO PARTICIPANTS..................................... 14 9.1 Loans to Participants..................................... 14 9.2 Accounting for Loans...................................... 15 ARTICLE 10 WITHDRAWALS AND DISTRIBUTIONS............................. 15 10.1 In-Service Withdrawals from Savings Deposits.............. 15 10.2 In-Service Withdrawals from Rollover Account.............. 17 10.3 Distribution Upon Retirement or Disability................ 17 10.4 Distribution Upon Termination of Employment............... 17 10.5 Right to Defer............................................ 18 10.6 Distribution Upon Death of Participant.................... 18 10.7 Manner of Payment......................................... 19 10.8 Direct Rollovers.......................................... 19 10.9 Rehire Before Distribution................................ 20 ARTICLE 11 AMENDMENT, MERGER AND TERMINATION OF PLAN................. 20 11.1 Amendment of Plan......................................... 20 11.2 Merger of Plans........................................... 20 11.3 Termination............................................... 20 11.4 Effect of Termination..................................... 21 ARTICLE 12 NAMED FIDUCIARIES......................................... 21 12.1 Identity of Named Fiduciaries............................. 21 12.2 Responsibilities and Authority of Plan Administrator...... 21 12.3 Responsibilities and Authority of Trustee................. 21 12.4 Responsibilities of Biogen................................ 21 12.5 Responsibilities Not Shared............................... 22 12.6 Dual Fiduciary Capacity Permitted......................... 22 12.7 Actions by Biogen......................................... 22 12.8 Procedure for Allocation and Delegation of Responsibilities.......................................... 22 12.9 Advice.................................................... 22 12.10 Indemnification........................................... 22 ARTICLE 13 THE PLAN ADMINISTRATOR.................................... 22 13.1 Appointment............................................... 22 13.2 Notice to Trustee......................................... 23 13.3 Administration of Plan.................................... 23 13.4 Reporting and Disclosure.................................. 23 13.5 Records................................................... 23 ii 13.6 Compensation and Expenses................................. 23 13.7 Decisions, Rules and Regulations.......................... 23 13.8 Secretary................................................. 23 13.9 Claims Review Procedure................................... 24 ARTICLE 14 MISCELLANEOUS............................................. 24 14.1 Qualified Domestic Relations Orders....................... 24 14.2 Nonalienation of Benefits................................. 24 14.3 Payment to Minors and Incompetents........................ 24 14.4 Current Address of Payee; Unclaimed Payments.............. 25 14.5 Disputes over Entitlement to Benefits..................... 25 14.6 Payment of Benefits....................................... 25 14.7 Top-Heavy Plan Provisions................................. 25 14.8 Rules of Construction..................................... 26 14.9 Text Controls............................................. 27 14.10 Applicable State Law...................................... 27 14.11 Paperless Administration.................................. 27 14.12 Correction of Mistakes in Plan Operation.................. 27 14.13 Veterans' Rights.......................................... 27 iii INDEX OF TERMS -------------- The items listed below are defined or explained in the plan sections or articles indicated. Accounts..........................................7.1 Affiliated........................................3.4 Applicable compensation...........................2.1 Beneficiary.......................................2.2 Biogen............................................2.3 Biogen stock......................................6.4 Claim............................................13.9 Claimant.........................................13.9 Code..............................................2.4 Deferral percentage............................5.2(c) Defined benefit plan fraction..................7.6(c) Defined contribution plan fraction.............7.6(c) Direct Rollovers.................................10.8 Disability....................................10.3(b) Eligible class....................................4.1 Employee..........................................2.5 Employer..........................................2.6 Employment........................................3.2 ERISA.............................................2.7 Financial hardship............................10.1(b) Higher paid group..............................5.2(b) Loans.............................................9.1 Lower paid group...............................5.2(c) Matching contribution percentage...............6.2(b) Matching employer contributions...................6.1 Maximum additions.................................7.6 Named fiduciaries....................Article 12, 12.1 Participant.......................................2.8 Participation.....................................4.2 Plan..............................................2.9 Plan Administrator.........................Article 13 Plan service......................................3.1 Plan year........................................2.11 Qualified domestic relations order...............14.1 Retirement....................................10.3(b) Rollover contributions............................5.5 Savings deposits..................................5.1 Top-heavy........................................14.7 total compensation.............................7.6(a) Trust agreement..................................2.12 Trust fund.......................................2.13 Trustee..........................................2.14 Valuation date....................................8.3 Vested interest...............................10.4(b) Withdrawals................................10.1, 10.2 iv ARTICLE 1 INTRODUCTION 1.1 ESTABLISHMENT OF PLAN. Biogen established this plan effective as of January 1, 1987. The plan has subsequently been amended as specified in Appendix A. 1.2 COMPLIANCE WITH CODE AND ERISA. This plan is intended to qualify as a profit-sharing plan under Section 401(a) of the Internal Revenue Code of 1986, as amended from time to time, and a qualified cash or deferred arrangement described in Section 401(k) of said Code, and to comply with the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended from time to time. This plan is also 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. The plan will be interpreted in a manner that comports with these intentions. 1.3 EXCLUSIVE BENEFIT OF PARTICIPANTS. The plan is for the exclusive benefit of participants and their beneficiaries. Employer and employee contributions are made to the trust fund for the purpose of accumulating a fund for distribution to participants and their beneficiaries in accordance with the plan. Except as provided in Section 6.5, no part of the trust fund or any distribution therefrom will be used for or diverted to purposes other than for the exclusive benefit of participants and their beneficiaries and defraying those reasonable expenses of administering the plan and trust fund not paid by the employers. 1.4 LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the plan will be construed (a) to give any person any benefit, right or interest except as expressly provided herein, or (b) to create a contract of employment or to give any employee the right to continue as an employee or to affect or modify his terms of employment in any way. 1.5 APPLICATION OF PLAN'S TERMS. The benefits and rights of a participant and his beneficiaries under the plan will be determined in accordance with the terms of the plan that are in effect on the date that contributions on a participant's behalf are made or credited to his accounts, or on the date of the participant's retirement, death or other termination of employment, whichever may be applicable. 1.6 BENEFITS NOT GUARANTEED. The employers, the trustee and the plan administrator do not guarantee the payment of benefits hereunder. Benefits will be paid only from the assets of the trust fund and are limited to the amount of assets therein. ARTICLE 2 DEFINITIONS This article contains a number of definitions of terms used in the plan. Other terms are defined, explained or clarified in other articles. This is done for convenience of plan administration. There is no other significance to the location of a definition. 2.1 APPLICABLE COMPENSATION of an employee for any calendar year or other period of reference means his total compensation for services paid by his employer during such period including wages, salary, overtime, cash bonuses and shift differential. Applicable compensation also includes salary reduction contributions made by his employer to this plan or any other employee benefit program on behalf of the employee in accordance with a salary reduction agreement under Code Section 401(k), 125 or, effective on and after January 1, 2001, 132(f)(4) with the employee. However, applicable compensation does not include reimbursed expenses, life insurance premiums included in his compensation for income tax purposes, stock options or stock bonuses, or any other items not constituting direct compensation for services. Compensation also does not include payments to or benefits received under this or any other public or private employee benefit plan (other than salary reduction contributions under this plan or other employee benefit program). The amount of applicable compensation taken into account under the plan for any participant in a particular plan year will not exceed $150,000 (as adjusted in accordance with Code Section 401(a)(17)). Notwithstanding the foregoing, effective January 1, 2002, the amount of applicable compensation taken into account under the plan for any participant in a particular plan year will not exceed the maximum provided for under Code Section 401(a)(17)(A) for such year (as adjusted in accordance with Code Section 401(a)(17)(B)). 2.2 BENEFICIARY means a person, class of persons or trust designated by a participant or, if there is no such designation, by the plan to receive a death benefit hereunder. 2.3 BIOGEN means Biogen, Inc. (a Massachusetts corporation) or its successor. 2.4 CODE means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute enacted in its place. 2.5 EMPLOYEE means an individual classified as an employee under the regular personnel classifications and practices of his employer. An individual is not an employee for purposes of this plan if the individual is classified as a consultant or contractor under his employer's regular personnel classifications and practices, or he is a party to an agreement to provide services to his employer without participating in this plan, notwithstanding that such individual may be treated as a common law employee for payroll tax or other legal purposes. 2.6 EMPLOYER means Biogen, Inc. or any successor organization to it, or any subsidiary or affiliate of Biogen, Inc. or other entity that adopts the plan for its employees with the consent of Biogen, Inc. upon such terms and conditions as Biogen, Inc. determines. The terms EMPLOYER or EMPLOYERS may refer to each employer individually, or to all the employers collectively, as the context may require. Employers in addition to Biogen, Inc. are listed in Appendix B. 2.7 ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor statute enacted in its place. 2.8 PARTICIPANT means an employee or former employee whose participation in the plan has begun and has not yet ended. 2.9 PLAN means the Biogen Savings Plan, as set forth in this plan instrument, and as it may be amended from time to time. 2.10 PLAN ADMINISTRATOR means the person, committee or entity appointed by Biogen or otherwise designated under Article 13 to administer the plan. 2.11 PLAN YEAR means the 12-month period beginning on each January 1 during the continuance of the plan. 2.12 TRUST AGREEMENT means the instrument executed by Biogen and the trustee, as amended from time to time, fixing the rights and responsibilities of each party with respect to the holding, investment and administration of the trust fund. 2.13 TRUST FUND means the property held by the trustee for the purposes of the plan. 2.14 TRUSTEE means the person, individual or corporate, serving as sole trustee, or the persons serving as co-trustees, at any time under the terms of the trust agreement. ARTICLE 3 PLAN SERVICE 2 3.1 PLAN SERVICE. Plan service of an employee means the sum of the following: (a) any period of his employment on and after January 1, 1987, whether or not continuous; and (b) each period, if any, between a termination of his employment on and after January 1, 1987, and his earliest subsequent reemployment, but only if such reemployment occurs within one year after such termination of employment. To determine an employee's years of plan service, all periods of his plan service will be aggregated, and each 365 days thereof will be one year of plan service. 3.2 EMPLOYMENT DEFINED. (a) ACTIVE SERVICE. Employment of a person means his active service as an employee (determined under the regular personnel policies, practices and classifications of his employer). (b) CERTAIN ABSENCES. A period of absence from active service will be considered part of an employee's employment if he receives compensation from his employer for such period or if such period falls in one of the following categories (whether or not he receives compensation for such period): (i) absence for military service for which his reemployment rights are protected by law; provided (but only for that part of the absence which exceeds one year in length) he returns to active service as an employee within the period when his reemployment rights are protected by law (or within such longer period as his employer in its discretion permits); and (ii) leave of absence due to sickness, accident, disability or other reason, for the period authorized by the employer, provided (but only for that part of such leave of absence which exceeds one year in length) he returns to active service with his employer at the end of such period of authorized absence. 3.3 SERVICE WITH AFFILIATED COMPANIES. An employee's plan service with an affiliated company will be counted for purposes of this plan. 3.4 AFFILIATED COMPANY DEFINED. Affiliated company means any corporation (foreign or domestic) which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the employer; and any other entity required to be aggregated with the employer pursuant to regulations under Code Section 414(o). ARTICLE 4 PARTICIPATION 4.1 ELIGIBLE CLASS. (a) GENERAL RULE. Each regular employee (determined under the regular personnel policies, practices and classifications of the employer) is in the class eligible to participate in the plan unless he is (a) a student (whether high school, college or graduate) employed on a temporary or casual basis, (b) except as provided in subsection (b) below, an employee of a non-U.S. subsidiary or division of an employer or (c) a member of a collective bargaining unit. An individual is not considered an employee or "regular employee" for purposes of this plan if the individual is classified as a consultant or contractor under his employer's regular personnel classifications and practices, or he is a party to an agreement to provide services to his employer without participating in this plan, notwithstanding that such individual may be treated as a common law employee for payroll tax or other legal purposes. 3 (b) ELIGIBILITY OF EMPLOYEES ON TEMPORARY FOREIGN ASSIGNMENT. An otherwise eligible employee (under subsection (a) above) who is temporarily assigned by the employer to work for the employer, an affiliated company, or on a joint venture with the employer outside of the United States with the intent on the part of the employer that such employee will return to work as an eligible employee of the employer in the United States will be treated as an employee in the class eligible to participate in the plan during such temporary assignment. Accordingly, such employee will be eligible to make savings deposits in accordance with the plan and to have employer matching contributions made with respect to his basic savings deposits as provided in the plan (provided, however, than any matching employer contributions that would otherwise be made while the eligible employee is on temporary foreign assignment will be reduced - but not below zero - to reflect any employer contributions on behalf of such employee to a defined contribution program in which such employee participates as a result of his temporary foreign assignment, unless it is reasonable to expect that such employer contributions will later be forfeited by the employee. 4.2 PARTICIPATION. Participation in the plan is voluntary and no employee will be required to participate. Each employee in the eligible class who has attained age 21 will be eligible to make savings deposits. The plan administrator, pursuant to its authority under Article 13, may adopt rules and procedures regarding the exact date when savings deposits will commence and what forms, if any, participants must complete and file with the plan administrator as prerequisites for such savings deposits to commence. Each employee who has met the eligibility requirements of this section will become a participant when a savings deposit by such employee is first credited to his account. 4.3 END OF PARTICIPATION. A participant's active participation in the plan will end upon the suspension of his savings deposits under Section 5.3 or the termination of his service as an employee in the eligible class for any reason. His participation will end when he has no further interest under the plan. 4.4 REENTRY OF FORMER ACTIVE PARTICIPANT. A former active participant who suspends his savings deposits may resume active participation under Section 5.3. A former active participant who terminates his service as an employee in the eligible class and who later returns to service as an employee in the eligible class will be eligible to make savings deposits which, subject to the applicable rules and procedures of the plan administrator, may start effective as of his date of rehire or any subsequent entry date. He will be an active participant again when a savings deposit by such employee is first credited to his account. ARTICLE 5 SAVINGS DEPOSITS BY PARTICIPANTS 5.1 SAVINGS DEPOSITS. (a) SAVINGS DEPOSITS BY PARTICIPANTS. Subject to the various limitations imposed by the plan, each eligible employee described in Section 4.2 may make savings deposits to the plan in a whole percentage of his applicable compensation. Subject to such limitations, the plan administrator may establish reasonable minimum or maximum percentages for savings deposits by participants (or by a particular class of participants such as highly compensated participants). Savings deposits may be made on an after-tax basis (by salary deduction) as described in subsection (e) below or on a before-tax basis (by salary reduction). An eligible employee may elect savings deposits in such amount as he specifies, provided that his before-tax savings deposits do not exceed the limits of Section 5.2 and provided further that his before-tax and after-tax savings deposits do not result in a violation of the limitations of Section 7.6 or violate any rules of the plan administrator. In addition, a participant may make special catch-up savings deposits as described in subsection (d) below, subject to the limitations described therein. The term SAVINGS DEPOSITS refers to a participant's after-tax and before-tax savings deposits and catch-up savings deposits hereunder. A participant's savings deposits under subsection (d) are referred to as his catch-up savings deposits. A participant's savings deposits on an after-tax basis are referred to as his AFTER-TAX SAVINGS DEPOSITS. A participant's before-tax savings deposits up to six percent of his applicable compensation are referred to as his BASIC SAVINGS DEPOSITS and any before-tax savings deposits above this amount are referred to as his SUPPLEMENTAL SAVINGS DEPOSITS. 4 (b) SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. The plan administrator, pursuant to Article 13, may adopt procedures and forms which participants must complete and file on a timely basis, as determined by the plan administrator, as prerequisites to commence savings deposits. The plan administrator may prescribe any and all notice requirements, deadlines, time periods, and election rules as it deems appropriate to administer participant sign-up requirements. Participants will be provided information regarding all sign-up requirements and procedures by the plan administrator. (c) CHARACTER OF SAVINGS DEPOSITS. For purposes of Code Section 414(h), it is specifically provided that basic savings deposits and supplemental savings (that is, all before-tax savings deposits) deposits and catch-up savings deposits are employer contributions. (d) SPECIAL CATCH-UP SAVINGS DEPOSITS. Effective as of January 1, 2002, each participant who is eligible to make savings deposits (elective deferrals) under this plan and who has attained age 50 before the close of the plan year shall be eligible to make additional savings deposits (referred to herein as "catch-up savings deposits") in accordance with, and subject to the limitations of, Code Section 414(v) and any regulations promulgated thereunder, as in effect for a particular plan year. Such catch-up savings deposits shall not be taken into account for purposes of the provisions of the plan implementing the required limitations of Code Sections 402(g) and 415. The plan shall not be treated as failing to satisfy the provisions of the plan implementing the requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of the making of such catch-up savings deposits. (e) AFTER-TAX SAVINGS DEPOSITS. Notwithstanding any other provision of the Plan to the contrary, effective January 1, 2002, each participant who is eligible to make savings deposits (elective deferrals) under this plan, except one who is also a participant in the Biogen, Inc. Voluntary Executive Supplemental Savings Plan (or who is designated as eligible to participate in such plan, regardless of whether he is actually participating or not), shall be eligible to make after-tax savings deposits to the Plan subject to the applicable limitations and restrictions on such after-tax savings deposits under the plan. (f) Notwithstanding the foregoing provisions of this Section 5.1, the maximum amount a participant may defer in the form of basic savings deposits, supplemental savings deposits, catch-up saving deposits and after-tax savings deposits shall be limited to 40 percent of the participant's applicable compensation, provided however that a participant's savings deposits will also be subject to the plan's annual additions limits, 401(k) limits, 401(m) limits and other applicable limits or nondiscrimination requirements under the Code. 5.2 401(K) LIMITS. (a) LIMITATIONS. A participant's basic and supplemental savings deposits for a plan year may not exceed the limits of subsection (b) below or result in a violation of Section 7.6. Also, a participant's basic and supplemental savings deposits (when combined with any other elective deferrals - as defined in regulations under Code Section 402(g) - under any other plan or arrangement maintained by Biogen or any employer in a controlled group with Biogen under Code Section 414(b) or (c), an affiliated service group with Biogen under Code Section 414(m) or otherwise aggregated with Biogen under Code Section 414(o)) in any calendar year may not exceed the maximum amount provided for under Code Section 402(g)(1) for such year (as adjusted periodically in accordance with Code Section 402(g)(4)). (b) HIGH-LOW TESTS. Basic and supplemental savings deposits by highly-compensated employees must not exceed amounts such that, as of the last day of each plan year, the average of the individual deferral percentages of the highly-compensated employees (the "highly-compensated deferral percentage" or "HDP") for such plan year does not exceed the average of the individual deferral percentages of lower-compensated employees (the "lower-compensated deferral percentage" or "LDP") for the preceding plan year by more than the amount specified under the following table. Notwithstanding the preceding sentence, if elected by the plan administrator, the maximum HDP for a plan year may be determined with reference to the LDP for that plan year (rather than the preceding plan year). If the plan administrator makes an election under the preceding sentence, the plan administrator may subsequently elect to determine the maximum HDP for a plan year with reference to the LDP for the preceding plan 5 year again. However, elections under the preceding two sentences may be made only under circumstances prescribed in regulations or other rulings of the Internal Revenue Service. IF LDP IS: HDP MAY NOT EXCEED: --------- ------------------ Less than 2% 2 times LDP At least 2% but 2% more than LDP less than 8% 8% or higher 1.25 times LDP Compliance with the foregoing requirement will be determined after taking into account any adjustments made to comply with the Code Section 415 limits under Section 7.6 below. The plan administrator may elect to perform testing for compliance with the foregoing requirement using any methodology (for example, testing separately those eligible employees who have not completed one year of service) available under regulations or rulings of the Internal Revenue Service, provided that the plan administrator elects and applies such methodology in accordance with such regulations or rulings. (c) DEFINITIONS. For purposes of subsection (b) above, the following definitions will apply. (i) The DEFERRAL PERCENTAGE of a participant for a plan year means his basic and supplemental basic and supplemental savings deposits for such year computed as a percentage of his applicable compensation for such year. If an employee is eligible to be a participant under Section 4.2 but has not elected to make basic and supplemental savings deposits, he will nevertheless be taken into account and his deferral percentage will be zero. In the plan administrator's discretion, basic and supplemental savings deposits of a participant in the lower paid group will not be included when determining his deferral percentage to the extent that the requirements of (b) above are met without taking such contributions into account. (ii) HIGHLY-COMPENSATED EMPLOYEES DEFINED. An employee is considered a highly-compensated employee for a plan year if he or she: (A) owns (or is considered to own within the meaning of Code Section 318) more than 5% of the outstanding stock of an employer at any time during the plan year or the preceding plan year; (B) receives annual compensation from the employer in excess of $90,000 (before any reductions in his compensation in accordance with a salary reduction agreement) during the preceding plan year. However, at the election of the plan administrator, an employee will be considered a highly compensated employee under subsection (B) above only if he or she also was a member of the top-paid group of employees for the preceding plan year. If the plan administrator so elects, the "top-paid group of employees" is the group consisting of the highest-paid 20% of employees of the employer for such preceding plan year. In determining the number of employees in the top-paid group, employees specified in Code Section 414(q)(5) will be excluded. The $90,000 amount in (B) above will be adjusted for cost-of-living increases in accordance with Code Section 414(q). In addition, the plan administrator may determine the highly-compensated employees for a plan year using any methodology available under regulations or rulings of the Internal Revenue Service, provided that the plan administrator elects and applies such methodology in accordance with such regulations or rulings. 6 (iii) If an eligible employee under Section 4.2 is not a highly compensated employee for a plan year, then he is a lower-compensated employee for such year. (d) MONITORING AND ADJUSTING EMPLOYEE BASIC AND SUPPLEMENTAL SAVINGS DEPOSITS. The plan administrator will monitor (or will arrange with the employer or a record keeper or service provider to monitor) participants' basic and supplemental savings deposits elections and deferral percentages and will adjust the amount of basic and supplemental savings deposits elected or made by highly-compensated employees to the extent necessary to satisfy the requirements of subsection (b) above. Any such adjustments may be made during a plan year in accordance with the plan administrator's procedures. If following the end of a plan year such requirements are not satisfied, the plan administrator will determine the maximum permitted HDP and will determine the amount needed to reduce the deferral percentage of each highly compensated employee whose deferral percentage is above such maximum to the maximum. After the aggregate dollar amount of all such reductions in the amount of basic and supplemental savings deposits for a plan year by highly-compensated employees to satisfy such subsection has been determined, the necessary reductions will be accomplished by reducing the basic and supplemental savings deposits of the participant (or participants) in the highly-compensated group with the highest dollar amount of basic and supplemental savings deposits first, next the participant (or participants) in such group with the second highest dollar amount of basic and supplemental savings deposits, and so on until adjustments equal to such aggregate dollar amount have been made. Such adjustments or reductions will be made by the plan administrator at such time or times as the plan administrator determines, and will be made in accordance with procedures established by the plan administrator. If basic and supplemental savings deposits by a highly-compensated employee for a plan year exceed the amount permitted under subsection (b) above, the necessary reduction amount plus earnings on such amount (as determined in accordance with applicable regulations under Code Section 401(k) but without any earnings for periods after the end of the relevant plan year) will be paid to the affected participant. Such payment will be made no later than the end of the succeeding plan year. The amount of earnings (or losses) to be distributed with a participant's excess basic and supplemental savings deposits will be determined under Section 8.3 with the following special rules: (i) payments to correct excess basic and supplemental savings deposits will be paid from each separate investment fund under Section 8.1 in which the participant's supplemental and (if necessary) basic savings deposits accounts are invested in accordance with the plan's ordering rules for withdrawals (or pro rata from each investment fund if there are no ordering rules); and (ii) the amount of earnings (or losses) will be the earnings or losses of such investment fund for the plan year of the correcting distribution multiplied by a fraction whose numerator is the amount of excess basic and supplemental savings deposits being distributed and whose denominator is the total of (i) the balance in such investment fund(s) at the beginning of such plan year plus (ii) the total of the contributions allocated to such investment fund(s) during such year. (e) 415 LIMITS. In addition, the plan administrator will monitor participants' basic and supplemental savings deposits to insure that the annual additions to each participant's accounts are within the limits specified in Section 7.6. If additional basic and supplemental savings deposits by a participant would cause a violation of such limits, his basic and supplemental savings deposits will cease immediately. 5.3 CHANGES IN SAVINGS DEPOSITS. (a) INCREASE OR REDUCTION. A participant making savings deposits may increase or reduce the rate of his savings deposits to any higher or lower rate permitted under Section 5.1(a) provided he satisfies such rules and procedures the plan administrator adopts for changes in participant savings deposits. The effective date of the new rate will be determined by rules and procedures adopted by the plan administrator. (b) SUSPENSION. A participant may suspend his savings deposits provided he satisfies such rules and procedures the plan administrator adopts for suspensions of participant savings deposits. The suspension of savings 7 deposits will become effective as soon as practicable upon fulfilling the requirements established by the Plan administrator. (c) RESUMPTION. Subject to Section 4.4 with respect to participants described therein, a participant who suspended his savings deposits under subsection (b) above may resume such deposits provided he satisfies such rules and procedures the plan administrator adopts for resumption of savings deposits. The effective date of such resumption will be determined in accordance with the plan administrator's rules and procedures. (d) PLAN ADMINISTRATOR RULES. The plan administrator may establish such rules and procedures for savings deposits as the plan administrator deems necessary for the efficient administration of the plan. The plan administrator's rules may provide that any commencement or change in a participant's savings deposits will be effective on the first day of the payroll period, may require a specified reasonable minimum period of advance notice prior to a change in savings deposits, and/or may provide for a minimum period of suspension prior to the resumption of savings deposits by a participant. 5.4 COLLECTION OF SAVINGS DEPOSITS. The employer will collect participants' savings deposits through payroll or other procedures and will deliver the amounts collected to the trustee as soon as practicable after collection (but in no event later than the deadline specified in any applicable regulations of the Department of Labor under ERISA). 5.5 ROLLOVER CONTRIBUTIONS. (a) With the approval of the plan administrator, an employee in the eligible class (whether or not a participant hereunder) may make a rollover or a direct rollover to the plan (or cause to be transferred to the plan directly from a qualified trust, qualified annuity plan, individual retirement account or individual retirement annuity) cash or property in an amount which constitutes (i) an eligible rollover distribution (as defined in Code Section 402(c)(4) or Code Section 403(a)(4), or (ii) a rollover contribution (as defined in Code Section 408(d)(3)). However, no rollover to this plan of accumulated deductible employee contributions made under another plan will be permitted, and a direct or indirect transfer to this plan from another qualified plan will not be permitted if such transfer would subject this plan to the qualified joint and survivor rules of Code Section 401(a)(11). (b) The employers, the plan administrator and the trustee have no responsibility for determining the propriety of, proper amount or time of, or status as a tax-free transaction of any transfer under subsection (a) above. (c) If an employee who is not yet a participant makes a rollover contribution under subsection (a) above, he will be considered to be a participant with respect to such contribution only. He will not be a participant for any other purpose of the plan until he completes the requirements for participation under Article 4. (d) A rollover will be credited to a separate rollover account in the name of the employee making such rollover contribution. (e) The plan administrator in its discretion may direct the return to the employee (or the retransfer to another trustee or custodian designated by the employee) of any rollover contribution to the extent the plan administrator determines that such return may be necessary to insure the continued qualification of this plan under Section 401(a) of the Code or that the holding of such rollover contribution would be administratively burdensome. (f) The plan administrator, in its discretion, may accept a rollover contribution from a qualified trust or 403(b) arrangement through a trustee-to-trustee transfer, which consists in whole or in part of an eligible employee's after-tax contributions to such qualified trust or 403(b) arrangement. The plan administrator shall separately account for such after-tax contributions and any earnings thereon, including the portion of such rollover contribution or transfer which is includible in gross income and the portion which is not includible in gross income. ARTICLE 6 EMPLOYER CONTRIBUTIONS 8 6.1 MATCHING EMPLOYER CONTRIBUTIONS. (a) GENERAL RULE. Periodically each employer will make a matching contribution on behalf of each participant employed by such employer who makes basic savings deposits. Subject to the limitations of Section 6.2, the employer's matching contribution will be equal to 25% of the participant's basic savings deposits. Matching contributions will be reduced by any forfeitures under Section 10.4, subject to the prior use of such forfeitures under Section 10.4(c) or Section 14.4. Notwithstanding the foregoing, no matching contributions shall be made to the plan on behalf of any participant based on special catch-up savings deposits described in Section 5.1(d) of the plan or after-tax savings deposits described in Section 5.1(e) of the plan made by such participant. (b) TRUE-UP MATCHING CONTRIBUTIONS. Following the end of each plan year (beginning with the 1999 plan year), an additional true-up matching contribution may be made on behalf of an eligible participant who has made savings deposits for the plan year equal to at least 6% of the participant's applicable compensation for such plan year. The additional true-up matching contribution, if any, made on behalf of an eligible participant for a plan year shall equal (i) minus (ii) where: (i) equals 1.5% of the participant's applicable compensation for such plan year; and (ii) equals the total amount of matching contribution previously credited to such participant's account for such plan year (before application of this subsection (b)). (iii) Participants eligible for an additional true-up matching contribution for the 1999 plan year shall include only those participants who are employed by the employer as of August 1, 2000. Participants eligible for an additional true-up matching contribution for each plan year thereafter shall include only those participants who are employed by the employer as of the April 1 following the end of such plan year. 6.2 401(m) LIMITS. (a) GENERAL LIMITS. Matching employer contributions (including true-up matching contributions, if any) and after-tax savings deposits (if any) on behalf of highly-compensated employees must not exceed such amounts that, as of the last day of each plan year, the average of the individual matching contribution percentages of the highly-compensated employees (the "highly-compensated matching contributions percentage" or "HMCP" may not exceed the average of the individual matching contribution percentages of the lower-compensated employees (the "lower-compensated matching contributions percentage" or "LMCP") by more than the amount specified in the following table. The maximum HMCP for a plan year will be determined by reference to the LMCP for the preceding plan year, or for that plan year (rather than the preceding plan year), in accordance with procedures described in Section 5.2(b). IF LMCP IS: HMCP MAY NOT EXCEED: ---------- ------------------- Less than 2% 2 times LMCP At least 2% but 2% more than LMCP less than 8% 8% or higher 1.25 times LMCP Compliance with the foregoing requirement will be determined after taking into account any adjustments made to comply with the Code Section 415 limits under Section 7.6 below. Highly compensated and lower-compensated employees are defined in Section 5.2(c). 9 The plan administrator will monitor and adjust matching contribution percentages of highly compensated employees to the extent necessary to satisfy this subsection. Such monitoring and adjustments will be accomplished under procedures similar to those specified in Sections 5.2(b) and (d). (b) MATCHING CONTRIBUTION PERCENTAGE. For purposes of this section, the matching contribution percentage of a participant for a plan year means the employer matching contribution (including true-up matching contribution, if any) on his behalf for such year plus after-tax savings deposits (if any) by him during such year, computed as a percentage of his applicable compensation for such year. The plan administrator may in its discretion include savings deposits of a participant in the lower compensated group in determining his matching contribution percentage, to the extent that such savings deposits are not used in determining his deferral percentage under Section 5.2(c)(i). 6.3 FORM AND TIME OF CONTRIBUTION. The employers' contribution under Section 6.1 will be paid to the trustee in cash (provided that, in the discretion of Biogen, employer contributions under Section 6.1 or under Section 5.1(c) may be in the form of Biogen stock to the extent that, in accordance with participants' investment instructions hereunder, such contributions are to be invested in the Biogen stock fund). Such contributions will normally be paid at periodic intervals (not less frequently than quarterly) determined by the employers. In any event, such contributions will be paid to the trustee no later than the due date (including extensions) for filing the employers' federal income tax return for such year. 6.4 BIOGEN STOCK DEFINED. Biogen stock means the common stock, $.01 par value, of Biogen. If the outstanding common stock of Biogen is changed into or exchanged for a different kind of stock or other securities of Biogen or another successor corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value or the like, then Biogen stock means such other stock or security. If an employer contribution is made in the form of Biogen stock under Section 6.3, for purposes of determining the amount of such employer contribution, such Biogen stock will be valued at its fair market value at the time of contribution to the trust fund. 6.5 RETURN OF CONTRIBUTION MADE IN ERROR OR NOT DEDUCTIBLE. Unless specifically identified as a non-deductible contribution, each matching employer contribution hereunder is specifically conditioned upon its deductibility on the federal income tax return covering the employer making the contribution. If all or part of a matching employer contribution is made because of a mistake of fact or if the deduction under Code Section 404 of any portion of a matching employer contribution is disallowed, the amount contributed because of a mistake of fact or the amount for which the deduction is disallowed will be returned to the contributing employer if demand therefor is made within the time allowed by law. ARTICLE 7 ACCOUNTS AND CREDITS 7.1 ESTABLISHMENT OF ACCOUNTS. The plan administrator will establish and maintain in the name of each participant such of the following accounts as are appropriate for the participant: (a) basic savings deposits account; (b) supplemental savings deposits account; (c) matching contributions account; (d) catch-up savings deposits accounts; (e) after-tax savings deposits account; and (f) rollover account (with separate accounting for after-tax contributions included in such rollover account as required under Section 5.5). 10 Credits and charges to such accounts will be made as provided in the plan. 7.2 CREDITING PARTICIPANTS' SAVINGS DEPOSITS. Basic and supplemental savings deposits made by a participant will be credited to such participant's basic or supplemental savings deposits account, as appropriate, when received and processed by the trustee. Catch-up savings deposits and after-tax savings deposits (if any) made by a participant will be credited to such participant's catch-up savings deposits accounts or after-tax savings deposits account, as appropriate, when received and processed by the trustee. 7.3 CREDITING MATCHING CONTRIBUTIONS AND FORFEITURES. Matching employer contributions on behalf of a participant and any forfeitures to be credited to such participant under Section 6.1 will be credited to such participant's matching contributions account when received and processed by the trustee. To the extent that forfeitures during any period exceed the amount to be credited under the preceding sentence during such period, the forfeitures will be carried over and credited as a matching contribution for the next processing period. 7.4 CREDITING ROLLOVERS. Rollovers by or on behalf of an eligible employee will be credited to the employee's rollover account when received and processed by the trustee following receipt thereof by the trustee. 7.5 CHARGES TO ACCOUNTS. Any amount distributed, paid, withdrawn or transferred from an account will be a charge against such account as of the date of distribution, payment, withdrawal or transfer. All distributions, payments, withdrawals or transfers from an account will be based upon the amount in such account as of the valuation date most recently preceding the date of such distribution, payment, withdrawal or transfer. 7.6 MAXIMUM ADDITIONS. (a) The annual additions to a participant's accounts for any plan year (which will be the LIMITATION YEAR for purposes of Code Section 415) may not exceed the lesser of (i) $40,000 as adjusted periodically for cost-of-living changes in accordance with Code Section 415 and any regulations thereunder, or (ii) 100 percent of his total compensation for such year. For purposes of this section, TOTAL COMPENSATION means a participant's total compensation from his employer for a plan year, as defined in Code Section 415 and regulations thereunder. (b) If the annual additions to a participant's accounts would exceed the limitations of subsection (a) above, after-tax savings deposits (if any) made on his behalf for such year which would be credited to his account but for the limitations of subsection (a) will be returned to him, but only to the extent necessary to comply with subsection (a). If, following the application of the preceding sentence (to the extent applicable), the annual additions to a participant's accounts would still exceed the limitations of subsection (a) above, the supplemental savings deposits first and then, to the extent necessary, basic savings deposits made on his behalf for such year which would be credited to his accounts but for the limitations of subsection (a) will be returned to him, but only to the extent necessary to comply with subsection (a). Any amount returned to a participant under this subsection (b) will include interest or earnings on such amount as provided in regulations in Code Section 415. (c) For purposes of this Section 7.6, ANNUAL ADDITIONS to a participant's accounts for any plan year means the sum of the following amounts credited to his accounts for such year: (i) basic savings deposits, (ii) supplemental savings deposits, (iii) after-tax savings deposits, and (iv) matching employer contributions and forfeitures. (d) For any plan year, the sum of a participant's defined contribution plan fraction and his defined benefit plan fraction may not exceed one, as follows: (i) His DEFINED CONTRIBUTION PLAN FRACTION for any plan year is the fraction (A) whose numerator is the sum of annual additions (as defined in Code Section 415(c)(2)) to his accounts under all qualified defined contribution plans maintained by Biogen (or any other employer that is included in a controlled group or under common control with Biogen within the meaning of Code Sections 414(b) and (c) and 415(h)) as of the close of such plan year, and (B) whose denominator is the sum of the lesser of the following amounts determined for such year and for each prior year of plan service with his employer: the 11 product of 1.25 (1.0 if the plan is top-heavy) and the dollar limitation in effect for such year, or the product of 1.4 and 25 percent of the participant's compensation for such year. (ii) His DEFINED BENEFIT PLAN FRACTION for any plan year is a fraction (A) whose numerator is his aggregate projected annual benefit under all defined benefit plans sponsored by Biogen (or any other employer that is included in a controlled group or under common control with Biogen within the meaning of Code Sections 414(b) and (c) and 415(h)) as of the close of such plan year, and (B) whose denominator is the lesser of the product of 1.25 (1.0 if the plan is top-heavy) and the dollar limitation in effect under Section 415(b)(1)(A) of the Code, or the product of 1.4 and the participant's highest average compensation as determined under Section 415(b)(1)(B) of the Code. For this purpose, the PROJECTED ANNUAL BENEFIT of a participant means the total normal retirement benefit to which he would be entitled on the assumptions that his employment continues until his normal retirement date and his annual earnings and all other relevant factors remain the same for all future years as in the year when the projection is made. (iii) If the sum of such fractions would exceed one without the application of this section, his benefit under the defined benefit plan or plans will be reduced to a benefit that will produce a defined benefit plan fraction and a defined contribution plan fraction that equal one. (iv) The provisions of this subsection (d) will not apply to any limitation year or plan year when combined defined contribution and defined benefit plan limitations are not applicable under Code Section 415(e). ARTICLE 8 INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE 8.1 INVESTMENT FUNDS. The plan administrator may direct the trustee to establish two or more separate investment funds within the trust fund and to invest each such separate investment fund in different types or categories of assets (e.g., equities or fixed-income securities, or shares of specified mutual funds) or in accordance with investment objectives specified by the plan administrator. One such separate investment fund will consist of Biogen stock (as defined in Section 6.4), plus shares of a money market mutual fund (or similar cash equivalent investment) as are necessary to facilitate the operation of such Biogen stock investment fund. The plan administrator may add or delete separate investment funds at its discretion. The plan administrator will maintain records that reflect the portion of each account of a participant that is invested in each separate investment fund. The plan administrator may delegate such record keeping responsibilities or may contract with a service provider (which may be the trustee or an affiliate of the trustee) for record keeping services. The existence of such records and of participants' accounts will not be deemed to give any person any right, title or interest in or to any specific assets or part of the trust fund or any separate investment fund. 8.2 INVESTMENT DIRECTIONS AND TRANSFERS AMONG FUNDS. (a) INVESTMENT OF MATCHING CONTRIBUTIONS. (i) Except as provided in subsection (ii) below, the matching contributions account of each participant will be invested in the Biogen stock fund. (ii) A participant who is at least age 55 and who has four or more years of plan service may elect to transfer all or any of his matching contributions account invested in the Biogen stock fund to one or more of the other separate investment funds available for the investment of savings deposits accounts, and the participant may thereafter direct transfers of his matching contributions account among the investment funds available under the plan in accordance with the rules specified in subsection (c) below. In addition, an employee described in the preceding sentence may direct that any future matching contributions on his 12 behalf will be invested in one or more of the separate investment funds (other than the Biogen stock fund) available for the investment of savings deposits accounts. (b) INVESTMENT OF SAVINGS DEPOSITS AND ROLLOVERS. Each participant may direct the separate investment fund or funds in which his savings deposits accounts and rollover account will be invested. A participant may direct investment of these accounts on his behalf entirely in one investment fund or in a combination of two or more of the investment funds. In addition, the participant may direct transfers among the investment funds so that these accounts are invested entirely in one investment fund or in a combination of two or more of the investment funds. The participant will have sole responsibility for the investment of his savings deposits accounts, rollover account and, to the extent provided for in subsection (a) (ii) above, matching contribution account, and for transfers among the available investment funds, and no named fiduciary or other person will have any liability for any loss or diminution in value resulting from the participant's exercise of such investment responsibility. It is intended that Section 404(c) of ERISA will apply to a participant's exercise of investment responsibilities under this subsection. (c) MANNER AND TIME OF GIVING DIRECTIONS. A participant's directions governing the investment of his accounts under subsection (a) or (b) will be given in accordance with such rules and procedures as the plan administrator may from time to time establish and communicate to participants. A participant must give such investment directions when he first authorizes savings deposits or makes a rollover contribution. A participant may give new investment directions, changing the investment of his future savings deposits or rollovers or future matching employer contributions on the participant's behalf, or directing transfers among the investment funds, subject in each case to subsections (a) and (b) above. 8.3 VALUATION OF ASSETS AND CREDITING INVESTMENT EXPERIENCE. (a) IN GENERAL. As of each valuation date, the trustee will determine the fair market value of the plan's assets, relying upon such evidence of value as it deems appropriate. In performing such valuations, the trustee may include any accrued but unpaid dividends, interest or other items, but will not include any contributions or forfeitures to be allocated as of such valuation date as an asset of any participant's account. Investment income and gains and losses of the trust fund will be credited or debited to participants' accounts in proportion to the balances in such accounts as of the preceding valuation date, reduced by any charges against any such account since such preceding valuation. The last day of each plan year will be a valuation date, and the plan administrator may from time to time designate other valuation dates for all accounts or for specified accounts only (such as, by way of example, daily or monthly valuation dates for accounts invested exclusively in shares of open-end mutual funds and annual valuation dates for all other accounts). (b) OPEN-END MUTUAL FUNDS. Notwithstanding subsection (a) above, in the case of accounts that are invested exclusively in shares of open-end mutual funds, the valuation of such accounts will be performed separately from the valuation of the other accounts, and the value of such mutual fund shares as of any valuation date will be the net asset value as of such date determined by the mutual fund (with such adjustments, if any, as the mutual fund may make in accordance with its normal procedures as described in its prospectus). Any dividends or capital gains or other distributions on shares of a mutual fund allocated to a participant's account will be reinvested in shares and fractional shares of such mutual fund. (c) BIOGEN STOCK. Notwithstanding subsection (a) above, in the case of accounts that are invested in the Biogen stock fund, the valuation of such accounts will be performed separately from the valuation of the other accounts, and the value of a share of Biogen stock or a unit in such fund as of any valuation date will be its fair market value as determined in good faith by the trustee (subject to the following paragraph). Any cash dividends on shares of Biogen stock or a unit in such fund will be reinvested in additional shares of Biogen stock or units in such fund. 13 (d) At any time when Biogen stock (or any other employer security held by the plan or proposed to be purchased by the plan) is not readily tradable on an established securities market, all valuations of Biogen stock (or other employer security) will be performed by an independent appraiser (meeting the requirements of Code Section 401(a)(28)(C)), and the trustee's determination of the fair market value of Biogen stock (or such other employer security) will be based upon a valuation report of such independent appraiser. ARTICLE 9 LOANS TO PARTICIPANTS 9.1 LOANS TO PARTICIPANTS. (a) AVAILABILITY OF LOANS. Upon application by a participant, the trustee may be directed to make a loan to the participant from his savings deposits account(s) and rollover account. Loans will be available to each eligible participant on a reasonably equivalent basis under uniform, nondiscriminatory borrowing rules. Such borrowing rules must be formulated and administered so that the requirements of Code Section 72(p) for non-taxable loans, the applicable Department of Labor regulations on plan loans, and the following provisions of this section are satisfied. Any loan hereunder will bear a reasonable rate of interest and will be evidenced by a promissory note signed by the participant in such form as the plan administrator may require. The amount of any such loan will be withdrawn from the participant's accounts and the investment fund or funds in which the participant's accounts are invested in accordance with the borrowing rules. (b) BORROWING RULES. The borrowing rules may contain such requirements pertaining to loans as are deemed necessary or desirable and which are not specified herein. The borrowing rules may govern the procedures and cut-off dates for applying for loans hereunder and the terms of such loans, including (i) the number of loans that a participant may request in any year and the number of loans that may be outstanding at any time to a participant, (ii) any restrictions on re-borrowing not stated in this section, (iii) the interest rate in effect from time to time for loans or the method of ascertaining such interest rate, and (iv) the repayment schedule for loans or the method for determining the repayment schedule. (c) AMOUNT OF LOANS. The minimum loan amount is $1,000 or such lesser amount as the borrowing rules may from time to time provide. The maximum aggregate loan amount is based upon the vested balance in the participant's accounts. No participant loan will exceed the smallest of (i) the amount in the participant's savings deposits accounts and rollover account, (ii) one-half of the participant's vested account balances, or (iii) $50,000 (reduced by the highest outstanding loan balance to the participant during the 12 months preceding the loan). For purposes of applying such limits, account values as of the valuation date immediately preceding the date when the loan is made will be used. (d) Maximum Repayment Period. (i) OTHER THAN RESIDENTIAL LOANS. Except as provided in subsection (ii) below, the maximum term of a loan will be five years (provided that, if provided in the borrowing rules, there may be a shorter repayment period for small loans). (ii) RESIDENTIAL LOANS. If a participant requests a loan for the acquisition or construction of his principal residence, maximum the repayment period will be determined by reference to bank loans for the same purpose but may not exceed 10 years. (e) SECURITY FOR REPAYMENT. Each loan hereunder will be a participant-directed investment for the benefit of the participant requesting such loan; accordingly, any default in the repayment of principal or interest of any loan hereunder will reduce the amount available for distribution to such participant (or his beneficiary). Thus, any loan hereunder will be effectively and adequately secured by the vested amount in the participant's accounts. To the extent provided in the borrowing rules, other security for repayment of a loan may be required in any 14 instance. A participant receiving a loan must execute such instruments and must pay any fees for filings required to perfect any security interest in the participant's accounts or other security. (f) REPAYMENT. A participant may be required to execute an agreement to repay the principal and interest of a loan through regular payroll deduction payments from the participant's compensation. Back-up repayment procedures may be established for participants who do not make payroll deduction repayment. Except as otherwise may be permitted under Treasury regulations, any such back-up procedures will provide for substantially level amortization payments made quarterly or more frequently. Any loan hereunder may be prepaid, in accordance with the note or other document evidencing the loan. If a participant's service as an employee is terminated for any reason, the entire unpaid principal and interest of any loan then outstanding to such participant may become immediately due and payable in accordance with the note or other document evidencing the loan. (g) ACTION UPON DEFAULT. If a participant defaults on any payment of interest or principal of a loan hereunder or defaults upon any other obligation relating to such loan, the plan administrator may take (or direct the trustee to take) such action or actions as it determines to be necessary to protect the interests of the plan. Such actions may include commencing legal proceedings against the participant, or foreclosing on any security interest in the participant's accounts or other security given in connection with a loan hereunder; however, the plan administrator will not direct foreclosure on the participant's savings deposits accounts at a time when the participant would not be entitled to withdraw from such account under Section 10.1. (h) DISTRIBUTION TO PARTICIPANT WITH LOAN. In the case of any participant with a loan outstanding hereunder, the amount available for distribution to such participant (or his beneficiary) will consist of the portion of his accounts invested in the investment funds of the trust fund. In addition, the participant's note will be distributed to him (or his beneficiary), and the trustee will report the value of the note for income tax purposes as the amount of unpaid principal and interest due thereon at the date of distribution. 9.2 ACCOUNTING FOR LOANS. (a) SOURCE OF LOAN. The plan administrator will establish procedures and ordering rules for liquidating the participant's accounts to make a loan to him. (b) LOAN ACCOUNT. The plan administrator will establish and maintain a loan account for each borrowing participant. The unpaid principal and accrued but unpaid interest on the loans to a participant will be reflected for plan accounting purposes in the participant's loan account. Repayments by the participant will be credited to his loan account, and will then be transferred from his loan account to the participant's other accounts. ARTICLE 10 WITHDRAWALS AND DISTRIBUTIONS 10.1 IN-SERVICE WITHDRAWALS FROM SAVINGS DEPOSITS. (a) APPLICATION. A participant may apply to the plan administrator for a withdrawal from his basic and supplemental savings deposits accounts. Except as provided in subsection (d) below, such withdrawals will be available only in cases of financial hardship. The participant will file an application setting forth the specific immediate and heavy financial needs prompting his request and the amount needed to meet such immediate financial need. The minimum withdrawal amount is $100, and the maximum withdrawal amount is the lesser of (i) the total amount in the participant's basic and supplemental savings deposits (excluding any interest or earnings on such savings deposits--other than any such interest or earnings in the participant's basic and supplemental savings deposits accounts as of December 31, 1988 to the extent identifiable in the accounting records of the plan) or (ii) the amount needed to alleviate his financial hardship (including the amount reasonably expected to be needed for income taxes and penalties payable on the amount withdrawn). (b) FINANCIAL HARDSHIP DEFINED. Financial hardship means that a participant has an immediate and heavy financial need and that the withdrawal is necessary to meet the need. 15 (i) IMMEDIATE AND HEAVY FINANCIAL NEED. A withdrawal for an immediate and heavy financial need must be occasioned by: (A) medical expenses incurred or needed by the participant or his spouse or any of his dependents; (B) tuition and related educational fees for the next 12 months of post-secondary education for the participant, his spouse, child or dependent; (C) purchase of the participant's principal residence (not including mortgage payments); (D) rent or mortgage payments to prevent the participant's eviction from or the foreclosure of the mortgage on his principal residence; (E) such other event or circumstance as the Internal Revenue Service permits; or (F) any other extraordinary personal need which the plan administrator in its sole discretion may determine under uniform rules of general application. Financial need under (A) through (E) above will be deemed to be a financial hardship without evidence of the participant's other financial resources. (ii) NECESSITY OF WITHDRAWAL. A withdrawal will be deemed necessary to satisfy the participant's immediate and heavy financial need if either (A) the participant has made all non-hardship withdrawals available under Section 10.2 and obtained all non-taxable loans available under Section 9.1, the participant does not make savings deposits hereunder (or salary reduction contributions to any other deferred compensation or other plan sponsored by Biogen or any other employer, except a health or welfare plan) for a period of six months following the date of the withdrawal, and following the participant's resumption of savings deposits after such six-month period, the participant does not make basic or supplemental savings deposits hereunder that, when added to his basic or supplemental savings deposits during the calendar year of the withdrawal, exceed any special rules or regulations for the application of the limitation in Code Section 402(g) following such resumption of savings deposits; or (B) the participant satisfies such other requirements as may be prescribed by the Internal Revenue Service. (iii) EVIDENCE AND DETERMINATION OF FINANCIAL HARDSHIP. A participant must establish to the plan administrator's satisfaction both that the participant has an immediate and heavy financial need and that the withdrawal is necessary to meet the need. The participant may establish either need or necessity (or both) under the deemed method described in subsection (i) (A) through (E) and subsection (ii) above. If the participant does not elect to use the deemed method to determine immediate and heavy financial need under subsection (i) (A) through (E) above, the participant in his hardship withdrawal application must show facts and circumstances amounting to immediate and heavy financial need under subsection (i)(F) above. If the participant does not elect to use the deemed method to determine necessity under subsection (ii) above, the participant in his hardship withdrawal application must show that the participant lacks other reasonably available financial resources to meet the hardship need (for example, by borrowing on commercially reasonable terms or by reasonable liquidation of other assets of the participant) so that the participant has no reasonable recourse other than to satisfy such hardship need through a withdrawal from this plan. (iv) PLAN ADMINISTRATOR DETERMINATIONS. A participant's application for a hardship withdrawal may be in writing or transmitted by electronic means, on such form and containing such information (or other evidence or materials establishing the participant's financial hardship) as the plan administrator may require. In determining whether a participant has a financial hardship, the plan administrator may reasonably rely upon the participant's representations, including representations concerning his inability to meet the need through other resources such as insurance proceeds, reasonable liquidation of other assets, distributions or non-taxable loans from other plans, or borrowing from other sources on reasonable terms, or through cessation of savings deposits hereunder. The plan administrator's determination of the existence of and the amount needed to meet a financial hardship will be binding on the participant. (c) PAYMENT. If approved by the plan administrator, a hardship withdrawal will be paid to the participant as soon as practicable after the hardship withdrawal is approved by the plan administrator. Any such withdrawal will be paid first from the participant's supplemental savings deposits account and next from his basic savings deposits account. (d) EXCEPTIONS. The requirement for financial hardship will not apply to withdrawals requested by a participant in the following situations: (i) after the participant has reached age 59 1/2, or (ii) to remove supplemental 16 and basic savings deposits during a calendar year which, when added to savings deposits under Code Section 401(k) or salary reduction contributions under Code Section 403(b) during the same year to another plan, exceed the limits on elective deferrals under Code Section 402(g). A request to remove excess supplemental and basic savings deposits under (ii) above must be filed with the plan administrator no later than the March 1 following such calendar year. Such a withdrawal will be paid to the participant as soon as practicable after the filing of his request and will include income and investment gain or loss allocable to such withdrawn amount. 10.2 IN-SERVICE WITHDRAWALS FROM ROLLOVER ACCOUNT. (a) AMOUNT. A participant may elect to withdraw from his rollover account any amount he specifies from a minimum of $1,000 (or the amount in his rollover account if less) to a maximum of the total amount in that account. A withdrawal request under this section will be made in accordance with applicable rules and procedures adopted by the plan administrator. (b) PAYMENT. Such an in-service withdrawal by a participant will be paid to him as soon as practicable after the participant files the form requesting the withdrawal. 10.2A IN-SERVICE WITHDRAWALS FROM AFTER-TAX SAVINGS DEPOSITS ACCOUNT. (a) AMOUNT. A participant may elect to withdraw from his after-tax savings deposits account any amount he specifies from a minimum of $1,000 (or the amount in such account, if less) to a maximum of the total amount in such account. A withdrawal request under this section will be made in accordance with applicable rules and procedures adopted by the plan administrator. (b) PAYMENT. Such an in-service withdrawal by a participant will be paid to him as soon as practicable after the participant files the form requesting the withdrawal. 10.3 DISTRIBUTION UPON RETIREMENT OR DISABILITY. (a) AMOUNT AND TIME OF DISTRIBUTION. A participant who retires from service with his employer or terminates from such service because of disability will receive the total amount in his account. Subject to Section 10.5, distribution of his account will be made as soon as practicable after his retirement or disability. For plan years beginning January 1, 1997, and thereafter, a participant may elect to receive a distribution on the April 1 of the year following the calendar year in which the participant reaches age 70-1/2, or, if still an employee of Biogen, the participant may elect to defer receiving distributions until he/she retires from the employer. Such elections will be made in accordance with rules and procedures of the plan administrator. Notwithstanding the preceding sentence, in the case of a participant who is a 5% or greater stockholder of Biogen, distribution must be made no later than the April 1 of the year following the calendar year in which the participant reaches age 70 1/2. (b) RETIREMENT AND DISABILITY DEFINED. For purposes of this plan, retirement means a participant's termination of employment on or after his 55th birthday. Disability means a participant's inability to perform the normal duties of his position with his employer because of a physical or mental impairment. 10.4 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT. (a) AMOUNT AND TIME OF DISTRIBUTION. A participant who terminates employment for any reason other than retirement, disability or death will receive the vested portion of his accounts. Subject to Section 10.5, his vested accounts will be payable as soon as practicable after his termination of employment. (b) VESTED INTEREST. Except as provided in the next paragraph, a participant will be fully vested in his accounts under the plan at all times. 17 A participant who is an active employee will be fully vested in his matching contribution account on his 55th birthday. Before that date, such a participant will have a vested interest in that percentage of his matching contribution account specified in the following table based upon his number of years of plan service: Years of Plan Service Vested Percentage ------------ ----------------- Less than 1 0% 1 25% 2 50% 3 75% 4 or more 100% (c) FORFEITURE OF NON-VESTED INTEREST. The non-vested portion of a terminated participant's matching contribution account, if any, will be forfeited by him on the day after his termination of employment. If a terminated participant whose account was wholly or partially forfeited returns to employment with an employer within six years of his termination, the amount forfeited (without adjustment for interest or earnings) will be restored to his account (out of current forfeitures to the extent available) as soon as practicable after the date of his return. The dollar amount restored will equal the dollar value of the separate investment fund shares or units forfeited on the date of forfeiture, and such restored dollar amount will be invested in shares or units of the available separate investment funds at their then fair market value on the date of such restoration in accordance with the participant's investment instructions in effect on such date. 10.5 RIGHT TO DEFER. The plan administrator will notify a participant of his right to receive payment of his vested account balance as soon as practicable after his retirement, disability or other termination of employment. Notwithstanding the foregoing provisions of this article, if his vested account balance exceeds $5,000, the participant will be given the right to defer payment of his accounts to a later date. Distribution of a participant's accounts may be deferred to a date no later than the April 1 following the year in which such participant reaches age 70 1/2. A participant who deferred payment of his accounts may accelerate such payment by filing a notice with the plan administrator specifying the earlier distribution date. For purposes of determining whether a participant's account exceeds $5,000 hereunder and application of the involuntary cash-out rules under the plan, the participant's rollover contributions to the plan and any direct rollovers or transfers on the participant's behalf to the plan shall not be taken into account. 10.6 DISTRIBUTION UPON DEATH OF PARTICIPANT. (a) IN GENERAL. If a participant dies during employment (or after retirement or disability but before distribution of his accounts), his beneficiary will receive the total amount in his accounts. Distribution of such amount will be made as soon as practicable after the date the plan administrator receives such evidence of the participant's death and the right of any beneficiary to receive such payment as it deems necessary, but in no event later than the end of the year following the calendar year containing participant's date of death. If a participant dies following termination of employment but before the distribution of his vested interest, his beneficiary will receive the amount owing to the participant under Section 10.4. Payment to the beneficiary will be made in accordance with the last sentence of the preceding paragraph. (b) DESIGNATION OF BENEFICIARY. A participant may designate one or more beneficiaries to receive any distribution payable under subsection (a) above and may revoke or change such a designation at any time. If the participant names two or more beneficiaries, distribution to them will be in such proportions as the participant designates or, if the participant does not so designate, in equal shares. Any designation of beneficiary will be in writing on such form as the plan administrator may prescribe and will be effective upon filing with the plan administrator. 18 Notwithstanding the preceding paragraph, the sole beneficiary of a participant who is married immediately before his death will be the participant's surviving spouse unless the participant designated and the spouse consented in writing to such designation of another person as beneficiary. The spouse's consent must acknowledge the effect of such consent and be witnessed by a plan representative or a notary public. (c) NO DESIGNATION. Any portion of a distribution payable upon the death of a participant which is not disposed of by a designation of beneficiary under subsection (b) above, for any reason whatsoever, will be paid to the participant's surviving spouse if living at his death, otherwise to the participant's estate. (d) PAYMENT UNDER PRIOR DESIGNATION. The plan administrator may direct payment in accordance with a prior designation of beneficiary (and will be fully protected in so doing) if such direction (i) is given before a later designation is received, or (ii) is due to the plan administrator's inability to verify the authenticity of a later designation. Such a distribution will discharge all liability therefor under the plan. 10.7 MANNER OF PAYMENT. Payments to a participant under the plan will be distributed in cash. Notwithstanding the preceding sentence, at a participant's election, the portion of the participant's accounts invested in the Biogen stock fund will be paid to him or her in the form of whole shares of Biogen stock (with the value of any fractional share paid in cash). The number of shares of Biogen stock paid will be based upon the fair market value of a share of Biogen stock determined by the trustee in good faith (subject to the second paragraph of Section 8.3 (c)) as of the most recent practicable date preceding payment. 10.8 DIRECT ROLLOVERS. (a) APPLICABILITY OF THIS SECTION. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover (a distributee may designate only one eligible retirement plan to receive such a direct payment). (b) DEFINITIONS. The following definitions apply for purposes of this section. (i) ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion of the balance to the credit of the distributee under this plan, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); and any distribution made on account of hardship. The portion of a distribution consisting of employee after-tax contributions constitutes part of an eligible rollover distribution to the extent provided in subsection (v) below. If the distributee receives a distribution in the form of Biogen stock and cash, the cash distribution may be directly rolled over to an eligible retirement plan if such cash distribution qualifies as an eligible rollover distribution, and the sock distribution may be retained by the distributee. Alternatively, the entire distribution (cash and stock) may be directly rolled over to an eligible retirement plan by the distributee. However, an eligible rollover distribution will not include any distribution that is below any threshold amount established by applicable regulations (including any threshold amount for direct rollovers when only a portion of a distributee's distribution is being rolled over). In general, subject to any thresholds established under the last sentence of the preceding paragraph, as long as Section 10.7 provides for distributions to participants or beneficiaries only in the form of a lump sum payment, all distributions from the plan will be eligible rollover distributions (except the portion, if any, of such payment that constitutes a required minimum distribution under Code Section 401(a)(9)). 19 (ii) ELIGIBLE RETIREMENT PLAN means an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), an annuity contract or custodial account described in Code Section 403(b) and an eligible plan under Code Section 457 which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state, which agrees to accept the distributee's eligible rollover distribution and to separately account for amounts transferred into such plan from this plan. (iii) DISTRIBUTEE means an employee or former employee. In addition, an employee's or former employee's surviving spouse and an employee's or former employee's spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), is a distributee with regard to the interest of the spouse or former spouse. (iv) DIRECT ROLLOVER means payment by this plan to the eligible retirement plan specified by the distributee, with such payment being made in any manner permitted by applicable regulations. (v) For purposes of the direct rollover provisions contained in this Section 10.8(b) of the plan, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income; provided, however, such after-tax portion may be transferred only to an individual retirement account or annuity described in Code Section 408(a) or 408(b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) which provides for separate accounting for such amounts transferred and earnings thereon, including the portion of such distribution which is includible in gross income and the portion which is not includible in gross income. 10.9 REHIRE BEFORE DISTRIBUTION. If a former active participant is rehired before distribution of his accounts has been made, such distribution will be deferred until his subsequent termination of employment. ARTICLE 11 AMENDMENT, MERGER AND TERMINATION OF PLAN 11.1 AMENDMENT OF PLAN. At any time and from time to time, Biogen may amend or modify any or all of the provisions of the plan without the consent of any person, provided that no amendment will reduce any participant's nonforfeitable account balance as of the date such amendment is adopted (or its effective date if later), and provided further that no amendment will permit any part of the trust fund to revert to the employers or be used for or diverted to purposes other than for the exclusive benefit of participants or their beneficiaries, except as provided in Section 6.5. In addition, the plan administrator may, subject to the provisos contained in the preceding sentence, amend or modify any or all of the provisions of the plan other than an amendment that would materially affect the benefits of participants or that would materially increase the cost of maintaining the plan to the employers. 11.2 MERGER OF PLANS. A merger or consolidation with, or transfer of assets or liabilities to, any other plan will be permitted only if the benefit each participant would receive if such plan were terminated immediately after the merger, consolidation or transfer is not less than the benefit he would have received if this plan had terminated immediately before the merger, consolidation or transfer. 11.3 TERMINATION. Biogen has established the plan and the employers are maintaining the plan with the bona fide expectation and intention that they will be able to continue the plan and contributions thereto indefinitely, but they will not be under any obligation or liability whatsoever to continue contributions or maintain the plan for any particular length of time. Notwithstanding any other provision hereof, an employer in its discretion may discontinue contributions to the plan indefinitely or temporarily and Biogen may terminate this plan at any time. There will be no liability to any participant, beneficiary or other person as a result of any such discontinuance or termination. 20 An employer's failure to make contributions in any year or years will not operate to terminate the plan in the absence of formal action by Biogen to terminate the plan. 11.4 EFFECT OF TERMINATION. Upon complete discontinuance of contributions or termination or partial termination of the plan, the accounts of affected participants will become nonforfeitable. After termination of the plan, no employee will become a participant and no further savings deposits or contributions will be made hereunder on behalf of participants. The trustee will continue to hold the assets of the trust fund for distribution as directed by the plan administrator. The plan administrator will determine whether to direct the trustee to disburse the plan's assets as immediate benefit payments, to retain and disburse them in the future, or to follow any other procedure which it deems advisable. ARTICLE 12 NAMED FIDUCIARIES 12.1 IDENTITY OF NAMED FIDUCIARIES. (a) NAMED FIDUCIARIES. Biogen, the trustee, any investment manager appointed by Biogen, and the plan administrator will be the named fiduciaries under the plan and will control and manage the plan and its assets to the extent and in the manner indicated in this article and in the trust agreement. Any responsibility assigned to a named fiduciary will not be deemed to be a duty of a "fiduciary" (as defined in ERISA) solely because of such assignment. (b) PLAN ADMINISTRATOR. Biogen will be the "plan administrator" as defined in ERISA. 12.2 RESPONSIBILITIES AND AUTHORITY OF PLAN ADMINISTRATOR. The plan administrator will control and manage the operation and administration of the plan except to the extent that such responsibilities are specifically assigned hereunder to Biogen, to an investment manager or to the trustee. The responsibilities and authority of the plan administrator are set forth in detail in various articles of this plan and primarily in Article 13. 12.3 RESPONSIBILITIES AND AUTHORITY OF TRUSTEE. The trustee will manage and control the assets of the plan, except to the extent that such responsibilities are specifically assigned hereunder or under the trust agreement to Biogen or the plan administrator, or are delegated to one or more investment managers by Biogen, or are performed by a participant with respect to the investment of his accounts among the investment funds in the trust fund or with respect to his taking a loan from his accounts in accordance with the plan. The responsibilities and authority of the trustee are set forth in detail primarily in the trust agreement. 12.4 RESPONSIBILITIES OF BIOGEN. Biogen will have the following responsibilities and authority with respect to control and management of the plan and its assets: (a) to amend or terminate the plan; (b) to merge or consolidate the plan with, or transfer all or part of the assets or liabilities to, any other plan; (c) to appoint, remove and replace the trustee and the plan administrator and to monitor their performances; (d) to appoint, remove and replace one or more investment managers, or to refrain from such appointments, and to monitor their performance; (e) to communicate such information to the plan administrator, trustee and investment managers as they may need for the proper performance of their duties; and 21 (f) to perform such additional duties as are imposed by the plan or by law. The responsibilities and authority of Biogen are set forth in further detail in the various articles of the plan and in the trust agreement. 12.5 RESPONSIBILITIES NOT SHARED. Except as otherwise provided herein or required by law, each named fiduciary will have only those responsibilities that are specifically assigned to it hereunder, and no named fiduciary will incur liability because of improper performance or nonperformance of responsibilities assigned to another named fiduciary. 12.6 DUAL FIDUCIARY CAPACITY PERMITTED. Any person or group of persons may serve in more than one fiduciary capacity, including service both as trustee and plan administrator. 12.7 ACTIONS BY BIOGEN. Wherever the plan specifies that Biogen is required or permitted to take any action, such action will be taken by its board of directors, or by a duly authorized committee thereof, or by one or more directors, officers, employees or other persons duly authorized to do so by the board of directors. 12.8 PROCEDURE FOR ALLOCATION AND DELEGATION OF RESPONSIBILITIES. The plan administrator or the members of the board of directors of Biogen or of a committee of such board may allocate their responsibilities among themselves in any reasonable manner and may delegate any of their responsibilities to any other person or persons by so specifying in a written instrument. No plan administrator or director will be liable for the improper discharge or nonperformance of any responsibility so allocated or delegated to another person except to the extent liability is imposed by law. 12.9 ADVICE. A named fiduciary may employ or retain such attorneys, accountants, investment advisors, consultants, specialists and other persons or firms as it deems necessary or desirable to advise or assist it in the performance of its duties. Unless otherwise provided by law, the fiduciary will be fully protected with respect to any action taken or omitted by him or it in reliance upon any such person or firm rendered within his or its area of expertise. 12.10 INDEMNIFICATION. To the extent permitted by law and not prohibited by Biogen's charter and by-laws, Biogen will indemnify and hold harmless every individual serving as a fiduciary (whether a named fiduciary or otherwise), and the estate of such an individual if he is deceased, from and against all claims, loss, damages, liability, and reasonable costs and expenses, incurred in carrying out his fiduciary responsibilities, unless due to the gross negligence, bad faith or willful misconduct of such individual; provided that counsel fees and amounts paid in settlement must be approved by Biogen and provided further that this Section 12.10 will not apply to any claim, loss, damages, liability, or costs and expenses which are covered by a liability insurance policy maintained by Biogen, or by the plan or by an individual fiduciary. The preceding sentence will not apply to a corporate trustee, an insurance company, an investment manager or outside service provider (or to an employee of any of the foregoing) unless Biogen otherwise specifies in writing. ARTICLE 13 THE PLAN ADMINISTRATOR 13.1 APPOINTMENT. Biogen will appoint a plan administrator to perform the duties of the plan administrator in accordance with the plan. The plan administrator may be an individual or the plan administrator may be a committee. The individual plan administrator or the committee members may, but need not, be plan participants or employees or officers of Biogen. If a committee, the number of persons serving on the committee at any time will be determined by Biogen, and may be changed from time to time by Biogen. Biogen may remove any person serving as plan administrator or committee member at any time, with or without cause, by filing written notice of his removal with such person and the trustee. A person serving as plan administrator or committee member may resign at any time by filing his written resignation with Biogen and the trustee. If a person who is serving as plan administrator or committee 22 member is an employee of Biogen, such person's appointment as plan administrator or committee member will automatically terminate when such person is no longer an employee of Biogen. A vacancy, however arising, will be filled by Biogen. In the event Biogen does not designate an individual as plan administrator or appoint a committee pursuant to this section, the Director of Human Resources (or the official performing the duties thereof) will be the plan administrator hereunder shall have all the same functions of the plan administrator. 13.2 NOTICE TO TRUSTEE. Biogen will notify the trustee in writing of the appointment of each person serving as plan administrator or committee member, and the trustee may assume such appointment continues in effect until written notice to the contrary is given by Biogen. 13.3 ADMINISTRATION OF PLAN. The plan administrator will have all powers and authority necessary or appropriate to carry out its responsibilities with respect to the operation and administration of the plan. It will have discretion to interpret and apply all plan provisions and may correct any defect, supply and omission or reconcile any inconsistency or ambiguity in such manner as it deems advisable. It will in its discretion make all final determinations concerning eligibility, benefits and rights hereunder, and all other matters concerning plan administration. All determinations and actions of the plan administrator will be conclusive and binding upon all persons, except as otherwise provided herein or by law, and except that the plan administrator may revoke or modify a determination or action previously made in error. Any action or omission by the plan administrator will be subject to review (by a court or otherwise) only for an abuse of discretion. 13.4 REPORTING AND DISCLOSURE. The plan administrator, acting as agent of Biogen in its capacity as ERISA plan administrator, will prepare, file, submit, distribute or make available any plan descriptions, reports, statements, forms or other information to any government agency, employee, former employee, or beneficiary as may be required by law or by the plan. 13.5 RECORDS. The plan administrator will record its acts and decisions, and keep all data, records, books of account and instruments pertaining to plan administration, which will be subject to inspection or audit by Biogen at any time. The employers will supply all information required by the plan administrator to administer the plan, and the plan administrator may rely upon the accuracy of such information. 13.6 COMPENSATION AND EXPENSES. The plan administrator will serve without compensation unless otherwise determined by Biogen, provided that in no event will an employee of an employer be compensated for his services as a plan administrator. All reasonable expenses of administering the plan will be paid out of the trust fund unless paid by the employers at the option of Biogen (with each employer bearing such share of the expenses that Biogen specifies). Such expenses include the compensation of all persons employed or retained by the plan administrator, premiums for bonds and insurance protecting the plan or trust fund and required by law or deemed advisable by the plan administrator, and all other costs of plan administration. 13.7 DECISIONS, RULES AND REGULATIONS. When the plan administrator is a committee, any action or decision concurred in by a majority of the members, either at a meeting or in writing without a meeting, will constitute an action or decision of the plan administrator. No plan administrator may act or vote on any matter which relates exclusively to himself. The plan administrator may adopt and amend such rules for the conduct of its business and may adopt, promulgate and amend any and all such rules relating to the administration of the plan, including, but not limited to, rules relating to plan enrollment periods, forms and procedures, elections, notice requirements, claims other rules and procedures it deems, with the discretionary powers granted to it under Section 13.3 of this Article, advisable to administer the plan. 13.8 SECRETARY. If the plan administrator is a committee, the committee at its option may appoint any member or other person to serve as secretary, and may remove him at any time. The committee will notify the trustee in writing of such appointment, and the trustee may assume his appointment as secretary continues until 23 written notice to the contrary is given by the committee. The secretary, or a majority of the committee members then in office, will have the authority to execute all instruments or memoranda necessary or appropriate to carry out the actions and decisions of the whole committee; and any person may rely upon any instrument or memorandum so executed as evidence of the committee action or decision indicated thereby. 13.9 CLAIMS REVIEW PROCEDURE. Any request for benefits (the "CLAIM") by a participant or his beneficiary (the "CLAIMANT") will be filed with the plan administrator. Within a reasonable period after receipt of a claim, the plan administrator will provide written notice to any claimant whose claim has been wholly or partly denied, including: (a) the reasons for the denial, (b) the plan provisions on which the denial is based, (c) any additional material or information necessary to perfect the claim and the reasons it is necessary, and (d) the plan's claims review procedure. A claimant will be given a full and fair review by the plan administrator of the denial of his claim if he requests a review in writing within 60 days after notification of the denial. The claimant may review pertinent documents and may submit issues and comments orally, in writing, or both. The plan administrator will render its decision on review promptly and in writing and will include specific reasons for the decision and reference to the plan provisions on which the decision is based. ARTICLE 14 MISCELLANEOUS 14.1 QUALIFIED DOMESTIC RELATIONS ORDERS. (a) A qualified domestic relations order (QDRO) is a judgment, decree, or order which meets the requirements of Code Section 414(p). An alternate payee is an individual named in the QDRO who is to receive some or all of the participant's benefit. (b) Upon receipt of any domestic relations order, the plan administrator will notify the participant involved and each alternate payee under the order (and under any previous QDRO relating to the participant's benefits). The plan administrator will determine whether the order is a QDRO and will notify each affected individual of its determination. In general, subject to the provisions of Code Section 414(p), the plan's claims procedure rules under Section 13.9 apply to this determination and any subsequent determination relating to the order. To the extent permitted by law, the plan administrator's determination that an order is or is not a QDRO is final. Any subsequent change in this determination is applied only prospectively unless the plan administrator rules otherwise. (c) If an order is determined to be a QDRO, the provisions of the QDRO will take precedence over any conflicting provisions of the plan (including Section 14.2 relating to non-alienation of benefits). To the extent provided in a QDRO, a former spouse will be treated as the spouse or surviving spouse of a participant for purposes of the death benefit provisions of Section 10.6 and any other relevant provision of the plan. The plan administrator may carry out the requirements of a QDRO and may make distribution to an alternate payee in accordance with a QDRO regardless of the age of the participant and regardless of whether the participant himself would be eligible to receive a distribution at such time. 14.2 NONALIENATION OF BENEFITS. No benefit, right or interest hereunder of any person will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, or to seizure, attachment or other legal, equitable or other process, or be liable for, or subject to, the debts, liabilities or other obligations of such person, except that the plan administrator may prescribe rules for the payment of benefits in accordance with a qualified domestic relations order as defined in Section 14.1, and except that payments may be made from a participant's account to the extent required under Code Section 410(a)(13) and the regulations thereunder. 14.3 PAYMENT TO MINORS AND INCOMPETENTS. If the plan administrator deems any person incapable of giving a binding receipt for benefit payments because of his minority, illness, infirmity or other incapacity, it may direct payment directly for the benefit of such person, or to any person selected by the plan administrator to disburse it. Such payment, to the extent thereof, will discharge all liability for such payment under the plan. 24 14.4 CURRENT ADDRESS OF PAYEE; UNCLAIMED PAYMENTS. Any person entitled to benefits is responsible for keeping the plan administrator informed of his current address at all times. The plan administrator, trustee and the employers have no obligation to locate such person, and will be fully protected if all payments and communications are mailed to his last known address as shown on the records of his employer, or are withheld pending receipt of proof of his current address and proof that he is alive. If a communication from the plan has been mailed to the participant's or beneficiary's last known address and is returned with no forwarding address or if the check for a plan distribution is not cashed, and if the participant (or his beneficiary) makes no claim for such benefit, the participant's benefit will be forfeited and reallocated to other participants when a period of three years less one day has elapsed since such communication or benefit payment check was mailed. If the participant (or his beneficiary) subsequently makes a claim for such benefit, the amount that was forfeited (without investment earnings or gains or losses) will be restored and such amount will be distributed to the participant (or beneficiary). Such restoration will be made first using any available forfeitures and second (to the extent necessary) using a contribution by the participant's employer. 14.5 DISPUTES OVER ENTITLEMENT TO BENEFITS. If two or more persons claim entitlement to payment of the same benefit hereunder, the plan administrator in its discretion may withhold payment of such benefit until the dispute has been determined by a court of competent jurisdiction or has been settled by the persons concerned. 14.6 PAYMENT OF BENEFITS. Unless he elects otherwise (but subject to the requirements of Section 10.5), a participant's benefit payments under the plan will begin no later than 60 days after the close of the plan year in which the latest of the following dates occurs: (a) the date he terminates service with his employer; (b) his 65th birthday; and (c) the tenth anniversary of the year in which he began participating in the plan. 14.7 TOP-HEAVY PLAN PROVISIONS. (a) APPLICABILITY OF SECTION. This section is included in the plan to meet the requirements of Code Section 416, and the provisions of this section will be operative only if, when and to the extent that Code Section 416 applies to the plan. At such time as the requirements of Code Section 416 apply to the plan because the plan is top-heavy as defined in subsection (b)(i) below, the provisions of this section will apply and will govern over any contrary provision of the plan. (b) Definitions. (i) The plan will be TOP-HEAVY for a plan year if, as of the determination date, the sum of the aggregate amount in the accounts of participants who are key employees exceeds 60 percent of such amount determined for all participants in this plan. Notwithstanding the preceding paragraph, if the plan is included within a required or permissive aggregation group, the plan will be top heavy for a plan year if, as of the determination date, the sum of (A) the aggregate amount in the accounts of participants who are key employees (including all defined contribution plans within such group) and (B) the aggregate present value of cumulative accrued benefits of participants who are key employees (including all defined benefit plans within such group), exceeds 60 percent of such amount determined for all participants in all such plans. In determining the amounts in participants' accounts and present values of accrued benefits under the preceding two paragraphs, (V) the present value of accrued benefits will be based on the actuarial assumptions used to determine the minimum funding requirements of Code Section 412(b); if there is more than one defined benefit plan in the aggregation group, each plan will use the same actuarial assumptions for purposes of the top heavy test, as determined by the actuary; (W) distributions made during the one-year period (five-year period in the case of any in-service withdrawal) ending on the determination date will be taken into account (X) rollover contributions after December 31, 1983, will be taken into account only to the extent provided in regulations under Code Section 416(g)(4)(A); (Y) account balances and accrued benefit values of a person who was but no longer is a key employee will be disregarded; and (Z) account balances and accrued benefit values of any individual who has not performed any services for an 25 employer and received compensation therefor (other than benefits under a deferred compensation plan) at any time during the one-year ending on the determination date will be disregarded. (ii) THE DETERMINATION DATE for purposes of determining whether the plan is top-heavy under subsection (i) for a particular plan year is the last day of the preceding plan year. In the case of the first plan year, the determination date is the last day of that year. (iii) A KEY EMPLOYEE is any employee or former employee (including a beneficiary of such an employee) who at any time during the plan year or any of the four preceding plan years was: (A) an officer of an employer having annual compensation greater than $130,000 (adjusted in accordance with Code Section 416(i) and any regulations thereunder) for such plan year (but no more than the lesser of 50 employees or 10% of all employees will be taken into account under this subsection (A) as key employees); (B) a person owning (or considered as owning within the meaning of Code Section 318) more than 5% of the outstanding stock of his employer (or any direct or indirect parent of his employer) or stock possessing more than 5% of the total combined voting power of all such stock; or (C) a person who has annual compensation from his employer of more than $150,000 and who would be described in subsection (C) above if 1% were substituted for 5%. For purposes of applying Code Section 318 to the provisions of this subsection (iii), subparagraph (C) of Code Section 318(a)(2) will be applied by substituting "five percent" for "50 percent". In addition, the rules of Code Section 414 (b), (c) and (m) will not apply for purposes of determining ownership under subsections (C) and (D) above. (iv) A NON-KEY EMPLOYEE is any employee in the plan (including a beneficiary of such an employee) who is not a key employee under subsection (iii) above. (v) A REQUIRED AGGREGATION GROUP includes all qualified plans of the employers in which a key employee participates and each other qualified plan of the employers that enables any of such plans to meet the requirements of Section 401(a)(4) or Section 410 of the Code. A permissive aggregation group includes (in addition to plans in a required aggregation group) any plan which Biogen designates for inclusion provided that inclusion of such plan does not cause the group to fail the requirements of Section 401(a)(4) or Section 410 of the Code. (c) MINIMUM CONTRIBUTION. For any plan year in which the plan is top-heavy, the employers will make a minimum contribution on behalf of each non-key employee who has satisfied the requirements of Section 4.2 (and who is therefore eligible to make savings deposits) equal to 3% of his total compensation (as defined in Section 7.6(a)). However, the minimum contribution called for under the preceding sentence will not exceed the contribution (determined as a percentage of his total compensation) for such plan year under this plan (and any other defined contribution plan included in an aggregation group with this plan) on behalf of the key employee for whom such contribution is the highest. Also, such minimum contribution will take into account any savings deposits and matching contributions by such employee during such plan year, and will be reduced as permitted under regulations under Code Section 416 to reflect contributions on behalf of or benefits accrued by such non-key employee under any other plan maintained by the employers. 14.8 RULES OF CONSTRUCTION. 26 (a) A word or phrase defined or explained in any section or article has the same meaning throughout the plan unless the context indicates otherwise. (b) Where the context so requires, the masculine includes the feminine, the singular includes the plural, and the plural includes the singular. (c) Unless the context indicates otherwise, the words "herein", "hereof", "hereunder", and words of similar import refer to the plan as a whole and not only to the section in which they appear. 14.9 TEXT CONTROLS. Headings and titles are for convenience only, and the text will control in all matters. 14.10 APPLICABLE STATE LAW. To the extent that state law applies, the provisions of the plan will be construed, enforced and administered according to the laws of the Commonwealth of Massachusetts. 14.11 PAPERLESS ADMINISTRATION. The plan administrator may establish procedures whereby an electronic or voice recognized authorization or election or election made by a participant may be acceptable under the plan in lieu of filing a written form as may otherwise be required under the plan. In such event, any reference in the plan to a written form shall be deemed to include such other authorization or election. 14.12 CORRECTION OF MISTAKES IN PLAN OPERATION. If as a result of a mistake in plan operation or administration (including by way of illustration and not by way of limitation, the omission of an employee who should have become a participant, the inclusion of an employee as a participant who should not have become a participant, the crediting of the wrong amount to a participant's accounts, and similar mistakes), the plan administrator may take such steps as the plan administrator determines are necessary or proper to correct the mistake (i.e., to put the affected participant(s) in the same position he would have been in if the mistake had never occurred). In so doing, the plan administrator may apply a correction methodology promulgated in any program of the IRS such as the Employee Plans Compliance Resolution System (EPCRS) or any successor or replacing program or other similar program. 14.13 VETERANS' RIGHTS. Notwithstanding any provision of this plan to the contrary, contributions and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u). Executed on December 31, 2001. BIOGEN, INC. By: /s/ Frank A. Burke, Jr. ------------------------------------------ Frank A. Burke, Jr. Executive Vice President - Human Resources 27 APPENDIX A ---------- Plan Amendments --------------- 1. The plan was amended by the First Amendment effective as of January 1, 1987. 2. The plan was amended by the Second Amendment effective as of December 30, 1989. 3. The plan was amended by the Third Amendment effective generally as of January 1, 1989. 4. The plan was amended by the Fourth Amendment effective as of December 6, 1991. 5. The plan was amended by the Fifth Amendment effective generally as of April 1, 1994. 6. The plan was amended by the Sixth Amendment effective generally as of May 1, 1995. 7. The plan was amended by the Seventh Amendment effective as of January 1, 1996 8. The plan was amended and restated in its entirety by the Eighth Amendment, effective as of January 1, 1997. 9. The plan was amended by the Ninth Amendment, effective as stated therein. 10. The plan was amended by the Tenth Amendment with various effective dates recited therein (amendments to comply with SBJPA `96, TRA `97 and IRRA `98, and various other amendments. Notwithstanding Section 1.5, and the amendment to Section 10.5 (increasing the cash out threshold from $3,500 to $5,000) will apply to participants who terminated employment with the Employer before January 1, 1999 and whose vested account balances on January 1, 1999 do not exceed $5,000; under amended Section 10.5, such participants will receive payment of their vested account balances. The amendment to Section 4.1(a) (clarifying that an individual classified as a consultant or contractor, etc. is not considered an employee or regular employee for purposes of the plan and therefore is not eligible to participate in the plan) is a clarification of existing plan requirements, and it is not intended to and does not create any implication that, prior to the Tenth Amendment, such an individual might have been eligible to participate in the plan. 11. The plan was amended by the Eleventh Amendment, effective as of April 1, 1999 (changes related to entry dates). 12. The plan was amended by the Twelfth Amendment effective August 1, 2000. 13. The plan was amended and restated by the Thirteenth Amendment and Restatement, effective generally as of January 1, 2002 (with other effective dates as specified therein) (changes to reflect the Economic Growth and Tax Relief and Reconciliation Act of 2001 and other changes). 28 APPENDIX B ---------- Participating Employers ----------------------- Biogen U.S. Corporation Biogen U.S. Limited Partnership 29 EX-10.47 12 b45372biexv10w47.txt EX-10.47 EXECUTIVE SEVERANCE EXHIBIT 10.47 EXECUTIVE SEVERANCE -- SENIOR/EXECUTIVE VICE PRESIDENT As a Senior Vice President or Executive Vice President, 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 at Biogen's expense of your participation in Biogen's group medical and dental insurance plans. The lump sum payment, equivalent to at least nine months of annual base salary and a prorated portion of your target annual performance bonus, will be calculated as follows: [9 + (A x 2)] x B = lump sum payment where: A is number of full years of service with Biogen, but (A x 2) not more than 9 B is monthly annual compensation (i.e., one-twelfth of sum of annual base salary plus target annual performance bonus modified by 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 participation in Biogen's group medical and dental insurance plans will continue until the earlier of (x) the date you become eligible to participate in the medical and dental insurance plans of a third party employer or (y) the date that is [9 + (A x 2)] 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 example: If your employment with Biogen is terminated after two months, you will receive a lump sum payment equal to nine months of your monthly annual compensation and continue to participate in Biogen's group medical and dental plans for nine months, unless you become eligible to participate in a third party employer's medical and dental plans before that date. If your employment with Biogen is terminated after five years, you will receive a lump sum payment equal to 18 months of your monthly annual compensation and continue to participate in Biogen's group medical and dental plans for 18 months, unless you become eligible to participate in a third party employer's medical and dental plans before that date. For purposes of the severance arrangement, "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. EX-10.48 13 b45372biexv10w48.txt EX-10.48 LETTER AGREEMENT DATED MAY 19, 1998 [BIOGEN LETTERHEAD] EXHIBIT 10.48 May 19, 1998 REVISED Ms. Sylvie Gregoire 78 rue Charles Laffitte 92200 Neuilly Sur Seine FRANCE Dear Sylvie: This letter confirms our discussion regarding your temporary transfer to the US headquarters in the role of Program Executive. Your annual salary will be $140,000 with continued participation in the Executive Bonus Plan. As in the past, you will be eligible to receive a target bonus of fifteen (15) percent of base salary. To facilitate your move from Paris to Boston, a relocation package will be provided which includes the movement of your household/personal effects, the services of a relocation firm, and reimbursement of all reasonable expenses associated with your move. This includes real-estate agent, legal and other closing costs associated with the purchase of your new residence in the Boston area; and up to 60 days temporary living in the Boston area pending the availability of your new residence. To further assist you with your relocation, Biogen will provide you with a one time relocation payment of $20,000. You will be entitled to participate in the US benefits program and you will be able to choose from a menu of benefit options through our flexible benefits program, BioChoice. These include health care, life, dependent life, and disability insurance as well as two flexible spending accounts, Med-Flex and D-Flex, for eligible medical or dependent care expenses. At the beginning of the calendar quarter following your date of transfer, you will be eligible to participate in Biogen's pension and 401(k) savings plans. You are also entitled to fifteen (15) vacation days. Biogen also offers a variety of additional benefits including group homeowners and automobile insurance. As part of your benefits package, Biogen will provide you assistance for tax planning and support of your 1998 tax returns. Your eligibility for and participation in the European benefit programs will cease upon your transfer to the US headquarters. As discussed, upon your transfer to Cambridge, the Company will subsidize the tuition costs for your son to attend the French school for up to two years ($8,500 per year). To facilitate your temporary transfer to the US headquarters, Biogen will provide counsel and assistance to you and your household members in securing the necessary documentation to reside and work in the United States. I understand Biogen's immigration counsel already has contacted you to address this matter. On behalf of Jim Tobin, congratulations and best wishes for continued success at Biogen. Sincerely, /s/ Frank A. Burke, Jr. ---------------------------------------- Frank A. Burke, Jr. Vice President, Human Resources /bk cc: Mr. James R. Tobin EX-10.49 14 b45372biexv10w49.txt EX-10.49 LETTER AGREEMENT DATED AUGUST 8, 2001 [BIOGEN LETTERHEAD] EXHIBIT 10.49 August 8, 2001 Ms. Sylvie Gregoire 9 Prospect Street Winchester, MA 01890 Dear Sylvie: I am pleased to advise you that the Compensation and Management Resources Committee has approved your appointment as Executive Vice President, Technical Operations, reporting to me. Effective July 19, 2001, your annual base salary is increased to $325,000 and your target bonus is increased to 50% of base salary under Biogen's management incentive plan. Effective August 8, 2001, the Stock and Option Plan Administration Committee has granted you an option to purchase up to 150,000 shares of Biogen's common stock, with a four year, straight-line vesting schedule. You will next be eligible for both a salary adjustment and merit stock option grant at year-end 2002. On behalf of the Board of Directors, please accept our congratulations and best wishes for success in this important new role. I look forward to your significant leadership and contributions as we continue to build Biogen. Best personal regards. Sincerely, /s/ James C. Mullen ---------------------------------------- James C. Mullen President and Chief Executive Officer JCM:bk cc: Personnel File EX-10.50 15 b45372biexv10w50.txt EX-10.50 LETTER AGREEMENT DATED OCTOBER 19, 2001 EXHIBIT 10.50 VICE PRESIDENT, HUMAN RESOURCES October 19, 2001 Sylvie Gregoire 9 Prospect Street Winchester, MA 01890 Dear Sylvie: On July 19, 2001, you were promoted to the Executive Vice President level of Biogen. At that time we were in the process of conducting a comprehensive review of the compensation and benefits associated with your promotion. I am pleased to confirm the full list of benefits that accompany this promotion. TARGET BONUS: Your incentive target is 50% of your base salary. LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and granting stock options to employees. You will be eligible for an annual merit stock option grant, based on a design which emphasizes the future expected value of the grant. The details of how we will communicate and value options will be outlined in December. CHANGE OF CONTROL: You have been designated as a "Designated Employee" for purposes of Biogen's 1985 Non-Qualified 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. VACATION: You are entitled to an additional week of vacation each year. This w~k is over and above the company's normal vacation schedule (which is based upon years of service). SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows participants to defer [pretax] base salary and future bonuses. Enrollment in this plan takes place in December each year. You will be provided additional information on the plan at that time. LIFE INSURANCE: You will have life insurance coverage that is the greater of $1,000,000 or three times your annual salary and subject to the normal medical standards of the life insurance policy. SEVERANCE: You will have a minimum severance benefit that is the greater of the severance outlined in your letter dated January 7, 2000 or the severance outlined in the Executive Severance document, which has been included with this letter. EXECUTIVE STOCK OWNERSHIP: You will be expected to acquire and maintain a personal financial interest in Biogen. Ownership is defined as stock held outright, stock held in the 401(k) plan and stock held under the Employee Stock Purchase Plan. Vested but unexercised shares would also be counted toward ownership guidelines. You will be required to maintain a financial interest of six times base salary. You will have a five-year period from the date of your appointment to Vice President to obtain this ownership level. TAX PREPARATION: You are eligible to have your federal and state income taxes prepared by PricewaterhouseCoopers. On behalf of Jim Mullen, please accept my sincere congratulations and best wishes for future success with Biogen. Sincerely, /s/ Frank A. Burke, Jr. Frank A. Burke, Jr. /bk Attachment EX-13 16 b45372biexv13.htm EX-13 FINANCIAL STATEMENTS FROM 2001 ANNUAL REPORT

Exhibit 13

Financials

Biogen, Inc. and Subsidiaries

2	Selected Financial Data
3	Management’s Discussion and Analysis of Financial Condition and Results of Operations
15	Consolidated Statements of Income
16	Consolidated Balance Sheets
17	Consolidated Statements of Cash Flows
18	Consolidated Statements of Shareholders’ Equity
19	Notes to Consolidated Financial Statements
35	Report of Independent Accountants
36	Senior Executive and Board Members
37	Shareholder Information

1

Selected Financial Data
Biogen, Inc. and Subsidiaries

(in thousands, except per share amounts)

Years Ended December 31,	2001		2000		1999		1998		1997
Product revenue	$	971,594	$	761,079	$	620,636	$	394,863	$	239,988
Royalty revenue		71,766		165,373		173,799		162,724		171,921
Total revenues		1,043,360		926,452		794,435		557,587		411,909
Total costs and expenses		683,162		598,096		478,184		366,948		285,787
Income before income taxes		389,497		487,105		329,016		210,193		148,968
Net income		272,683		333,577		220,450		138,697		89,167
Diluted earnings per share		1.78		2.16		1.40		0.90		0.58
Cash, cash equivalents and short-term marketable securities		798,107		682,412		654,539		516,914		440,088
Total assets		1,721,046		1,431,856		1,277,973		924,715		813,825
Long-term debt, less current portion		42,297		47,185		52,073		56,960		61,846
Shareholders’ equity		1,348,832		1,106,402		979,530		718,613		536,293
Shares used in calculating diluted earnings per share		152,916		154,602		157,788		154,270		152,999

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Management’s Discussion and Analysis of Financial Condition and Results of Operations
Biogen, Inc. and Subsidiaries

Overview

Biogen, Inc. (the “Company” or “Biogen”) is a biopharmaceutical company principally engaged in the business of developing, manufacturing and marketing drugs for human health care. The Company currently derives revenues from sales of its AVONEX® (Interferon beta-1a) product for the treatment of relapsing forms of multiple sclerosis (“MS”). The Company also derives revenue from royalties on sales by the Company’s licensees of a number of products covered under patents controlled by the Company.

Results of Operations 2001 As Compared to 2000

Revenues

Total revenues in 2001 were $1,043.4 million, as compared to $926.5 million in 2000, an increase of $116.9 million or approximately 13%.

Product sales in 2001 were $971.6 million as compared to $761.1 million in 2000, an increase of $210.5 million or approximately 28%. Product sales from AVONEX represented approximately 93% of the Company’s total revenues in 2001 as compared to 82% in 2000. The growth in 2001 was primarily attributable to an increase in the sales volume of AVONEX in the United States and in the fifteen member countries of the European Union (“EU”). AVONEX sales outside of the United States were approximately $260.5 million in 2001 as compared to $208.5 million in 2000. The Company expects sales from AVONEX outside the United States to continue to increase as a percentage of total product sales. The Company, however, expects to face increasing competition in the MS marketplace in and outside the United States from existing and new MS treatments that may impact sales of AVONEX. In the United States, Biogen expects future growth in AVONEX revenues to be dependent to a large extent on the Company’s ability to compete successfully with Serono, Inc. (“Serono”) and its REBIF® interferon beta 1a product which was launched in the United States in March 2002 as a treatment for relapsing/remitting MS. The FDA approved REBIF for sale in the United States over a year before the expiration of AVONEX’s orphan drug marketing exclusivity. Biogen expects Serono to compete aggressively in the United States market. REBIF is already on the market in the EU. See “Outlook – Competition”.

Revenues from royalties in 2001 were $71.8 million, a decrease of $93.6 million or approximately 57% as compared to $165.4 million of royalty revenue in 2000. Revenues from royalties represented approximately 7% of total revenues in 2001 as compared to 18% in 2000. The decrease in royalty revenues in 2001 over the comparable period in 2000 is primarily attributable to expiration of Biogen’s alpha interferon patents in most of Europe and in Japan and a dispute, currently in arbitration, with Schering-Plough Corporation (“Schering-Plough”) over royalties payable by Schering-Plough on U.S. sales of its alpha interferon products, and, to a lesser extent, attributable to lower licensee sales. See “Outlook – Royalty Revenue” and “Outlook – Patents and Other Proprietary Rights”.

Biogen expects the low end of the range of potential royalty revenues in 2002 to be consistent with 2001. The low end of the range excludes amounts that are subject to the dispute with Schering-Plough. As noted above, Biogen is currently in arbitration with Schering-Plough on the issue of whether and to what extent Schering-Plough has an obligation to pay royalties in the United States on sales of its alpha interferon product. See “Outlook – Royalty Revenue.” If Biogen were to prevail in this arbitration in 2002, Biogen expects that royalty revenues from Schering-Plough in 2002 would be higher than in 2001. Royalty revenues would also be higher in 2002 than in 2001 if Schering-Plough commences payments of royalties on sales of alpha interferon products in the United States based on issuance of a Roche/Genentech patent. See “Outlook-Royalty Revenues”. In addition, royalty revenues may fluctuate as a result of fluctuations in sales levels of products sold by the Company’s licensees from quarter to quarter due to the timing and extent of major events such as new indication approvals or government sponsored programs. For a discussion of some of the other factors that may affect royalty revenues in the future, see “Outlook – Royalty Revenue” and “Outlook – Patents and Other Proprietary Rights”. The Company expects product sales as a percentage of total revenues to continue to increase in the near and long term as the Company continues to market AVONEX worldwide.

Costs and expenses

Total costs and expenses in 2001 were $683.2 million as compared to $598.1 million in 2000, an increase of approximately 14%.

Cost of revenues in 2001 totaled $136.5 million, an increase of $11.3 million or 9% as compared to 2000. The increase in cost of revenues was attributable to the higher sales volume of AVONEX. Included in cost of revenues in 2001 and 2000 is $131.9 million and $112.9 million, respectively, from product sales and $4.6 million and $12.3 million, respectively, relating to royalty revenue. Gross margins on product sales increased to approximately 86% for the period ended December 31, 2001 compared to 85% for the same period in 2000 due to efficiencies of production reducing cost of goods sold in 2001. Gross margins on royalty revenue increased to approximately 94% for the period ended December 31, 2001 compared to 93% for the same period in 2000. The Company expects that gross margins on royalty revenue will fluctuate in the future based on changes in sales volumes for specific

3

products.

Research and development expenses in 2001 were $314.6 million, an increase of $11.8 million or 4% as compared to $302.8 million in 2000. The increase was primarily due to an increase in clinical production and other costs associated with the Company’s development efforts related to its ongoing research and development programs of $19.9 million and an increase in the funding of collaboration agreements of $7.2 million, offset by a reduction in the Company’s clinical trial costs of $15.3 million in 2001. Costs for upfront fees and milestone payments may cause variability in future research and development expense. See “Critical Accounting Policies”.

Selling, general and administrative expenses in 2001 were $232.1 million, an increase of $62 million or 36% as compared to 2000. This increase was primarily due to an increase in selling and marketing expenses related to the sale of AVONEX. The Company expects that selling, general and administrative expenses will continue to increase in the near term as the Company continues to expand its sales and marketing organizations and efforts necessary to sell AVONEX worldwide in response to increased competition, and as the Company expands in anticipation of the possible approval of additional products, including AMEVIVE® (alefacept).

Other income, net

Other income, net consists of the following (in thousands):

December 31,	2001			2000
Interest income	$	44,128		$	42,965
Interest expense		( 3,954	)		( 4,310	)
Other income (expense)		(10,875	)		120,094
Total other income, net	$	29,299		$	158,749

Other income, net consists primarily of interest income, partially offset by interest expenses and other non-operating income and expenses. Other income, net in 2001 was $29.3 million as compared to $158.7 million in 2000, a decrease of $129.4 million. Interest income in 2001 was $44.1 million compared to $43 million in 2000, an increase of $1.1 million or 3% due to an increase in funds invested. The Company expects interest income to vary based on changes in the amount of funds invested and fluctuations in interest rates. Interest expense decreased $0.4 million or 9% in 2001 from 2000 due to lower outstanding borrowing under building loan agreements. Other income (expense) decreased by $109.2 million in 2001 from 2000. Other income (expense) for the period ended December 31, 2001 included realized gains on the sale of certain non-current marketable securities totaling $32.1 million, offset by a $28 million write-down for unrealized losses on certain non-current marketable securities that were determined to be other than temporary. Additionally, the Company reported a charge of $20 million as part of the settlement of an ongoing patent infringement dispute with Berlex. See “Legal Matters”. Other income (expense) for the period ended December 31, 2000 included realized gains on the sale of certain non-current marketable securities totaling approximately $101.1 million. Additionally, the Company realized gains of approximately $24.1 million in 2000 upon the acquisition by third parties of two companies in which the Company had invested.

As part of its strategic product development efforts, the Company invests in equity securities of certain biotechnology companies with which it has collaborative agreements. As a matter of policy, Biogen determines on a quarterly basis whether any decline in the fair value of a marketable security is temporary or other than temporary. Unrealized gains and losses on marketable securities are included in other comprehensive income in shareholders’ equity, net of related tax effects. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value with a charge to current earnings. The factors that the Company considers in its assessments include prospects for favorable clinical trial results, new product initiatives and new collaborative agreements.

As part of its assessments at December 31, 2001, the Company assessed the unrealized losses on its investments in Curis Inc. and Targeted Genetics Corporation (see “Financial Condition”), and determined that the positive evidence suggesting that the investments described above would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at December 31, 2001. Accordingly, the related unrealized losses of approximately $28 million were reclassified from other comprehensive income to current expense in the fourth quarter of 2001.

The Company had no unrealized losses at December 31, 2001 that were determined to be temporary.

4

Income taxes

The Company’s effective tax rate in 2001 was 30%. Income tax expense for 2001 varied from the amount computed at the U.S. federal statutory rates primarily due to higher sales in European jurisdictions with lower tax rates and to the utilization of research and development tax credits. The Company’s effective tax rate outside the U.S. is lower than the U.S. tax rate, and the Company expects that the U.S. tax rate will continue to decline as a percentage of its total tax rate as international sales increase.

Results of Operations 2000 As Compared to 1999

Revenues

Total revenues in 2000 were $926.5 million, as compared to $794.4 million in 1999, an increase of $132.1 million or approximately 17%.

Product sales in 2000 were $761.1 million as compared to $620.6 million in 1999, an increase of $140.5 million or approximately 23%. Product sales from AVONEX represent approximately 82% of the Company’s total revenues in 2000 as compared to 78% in 1999. The growth in 2000 was primarily attributable to an increase in the sales volume of AVONEX in the United States and in the fifteen member countries of the EU. AVONEX sales outside of the United States were approximately $208.5 million in 2000 as compared to $178.4 million in 1999.

Revenues from royalties in 2000 were $165.4 million, a decrease of $8.4 million or approximately 5% as compared to $173.8 million of royalty revenue in 1999. Revenues from royalties represented approximately 18% of total revenues in 2000 as compared to 22% in 1999. The decrease in royalty revenues in 2000 over the comparable period in 1999 is primarily the result of reductions attributable to patent expirations and lower licensee sales.

Costs and expenses

Total costs and expenses in 2000 were $598.1 million as compared to $478.2 million in 1999, an increase of approximately 25%.

Cost of revenues in 2000 totaled $125.2 million, an increase of $14.2 million or 13% as compared to 1999. The increase in cost of revenues was attributable to the higher sales volume of AVONEX. Included in cost of revenues in 2000 and 1999 is $112.9 million and $96.9 million, respectively, from product sales and $12.3 million and $14.1 million, respectively, relating to royalty revenue. Gross margins on product sales increased to approximately 85% for the period ended December 31, 2000 compared to 84% for the same period in 1999. Gross margins on royalty revenue increased to approximately 93% for the period ended December 31, 2000 compared to 92% for the same period in 1999.

Research and development expenses in 2000 were $302.8 million, an increase of $81.6 million or 37% as compared to $221.2 million in 1999. The increase was primarily due to an increase in clinical trial costs of $35.9 million, the costs associated with an increase in the Company’s other development efforts related to its ongoing research and development programs of $14 million and the funding of collaboration agreements of $12.4 million.

Selling, general and administrative expenses in 2000 were $170.1 million, an increase of $24.1 million or 17% as compared to 1999. This increase was primarily due to an increase in selling and marketing expenses related to the sale of AVONEX.

Other income, net

Other income, net consists of the following (in thousands):

December 31,	2000			1999
Interest income	$	42,965		$	35,407
Interest expense		(4,310	)		(4,639	)
Other income (expense)		120,094			(18,003	)
Total other income, net	$	158,749		$	12,765

Other income, net consists primarily of interest income, partially offset by interest expenses and other non-operating income and expenses. Other income, net in 2000 was $158.7 million as compared to $12.8 million in 1999, an increase of $145.9 million. Interest income in 2000 was $43 million compared $35.4 million in 1999, an increase of $7.6 million or 21% due to higher average yields and an increase in funds invested. Interest expense decreased $0.3 million or 7% in 2000 from 1999. Other income (expense) increased by $138.1 million in 2000 from 1999. Other income (expense) for the period ended December 31, 2000

5

included gains on the sale of certain non-current marketable securities totaling approximately $101.1 million. Additionally, the Company realized gains of approximately $24.1 million upon the acquisition of two of its investees by third parties. Other income (expense) for the period ended December 31, 1999 included a $15 million write-down of certain non-current marketable securities.

Income taxes

The Company’s effective tax rate in 2000 was 31.5%. Income tax expense for 2000 varied from the amount computed at the U.S. federal statutory rates primarily due to higher sales in European jurisdictions with lower tax rates and to the utilization of research and development tax credits

Financial Condition

At December 31, 2001, cash, cash equivalents and short-term marketable securities were $798.1 million compared with $682.4 million at December 31, 2000, an increase of $115.7 million. Working capital increased $95.5 million to $802.8 million. Net cash from operating activities which included net income, for the year ended December 31, 2001 was $316.4 million compared with $365.9 million in 2000, and also included $32.1 million of realized gains on the sale of non-current marketable securities, tax benefits related to stock options of $35.1 million, and a non-cash adjustment of $27.9 million related to the write-down of non-current marketable securities. Cash outflows from investing activities during 2001 included investments in property and equipment and patents of $195.5 million and net purchases of marketable securities totaling $57.4 million. Significant cash outflows from financing activities included $88.3 million for purchases of the Company’s common stock under its stock repurchase program and $4.9 million for repayments on loan agreements with banks. Cash inflows from financing activities included $35 million from common stock option exercises and employee stock purchase plan activity.

In August 1995, the Company entered into a loan agreement with a bank for financing the construction of its biological manufacturing facility in North Carolina (the “Construction Loan”). During 1997, the Company completed construction of the facility and the funds advanced under the Construction Loan were converted to a floating rate ten-year term loan with principal and interest payable quarterly. As of December 31, 2001, the Company had $33 million outstanding under the Construction Loan. The Construction Loan is collateralized by the underlying building. The Company also entered into an interest rate swap agreement with the same bank, fixing its interest rate on the Construction Loan at 7.75% during the remaining term of the loan with interest payable quarterly. In addition, as of December 31, 2001, the Company had $14.2 million outstanding under a floating rate loan with a bank (the “Term Loan”). The Term Loan is collateralized by the Company’s laboratory and office building in Cambridge, Massachusetts. The Company has fixed its interest rate on the Term Loan at 7.5% under the terms of an interest rate swap agreement. Terms of the Company’s loan agreements include various covenants, including financial covenants which require the Company to maintain minimum net worth, cash flow and various financial ratios. The Company is in compliance with all covenants or requirements set forth in its credit agreements.

On December 18, 2000, the Company announced that its Board of Directors had authorized the repurchase of up to 4 million shares of the Company’s common stock. The repurchased stock provides the Company with treasury shares for general corporate purposes, such as stock to be issued under employee stock option and stock purchase plans. During 2001, the Company repurchased approximately 1.5 million shares of its common stock at a cost of $88.3 million. Approximately 2.5 million shares remain authorized for repurchase under this program at December 31, 2001. In November of 2000, the Company completed a previous stock repurchase program. During 2000, the Company repurchased approximately 4.6 million shares of its common stock under this program at a cost of $300.2 million.

The Company is building a large scale manufacturing plant in Research Triangle Park, North Carolina. The Company expects that construction will be completed early in 2002. The project is expected to cost $175 million, of which $172.5 million had been committed for construction costs at December 31, 2001. Additionally, the Company began expansion of its Research Triangle Park, North Carolina complex by constructing a laboratory office building and adding manufacturing capacity. The projects are expected to be completed by the summer of 2003 at a total cost of approximately $138 million. As of December 31, 2001, the Company had committed $87 million for construction costs. The Company is also completing plans to build a fill finish plant in Denmark. The Company expects that construction will commence in 2002 and be completed early in 2005, at an estimated cost of $130 million. At December 31, 2001, $17 million had been committed for construction costs related to the fill finish plant in Denmark.

In July 2001, the Company signed a development and marketing collaboration agreement (the “ICOS Agreement”) with ICOS Corporation (“ICOS”), under which the Company and ICOS will collaborate worldwide on the development and commercialization of orally active, small molecule LFA-1 antagonists as oral therapeutics for the treatment of inflammatory conditions. Under the terms of the ICOS agreement, the Company paid ICOS a one-time, non-refundable license fee of $8 million, which was charged to research and development expense. Additionally, as part of the agreement, Biogen made available to ICOS a line of credit in the amount of $20 million, of which $17.7 million was available at December 31, 2001. During 2001, the Company provided $2.3 million from the line of credit to ICOS that was charged to research and development expense in 2001

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upon the achievement of certain clinical milestones by ICOS. As of December 31, 2001, there were no borrowings outstanding under the credit facility. The Company has committed to providing milestone payments to ICOS upon the achievement of certain future events. If all the milestones were achieved and commercialization were to be successful in excess of specified levels of sales, the Company would be required to pay up to an additional $83.5 million over the life of the agreement.

In September 2000, the Company signed a research and development agreement (the “Eos Agreement”) with Eos Biotechnology, Inc. (“Eos”), under which the Company and Eos will collaborate in the research and development of novel targets for antibody and protein therapeutics in the area of breast cancer. Under the Eos Agreement, the Company purchased 1.9 million shares of preferred stock of Eos for $5 million at fair market value. In addition, the Company paid a one-time non-refundable license fee of $6 million, which was charged to research and development expense and acquired certain exclusive, worldwide rights related to breast cancer-specific molecules for the use in the development of new antibody and secreted protein therapeutics. The Company accounts for its investment in Eos, which is included in other assets, using the cost method of accounting subject to periodic review of impairment. The Company provided Eos with research and development funding of $1.5 million in 2001 and $250,000 in 2000. The Company expects to fund research activities of Eos related to the collaboration of up to $1.5 million, $1.75 million and $1 million in 2002, 2003, and 2004, respectively.

In August 2000, the Company signed a development and marketing collaboration agreement (the “Antegren Agreement”) with Elan Pharma International, Ltd, an affiliate of Elan Corporation, plc (“Elan”) under which the Company and Elan collaborate in the development, manufacture and commercialization of Antegren® (natalizumab), a humanized monoclonal antibody and alpha 4 integrin inhibitor. Under the terms of the Antegren Agreement, Biogen and Elan will share costs for on-going development activities. The Company paid a one-time non-refundable license fee of $15 million in 2000, which was charged to research and development expense. During 2001, the Company provided $16 million to Elan for certain milestones achieved during the year, which were charged to research and development expense. The Company has committed to paying Elan additional amounts upon the completion of certain future milestones. If all the milestones are achieved, the Company would be required to pay up to an additional $21 million over the life of the agreement.

In October 1997, the Company signed a research and option agreement (the “CuraGen Agreement”) with CuraGen Corporation (“CuraGen”) under which the Company and CuraGen collaborate in the discovery of novel genes using CuraGen’s functional genomics technologies. The Company provided CuraGen with research and development funding of $1.5 million and $1.1 million in 2000 and 1999, respectively. The CuraGen Agreement was terminated in September 2000 and all investments in CuraGen common stock were sold during the year 2000.

In July 1996, the Company signed a collaborative research and commercialization agreement (the “Ontogeny Agreement”) with Ontogeny, Inc. (“Ontogeny”), a private biotechnology company, for the development and commercialization of three specific hedgehog cell proteins, a class of novel human proteins, that are responsible for reducing the formation or regeneration of tissue. In August 2000, Ontogeny merged with two other biotechnology companies to form Curis Inc. (“Curis”). As a shareholder in Ontogeny, Biogen received Curis common stock in exchange for the Company’s shares in Ontogeny. The Company provided $1 million and $2.8 million of research funding to Ontogeny in 2000 and 1999, respectively. Additionally, the Company provided $1.5 million upon conclusion of the Ontogeny Agreement, which was charged to research and development expense in 2000. At December 31, 2001 the Company retained approximately 308,000 shares of Curis common stock, and included the investment in long-term marketable securities available-for-sale.

In August 1995, the Company signed a collaborative research agreement (the “Genovo Agreement”) for the development of human gene therapy treatments with Genovo, Inc. (“Genovo”), a gene therapy research company. Under the Genovo Agreement, the Company acquired 380,000 shares of Genovo Series A Preferred stock for $4.5 million and acquired certain licensing rights. The Company accounted for this investment, which was included in other assets, using the equity method of accounting. The Company recorded its proportion of Genovo’s net losses as research and development expense in the amounts of $3.9 million and $7.6 million in 2000 and 1999, respectively. In August 2000, Genovo entered into a merger agreement (“Targeted Merger Agreement”) with Targeted Genetics Corporation (“Targeted”). As a shareholder in Genovo, Biogen received Targeted common stock in exchange for the Company’s shares in Genovo. Additionally, concurrently with the Targeted Merger Agreement, the Company entered into a development and marketing agreement and a funding agreement (the “Targeted Agreements”) for gene therapy research and development in oncology. The Targeted Agreements provide for a $10 million credit facility. Targeted also has an option to sell to the Company an additional $10 million of Targeted common stock at fair value. As of December 31, 2001, there were $10 million of borrowings outstanding under the credit facility and no additional common stock had been purchased by the Company. The Company provided $1 million and $250,000 in research funding to Targeted in 2001 and 2000, respectively. The Company expects to fund research activities of Targeted related to the collaboration of up to $1 million and $750,000 in 2002 and 2003, respectively.

The following summarizes the Company’s contractual obligations (excluding contingent milestone payments) at December 31, 2001, and the effects such obligations are expected to have on its liquidity and cash flows in future periods.

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			Payments due by period
	Total		Less than		1-3		4-5		After
(in thousands)	Years		1 year		Years		Years		5 Years
Long-term debt	$	47,185	$	4,888	$	9,776	$	15,609	$	16,912
Non-cancelable operating leases		145,577		20,493		37,333		30,172		57,579
Other long-term obligations		6,000		2,500		3,500		—		—
Total contractual cash obligations	$	198,762	$	27,881	$	50,609	$	45,781	$	74,491

The Company is in compliance with all covenants or other requirements set forth in its credit agreements.

The Company does not have any other relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, the Company is not exposed to any financing, liquidity, market or credit risk that could arise if the Company had engaged in such relationships.

The Company believes that existing funds and cash generated from operations are adequate to satisfy its working capital and capital expenditure requirements in the foreseeable future. However, the Company may raise additional capital to take advantage of favorable conditions in the market or in connection with the Company’s development activities.

Legal Matters

On July 3, 1996, Berlex Laboratories, Inc. (“Berlex”) filed suit against Biogen in the United States District Court for the District of New Jersey alleging infringement by Biogen of Berlex’s “McCormick” patent (U.S. Patent No. 5,376,567) in the United States in the production of Biogen’s AVONEX product. In November 1996, Berlex’s New Jersey action was transferred to the United States District Court in Massachusetts and consolidated for pre-trial purposes with a related declaratory judgment action previously filed by Biogen. On August 18, 1998, Berlex filed a second suit against Biogen alleging infringement by Biogen of a patent which was issued to Berlex in August 1998 and which is related to the McCormick patent (U.S. Patent No. 5,795,779). On September 23, 1998, the cases were consolidated for pre-trial and trial purposes. Berlex sought a judgment granting it damages, a trebling of any damages awarded and a permanent injunction restraining Biogen from the alleged infringement. A hearing on the parties’ summary judgment motions in the case was completed in March 2000. In September 2000, the District Court rendered final judgment in favor of Biogen and against Berlex determining that Biogen’s production of AVONEX did not infringe any of the claims of the Berlex patents. Berlex has appealed this decision with the Court of Appeals for the Federal Circuit. Oral arguments were presented by the parties to the Court of Appeals on November 7, 2001 and a decision is expected in the first half of 2002. In January 2002, Biogen and Berlex reached a settlement of the litigation pursuant to which the parties agreed to end the dispute in return for a payment of $20 million from Biogen to Berlex, and the possibility of a second and final payment from Biogen to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in favor of Biogen. If the Court of Appeals were to rule against Biogen and return the case to the District Court, Biogen believes that the most likely decision would require it to make a second and final payment of $55 million to Berlex. In the event the ruling is significantly adverse to Biogen, the second and final payment to Berlex would be $230 million. As part of the settlement, Biogen and Berlex agreed not to pursue further litigation about these patents. Biogen has recorded a $20 million charge in “Other Income, net” in the fourth quarter of 2001 to account for the first payment to Berlex. The Company has determined that, based on information currently available, the most probable outcome is that no additional payments will be required.

In 1995, the Company filed an opposition with the Opposition Division of the European Patent Office to oppose a European patent (the “Rentschler I Patent”) issued to Dr. Rentschler Biotechnologie GmbH (“Rentschler”) relating to compositions of matter of beta interferon. In 1997, the European Patent Office issued a decision to revoke the Rentschler I Patent. Rentschler appealed that decision and an oral hearing on the appeal took place in December 2000. At the oral hearing in order to gain reinstatement of the patent, Rentschler narrowed the patent claims so as to claim only a specific cell line. Biogen does not use the specific cell line now claimed. On October 13, 1998, the Company filed another opposition with the Opposition Division of the European Patent Office to oppose a second European patent issued to Rentschler (the “Rentschler II Patent”) with certain claims regarding compositions of matter of beta interferon with specific regard to the structure of the glycosylated molecule. A hearing on the Company’s opposition previously scheduled for October 2000 has been postponed, and will likely be held in 2002. While Biogen believes that the Rentschler II Patent will be revoked, if the Rentschler II Patent were to be upheld and if Rentschler were to obtain, through legal proceedings, a determination that the Company’s sale of AVONEX in Europe infringes a valid Rentschler II Patent, such result could have a material adverse effect on the Company’s results of operation and financial position.

Critical Accounting Policies

The preparation of consolidated financial statements requires the Company to make estimates and judgements that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-

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going basis, the Company evaluates its estimates, including those related to revenue recognition, marketable securities, hedging programs, bad debts, inventories, patents, income taxes, pensions, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition and Accounts Receivable

SEC Staff Accounting Bulletin No 101 (“SAB 101”) was effective for the Company in fiscal 2000. SAB 101 provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. SAB 101 establishes the SEC’s view that it is not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. Further, SAB 101 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. The Company believes that its revenue recognition policies are in compliance with SAB 101.

Revenues from product sales are recognized when product is shipped and title and risk of loss has passed to the customer. Revenues are recorded net of applicable allowances for returns, rebates and other applicable discounts and allowances. The timing of distributor orders and shipments can cause variability in earnings. The Company prepares its estimates for sales returns and allowances, discounts and rebates quarterly based primarily on historical experience updated for changes in facts and circumstances, as appropriate. If actual future results vary, the Company may need to adjust its estimates, which could have an impact on earnings in the period of adjustment.

The Company receives royalty revenues under license agreements with a number of third parties that sell products based on technology developed by the Company or to which the Company has rights. The license agreements provide for the payment of royalties to the Company based on sales of the licensed product. The Company records these revenues based on estimates of the sales that occurred during the relevant period. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties paid to the Company (adjusted for any changes in facts and circumstances, as appropriate). The Company maintains regular communication with its licensees in order to gauge the reasonableness of its estimates. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period which they become known, typically the following quarter. Historically, adjustments have not been material based on actual amounts paid by licensees. There are no future performance obligations on the part of the Company under these license agreements. Under this policy, revenue can vary due to factors such as resolution of royalty disputes and arbitration.

Revenue is not recognized in any circumstances unless collectibility is reasonably assured.

Biogen maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of Biogen’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required, which could affect future earnings.

Marketable securities

As part of its strategic product development efforts, the Company invests in equity securities of certain biotechnology companies with which it has collaborative agreements. Statement of Financial Accounting Standards (“SFAS”) No. 115 (“SFAS 115”), Accounting for Certain Investment in Debt and Equity Securities, addresses the accounting for investment in marketable equity securities. As a matter of policy, Biogen determines on a quarterly basis whether any decline in the fair value of a marketable security is temporary or other than temporary. Unrealized gains and losses on marketable securities are included in other comprehensive income in shareholders’ equity, net of related tax effects. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value with a charge to current earnings. The factors that the Company considers in its assessments include prospects for favorable clinical trial results, new product initiatives and new collaborative agreements. Any future determinations that unrealized losses are other than temporary could have an impact on earnings.

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Inventory capitalization

Inventories are stated at the lower of cost or market with cost determined under the first-in/first-out (“FIFO”) method, and are included in other current assets. Included in inventory are raw materials used in the production of pre-clinical and clinical products, which are expensed as research and development costs when consumed.

Biogen writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual realizable value is less than that estimated by Biogen, additional inventory write-downs may be required.

Biogen capitalizes inventory costs associated with certain products prior to regulatory approval, based on management’s judgment of probable future commercialization. Biogen would be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies. At December 31, 2001, capitalized inventory related to AMEVIVE, which has not yet received regulatory approval, was $8.4 million.

Research and development expenses

Research and development expenses are comprised of costs incurred in performing research and development activities including salaries and benefits, facilities costs, overhead costs, clinical trial and related clinical manufacturing costs, contract services and other outside costs. Research and development costs, including upfront fees and milestones paid to collaborative partners, are expensed as incurred. The timing of upfront fees and milestone payments in the future may cause variability in future research and development expense.

Accounting for contingencies and litigation

Because of the substantive terms of the Berlex settlement arrangement were agreed to in the fourth quarter of 2001, the Company determined that the provisions of SFAS 5, “Accounting for Contingencies,” required that the Company account for this settlement in its December 31, 2001 financial statements. The guidance in Financial Accounting Standards Board (“FASB”), Interpretation No. 14, Reasonable Estimation of the Amount of a Loss, an Interpretation of SFAS 5, requires that when an amount within the range of potential loss appears to be a better estimate that any other amount within the range, that amount should be accrued. It further requires that when no amount within the range is a better estimate than any other amount, the minimum amount in the range should be accrued. In the case of the Berlex settlement, Biogen determined that $20 million is both the best estimate of the Company’s potential loss, and the minimum amount in the range of potential losses. As a result, the Company recorded a charge of $20 million related to this settlement in its December 31, 2001 financial statements.

New Accounting Pronouncements

In July 2001, the FASB issued SFAS 141, “Business Combinations” and SFAS 142, “Goodwill and Other Intangible Assets.” SFAS 141 requires that all business combinations be accounted for under the purchase method only and that certain acquired intangible assets in a business combination be recognized as assets apart from goodwill. SFAS 142 requires that ratable amortization of goodwill be replaced with periodic tests of the goodwill’s impairment and that intangible assets other than goodwill be amortized over their useful lives. SFAS 141 is effective for all business combinations initiated after June 30, 2001 and for all business combinations accounted for by the purchase method for which the date of acquisition is after June 30, 2001. The provisions of SFAS 142 will be effective for fiscal years beginning after December 15, 2001, and will thus be adopted by the Company, as required, in fiscal year 2002. The impact of SFAS 141 and SFAS 142 on the Company’s financial statements is not expected to be material.

In August 2001, the FASB issued SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 144 requires that those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001, and will thus be adopted by the Company, as required, in fiscal year 2002. The adoption of SFAS 144 is not expected to have material effect on the Company’s financial statements.

In February 2002, the FASB Emerging Issues Task Force (“EITF”) released EITF Issue No. 01-09 (“EITF 01-09”), “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. EITF 01-09 states that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor’s income statement. The provisions of EITF 01-09 will be effective for fiscal years beginning after December 15, 2001, and will thus be adopted by the Company, as required, in 2002. The Company is currently evaluating the effect on the Company’s financial statements of adoption of EITF 01-09.

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Outlook

Safe Harbor Statement Under Private Securities Litigation Reform Act of 1996

In addition to historical information, this annual report contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Reference is made in particular to forward-looking statements regarding the anticipated level of future product sales, royalty revenues, expenses and profits, statements regarding the timing of clinical trials, statements regarding the potential outcome of clinical programs, statements regarding expectations regarding regulatory approvals, the marketing of additional products and predictions as to the impact of competitive products, predictions regarding the anticipated outcome of pending or anticipated litigation, arbitration and patent-related proceedings, statements regarding the Company’s expectations regarding facility expansion and Biogen’s expectations as to the value of its investments in certain marketable securities. These and all other forward-looking statements are made based on Biogen’s current belief as to the outcome and timing of such future events. Factors which could cause actual results to differ from Biogen’s expectations and which could negatively impact Biogen’s financial condition and results of operations are discussed below.

Dependence on AVONEX Sales

Biogen’s ability to sustain increases in revenues and profitability until at least approval and launch of a second product will be primarily dependent on the level of revenues and profitability from AVONEX sales. The level of revenues from sales of AVONEX will depend on a number of factors, including: Biogen’s ability to sustain market share of AVONEX in light of competitive products for the treatment of multiple sclerosis (“MS”), including the launch of REBIF in the United States; continued market acceptance of AVONEX worldwide; Biogen’s ability to maintain a high level of patient satisfaction with AVONEX; the nature of regulatory and pricing decisions related to AVONEX worldwide; the extent to which AVONEX continues to receive and maintains reimbursement coverage; the success of ongoing development related to AVONEX in expanded MS indications; and the continued accessibility of third parties to vial, label, and distribute AVONEX on acceptable terms.

Competition

Biogen faces increasing competition from other products for the treatment of relapsing forms of MS. In 2001, AVONEX competed in the United States as a treatment for MS with three other products: an interferon beta-1b product sold under the brand name BETASERON® by Berlex Laboratories, a product known as COPAXONE® (glatiramer acetate) marketed by Teva Neuroscience, Inc. and Aventis Pharmaceuticals, Inc. and NOVANTRONE® (mitoxantrone for injection) marketed by Immunex Corporation for patients with clinically worsening forms of relapsing-remitting and secondary progressive MS. Biogen expects that competition in the United States will increase significantly with the March 2002 launch of REBIF, an interferon beta-1a product marketed by Serono, Inc. (“Serono”). The FDA approved REBIF for sale in the United States over a year earlier than the expiration of AVONEX’s orphan drug marketing exclusivity based on the 24-week results of a head-to-head study of AVONEX and REBIF conducted by Serono. Biogen expects Serono to compete aggressively in the United States market. In most countries outside of the United States, AVONEX competes with REBIF, BETASERON (sold in the EU by Schering A.G. under the name BETAFERON®), and COPAXONE.

A number of companies, including Biogen, are working to develop products to treat MS which may in the future compete with AVONEX, the worldwide market leader among MS therapies. AVONEX may also in the future face competition from off-label uses of drugs approved for other indications. Some of Biogen’s current competitors are also working to develop alternative formulations for delivery of their products which may in the future compete with AVONEX. Biogen believes that competition among treatments for MS will be based on product performance, service and price.

If AMEVIVE is approved, Biogen will also face significant competition from other products for the treatment of moderate-to-severe plaque psoriasis. AMEVIVE would compete with existing therapies such as oral retinoids, steroids, methotrexate and cyclosporin, as well as new drugs currently in development and drugs approved for other indications. Genentech and Xoma Corporation are co-developing XANELIM® (efalizumab), an antibody designed to block certain immune cells as a potential treatment for moderate-to-severe psoriasis. The companies have completed Phase 3 trials for XANELIM and expect to complete a one-year Phase 3 extension trial in early 2002. Centocor, Inc. sells REMICADE® (Infliximab) worldwide as a treatment for other indications and has initiated a Phase 2 proof of concept study for REMICADE as a potential treatment for psoriasis. ENBREL® (etanercept), a drug co-developed by Immunex Corporation and Wyeth (formerly American Home Products Corporation) has been approved by the FDA as a treatment for psoriatic arthritis, a disease that has skin plaque systems associated with moderate-to-severe plaque psoriasis. In addition, a number of other companies are working to develop products to treat psoriasis which may ultimately compete with AMEVIVE.

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Royalty Revenue

Biogen receives royalty revenues which, prior to 2001, contributed a significant amount to its overall profitability. Royalty revenues have decreased significantly in recent years primarily as the result of patent expirations, see “Outlook — Patents and Other Proprietary Rights,” and a royalty dispute with Schering-Plough. As noted above, Biogen is currently in arbitration with Schering-Plough on the issue of whether and to what extent Schering-Plough has an obligation to pay royalties in the United States on sales of its alpha interferon products. Schering-Plough has taken the position that a Court of Appeal’s decision affirming a District Court’s ruling which narrowed the scope of the claims of Biogen’s United States alpha interferon patent (the “901 Patent”) allowed it to discontinue royalty payments to Biogen in the United States on sales of its alpha interferon products. The Court of Appeals decision came as part of a suit filed by Schering-Plough, as Biogen’s exclusive licensee, against Amgen, Inc. (“Amgen”) to enforce the 901 Patent which Schering-Plough claimed was infringed by Amgen’s consensus interferon product. Biogen disagrees with Schering-Plough’s position and has filed for arbitration to compel payment of unpaid past royalties and to ensure payment of royalties due in the future under the license agreement. Given Schering-Plough’s history of taking aggressive positions in contract interpretation, Biogen has included in the arbitration claims which would resolve issues related to future royalty payments to pre-empt any potential challenges by Schering-Plough. These claims include asking the arbitration panel to confirm Schering-Plough’s obligation to commence royalty payments in July 2002 (the expiration date of the 901 Patent) based on a patent application owned by F. Hoffman-LaRoche (“Roche”) and Genentech, Inc. (“Genentech”). The agreement between Biogen and Schering-Plough extending Schering-Plough’s royalty obligation beyond the expiration date of the 901 Patent was part of the settlement of a lawsuit between Biogen and Roche/Genentech. In return for Schering-Plough’s agreement to extend its royalty obligation, Biogen settled the lawsuit with Roche/Genentech and Roche granted Schering-Plough an exclusive license for Schering-Plough to sell its products under the Roche/Genentech patent rights that were the subject of the dispute. Biogen intends to vigorously pursue its claims against Schering-Plough, but there is no guarantee that Biogen will be successful in its efforts.There are a number of other factors which could also cause the actual level of royalty revenue to differ from Biogen’s expectations. For example, pricing reforms, health care reform initiatives, other legal and regulatory developments and the introduction of competitive products may have an impact on product sales by Biogen’s licensees. In addition, sales levels of products sold by Biogen’s licensees may fluctuate from quarter to quarter due to the timing and extent of major events such as new indication approvals or government sponsored programs. Since Biogen is not involved in the development or sale of products by its licensees, it cannot be certain of the timing or potential impact of factors which may affect sales by licensees. See “Outlook — Patents and Other Proprietary Rights.”

Patents and Other Proprietary Rights

Biogen has numerous issued patents and patent applications pending on a number of its processes and products. Biogen has also obtained rights to certain patents under licenses with third parties which provide for the payment of royalties. There can be no assurances that Biogen’s existing patents or others, if obtained, will substantially protect or commercially benefit Biogen. In addition, Biogen does not know to what extent its pending patent applications or patent applications licensed from third parties will be granted or whether any of Biogen’s patents will prevail if they are challenged in litigation. Also, there is also no assurance that third parties have not or will not be granted patents claiming subject matter necessary to Biogen’s business. Biogen is aware that others, including various universities and companies working in the biotechnology field, have also filed patent applications and have been granted patents in the United States and in other countries claiming subject matter potentially useful or necessary to Biogen’s business. Some of those patents and patent applications claim only specific products or methods of making such products, while others claim more general processes or techniques useful or now used in the biotechnology industry. For example, Genentech has been granted patents and is prosecuting other patent applications in the United States and certain other countries which it may allege are currently used by Biogen and the rest of the biotechnology industry to produce recombinant proteins in host cells. Genentech has offered to Biogen and others in the industry non-exclusive licenses under some of those patents and patent applications for various proteins and in various fields of use, but not for others. Biogen is also aware of certain patents held by Genentech relating to immunoadhesion technology that Genentech may take the position are valid and infringed by Biogen’s future commercial activities with AMEVIVE. Biogen is evaluating these patents to determine if a license should be taken. The ultimate scope and validity of Genentech’s patents, of other existing patents, or of patents which may be granted to third parties in the future, and the extent to which Biogen may wish or be required to acquire rights under such patents and the availability and cost of acquiring such rights, currently cannot be determined by Biogen.

Biogen has granted an exclusive worldwide license to Schering-Plough under Biogen’s alpha interferon patents. Schering-Plough’s royalty obligation to Biogen on sales of Schering-Plough’s INTRON® A brand of alpha interferon in Japan and Europe terminated upon expiration of Biogen’s alpha interferon patent in such territories in January 2001, except in France, Italy and Spain. Biogen has obtained supplementary protection certificates in France and Italy extending the coverage (in France until 2003 and in Italy until 2007). In Spain, Biogen’s alpha interferon patents expire in 2003. In 2000, a Court of Appeals decision affirmed a District Court’s decision narrowing the scope of Biogen’s United States alpha interferon patents. For a discussion of the arbitration with Schering-Plough over the implications of the decision on the amount of royalties owed to Biogen on sales of alpha interferon products in the United States, see “Outlook — Royalty Revenue”. In consideration of assignment to Schering-Plough by Biogen of a Biogen patent application claiming recombinant mature human alpha interferon, Schering-Plough has agreed to pay to Biogen certain sums on sales by Schering-Plough of alpha interferon products in the United States from the date when Biogen’s existing United States alpha interferon patent expires (i.e. July 2002) until expiration of the Roche/Genentech patent. The

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Roche/Genentech patent right was the subject of a lawsuit brought by Biogen which was ultimately settled. Schering-Plough entered into an agreement with Roche as part of the settlement. In addition to deciding other aspects of the royalty dispute, Biogen has asked an arbitration panel to confirm Schering-Plough’s obligation to pay royalties commencing in July 2002. See “Outlook – Royalty Revenues.”

Biogen has licensed its recombinant hepatitis B antigen patent rights to GlaxoSmithKline plc and Merck and Co, Inc. to manufacturer and market hepatitis B vaccines and to manufacturers of diagnostic test kits, and receives royalties on sales of the vaccines and test kits by its licensees. See “Principal Products Being Marketed or Developed by Biogen’s Licensees — Hepatitis B Vaccines and Diagnostics.” The obligation of Glaxo and Merck to pay royalties on sales of hepatitis B vaccines and the obligation of Biogen’s other licensees under its hepatitis B patents to pay royalties on sales of diagnostic products will terminate upon expiration of Biogen’s hepatitis B patents in each licensed country. Following the conclusion of a successful interference proceeding in the United States, Biogen was granted patents in the United States expiring in 2018 and which broadly cover hepatitis B virus polypeptides and vaccines and diagnostics containing such polypeptides. Biogen’s European hepatitis B patents expired at the end of 1999, except in those countries in which Biogen has obtained supplementary protection certificates. Coverage under supplementary protection certificates still exists in Austria, France, Italy, Luxembourg and Sweden. The additional coverage afforded by the supplementary protection certificates ranges from one to five years. There can be no assurance as to the extent of coverage available under the supplementary protection certificates, or that protection will be available in additional countries.

There has been, and Biogen expects that there may continue to be significant litigation in the industry regarding patents and other intellectual property rights. Such litigation could create uncertainty and consume substantial resources. See also “Legal Matters”.

Products

AVONEX is currently the only product sold by Biogen. Biogen’s long-term viability and growth will depend on the successful development and commercialization of other products from its research and development activities and collaborations. Biogen expects that its next product on the market will be AMEVIVE. In the second quarter of 2001, the Company completed Phase 3 clinical studies of both the intramuscular and intravenous formulations of AMEVIVE in patients with moderate to severe psoriasis. In August of 2001, Biogen completed a simultaneous filing for regulatory approval of AMEVIVE in the United States and Europe, with submission of data from the clinical studies. The applications are currently under review by both the FDA and regulatory authorities in the EU. Biogen continues to expand its development efforts related to other potential products in its pipeline. The expansion of the pipeline may include increases in spending on internal projects, the acquisition of third-party technologies or products or other types of investments. Product development involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. Success in preclinical and early clinical trials does not ensure that later stage or large-scale clinical trials will be successful. Many important factors affect Biogen’s ability to successfully develop and commercialize AMEVIVE and its other potential products, including the ability to obtain and maintain necessary patents and licenses, to demonstrate safety and efficacy of drug candidates at each stage of the clinical trial process, to overcome technical hurdles that may arise, to meet applicable regulatory standards, to obtain reimbursement coverage for the products, to receive required regulatory approvals, to be capable of producing drug candidates in commercial quantities at reasonable costs, to compete successfully against other products and to market products successfully. Success in early stage clinical trials or preclinical work does not ensure that later stage or larger scale clinical trials will be successful. Even if later stage clinical trials are successful, the risk exists that unexpected concerns may arise from analysis of data or from additional data or that obstacles may arise or issues be identified in connection with review of clinical data with regulatory authorities or that regulatory authorities may disagree with the Company’s view of the data or require additional data or information or additional studies. There can be no assurance that Biogen will be successful in its efforts to develop and commercialize new products.

Market Risk

Biogen has exposure to financial risk in several areas including changes in foreign exchange rates and interest rates. Biogen attempts to minimize its exposures by using certain financial instruments, for purposes other than trading, in accordance with the Biogen’s overall risk management guidelines. Further information regarding the Biogen’s accounting policies for financial instruments and disclosures of financial instruments can be found in Notes 1, 2 and 3 to Biogen’s Consolidated Financial Statements.

Foreign Exchange

Biogen has operations in several European countries, Japan, Australia and Canada in connection with the sale of AVONEX. Biogen also receives royalty revenues based on worldwide product sales by its licensees. As a result, Biogen’s financial position, results of operations and cash flows can be affected by fluctuations in foreign currency exchange rates (primarily the Euro, British pound, Japanese yen and Canadian dollar).

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Biogen uses foreign currency forward contracts to manage foreign currency risk and does not engage in currency speculation. Biogen uses these forward contracts to hedge certain forecasted transactions denominated in foreign currencies. A hypothetical adverse 10% movement in foreign exchange rates compared to the U.S. dollar across all maturities would result in a hypothetical loss in fair value of approximately $11 million. Biogen’s use of this methodology to quantify the market risk of such instruments should not be construed as an endorsement of its accuracy or the accuracy of the related assumptions. The quantitative information about market risk is necessarily limited because it does not take into account operating transactions.

Interest Rates

Biogen is exposed to risk of interest rate fluctuations in connection with its variable rate long-term debt. The Term Loan requires annual principal payments of $1.7 million through 2004, with the balance due in 2005. The Construction Loan requires annual principal payments of $3.2 million through 2006, with the balance due in 2007. At December 31, 2001, the carrying values of the Term Loan and the Construction Loan approximated fair value.

Biogen has fixed its interest rates on the Term Loan and Construction Loan by entering interest rate swap agreements under which Biogen exchanges the difference between 7.5% and 7.75%, respectively, and a floating rate. The notional principal balances on the interest rate swap agreements are exactly equal to the principal on the underlying debt agreements. All other relevant terms of the interest rate swap agreements (including the index rate, reset period, etc.) exactly match the underlying loan agreements. The fair value of the interest rate swap agreements at December 31, 2001, representing the cash requirements of Biogen to settle the agreements, was approximately $3.3 million. Terms of Biogen’s loan agreements include various covenants, including financial covenants which require Biogen to maintain minimum net worth, cash flow and various financial ratios.

The fair value of Biogen’s cash, cash equivalents, marketable securities, long-term debt and interest rate swap agreements are subject to change as a result of potential changes in market interest rates. The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities. Biogen estimates that such hypothetical adverse 100 basis point movement would not have materially impacted net income or materially affected the fair value of interest rate sensitive instruments.

Stock Price

The stock prices of biotechnology companies are subject to significant fluctuations. The stock price may be affected by a number of factors including, but not limited to clinical trial results and other product development events, the outcome of litigation, the financial impact of changes in the value of investments, including investments in other biotechnology companies, the decisions relating to intellectual property rights and the entrance of competitive products into the market, changes in reimbursement policies or other practices related to the pharmaceutical industry or other industry and market changes or trends. In addition, if revenues or earnings in any quarter fail to meet the investment community’s expectations, there could be an immediate adverse impact on Biogen’s stock price.

14

Consolidated Statements of Income
Biogen, Inc. and Subsidiaries

(in thousands, except per share amounts)

For the years ended December 31,		2001		2000		1999
Revenues:
	Product	$	971,594	$	761,079	$	620,636
	Royalties		71,766		165,373		173,799
	Total revenues		1,043,360		926,452		794,435
Costs and expenses:
	Cost of revenues		136,510		125,198		111,005
	Research and development		314,556		302,840		221,153
	Selling, general & administrative		232,096		170,058		146,026
	Total costs and expenses		683,162		598,096		478,184
	Income from operations		360,198		328,356		316,251
	Other income, net		29,299		158,749		12,765
	Income before income taxes		389,497		487,105		329,016
	Income taxes		116,814		153,528		108,566
	Net Income	$	272,683	$	333,577	$	220,450
	Basic earnings per share	$	1.84	$	2.24	$	1.47
	Diluted earnings per share	$	1.78	$	2.16	$	1.40
Shares used in calculating:
	Basic earnings per share		148,355		148,743		149,921
	Diluted earnings per share		152,916		154,602		157,788

See accompanying notes to consolidated financial statements.

15

Consolidated Balance Sheets
Biogen, Inc. and Subsidiaries

(in thousands, except share amounts)

As of December 31,		2001			2000
Assets
Current assets
	Cash and cash equivalents	$	54,042		$	48,737
	Marketable securities		744,065			633,675
	Accounts receivable, less allowance for doubtful accounts of $2,082 and $2,436, respectively		177,582			143,178
	Deferred tax assets		44,108			40,047
	Other current assets		77,930			62,634
	Total current assets		1,097,727			928,271
Property and equipment, net			555,998			400,429
Patents			16,562			13,510
Marketable securities			12,183			71,982
Other assets			38,576			17,664
		$	1,721,046		$	1,431,856
Liabilities and Shareholders’ Equity
Current liabilities
	Accounts payable	$	50,944		$	37,869
	Current portion of long-term debt		4,888			4,888
	Accrued expenses and other		239,110			178,264
	Total current liabilities		294,942			221,021
Long-term debt, less current portion			42,297			47,185
Other long-term liabilities			34,975			57,248
Commitments and contingencies			—			—
Shareholders’ equity
	Common stock, par value $0.01 per share (375,000,000 Shares authorized; 151,705,636 shares issued in 2001 and 2000)		1,517			1,517
	Additional paid-in capital		808,076			772,172
	Treasury stock, at cost, 3,233,351 and 3,882,979 shares in 2001 and 2000, respectively		(176,123	)		(233,576	)
	Retained earnings		705,893			543,913
	Accumulated other comprehensive income		9,469			22,376
	Total shareholders’ equity		1,348,832			1,106,402
		$	1,721,046		$	1,431,856

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows
Biogen, Inc. and Subsidiaries

(in thousands)

For the years ended December 31,			2001			2000			1999
Cash Flows from Operating Activities Net Income			$	272,683		$	333,577		$	220,450
	Adjustments to reconcile net income to net cash provided from operating activities
	Depreciation and amortization			36,913			38,824			31,099
	Other			(267	)		(569	)		5,162
	Deferred income taxes			(18,100	)		25,203			(23,981	)
	Realized gain on sale of non-current marketable securities			(32,143	)		(101,129	)		—
	Tax benefit of stock options			35,075			81,023			91,295
	Write-down of non-current marketable securities			27,942			—			15,287
	Changes in:
		Accounts receivable		(34,404	)		(5,815	)		(36,082	)
		Other current and other assets		(41,884	)		(35,329	)		(41,372	)
		Accounts payable, accrued expenses and other current and long-term liabilities		70,543			30,154			101,725
	Net cash flows from operating activities			316,358			365,939			363,583
Cash Flows from Investing Activities Purchases of current marketable securities				(827,807	)		(627,168	)		(1,120,218	)
	Proceeds from sales and maturities of current marketable securities			734,599			606,087			1,006,465
	Proceeds from sales of non-current marketable securities			35,827			120,199			—
	Investment in collaborative partners			—			(5,000	)		(10,000	)
	Acquisitions of property and equipment			(190,753	)		(194,402	)		(82,528	)
	Additions to patents			(4,781	)		(4,713	)		(3,799	)
	Net cash flows from investing activities			(252,915	)		(104,997	)		(210,080	)
Cash Flows from Financing Activities Repayments on long-term debt				(4,888	)		(4,888	)		(4,887	)
	Purchases of treasury stock			(88,284	)		(300,192	)		(197,717	)
	Proceeds from put warrants			—			—			22,086
	Issuance of common stock and option exercises			35,034			35,955			58,490
	Net cash flows from financing activities			(58,138	)		(269,125	)		(122,028	)
Net increase (decrease) in cash and cash equivalents				5,305			(8,183	)		31,475
Cash and cash equivalents, beginning of the year				48,737			56,920			25,445
Cash and cash equivalents, end of the year			$	54,042		$	48,737		$	56,920
Supplemental Cash Flow Data
Cash paid during the year for:
	Interest		$	3,954		$	4,314		$	4,598
	Income taxes		$	79,002		$	42,683		$	4,787

See accompanying notes to consolidated financial statements.

17

Consolidated Statements of Shareholders’ Equity
Biogen, Inc. and Subsidiaries

													Accumulated
				Additional									Other			Total
		Common		Paid-in			Treasury			Retained			Comprehensive			Shareholders'
(in thousands)		Stock		Capital			Stock			Earnings			Income			Equity
Balance, December 31, 1998		$	1,483	$	538,105		$	(21,317	)	$	213,507		$	(13,165	)	$	718,613
Net income											220,450						220,450
Unrealized gains/losses on marketable securities, net of tax of $25,013														48,555			48,555
Unrealized gains/losses on foreign currency forward contracts, net of tax of $2,490														6,654			6,654
Unrealized gains/losses on interest rate swaps, net of tax of $137														4,501			4,501
Translation adjustment														(927	)		(927	)
	Total comprehensive income																279,233
Exercise of options and related tax benefits			24		108,952			122,750			(81,941	)					149,785
Proceeds from sale of put warrants					22,086												22,086
Treasury stock purchased								(197,717	)								(197,717	)
Compensation expense related to stock options					7,530												7,530
Balance, December 31, 1999		$	1,507	$	676,673		$	(96,284	)	$	352,016		$	45,618		$	979,530
Net income											333,577						333,577
Unrealized gains/losses on marketable securities, net of tax of $6,791														(16,152	)		(16,152	)
Unrealized gains/losses on foreign currency forward contracts, net of tax of $1,686														(5,311	)		(5,311	)
Unrealized gains/losses on interest rate swaps, net of tax of $789														(1,458	)		(1,458	)
Translation adjustment														(321	)		(321	)
	Total comprehensive income																310,335
Exercise of options and related tax benefits			10		95,748			162,900			(141,680	)					116,978
Treasury stock purchased								(300,192	)								(300,192	)
Compensation expense related to stock options					(249	)											(249	)
Balance, December 31, 2000		$	1,517	$	772,172		$	(233,576	)	$	543,913		$	22,376		$	1,106,402
Net income											272,683						272,683
Unrealized gains/losses on marketable securities, net of tax of $4,750														(11,352	)		(11,352	)
Unrealized gains/losses on foreign currency forward contracts, net of tax of $52														(87	)		(87	)
Unrealized gains/losses on interest rate swaps, net of tax of $587														(981	)		(981	)
Translation adjustment														(487	)		(487	)
	Total comprehensive income																259,776
Exercise of options and related tax benefits					35,075			145,737			(110,703	)					70,109
Treasury stock purchased								(88,284	)								(88,284	)
Compensation expense related to stock options					829												829
Balance, December 31, 2001		$	1,517	$	808,076		$	(176,123	)	$	705,893		$	9,469		$	1,348,832

See accompanying notes to consolidated financial statements.

18

Notes to Consolidated Financial Statements
Biogen, Inc. and Subsidiaries

1. Summary of Significant Accounting Policies

Business

Biogen, Inc. (“Biogen” or the “Company”) is a biopharmaceutical company principally engaged in the business of developing, manufacturing and marketing drugs for human health care. The Company currently derives revenues from sales of its AVONEX® (Interferon beta-la) product for the treatment of relapsing forms of multiple sclerosis and from royalties on worldwide sales by the Company’s licensees of a number of products covered under patents controlled by the Company, including alpha interferon and hepatitis B vaccines and diagnostic products.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. Certain items in prior years’ financial statements have been reclassified to conform with the current year’s presentation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and use assumptions that affect certain reported amounts and disclosures; actual amounts may differ.

Translation of Foreign Currencies

The functional currency for most of the Company’s foreign subsidiaries is the local currency. Assets and liabilities are translated at current rates of exchange. Income and expense items are translated at the average exchange rates for the year. Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into U.S. dollars are excluded from the determination of net income and are accumulated in a separate component of shareholders’ equity. The U.S. dollar is the functional currency for certain foreign subsidiaries. The Company’s subsidiaries which have the U.S. dollar as the functional currency are remeasured into U.S. dollars using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets. Foreign exchange transaction gains and losses are included in the results of operations in other income, net. Foreign exchange gains totaled $1.2 million, $2.8 million and $2.5 million in 2001, 2000, and 1999, respectively.

Cash and Cash Equivalents

The Company considers only those investments, which are highly liquid, readily convertible to cash and which mature within three months from date of purchase to be cash equivalents.

Fair Value of Financial Instruments

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses and other, approximate fair value due to their short-term maturities. Marketable securities are carried at fair value based on quoted market prices, consistent with the requirements of Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The fair values of trading securities, interest rate swaps, foreign currency forward contracts and options on non-marketable instruments are based on quoted market prices or pricing models using current market rates. The Company’s long-term debt approximates fair value.

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Inventories

Inventories are stated at the lower of cost or market with cost determined under the first-in/first-out (“FIFO”) method and are included in other current assets. Included in inventory are raw materials used in the production of pre-clinical and clinical products which are expensed as research and development costs when consumed. The components of inventories for the periods ending December 31, are as follows:

(in thousands)	2001		2000
Raw materials	$	14,754	$	7,775
Work in process		17,004		17,582
Finished goods		20,161		14,172
	$	51,919	$	39,529

Biogen writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual realizable value is less than that estimated by Biogen, additional inventory write-downs may be required. The Company has not had any material writedowns of inventory for the years ended December 31, 2001, 2000, or 1999.

Biogen capitalizes inventory costs associated with certain products prior to regulatory approval, based on management’s judgment of probable future commercialization. Biogen would be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies. At December 31, 2001, capitalized inventory related to AMEVIVE® (alefacept), which has not yet received regulatory approval, was $8.4 million.

Marketable Securities

The Company invests its excess cash balances in short-term marketable securities, principally corporate notes and government securities. At December 31, 2001, substantially all of the Company’s securities were classified as “available-for-sale”. All available-for-sale securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income in shareholders’ equity, net of related tax effects. Realized gains and losses and declines in value, if any, judged to be other than temporary on available-for-sale securities are reported in other income or expense.

As part of its strategic product development efforts, the Company invests in equity securities of certain biotechnology companies with which it has collaborative agreements. As a matter of policy, Biogen determines on a quarterly basis whether any decline in the fair value of a marketable security is temporary or other than temporary. Unrealized gains and losses on marketable securities are included in other comprehensive income in shareholders’ equity, net of related tax effects. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value with a charge to current earnings. The factors that the Company considers in its assessments include prospects for favorable clinical trial results, new product initiatives and new collaborative agreements.

As part of its assessments at December 31, 2001, the Company assessed the unrealized losses on its investments in Curis Inc. and Targeted Genetics Corporation, and determined that the positive evidence suggesting that the investments described above would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at December 31, 2001. Accordingly, the related unrealized losses of approximately $28 million were reclassified from other comprehensive income to current expense in the fourth quarter of 2001.

The Company had no unrealized losses at December 31, 2001 that were determined to be temporary.

Property and Equipment

Property and equipment is carried at cost, subject to review of impairment for significant assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the useful life or the term of the respective lease. Maintenance of computer systems is expensed as incurred. Buildings and equipment are depreciated over estimated useful lives ranging from 30 to 40 and 3 to 10 years, respectively. The Company capitalizes certain incremental costs associated with the validation effort required for licensing by the FDA of manufacturing equipment for the production of a commercially approved drug. These costs include primarily direct labor and material and are incurred in preparing the equipment for its intended use. Net capitalized validation costs were $5.4 million and $4.3 million at December 31, 2001 and 2000, respectively. The validation costs are amortized over the life of the related equipment.

20

Patents

The costs associated with successful patent defenses and patent applications are capitalized and amortized on a straight-line basis over estimated useful lives up to 15 years. Accumulated amortization of patent costs was $15.7 million and $25.2 million as of December 31, 2001 and 2000, respectively. The carrying value of patents is regularly reviewed by the Company and impairments are recognized when the expected future operating cash flows derived from the patent is less than their carrying value.

Derivatives and Hedging Activities

Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”, (“SFAS 133”) requires that all derivatives be recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The Company assesses, both at its inception and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting the changes in cash flows of hedged items. The Company assesses hedge ineffectiveness on a quarterly basis and records the gain or loss related to the ineffective portion to current earnings to the extent significant. If the Company determines that a forecasted transaction is no longer probable of occurring, the Company discontinues hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in current earnings.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive Income”, requires the display of comprehensive income and its components as part of the Company’s full set of financial statements. Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes certain changes in equity that are excluded from net income, such as translation adjustments and unrealized holding gains and losses on available-for-sale marketable securities and certain derivative instruments, net of tax. The Consolidated Statements of Shareholders’ Equity reflect comprehensive income for years ended December 31, 2001, 2000 and 1999 of $259.8 million, $310.3 million and $279.2 million, respectively.

In accordance with SFAS 133, the Company records an adjustment to other comprehensive income to recognize at fair value all derivatives designated as cash flow hedging instruments, which comprised unrealized gains or losses related to the Company’s interest rate swaps. During 1999, the Company recorded $4.5 million of unrealized gains to other comprehensive income reflecting the increase in the fair value of the interest rate swaps and at December 31, 1999 had a cumulative unrealized gain, net of tax, of $366,000. During 2000, the Company recorded $1.5 million of unrealized losses to other comprehensive income reflecting the decrease in the fair value of the interest rate swaps and at December 31, 2000 had a cumulative unrealized loss, net of tax, of $1.1 million. During 2001, the Company recorded $1 million of unrealized losses to other comprehensive income reflecting the decrease in the fair value of the interest rate swaps and at December 31, 2001 had a cumulative unrealized loss, net of tax, of $2.1 million.

The Company has foreign currency forward contracts to hedge specific transactions denominated in foreign currencies. During 1999, the fair value of the Company’s foreign currency forward contracts increased by $6.7 million in unrealized gains. At December 31, 1999, the Company had cumulative unrealized gains, net of tax, of $6.7 million on its foreign currency forward contracts. During 2000, the fair value of the Company’s foreign currency forward contracts decreased by $5.3 million. At December 31, 2000, the Company had cumulative unrealized gains, net of tax, of $1.4 million on its foreign currency forward contracts. During 2001, the fair value of the Company’s foreign currency forward contracts decreased by approximately $0.1 million. At December 31, 2001, the Company had cumulative unrealized gains, net of tax, of $1.3 million on its foreign currency forward contracts.

Segment Information

Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information”, (“SFAS 131”) establishes standards for reporting information on operating segments in interim and annual financial statements. The Company’s chief operating decision-makers review the profit and loss of the Company on an aggregate basis and manage the operations of the Company as a single operating segment. Accordingly, the Company operates in one segment, which is the business of developing, manufacturing and marketing drugs for human health care.

Revenue Recognition and Accounts Receivable

SEC Staff Accounting Bulletin No 101 (“SAB 101”) was effective for the Company in fiscal 2000. SAB 101 provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. SAB 101 establishes the SEC’s view that it is

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not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. Further, SAB 101 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. The Company believes that its revenue recognition policies are in compliance with SAB 101.

Revenues from product sales are recognized when product is shipped and title and risk of loss has passed to the customer. Revenues are recorded net of applicable allowances for returns, rebates and other applicable discounts and allowances. The Company prepares its estimates for sales returns and allowances, discounts and rebates quarterly based primarily on historical experience updated for changes in facts and circumstances, as appropriate.

The Company receives royalty revenues under license agreements with a number of third parties that sell products based on technology developed by the Company or to which the Company has rights. The license agreements provide for the payment of royalties to the Company based on sales of the licensed product. The Company records these revenues based on estimates of the sales that occurred during the relevant period. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties paid to the Company (adjusted for any changes in facts and circumstances, as appropriate). The Company maintains regular communication with its licensees in order to gauge the reasonableness of its estimates. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period which they become known, typically the following quarter. Historically, adjustments have not been material based on actual amounts paid by licensees. There are no future performance obligations on the part of the Company under these license agreements.

Revenue is not recognized in any circumstances unless collectibility is reasonably assured.

Research and Development Expenses

Research and development expenses are comprised of costs incurred in performing research and development activities including salaries and benefits, facilities costs, overhead costs, clinical trial and related clinical manufacturing costs, contract services and other outside costs. Research and development costs, including upfront fees and milestones paid to collaborative partners, are expensed as incurred.

Earnings per Share

The Company calculates earnings per share in accordance with Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS 128”). SFAS 128 requires the presentation of “basic” earnings per share and “diluted” earnings per share. Basic earnings per share is computed by dividing the net income available to common shareholders by the weighted average number of shares of common stock outstanding. For purposes of calculating diluted earnings per share the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents such as stock options and warrants.

Dilutive securities include options outstanding under the Company’s stock option plans. Options to purchase 3.8 million shares, 2.7 million shares and 276,000 shares were outstanding at December 31, 2001, 2000, and 1999, respectively, but not included in the computations of diluted earnings per share because the options’ exercise prices were greater than the average market price during the periods. The put warrants sold in connection with the Company’s stock repurchase program in 1999 did not have a significant additional dilutive effect. As of December 31, 2001, there were no outstanding put warrants.

Shares used in calculating basic and diluted earnings per share for the periods ending December 31, are as follows:

(in thousands)	2001		2000		1999
Weighted average number of shares of common stock outstanding		148,355		148,743		149,921
Dilutive stock options		4,561		5,859		7,867
Shares used in calculating diluted earnings per share		152,916		154,602		157,788

On June 11, 1999, the Board of Directors declared a two-for-one stock split to be effected in the form of a stock dividend of one share of common stock for each share outstanding. The stock dividend was payable on June 25, 1999 to shareholders of record at the close of business on June 11, 1999. All references to number of shares and per share amounts in the financial statements have been restated to give effect to the stock split for all periods presented.

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2. Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and marketable securities. Wholesale distributors and large pharmaceutical companies account for the majority of the accounts receivable and collateral is generally not required. To mitigate the risk, the Company monitors the financial performance and credit worthiness of its customers. The Company invests its excess cash balances in marketable debt securities, primarily U.S. government securities and corporate bonds and notes, with strong credit ratings. The Company limits the amount of investment exposure as to institution, maturity and investment type.

The average maturity of the Company’s marketable securities as of December 31, 2001 and 2000 was 29 months and 30 months, respectively. Proceeds from maturities and other sales of marketable securities, which were primarily reinvested, for the years ended December 31, 2001, 2000 and 1999 were approximately $735 million, $606 million and $1,006 million, respectively. The cost of securities sold is determined based on the specific identification method. Realized gains and (losses) on these sales for the years ended December 31, 2001, 2000 and 1999 were $6.1 million, $(1.8) million and $(1.4) million, respectively.

The following is a summary of marketable securities:

			Net
			Unrealized		Amortized
(in thousands)	Fair Value		Gains		Cost
December 31, 2001:
U.S. Government securities	$	252,838	$	6,414	$	246,424
Corporate debt securities		491,227		12,349		478,878
	$	744,065	$	18,763	$	725,302
Marketable securities, noncurrent	$	12,183	$	—	$	12,183
December 31, 2000:
U.S. Government securities	$	288,214	$	5,284	$	282,930
Corporate debt securities		345,461		2,444		343,017
	$	633,675	$	7,728	$	625,947
Marketable securities, noncurrent	$	71,982	$	28,174	$	43,808

The Company uses interest rate swap agreements to mitigate the risk associated with its floating rate debt. The fair value of the interest rate swap agreements at December 31, 2001, representing the cash requirements of the Company to settle the agreements, approximated $3.3 million. The fair value of the interest rate swap agreements at December 31, 2000, representing the cash requirements of the Company to settle the agreements, was approximately $1.7 million. The Company has designated the interest rate swaps as cash flow hedges. There were no amounts of hedge ineffectiveness related to the Company’s interest rate swaps during 2001 and 2000, and no gains or losses were excluded from the assessment of hedge effectiveness. The Company records the differential to be paid or received on the interest rate swaps as incremental interest expense. The Company expects approximately $2.5 million in losses related to its interest rate swaps to affect earnings in 2002.

The Company has foreign currency forward contracts to hedge specific transactions denominated in foreign currencies. All foreign currency forward contracts have durations of ninety days to 12 months. These contracts have been designated as cash flow hedges and accordingly, to the extent effective, any unrealized gains or losses on these foreign currency forward contracts are reported in other comprehensive income. Realized gains and losses for the effective portion are recognized with the underlying hedge transaction. The Company assesses hedge ineffectiveness on a quarterly basis and records the gain or loss related to the ineffective portion to current earnings to the extent significant. If the Company determines that a forecasted transaction is no longer probable of occurring, the Company discontinues hedge accounting for the affected portion of the hedge instrument and any related unrealized gain or loss on the contract is recognized in current earnings. The notional settlement amount of the foreign currency forward contracts outstanding at December 31, 2001 was approximately $113.4 million. These contracts had a fair value of $2.0 million, representing an unrealized gain, and were included in other current assets at December 31, 2001.

In 2001, there were no significant amounts recognized in earnings due to hedge ineffectiveness or as a result of the discontinuance of cash flow hedges upon determining that it was no longer probable that the original forecasted transaction would occur. The Company recognized $6.9 million of gains in product revenue and $2 million of gains in royalty revenue for the settlement of certain effective cash flow hedge instruments during the year ended December 31, 2001. These settlements were recorded in the same period as the related forecasted transactions affecting earnings. The Company expects approximately $2 million of unrealized gains at December 31, 2001 to affect earnings in 2002 related to its foreign currency forward contracts.

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In 2000, there were no significant amounts recognized in earnings due to hedge ineffectiveness. During 2000, the Company recognized $977,000 in other income as a result of the discontinuance of cash flow hedges upon determining that it was no longer probable that the original forecasted transaction would occur. The Company recognized $12.7 million of gains in product revenue and $3.7 million of gains in royalty revenue for the settlement of certain effective cash flow hedge instruments during the year ended December 31, 2000. These settlements were recorded in the same period as the related forecasted transactions affecting earnings.

In 1999, there were no significant amounts recognized in earnings due to hedge ineffectiveness or as a result of the discontinuance of cash flow hedge accounting because it was probable that the original transaction would not occur. The Company recognized $7.4 million of gains in product revenue and $2.7 million of gains in royalty revenue for the settlement of certain effective cash flow hedge instruments during the year ended December 31, 1999. These settlements were recorded in the same period as the related forecasted transactions affecting earnings.

3. Borrowings

As of December 31, 2001, the Company had $14.2 million outstanding under a floating rate loan with a bank (the “Term Loan”). The Term Loan is collateralized by the Company’s laboratory and office building in Cambridge, Massachusetts. The Term Loan provides for annual principal payments of $1.7 million in each of the years 1996 through 2004 with the balance due May 8, 2005. The Company also entered into an interest rate swap agreement, with the same bank, fixing its interest rate at 7.5% during the remaining term of the loan, payable semi-annually.

As of December 31, 2001, the Company had $33 million outstanding under a floating rate loan agreement with a bank for financing the construction of its biological manufacturing facility in North Carolina (the “Construction Loan”). The Construction Loan is collateralized by the facility. Payments of $805,000 are due quarterly through 2006 with the balance due in 2007. The Company also entered into an interest rate swap agreement, with the same bank, fixing its interest rate at 7.75% during the remaining term of the loan, payable quarterly.

The Term Loan and Construction Loan agreements include various covenants, including financial covenants, which require the Company to maintain minimum net worth, cash flow and various financial ratios. The Company’s long-term debt obligations are carried at face value, which approximates fair market value.

Long-term debt at December 31, consists of the following:

(in thousands)	2001			2000
Term Loan due 2005	$	14,168		$	15,836
Construction Loan due 2007		33,017			36,237
		47,185			52,073
Current portion		(4,888	)		(4,888	)
	$	42,297		$	47,185

4. Consolidated Balance Sheets Details

Property and equipment:

	December 31,
(in thousands)	2001		2000
Land	$	23,532	$	12,349
Buildings		170,504		84,119
Leasehold improvements		65,381		63,845
Equipment		249,887		185,404
Construction in Progress		218,521		191,355
Total cost		727,825		537,072
Less accumulated depreciation		171,827		136,643
	$	555,998	$	400,429

Depreciation expense was $36.9 million, $27.8 million and $25.9 million for 2001, 2000 and 1999, respectively.

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Accrued expenses and other:

	December 31,
(in thousands)	2001		2000
Royalties and licensing fees	$	34,361	$	32,188
Income taxes		90,131		69,494
Clinical trial costs		13,099		24,694
Legal settlement accrual		20,000		—
Other		81,519		51,888
	$	239,110	$	178,264

5. Pensions

The Company has a defined benefit pension plan which provides benefits to substantially all of its employees. The Company also has a supplemental retirement benefit plan which covers certain employees. The pension plans are noncontributory with benefit formulas based on employee earnings and credited years of service. The Company’s funding policy for its pension plans is to contribute amounts deductible for federal income tax purposes. Funds contributed to the plans are invested in fixed income and equity securities.

The components of net periodic pension cost for each of the three years ended December 31 are summarized below:

(in thousands)	2001			2000			1999
Service cost	$	3,644		$	3,314		$	2,923
Interest cost		2,039			1,799			1,307
Expected return on plan assets		(1,655	)		(1,258	)		(994	)
Amortization of prior service cost		43			43			43
Amortization of net actuarial loss		16			86			22
Net pension cost	$	4,087		$	3,984		$	3,301

Reconciliations of projected benefit obligations, fair value of plan assets and the funded status of the plans as of December 31, are presented below:

(in thousands)	2001			2000
Change in projected benefit obligation
Net projected benefit obligation at the beginning of the year	$	(24,434	)	$	(19,377	)
Service cost		(3,644	)		(3,314	)
Interest cost		(2,039	)		(1,799	)
Actuarial loss		(190	)		(935	)
Gross benefits paid		317			991
Net projected benefit obligation at the end of the year		(29,990	)		(24,434	)
Change in plan assets
Fair value of plan assets at the beginning of the year		15,256			15,061
Actual return on plan assets		(1,090	)		(934	)
Employer contributions		5,000			2,000
Gross benefits paid		(182	)		(752	)
Administrative expenses		(256	)		(119	)
Fair value of plan assets at the end of the year		18,728			15,256
Funded status at the end of the year
Funded status at the end of the year		(11,262	)		(9,178	)
Unrecognized net actuarial loss		4,295			1,224
Unrecognized prior service cost		229			271
Net amount recognized at the end of the year	$	(6,738	)	$	(7,683	)

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Weighted average assumptions at the end of the year	2001		2000
Discount rate	7.25	%	7.50	%
Expected return on plan assets	9.00	%	8.00	%
Rates of compensation increase	5.00	%	5.00	%

The Company has an unfunded supplemental retirement plan. As of December 31, 2001 the projected benefit and the accumulated benefit obligations were $5.9 million and $4.6 million, respectively. As of December 31, 2000 the projected benefit and the accumulated benefit obligations were $5.7 million and $3.7 million, respectively.

6. Other Income, Net

Other income, net consists of the following (in thousands):

				December 31,
(in thousands)	2001			2000			1999
Interest income	$	44,128		$	42,965		$	35,407
Interest expense		(3,954	)		(4,310	)		(4,639	)
Other income (expense)		(10,875	)		120,094			(18,003	)
Total other income, net	$	29,299		$	158,749		$	12,765

Other income (expense) for the period ended December 31, 2001 included realized gains on the sale of certain non-current marketable securities totaling $32.1 million and a $28 million write-down of unrealized losses in certain non-current marketable securities that were determined to be other than temporary. Additionally, the Company reported a charge of $20 million as part of the settlement of the ongoing patent infringement dispute with Berlex. (See Note 9 of the Notes to Consolidated Financial Statements).

Other income (expense) for the period ended December 31, 2000 included realized gains on the sale of certain non-current marketable securities totaling approximately $101.1 million. Additionally, the Company realized gains of approximately $24.1 million upon the acquisition of two of its investees by third parties. Other income (expense) for the period ended December 31, 1999 included a $15 million write-down of unrealized losses in certain non-current marketable securities that were determined to be other than temporary.

As part of its strategic product development efforts, the Company invests in equity securities of certain biotechnology companies with which it has collaborative agreements. As a matter of policy, Biogen determines on a quarterly basis whether any decline in the fair value of a marketable security is temporary or other than temporary. Unrealized gains and losses on marketable securities are included in other comprehensive income in shareholders’ equity, net of related tax effects. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value with a charge to current earnings. The factors that the Company considers in its assessments include prospects for favorable clinical trial results, new product initiatives and new collaborative agreements.

As part of its assessments at December 31, 2001, the Company assessed the unrealized losses on its investments in Curis Inc. and Targeted Genetics Corporation, and determined that the positive evidence suggesting that these investments would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at December 31, 2001. Accordingly, the related unrealized losses of approximately $28 million were recognized as other expense in the fourth quarter of 2001. As part of its assessments at June 30, 1999, the Company assessed the unrealized losses on its investments in Creative BioMolecules, Inc, CV Therapeutics, and CuraGen, and determined that the positive evidence suggesting that these investments would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at June 30, 1999. Accordingly, the related unrealized losses of approximately $15 million were recognized as other expense in the second quarter of 1999.

The Company had no unrealized losses at December 31, 2001 that were determined to be temporary.

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7. Income Taxes

The components of income before income taxes and of income tax expense (benefit) for each of the three years ended December 31, are as follows:

(in thousands)		2001			2000			1999
Income before income taxes:
	Domestic	$	298,669		$	379,489		$	253,303
	Foreign		90,828			107,616			75,713
		$	389,497		$	487,105		$	329,016
Income tax expense:
Current
	Federal	$	119,930		$	115,696		$	112,499
	State		12,911			11,969			15,587
	Foreign		1,917			1,098			4,206
		$	134,758		$	128,763		$	132,292
Deferred
	Federal	$	(16,257	)	$	25,344		$	(20,863	)
	State		(1,687	)		(579	)		(2,863	)
			(17,944	)		24,765			(23,726	)
Total income tax expense		$	116,814		$	153,528		$	108,566

Deferred tax assets (liabilities) are comprised of the following at December 31:

(in thousands)	2001			2000
Tax credits	$	25,440		$	28,135
Inventory and other reserves		18,288			11,532
Other		380			380
Deferred tax asset		44,108			40,047
Depreciation, amortization and other		(10,365	)		(24,189	)
Unrealized gain on investments		(6,424	)		(12,956	)
Deferred tax liabilities		(16,789	)		(37,145	)
	$	27,318		$	2,901

A reconciliation of the U.S. federal statutory tax rate to the effective tax rate for the periods ending December 31 is as follows:

	2001			2000			1999
Statutory rate		35.0	%		35.0	%		35.0	%
State taxes		2.5			3.2			3.3
Foreign taxes		(4.2	)		(2.6	)		(2.6	)
Credits and net operating loss utilization		(3.4	)		(3.3	)		(2.6	)
Other		0.1			(0.8	)		(0.1	)
Effective tax rate		30.0	%		31.5	%		33.0	%

At December 31, 2001, the Company had tax credits of $25.4 million, most of which expire at various dates through 2016.

As of December 31, 2001, undistributed foreign earnings of non-U.S. subsidiaries included in consolidated retained earnings aggregated $188.3 million, exclusive of earnings that would result in little or no tax under current U.S. tax law. The Company intends to reinvest these earnings indefinitely in operations outside the United States. It is not practicable to estimate the amount of additional tax that might be payable if such earnings were remitted to the United States.

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8. Research Collaborations

In July 2001, the Company signed a development and marketing collaboration agreement (the “ICOS Agreement”) with ICOS Corporation (“ICOS”), under which the Company and ICOS will collaborate worldwide on the development and commercialization of orally active, small molecule LFA-1 antagonists as oral therapeutics for the treatment of inflammatory conditions. Under the terms of the ICOS agreement, the Company paid ICOS a one-time, non-refundable license fee of $8 million, which was charged to research and development expense. Additionally, as part of the agreement, Biogen made available to ICOS a line of credit in the amount of $20 million, of which $17.7 million was available at December 31, 2001. During 2001, the Company provided $2.3 million from the line of credit to ICOS that was charged to research and development expense in 2001 upon the achievement of certain clinical milestones by ICOS. As of December 31, 2001, there were no borrowings outstanding under the credit facility. The Company has committed to providing milestone payments to ICOS upon the achievement of certain future events. If all the milestones were achieved and commercialization were to be successful in excess of specified levels of sales, the Company would be required to pay up to an additional $83.5 million over the life of the agreement.

In September 2000, the Company signed a research and development agreement (the “Eos Agreement”) with Eos Biotechnology, Inc. (“Eos”), under which the Company and Eos will collaborate in the research and development of novel targets for antibody and protein therapeutics in the area of breast cancer. Under the Eos Agreement, the Company purchased 1.9 million shares of preferred stock of Eos for $5 million at fair market value. In addition, the Company paid a one-time non-refundable license fee of $6 million, which was charged to research and development expense and acquired certain exclusive, worldwide rights related to breast cancer-specific molecules for the use in the development of new antibody and secreted protein therapeutics. The Company accounts for its investment in Eos, which is included in other assets, using the cost method of accounting, subject to periodic review of impairment. The Company provided Eos with research and development funding of $1.5 million in 2001 and $250,000 in 2000. The Company expects to fund research activities of Eos related to the collaboration of up to $1.5 million, $1.75 million and $1 million in 2002, 2003, and 2004, respectively.

In August 2000, the Company signed a development and marketing collaboration agreement (the “Antegren Agreement”) with Elan Pharma International, Ltd, an affiliate of Elan Corporation, plc (“Elan”) under which the Company and Elan collaborate in the development, manufacture and commercialization of Antegren® (natalizumab), a humanized monoclonal antibody and alpha 4 integrin inhibitor. Under the terms of the Antegren Agreement, Biogen and Elan will share costs for on-going development activities. The Company paid a one-time non-refundable license fee of $15 million in 2000, which was charged to research and development expense. During 2001, the Company provided $16 million to Elan for certain milestones achieved during the year, which were charged to research and development expense. The Company has committed to paying Elan additional amounts upon the completion of certain future milestones. If all the milestones are achieved, the Company would be required to pay up to an additional $21 million over the life of the agreement.

In October 1997, the Company signed a research and option agreement (the “CuraGen Agreement”) with CuraGen Corporation (“CuraGen”) under which the Company and CuraGen collaborate in the discovery of novel genes using CuraGen’s functional genomics technologies. The Company provided CuraGen with research and development funding of $1.5 million and $1.1 million in 2000 and 1999, respectively. The CuraGen Agreement was terminated in September 2000 and all investments in CuraGen common stock were sold during the year 2000.

In July 1996, the Company signed a collaborative research and commercialization agreement (the “Ontogeny Agreement”) with Ontogeny, Inc. (“Ontogeny”), a private biotechnology company, for the development and commercialization of three specific hedgehog cell proteins, a class of novel human proteins, that are responsible for reducing the formation or regeneration of tissue. In August 2000, Ontogeny merged with two other biotechnology companies to form Curis Inc. (“Curis”). As a shareholder in Ontogeny, Biogen received Curis common stock in exchange for the Company’s shares in Ontogeny. The Company provided $1 million and $2.8 million of research funding to Ontogeny in 2000 and 1999, respectively. Additionally, the Company provided $1.5 million upon conclusion of the Ontogeny Agreement, which was charged to research and development expense in 2000. At December 31, 2001 the Company retained approximately 308,000 shares of Curis common stock, and included the investment in long-term marketable securities available-for-sale.

In August 1995, the Company signed a collaborative research agreement (the “Genovo Agreement”) for the development of human gene therapy treatments with Genovo, Inc. (“Genovo”), a gene therapy research company. Under the Genovo Agreement, the Company acquired 380,000 shares of Genovo Series A Preferred stock for $4.5 million and acquired certain licensing rights. The Company accounted for this investment, which was included in other assets, using the equity method of accounting. The Company recorded its proportion of Genovo’s net losses as research and development expense in the amounts of $3.9 million and $7.6 million in 2000 and 1999, respectively. In August 2000, Genovo entered into a merger agreement (“Targeted Merger Agreement”) with Targeted Genetics Corporation (“Targeted”). As a shareholder in Genovo, Biogen received Targeted common stock in exchange for the Company’s shares in Genovo. Additionally, concurrently with the Targeted Merger Agreement, the Company entered into a development and marketing agreement and a funding agreement (the “Targeted Agreements”) for gene

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therapy research and development in oncology. The Targeted Agreements provide for a $10 million credit facility. Targeted also has an option to sell to the Company an additional $10 million of Targeted common stock at fair value. As of December 31, 2001, there were $10 million of borrowings outstanding under the credit facility and no additional common stock had been purchased by the Company. The Company provided $1 million and $250,000 in research funding to Targeted in 2001 and 2000, respectively. The Company expects to fund research activities of Targeted related to the collaboration of up to $1 million and $750,000 in 2002 and 2003, respectively.

9. Commitments and Contingencies

The Company rents laboratory and office space and certain equipment under noncancellable operating leases. The rental expense under these leases, which terminate at various dates through 2015, amounted to $17.2 million in 2001, $14.9 million in 2000 and $11.9 million in 1999. The lease agreements contain various clauses for renewal at the option of the Company and, in certain cases, escalation clauses linked generally to rates of inflation.

At December 31, 2001, minimum annual rental commitments under noncancellable leases were as follows:

Year	(in thousands)
2002	$	20,493
2003		18,861
2004		18,472
2005		17,599
2006		12,573
Thereafter		57,579
Total minimum lease payments	$	145,577

The Company is building a large scale manufacturing plant in Research Triangle Park, North Carolina. The Company expects that construction will be completed early in 2002. The project is expected to cost $175 million, of which $172.5 million had been committed for construction costs at December 31, 2001. Additionally, the Company began expansion of its Research Triangle Park, North Carolina complex by constructing a laboratory office building and adding manufacturing capacity. The projects are expected to be completed by the summer of 2003 at a total cost of approximately $138 million. As of December 31, 2001, the Company had committed $87 million for construction costs. The Company is also completing plans to build a fill finish plant in Denmark. The Company expects that construction will commence in 2002 and be completed early in 2005, at an estimated cost of $130 million. At December 31, 2001, $17 million had been committed for construction costs related to the fill finish plant in Denmark.

On July 3, 1996, Berlex Laboratories, Inc. (“Berlex”) filed suit against Biogen in the United States District Court for the District of New Jersey alleging infringement by Biogen of Berlex’s “McCormick” patent (U.S. Patent No. 5,376,567) in the United States in the production of Biogen’s AVONEX product. In November 1996, Berlex’s New Jersey action was transferred to the United States District Court in Massachusetts and consolidated for pre-trial purposes with a related declaratory judgment action previously filed by Biogen. On August 18, 1998, Berlex filed a second suit against Biogen alleging infringement by Biogen of a patent which was issued to Berlex in August 1998 and which is related to the McCormick patent (U.S. Patent No. 5,795,779). On September 23, 1998, the cases were consolidated for pre-trial and trial purposes. Berlex sought a judgment granting it damages, a trebling of any damages awarded and a permanent injunction restraining Biogen from the alleged infringement. A hearing on the parties’ summary judgment motions in the case was completed in March 2000. In September 2000, the District Court rendered final judgment in favor of Biogen and against Berlex determining that Biogen’s production of AVONEX did not infringe any of the claims of the Berlex patents. Berlex has appealed this decision with the Court of Appeals for the Federal Circuit. Oral arguments were presented by the parties to the Court of Appeals on November 7, 2001 and a decision is expected in the first half of 2002. In January 2002, Biogen and Berlex reached a settlement of the litigation pursuant to which the parties agreed to end the dispute in return for a payment of $20 million from Biogen to Berlex and the possibility of a second and final payment from Biogen to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in favor of Biogen. If the Court of Appeals were to rule against Biogen and return the case to the District Court, Biogen believes that the most likely decision would require it to make a second and final payment of $55 million to Berlex. In the event the ruling is significantly adverse to Biogen, the second and final payment to Berlex would be $230 million. As part of the settlement, Biogen and Berlex agreed not to pursue further litigation about these patents. Biogen has recorded a $20 million charge in “Other Income, net” in the fourth quarter of 2001 to account for the first payment to Berlex. The Company has determined that, based on information currently available, the most probable outcome is that no additional payments will be required.

In 1995, the Company filed an opposition with the Opposition Division of the European Patent Office to oppose a European patent (the “Rentschler I Patent”) issued to Dr. Rentschler Biotechnologie GmbH (“Rentschler”) relating to compositions of matter of beta interferon. In 1997, the European Patent Office issued a decision to revoke the Rentschler I Patent. Rentschler

29

appealed that decision and an oral hearing on the appeal took place in December 2000. At the oral hearing in order to gain reinstatement of the patent, Rentschler narrowed the patent claims so as to claim only a specific cell line. Biogen does not use the specific cell line now claimed. On October 13, 1998, the Company filed another opposition with the Opposition Division of the European Patent Office to oppose a second European patent issued to Rentschler (the “Rentschler II Patent”) with certain claims regarding compositions of matter of beta interferon with specific regard to the structure of the glycosylated molecule. A hearing on the Company’s opposition previously scheduled for October 2000 has been postponed, and will likely be held in 2002. While Biogen believes that the Rentschler II Patent will be revoked, if the Rentschler II Patent were to be upheld and if Rentschler were to obtain, through legal proceedings, a determination that the Company’s sale of AVONEX in Europe infringes a valid Rentschler II Patent, such result could have a material adverse effect on the Company’s results of operation and financial position.

10. Shareholders’ Equity

Convertible Exchangeable Preferred Stock

The Company has authority to issue 20,000,000 shares of $.01 par value preferred stock.

Shareholder Rights Plan

In 1989, the Company’s Board of Directors declared a dividend to holders of the Company’s common stock of rights (the “Old Rights”) to purchase shares of Series A Junior Participating Preferred Stock (the “Old Preferred Stock”). Each Old Right entitled the registered holder to purchase from the Company one one-hundredth of a share of Old Preferred Stock upon the terms and subject to the conditions set forth in a Rights Agreement, dated as of May 8, 1989, between the Company and The First National Bank of Boston (the “Old Plan”). The Old Plan and the Old Rights expired on May 8, 1999. Consequently, on April 16, 1999, the Board of Directors declared a dividend to holders of the Company’s common stock of one new preferred share purchase right (a “New Right”) for each outstanding share of common stock. The New Rights were granted on May 8, 1999 pursuant to a new Rights Agreement, dated May 8, 1999, between the Company and State Street Bank and Trust Company, as Rights Agent (the “New Plan”). Each New Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A-1 Junior Participating Preferred Stock, par value $.01 per share (“New Preferred Stock”), at a price of $850 per one one-thousandth of a share of New Preferred Stock, subject to adjustment. Each one one-thousandth of a share of New Preferred Stock has rights, privileges and preferences which make its value approximately equal to the value of one share of the Company’s common stock. The New Rights are exercisable only if a person or group acquires 20% or more of the outstanding common stock of the Company or commences a tender or exchange offer, the consummation of which would result in the ownership of 20% or more of the outstanding common stock of the Company. Once the New Rights become exercisable, and in some circumstances if additional conditions are met, each New Right will entitle the Company’s shareholders (other than the acquirer) to, among other things, purchase common stock at a substantial discount. Unless earlier redeemed or exchanged by the Company, the New Rights expire on May 8, 2009. The Company is entitled to redeem the New Rights at a price of $.001 per New Right.

The Old Preferred Stock has been eliminated and replaced with the New Preferred Stock. At December 31, 2001, the Company had 250,000 shares of New Preferred Stock authorized for use in connection with the New Plan.

Share Option and Purchase Plans

The Company has several stock-based compensation plans. The Company applies APB Opinion No. 25 “Accounting for Stock Issued to Employees” in accounting for its plans and applies Statement of Financial Accounting Standards No. 123 “Accounting for Stock Issued to Employees” (“SFAS 123”) for disclosure purposes only. The SFAS 123 disclosures include pro forma net income and earnings per share as if the fair value-based method of accounting had been used. Stock issued to non-employees is accounted for in accordance with SFAS 123 and related interpretations. Included in compensation expense for the periods ending December 31, 2001, 2000 and 1999 were approximately $829,000, $(249,000), and $7.5 million, respectively, related to stock based compensation plans.

The Company has several plans and arrangements under which it may grant options to employees, Directors and Scientific Board members to purchase common stock. Under the terms of the Company’s stock-based compensation plans, approximately 54 million options may be granted. Option grants are typically made under the 1985 Non-Qualified Stock Option Plan and the 1987 Scientific Board Stock Option Plan (the “Plans”). Options under the Plans are granted at no less than 100% of the fair market value on the date of grant. Options generally become exercisable over various periods, typically 5 to 7 years for employees and 3 years for Directors and Scientific Board members, and have a maximum term of 10 years.

30

Activity under these plans for the periods ending December 31, is as follows (shares are in thousands):

(shares are in thousands)	2001					2000					1999
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding, Jan. 1		16,917		$	31.70		17,938		$	24.53		22,376		$	15.97
Granted		3,840			57.13		2,731			55.34		3,099			60.24
Exercised		(2,079	)		15.48		(3,250	)		11.61		(5,435	)		10.45
Canceled		(921	)		37.24		(502	)		34.17		(2,102	)		22.41
Outstanding, Dec. 31		17,757		$	38.81		16,917		$	31.70		17,938		$	24.53
Options exercisable		9,466					9,093					9,384
Available for grant		9,081					1,578					3,807
Weighted average fair value of options granted				$	31.77				$	24.34				$	26.23

The table below summarizes options outstanding and exercisable at December 31, 2001:

(shares are in thousands)	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of	Number		Contractual		Exercise		Number		Exercise
Exercise Price	Outstanding		Life		Price		Exercisable		Price
$0.00-$10.00		1,505		1.98	$	8.26		1,504	$	8.26
$10.01-$20.00		5,122		4.38		15.90		4,328		15.60
$20.01-$30.00		665		6.04		22.88		428		22.97
$30.01-$40.00		186		6.76		33.20		157		33.13
$40.01-$50.00		2,295		7.02		41.41		1,505		41.16
$50.01-$60.00		5,772		9.30		55.72		648		54.43
$60.01-$70.00		660		8.90		64.29		108		64.25
$70.01-$80.00		1,369		7.95		72.37		706		72.18
Over $80.00		183		7.79		85.93		82		86.13
Total		17,757			$	38.81		9,466	$	27.16

The Company also has two employee stock purchase plans covering substantially all of its employees. The plans allow employees to purchase common stock at 85% of the lower of the fair market value at either the date of the beginning of the plan period or the purchase date. Purchases under the plans are subject to certain limitations and may not exceed an aggregate of 1,000,000 shares; no shares may be issued after December 31, 2007. Through December 31, 2001, 465,189 shares have been issued under the stock purchase plans.

If compensation cost for the Company’s 2001, 2000 and 1999 grants under the stock-based compensation plans had been determined based on SFAS 123, the Company’s pro forma net income, and pro forma diluted earnings per share for the years ending December 31, would have been as follows (in thousands except per share data):

(in thousands, except per share data)	2001		2000		1999
Pro forma net income	$	224,424	$	294,412	$	196,965
Pro forma diluted earnings per share	$	1.47	$	1.90	$	1.25

The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2001			2000			1999
Expected dividend yield		0	%		0	%		0	%
Expected stock price volatility		44	%		45	%		36	%
Risk-free interest rate		5.5	%		6.9	%		5.5	%
Expected option term in years		7.5			5.5			5.6

31

The effects of applying SFAS 123 in this pro forma disclosure are not indicative of future amounts. SFAS 123 did not apply to awards prior to 1995, and additional awards in future years are anticipated.

Stock Repurchase Program

On December 18, 2000, the Company announced that its Board of Directors had authorized the repurchase of up to 4 million shares of the Company’s common stock. The repurchased stock provides the Company with treasury shares for general corporate purposes, such as stock to be issued under employee stock option and stock purchase plans. During 2001, the Company repurchased approximately 1.5 million shares of its common stock at a cost of $88.3 million. Approximately 2.5 million shares remain authorized for repurchase under this program at December 31, 2001.

On February 22, 1999, the Company announced that its Board of Directors had authorized the repurchase of up to 8 million shares of the Company’s common stock. The repurchased stock provided the Company with treasury shares for general corporate purposes, such as stock to be issued under employee stock option and stock purchase plans. During 1999, the Company repurchased approximately 3.4 million shares of its common stock at a cost of $197.7 million. During 2000, the Company repurchased approximately 4.6 million shares of its common stock at a cost of $300.2 million, completing this program.

To enhance the 1999 stock repurchase program, the Company sold put warrants to and purchased call options from independent third parties for a total of 4 million shares of which 2.2 million shares were outstanding at December 31, 1999, at a strike price of $49.47. None of the put warrants and call options were outstanding at December 31, 2000 or 2001. Additionally, during 1999 in a separate put warrant program to facilitate its purchase of common stock, the Company sold put warrants for total proceeds of $22.1 million. The Company had put warrants to purchase 1.6 million shares outstanding at December 31, 1999, at an average strike price of $68.99 relating to this put warrant program. None of the put warrants were outstanding at December 31, 2000. The outstanding put warrants permitted a net-share settlement at the Company’s option and, therefore, did not result in a put obligation liability on the Company’s Consolidated Balance Sheets. The put warrants sold in connection with the Company’s stock repurchase program did not have a significant additional dilutive effect.

11. Segment Information

         The Company operates in one segment, which is the business of developing, manufacturing and marketing drugs for human health care. The chief operating decision-makers review the profit and loss of the Company on an aggregate basis and manage the operations of the Company as a single operating segment. The Company currently derives product revenues from sales of its AVONEX product for the treatment of relapsing forms of multiple sclerosis. The Company also derives revenue from royalties on worldwide sales by the Company’s licensees of a number of products covered under patents controlled by the Company, including alpha interferon and hepatitis B vaccines and diagnostic products. Revenues are primarily attributed from external customers to individual countries where earned based on location of the customer or licensee. At December 31, 2001, and 2000, respectively, product and royalty revenues from external customers in The Netherlands were approximately 11% and 10% of total revenues. As of December 31, 1999, no material amounts of product or royalty revenue could be attributable to an individual foreign country.

32

The Company’s geographic information is as follows (in thousands):

(in thousands)	US		Europe		Asia		Other		Total
December 31, 2001:
Product revenue from external customers	$	711,143	$	246,581	$	—	$	13,870	$	971,594
Royalty revenue from external customers		45,164		21,911		4,468		223		71,766
Long-lived assets		614,026		9,214		—		79		623,319
December 31, 2000:	US		Europe		Asia		Other		Total
Product revenue from external customers	$	552,591	$	199,714	$	—	$	8,774	$	761,079
Royalty revenue from external customers		120,578		26,414		16,479		1,902		165,373
Long-lived assets		497,347		6,125		—		113		503,585
December 31, 1999:	US		Europe		Asia		Other		Total
Product revenue from external customers	$	442,278	$	173,640	$	—	$	4,718	$	620,636
Royalty revenue from external customers		117,182		38,391		15,871		2,355		173,799
Long-lived assets		346,706		20,910		—		131		367,747

The Company received revenue from three wholesale distributors and a specialty distributor in 2001 accounting for a total of 21%, 16%, 14%, and 14% of total product and royalty revenue. The Company received revenue from five unrelated parties in 2000 accounting for a total of 18%, 13%, 12%, 11% and 10% of total product and royalty revenue. The Company received revenue from five unrelated parties in 1999 accounting for a total of 15%, 13%, 13%, 11% and 11% of total product and royalty revenue.

12. Quarterly Financial Data (Unaudited)

(in thousands,		First		Second		Third		Fourth			Total
except per share amounts)		Quarter		Quarter		Quarter		Quarter			Year
	2001
Total revenues		$	237,047	$	260,662	$	265,193	$	280,458		$	1,043,360
Product revenue			219,997		243,217		249,203		259,177			971,594
Royalties revenue			17,050		17,445		15,990		21,281			71,766
Total expenses and taxes			181,387		200,343		205,517		212,729			799,976
Other income (expense), net			16,463		11,533		10,147		(8,844	)		29,299
Net income			72,123		71,852		69,823		58,885			272,683
Basic earnings per share			0.49		0.48		0.47		0.40			1.84
Diluted earnings per share			0.47		0.47		0.46		0.39			1.78
	2000
Total revenues		$	216,848	$	230,514	$	233,754	$	245,336		$	926,452
Product revenue			174,596		190,009		193,242		203,232			761,079
Royalties revenue			42,252		40,505		40,512		42,104			165,373
Total expenses and taxes			194,506		175,191		198,577		183,350			751,624
Other income, net			99,024		16,737		33,204		9,784			158,749
Net income			121,366		72,060		68,381		71,770			333,577
Basic earnings per share			0.81		0.48		0.46		0.49			2.24
Diluted earnings per share			0.77		0.47		0.44		0.47			2.16

33

13. New Accounting Pronouncements

In July 2001, the FASB issued SFAS 141, “Business Combinations” and SFAS 142, “Goodwill and Other Intangible Assets.” SFAS 141 requires that all business combinations be accounted for under the purchase method only and that certain acquired intangible assets in a business combination be recognized as assets apart from goodwill. SFAS 142 requires that ratable amortization of goodwill be replaced with periodic tests of the goodwill’s impairment and that intangible assets other than goodwill be amortized over their useful lives. SFAS 141 is effective for all business combinations initiated after June 30, 2001 and for all business combinations accounted for by the purchase method for which the date of acquisition is after June 30, 2001. The provisions of SFAS 142 will be effective for fiscal years beginning after December 15, 2001, and will thus be adopted by the Company, as required, in fiscal year 2002. The impact of SFAS 141 and SFAS 142 on the Company’s financial statements is not expected to be material.

In August 2001, the FASB issued SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 144 requires that those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001, and will thus be adopted by the Company, as required, in fiscal year 2002. The adoption of SFAS 144 is not expected to have a material effect on the Company’s financial statements.

In February 2002, the FASB Emerging Issues Task Force (“EITF”) released EITF Issue No. 01-09 (“EITF 01-09”), “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. EITF 01-09 states that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor’s income statement. The provisions of EITF 01-09 will be effective for fiscal years beginning after December 15, 2001, and will thus be adopted by the Company , as required, in 2002. The Company is currently evaluating the effect on the Company’s financial statements of adoption of EITF 01-09.

34

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of Biogen, Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of cash flows and of shareholders’ equity present fairly, in all material respects, the financial position of Biogen, Inc. and its subsidiaries at December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
January 17, 2002

35

Senior Executives and Board Members
Biogen, Inc. and Subsidiaries

Senior Biogen Executives	Board of Directors
James L. Vincent	James L. Vincent 2,3,5
Chairman of the Board	Chairman of the Board
	Biogen, Inc.
James C. Mullen
President and Chief Executive Officer	Alan Belzer 1, 5
	President, Chief Operating Officer and Director,
Burt A. Adelman, M.D.	Allied-Signal, Inc. (retired)
Executive Vice-President – Research
and Development	Harold W. Buirkle 1,2,4
	Managing Director, The Henley Group, Inc. (retired)
Cornelis “Kees” Been
Senior Vice President – Oncology Business	Mary L. Good, Ph.D. 2
Unit	Former Undersecretary for Technology, U.S
	Department of Commerce; Managing Member,
Thomas J. Bucknum, Esq	Venture Capital Investors, LLC; Donaghey University
Executive Vice President – General Counsel,	Professor at University of Arkansas at Little Rock;
Secretary and Clerk	Dean, Donaghey College of Information Science and
	System Engineering
Frank A. Burke, Jr.
Executive Vice President – Human Resources	Thomas F. Keller, Ph.D. 1
	R. J. Reynolds Professor and Former Dean, Fuqua School
Nadine D. Cohen, Ph.D.	of Business, Duke University
Senior Vice President – Regulatory Affairs
	Roger H. Morley 2,4
Michael Gilman, Ph.D.	Vice President, Schiller International University
Senior Vice President – Research	Co-Managing Director, R&R Inventions Ltd.;
	Former President, American Express Co.
Sylvie L. Gregoire, Pharm. D
Executive Vice President – Technical	James C. Mullen
Operations	President and Chief Executive Officer
	Biogen, Inc.
Robert A. Hamm
Senior Vice President – Europe, Canada,	Sir Kenneth Murray, Ph.D. 3,5
Africa and Middle East	Biogen Professor of Molecular Biology, Emeritus
	University of Edinburgh; Fellow of The Royal Society
Hans Peter Hasler
Executive Vice President – Commercial	Eckhard Pfeiffer
Operations	President and Chief Executive Officer,
	Compaq Corporation (retired)
Peter N. Kellogg
Executive Vice President – Finance and	Phillip A. Sharp, Ph.D. 2, 3
Chief Financial Officer	Institute Professor and Director of the McGovern Institute
	for Brain Research, Massachusetts Institute of Technology;
Toshio Nakata, D. Sc	Nobel Laureate
President – Biogen Japan, Ltd. and
Senior Vice President – Biogen, Inc.	Alan K. Simpson 5
	Director of the Institute of Politics and Visiting Lecturer,
John W. Palmer	John F. Kennedy School of Government, Harvard
Senior Vice President – Corporate	University; Visiting Lecturer, University of Wyoming;
Development	Former U.S. Senator
Patrick J. Purcell	James W. Stevens 1, 5
Senior Vice President – Chief Information	Former Chairman, Prudential Asset
Officer	Management Group
Craig Schneier	1 Member of the Finance and Audit Committee
Senior Vice President – Strategic Organization,	2 Member of the Compensation and Management
Design and Effectiveness	Resources Committee
	3 Member of the Project Share Committee
	4 Member of the Stock and Option Plan
	Administration Committee
	5 Member of the Nominating Committee

36

Shareholder Information
Biogen, Inc. and Subsidiaries

Corporate Headquarters:			SEC Form 10-K
Biogen, Inc.			A copy of the Company’s annual report to the
14 Cambridge Center			Securities and Exchange Commission on
Cambridge, MA 02142			Form 10-K is available upon written request to the:
Telephone: (617) 679-2000			Public Affairs Department
Fax:            (617) 679-2617			Biogen, Inc.
			15 Cambridge Center
Annual Meeting			Cambridge, MA 02142.
Friday, June 14, 2002 at 10:00 a.m
at the Company’s offices in 15 Cambridge Center,			Transfer Agent
Cambridge, MA
All shareholders are welcome			For shareholder questions regarding lost certificates, address
			changes and changes of ownership or name in which the
Market for Securities			shares are held, direct inquiries to:
Biogen’s securities are quoted on the			EquiServe
NASDAQ National Market System			150 Royall Street
Common stock symbol: BGEN			Canton, MA 02021
			(877) 282-1168
As of March 26, 2002 there were approximately			www.equiserve.com
2,514 holders of record of the Company’s Common
Stock. The Company has not paid any cash dividends
on its Common Stock since its inception, and does not			Independent Accountants
intend to pay any dividends in the foreseeable future			PricewaterhouseCoopers LLP
The quarterly high and low closing prices of the			160 Federal Street
Company’s Common Stock on the NASDAQ National			Boston, MA 02110
Market System for 2001 and 2000 are as follows:
			U.S. Legal Counsel
			Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
			One Financial Center
			Boston, MA 02111
	High	Low
Fiscal 2001			News Releases
First Quarter	74 50	5131	As a service to our shareholders and prospective investors,
Second Quarter	66 80	52 03	copies of Biogen news releases issued in the last 12 months
Third Quarter	61 99	49 45	are now available almost immediately 24 hours a day, seven
Fourth Quarter	59 63	52 68	days a week, on the Internet’s World Wide Web at
			http:\www.prnewswire.com. Biogen news releases
Fiscal 2000			are usually posted within one hour of being issued
			and are available at no cost.
First Quarter	119 50	6987
Second Quarter	72 75	49 75
Third Quarter	74 75	5300
Fourth Quarter	64 25	5025	The Biogen logo, AVONEX® and AMEVIVE® are registered
			trademarks of Biogen, Inc. ADENTRI™ is a trademark of Biogen,
			Inc. PEG-INTRON®, INTRON®A, and REBETOL® are registered
			trademarks of Schering-Plough Corporation. REBETRON™ is a
			trademark of Schering-Plough Corporation.
			BETASERON® is a registered trademark of Berlex Laboratories, Inc.
			BETAFERON® is a registered trademark of Schering AG, Germany.
			COPAXONE® is a registered trademark of Teva Neuroscience, Inc.
			INFERGEN® and NEUPOGEN® are registered trademarks
			of Amgen, Inc. REBIF® is a registered trademark of
			Serono S.A. ANTEGREN® is a registered trademark of Elan
			Corporation. NOVANTRONE® and ENBREL® are registered
			trademarks of Immunex Corporation. XANELIM® is a registered
			trademark of Genentech, Inc. REMICADE® is a registered trademark of Centocor, Inc.

37

BIOGEN, INC.
Schedule II
Valuation and Qualifying Accounts and Reserves
Years Ended December 31, 2001, 2000 and 1999
(in thousands)

	Balance at						Balance at End
Description	Beginning of Period		Additions		Deductions		of Period
Allowance for Doubtful Accounts1
Year Ended December 31, 2001	$	2,436	$	386	$	740		$	2,082
Year Ended December 31, 2000	$	1,642	$	794	$	—		$	2,436
Year Ended December 31, 1999	$	1,642	$	—	$	—		$	1,642
Sales Returns & Allowances,
Discounts and Rebates2
Year Ended December 31, 2001	$	9,040	$	94,266	$	89,027		$	14,279
Year Ended December 31, 2000	$	8,654	$	58,666	$	58,280		$	9,040
Year Ended December 31, 1999	$	5,592	$	42,090	$	39,028		$	8,654

 
Figure 1

¹ Additions to allowance for doubtful accounts are recorded as an expense.

² Additions to sales returns & allowances, discounts, and rebates are recorded as a reduction of revenue.

S-1

Report of Independent Accountants on
Financial Statement Schedule

To the Board of Directors and
Shareholders of Biogen, Inc.:

Our audits of the consolidated financial statements referred to in our report dated January 17, 2002 appearing in the 2001 Annual Report to Shareholders of Biogen, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
January 17, 2002

S-2 EX-21 17 b45372biexv21.txt EX-21 SUBSIDIARIES OF THE REGISTRANT . . . EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT Biogen Canada, Inc. Delaware Bio Holding I, Inc. Delaware Bio Holding II, Inc. Delaware Biogen Realty Corporation Massachusetts Biogen Realty Limited Partnership Massachusetts Biogen U.S. Corporation Massachusetts Biogen U.S. Limited Partnership Massachusetts Biogen (RTP) Realty LLC Delaware Biogen (Denmark) Manufacturing ApS Denmark Biogen Australia Pty Ltd Australia Biogen Belgium S.A./N.V. Belgium Biogen B.V. The Netherlands Biogen France S.A. France Biogen Farmaceutica SL Spain Biogen GmbH Austria Biogen GmbH Germany Biogen International B.V. The Netherlands Biogen (Bermuda) Investments, Ltd. Bermuda Biogen Japan Ltd. Japan Biogen Limited United Kingdom Biotech Manufacturing CV The Netherlands Biotech Manufacturing Limited Channel Islands Biogen Norway AS Norway Biogen Sweden AB Sweden Biogen Denmark A/S Denmark Biogen Finland Oy Finland EX-23 18 b45372biexv23.txt EX-23 CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 33-51639 and 333-71695) and in the Registration Statements on Form S-8 (Nos. 33-63013, 33-71647, 33-37312, 33-69174, 33-63015, 333-42887, 333-70701, 333-53598 and 333-81668) of Biogen, Inc. of our report dated January 17, 2002 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated January 17, 2002 relating to the financial statement schedule, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts March 29, 2002 GRAPHIC 19 b45372bixbox.gif GRAPHIC begin 644 b45372bixbox.gif M1TE&.#EA#``,`/?^``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H* M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9 M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*" M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1 MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYRGI^?GZ"@ MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^ MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)RWM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ M^OO[^_S\_/W]_?[^_O___R'Y!`$``/X`+``````,``P`!PA>`/]%8T:PH,%_ M&0`H7,@0(3UF_R)&C*8N`T)P"O1(1"4@F$6+UB@0^H=*P2V$*/]94\!$P$F4 J%B/^`1!%XL>('#-EC'BSY,F0(S]& GRAPHIC 20 b45372bibox.gif GRAPHIC begin 644 b45372bibox.gif M1TE&.#EA#``,`/?^``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H* M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9 M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*" M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1 MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYRGI^?GZ"@ MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^ MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)RWM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ M^OO[^_S\_/W]_?[^_O___R'Y!`$``/X`+``````,``P`!P@Z`/\)'$APX)L? M"!,J_/<#F;B'$!\:8"BNX,`#%"T*Q/BCHD:.'BV"U/AOY,>,)SN2Y&C@@,N7 &+@$$!``[ ` end -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.20

                                                                   EXHIBIT 10.20

                                  BIOGEN, INC.

                        1983 EMPLOYEE STOCK PURCHASE PLAN
       (As amended and restated through December 14, 2001, effective as of
                               December 31, 2001)

I.   PURPOSE AND DEFINITIONS

          A.   Purpose of the Plan: The Plan is intended to encourage ownership
of Shares by all employees of the Company and its Affiliates.

          B.   Definitions: Unless otherwise specified or unless the context
otherwise requires, the following terms, as used in this Employee Stock Purchase
Plan, have the following meanings:

          1.   "Affiliate" means (a) a corporation in respect of which the
          Company owns directly or indirectly fifty percent (50%) or more of the
          voting securities thereof or which is otherwise controlled by the
          Company; or (b) to the extent not inconsistent with Section 423(a) of
          the Code, an unincorporated trade or business controlled by the
          Company which has elected, for federal income tax purposes, to be
          either (i) classified as an association taxable as a corporation or
          (ii) disregarded as an entity separate from its owner (as provided in
          Section 301.7701-3 of the federal income tax regulations). For
          purposes of this definition, the Company shall be deemed to control
          another entity if the Company possesses, directly or indirectly, the
          power to direct or cause the direction of the management and policies
          of such entity, whether through ownership of voting securities, by
          contract or otherwise.

          2.   "Board" means the Board of Directors of the Company.

          3.   "Code" means the United States Internal Revenue Code of 1986, as
          amended from time to time.

          4.   "Committee" means the Stock and Option Plan Administration
          Committee of the Board or, if such committee ceases to exist, the
          Board or a committee thereof to which responsibility for administering
          the Plan shall have been delegated.

          5.   "Company" means Biogen, Inc., a Massachusetts Corporation.

          6.   "Compensation" means salary and wages, including overtime pay,
          received by an Employee before any salary reduction by the employee
          under Code Sections 401(k) or 125, but excluding bonus, incentive and
          similar payments and all other forms of non-cash remuneration.

          7.   "Custodian" shall have the meaning set forth in Section IV.C.


                                  Page 1 of 10


          8.   "Employee" means an individual employed by the Company or an
          Affiliate as a common law employee (determined under the regular
          personnel policies, practices and classifications of the Company or
          the Affiliate, as applicable) whose customary employment is 20 hours
          or more per week and who resides or performs his principal duties
          within the United States, except as is otherwise determined by the
          Committee (ii) employees of non-U.S. Affiliates, except as is
          otherwise determined by the Committee. An individual is not considered
          an Employee for purposes of the Plan if the individual is classified
          as a consultant or contractor under the Company or an Affiliate's
          regular personnel classifications and practices, or if the individual
          is a party to an agreement to provide services to the Company or an
          Affiliate without participating in the Plan, notwithstanding that such
          individual may be treated as a common law employee for payroll tax,
          coverage requirements under Section 410(b) of the Code,
          nondiscrimination requirements under Section 401(a)(4) of the Code or
          other legal purposes.

          9.   "Employee Share Price" shall have the meaning set forth in
          Section V.A.

          10.  "Enrollment Dates" are the earliest date participation is
          permitted hereunder by the Committee when the Plan is first made
          operative and each successive January 1 and July 1 thereafter.

          11.  "Exchange Act" means the United States Securities Exchange Act of
          1934, as amended from time to time.

          12.  "Fair Market Value"

               (i)  If Shares are purchased by the Plan on a U.S. securities
               exchange or the Nasdaq National Market or the Nasdaq SmallCap
               Market, the actual purchase price of such Shares shall be such
               Shares' Fair Market Value.

               (ii) In all other circumstances including if Shares are purchased
               by the Plan from the Company, in determining such Shares' Fair
               Market Value, if the Shares are then listed on any U.S.
               securities exchange or traded on the Nasdaq National Market or
               the Nasdaq SmallCap Market AND sale prices are regularly reported
               for the Shares, then the Fair Market Value shall be the
               arithmetic mean between the "high" and "low" sale prices for the
               Shares reported on the applicable composite tape or other
               comparable reporting system on the applicable date, or if the
               applicable date is not a trading day, on the most recent trading
               day immediately prior to the applicable date. If sale prices are
               not regularly reported for the Shares as described in the
               immediately preceding sentence but bid and asked prices for the
               Shares are regularly reported, then the Fair Market Value shall
               be the mean between the closing or last bid and asked prices for
               the Shares on the applicable date or, if the applicable date is
               not a trading day, on the most recent trading day immediately
               prior to the applicable date. If sale prices are not regularly
               reported for the Shares as described in two



                                  Page 2 of 10


               immediately preceding sentences, then the Fair Market Value shall
               be such value as the Committee in good faith determines.

          13.  "Monthly Share Purchase Date" shall have the meaning set forth in
          Section IV.C.

          14.  "Option" means a right or option granted under the Plan.

          15.  "Participant" means an Employee who is enrolled in the Plan,
          provided however that no Employee may be granted an Option under the
          Plan if, immediately after the Option is granted, such Employee owns
          stock possessing five percent (5%) or more of the total combined
          voting power (or in the case of non-voting stock, value) of all
          classes of issued and outstanding stock of the Company or Affiliate(s)
          (other than wholly owned subsidiaries of the Company.) For purposes of
          determining stock ownership the applicable rules of the Code
          (including attribution) shall control.

          16.  "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 including where appropriate his/her estate.

          17.  "Plan" means this Employee Stock Purchase Plan, as amended and
          restated from time to time.

          18.  "Shares" means the Common Stock of the Company, par value $0.01
          per share, as to which Options have been or may be granted under the
          Plan or any shares of capital stock into which the Shares are changed
          or for which they are exchanged within the provisions of Article VI of
          the Plan.

II.  SHARES SUBJECT TO THE PLAN

          A.   Subject to the terms of Article VI, the maximum aggregate number
of Shares which may be optioned and purchased from time to time shall be One
Million (1,000,000) Shares.

          If an Option ceases to be "outstanding", in whole or in part, the
Shares which were subject to such Option but not purchased shall be available
for the granting of the other Options. An Option shall be treated as
"outstanding" until such Option is exercised in full, or terminates or expires
under the provisions of the Plan.

          B.   No options shall be granted after December 31, 2007.

III. ADMINISTRATION OF THE PLAN

          The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee is authorized to interpret the provisions
of the Plan and each Option, and to make any



                                  Page 3 of 10

rules and determinations which it deems necessary or advisable for the
administration of the Plan provided, however, that all such interpretations,
rules, determinations, terms and conditions shall be made and prescribed in the
context of preserving the tax status of the Options under the Plan granted to
Employees subject to United States federal income taxation and the Plan within
the meaning of Section 423 of the Code. In addition, the Plan is intended to
comply in all respects with Rule 16b-3 or its successors promulgated under the
Exchange Act, with respect to Participants who are subject to Section 16 of the
Exchange Act. The Plan will be interpreted in a manner which comports with this
intention.

IV.  ELIGIBILITY FOR PARTICIPATION

          A.   Subject to the limits in Article II, on the January 1 Enrollment
Date of each year in the case of an Employee who is a Participant on such
January 1 Enrollment Date and on the July 1 Enrollment Date of each year in the
case of an Employee who is a Participant on such July 1 Enrollment Date, the
Company will be deemed to have granted to each such Participant an Option to
purchase, during a six-month period commencing on the Enrollment Date on which
such Option is granted and in the manner provided hereunder, such number of
Shares as have an aggregate Employee Share Price (as determined under Section
V.A) equal to $2,500.00. If, on any Enrollment Date, an insufficient number of
Shares remains available under the Plan to grant to each Participant an Option
to purchase such number of Shares, then the number of Shares subject to each
Option to be granted on such Enrollment Date shall be reduced equally so that
the aggregate number of Share subject to all Options granted on such Enrollment
Date shall not exceed the number of Shares then available under the Plan.

          B.   Employee Contributions: Each eligible Employee may, on an
enrollment application and payroll withholding form approved by the Committee
and filed with his/her employer's payroll department no later than thirty (30)
days prior to a January or July Enrollment Date, elect to participate and make
contributions by payroll deduction of any whole percentage form 1% to 10% of
such Employee's Compensation payable on each payroll period.

          In the event that the amount contributed by a Participant during an
Option exercise period (i.e., the six-month periods commencing on an Enrollment
Date) is in excess of the maximum amount which may be applied to purchase shares
for such Participant, such excess shall be returned to the Participant. No
interest shall accrue or be payable to any Participant with respect to any
amount contributed by the Participant, whether such sums are applied to purchase
Shares or are returned to the Participant.

          Payroll deductions may only be increased by a Participant effective as
of an Enrollment Date, but may be decreased effective with respect to any
payroll period, provided written election on a change authorization and payroll
withholding form approved by the Committee is received by the Participant's
employer's payroll department no later than thirty (30) days prior thereto.

          C.   Application of Payroll Contributions:


                                  Page 4 of 10

               1.   The employer will remit to a bank, stock brokerage firm or
          other custodian (the "Custodian") selected by the Company, the
          accumulated withheld funds of all electing Participants together with
          employer contributions pursuant to Section IV.G, if any, as soon as
          reasonably possible following the end of the month in which the
          deductions were made. Prior to such remittance, Participant
          contributions may be commingled with other Company funds. Not less
          frequently than monthly, the Custodian shall buy from the Company or,
          if the Committee prior thereto approves, give an order to the stock
          broker selected by the Company to purchase (or if the Custodian shall
          be such stock broker, shall itself purchase) in the open market, the
          total number of Shares purchasable with the monies available from such
          remittance. The date on which Shares are so acquired shall be referred
          to as the "Monthly Share Purchase Date." The Committee shall instruct
          the Custodian whether to purchase Shares from the Company or on the
          open market, after giving due consideration to any applicable
          securities laws and the advice of the chief financial officer of the
          Company. A Participant shall be deemed to have exercised his/her
          Options on the Monthly Share Purchase Date to the extent of such
          purchase unless prior thereto the Participant shall have effectively
          withdrawn pursuant to the terms hereof.

               The Company may, in its sole and absolute discretion, refuse to
          sell Shares to the Custodian under the Plan if to do so would be
          violative of any commitment or restriction (whether legally binding or
          otherwise) not to issue or sell its own shares, as from time to time
          exists, and whether such commitment or restriction existed prior to or
          subsequent to the adoption of the Plan or for any other reason the
          Company deems appropriate. The refusal of the Company to sell Shares
          to the Custodian under the Plan shall not adversely affect the Plan's
          right and power to acquire such Shares from any other source the
          Committee deems appropriate.

               2.   The certificates representing the Shares so purchased shall
          be issued in the name of and delivered to the Custodian and the
          account of each electing Participant shall be credited with the number
          of Shares to which he/she shall be entitled on the basis of his/her
          proportion of the aggregate remittance.

               3.   Any cash dividends paid on Shares shall automatically be
          used to purchase additional shares of the Common Stock of the Company,
          unless a Participant in writing instructs the Custodian to the
          contrary. The purchases described in the preceding sentence, whether
          purchased by the Custodian from the Company or in the open market,
          shall be in addition to the number of Shares purchasable pursuant to
          Section II.A and Section IV.A and shall not be of Shares optioned
          under the Plan. Section IV.G with respect to employer's contribution
          shall be inapplicable with respect to shares of the Common Stock of
          the Company acquired under this Paragraph IV.C.3.

               4.   By enrolling in the Plan, each Participant is deemed to have
          authorized the establishment of a brokerage account in his/her name at
          a securities brokerage firm selected




                                  Page 5 of 10

          by or approved of by the Committee.

          D.   Transfer of Certificates to Electing Participants:

               1.   Upon request by a Participant and receipt by the Custodian
          of written notice to such effect from the Company, all or any portion
          of the Shares in the Participant's account shall be transferred by the
          Custodian out of its name into the name of the Participant and a
          certificate evidencing them shall be issued in the name of and
          delivered to the Participant.

               2.   In order to preserve the intended purposes of the Plan as
          set forth in Section 1.A, Employees who become Participants in the
          Plan agree not to transfer or otherwise dispose of Shares acquired on
          their behalf under the Plan (other than in the case of an Employee's
          death or total and permanent disability as determined by the
          Committee) prior to one year from the date of acquisition of such
          Shares on their behalf.

          E.   Shares Retained by the Custodian: Accumulation of Shares not
transferred to Participants under Section IV.D shall be held by the Custodian
for the account of the Participant entitled thereto, but all rights accruing to
an owner of record on such Shares shall belong to and be vested in the
Participant for whose account it is being held, including the right to receive
any and all dividend payable in respect of such Shares whether in cash, shares
of the Company's Common Stock or otherwise, and the right to receive all notices
of stockholders' meetings (which shall be forwarded to the Participant by the
Custodian without delay) and to direct the Custodian how to vote thereat to the
same extent as if such Shares were held in street name by a brokerage firm or
otherwise.

          F.   Withdrawal:

               1.   An electing Participant may discontinue his/her election and
          withdraw from the Plan as of the payroll period next following 30 days
          from the date written notice on a change authorization and payroll
          withholding form approved by the Committee is received by his/her
          employer's payroll department; provided, however, that an electing
          Participant who shall have discontinued his/her election and withdrawn
          from the Plan may not resubscribe to the Plan prior to the Enrollment
          Date coincident with or next following twelve (12) months from the
          effective date of such discontinuance.

               2.   A Participant shall be deemed to have discontinued his/her
          election and withdrawn from the Plan immediately upon the occurrence
          of any of the following:

               a.   The termination for any reason of the Participant's
               employment with the Company or with an Affiliate. 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 who has elected participation under the Plan who is
               absent from work with the Company or with an Affiliate because of
               temporary disability (any disability other than a permanent or
               total disability) or who is on leave of absence for any



                                  Page 6 of 10


               purpose authorized by his/her employer and permitted by an
               authoritative interpretation (e.g., regulation, ruling, case law,
               etc.) of Section 423 of the Code, shall not, during the period of
               any such absence, be deemed, by virtue of such absence alone, to
               have terminated his/her employment with the Company or with an
               Affiliate, except as the Committee may otherwise expressly
               provide or determine.

               b.   Death of the Participant.

               c.   The filing with or levying upon the Company or the Custodian
               of any judgment, attachment, garnishment, or other court order
               affecting either the Participant's earnings or his/her account
               under the Plan.

               d.   Termination of the Plan prior to its expiration.

               e.   Expiration of the Plan.

               3.   Upon the discontinuance of an election and withdrawal from
          the Plan by a Participant, all Shares in the account of the
          Participant shall be transferred out of the Custodian's name and into
          the name of the Participant and a certificate evidencing such Shares
          shall be issued in the name of and delivered to the Participant; and
          all dividends and remaining cash if any credited to his/her account
          shall be paid to the Participant.

          G.   Employer Contribution: Each Participant's employer will, as
frequently as is necessary contribute an amount equal to the difference between
the Employee Share Price as determined at Section V.A and the cost per share to
the Custodian if the Shares are not acquired from the Company. If the Shares are
acquired from the Company, the Company shall sell such Shares to the Custodian
at a price equal to the Employee Share Price.


V.  TERMS AND CONDITIONS OF OPTIONS AND ISSUANCE OF SHARES

          No Option shall be granted to a Participant, and no purported grant of
any Option shall be effective, until an enrollment application and payroll
withholding form approved by the Committee shall have been duly executed on
behalf of the Company and by the Participant. Such enrollment application and
payroll withholding form and the agreement constituted thereby shall be subject
to at least the following terms and conditions:

          A.   Employee Share Price: The "Employee Share Price" as of a Monthly
Share Purchase Date shall be eighty-five percent (85%) of the lower of the:

               1.   Fair Market Value of the Shares at the date of grant of the
          Option (i.e., the applicable January 1 or July 1 Enrollment Date); or

               2.   Fair Market Value of the Shares at the Monthly Share
          Purchase Date.



                                  Page 7 of 10

          B.   Effect of Death and Participant's Survivors: In the event that a
Participant to whom an Option has been granted ceases to be an employee of the
Company or of an Affiliate by reason of such Participant's death, such Option to
the extent exercisable but not exercised on the date of death shall be deemed
exercised by the Participant's Survivors to the extent of any monies contributed
by the Participant and his/her employer prior to the Participant's death.

          A Participant may determine that a designated person shall become the
Participant's Survivor either by selecting a joint account (with a right of
survivorship running to such designated joint owner), or by so designating in
his/her will or otherwise as controlled under the applicable law with respect to
testamentary dispositions. In the absence of a valid disposition the applicable
laws of descent and distribution shall control. The Custodian may require such
proof and indemnification (documentary or otherwise) as it deems necessary and
appropriate before releasing any Shares and/or funds in a Participant's account
to a person other than the Participant.

          C.   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 or pursuant to
a qualified domestic relations order as interpreted under Rule 16b-3 promulgated
under the Exchange Act, 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). Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
any Option or of any rights granted hereunder contrary to the provisions of this
Section V.C shall be null and void.

          D.   All Participants to Have Equal Rights and Privileges: All
Participants shall have equal rights and privileges under the Plan. The fact
that the maximum number of Shares which may be acquired by Participants bears a
uniform relationship to compensation or is limited by a maximum purchase
restriction shall not be deemed to be violative of the foregoing sentence.

VI.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

          In the event that the outstanding shares of the Company's Common Stock
are 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 and, in addition, appropriate adjustment to prevent dilution or
enlargement of the rights granted to or available for Participants shall be made
in the number and kind of Shares and in the Employee Share Price of 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 the applicable provisions of the
Code, constitute such a modification, extension or renewal of an Option as to
cause


                                  Page 8 of 10

it to be considered as the grant of a new Option.

VII. EFFECT OF 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 VI is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights of a Participant or a Participant's
Survivors hereunder have not otherwise terminated and expired, the Participant
or the Participant's Survivors shall be deemed to have exercised such Options to
the extent of any monies contributed by the Participant or his/her employer as
of the date immediately prior to such dissolution or liquidation.

VIII.  TERMINATION OF THE PLAN

         No Options shall be granted after December 31, 2007. The Plan may be
terminated at an earlier date by vote of either the stockholders of the Company
or the Board. The termination of the Plan shall not affect any Options granted
or Shares acquired prior to the effective date of such termination.

IX.  AMENDMENT OF THE PLAN

          Except as provided in the following sentence, the Plan may be amended
by the stockholders of the Company, the Board, or the Committee, including
amendment of the Plan from time to time to designate corporations whose
employees may be offered Options under the Plan from among a group consisting of
the Company and Affiliates. Amendments effecting: (i) any increase in the
aggregate number of Shares which may be issued under the Plan (other than an
increase merely reflecting a change in capitalization such as stock dividend or
stock split) or (ii) changing the designation of corporations whose employees
may be offered options under the Plan, except designations described in the
preceding sentence, must be approved by the stockholders within twelve (12)
months after such amendment is adopted by the Board or by the Committee or such
amendment is void ab initio. In addition, if the scope of any amendment is such
as to require stockholder approval in order to comply with Rule 16b-3 under the
Exchange Act, such amendment shall also require approval by the stockholders. No
amendment shall affect any Options theretofore granted or any Shares theretofore
acquired by a Participant, unless such amendment shall expressly so provide and
unless any Participant to whom an Option has been granted who would be adversely
affected by such amendment consents in writing thereto.

X.  EMPLOYMENT RELATIONSHIP

          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 his/her employment with the Company or an
Affiliate.


                                  Page 9 of 10

XI.   OPTION HOLDERS NOT STOCKHOLDERS

          Neither the granting of an Option nor the deduction from payroll shall
constitute an Employee the owner of Shares covered by an Option until such
Shares have been purchased on his/her behalf pursuant to Article IV.

XII.  WITHHOLDING TAXES

          Any taxes subject to withholding payable with respect to the amounts
to be paid to the Custodian pursuant to the provisions hereof will be deducted
by a Participant's employer from the balance of the Participant's salary, and
not reduce the amounts so to be paid to the Custodian.

XIII. USE OF FUNDS BY THE COMPANY

          The proceeds received by the Company from the sale of Shares pursuant
to Options granted under the Plan will be used for general corporate purposes.

XIV.  STATEMENT OF ACCOUNT

         Following each purchase of Shares on behalf of a Participant, such
Participant will receive from the Custodian a statement of his/her account
showing (i) the respective total amounts of payments (by the Participant and, if
applicable, his/her employer) made to the Custodian on behalf of such
Participant under Paragraph IV.C.1, (ii) the Participant's share of any cash
dividends and other cash distributions and of the amount and proceeds of sale of
any other distributions or rights received by the Custodian, (iii) the total
cost of all Shares purchased by the Custodian for the account of such
Participant, (iv) such Participant's share of any stock dividends on the Shares,
and (v) the number of Shares delivered, or to be delivered, to such Participant
with respect to the period since the last statement.

XI.   BROKERAGE COMMISSIONS AND OTHER COSTS

          Brokerage commissions, if any, payable in connection with the purchase
of Shares hereunder (and shares acquired through dividend reinvestment, if any)
and transfer taxes payable in connection with the delivery to Participants of
Shares acquired hereunder (and shares acquired through dividend reinvestment, if
any) together with the other costs and expenses incurred in administering the
Plan, including the fees and expenses of the Custodian, will be borne by the
Company and Affiliates.

XIV.  EFFECTIVE DATE

          The Plan became effective on October 1, 1983.




                                  Page 10 of 10

EX-10.23

                                                                   EXHIBIT 10.23

                                  BIOGEN, INC.
                    1987 SCIENTIFIC BOARD STOCK OPTION PLAN
      (As amended and restated through December 14, 2001, effective as of
                               December 31, 2001)


I.   PURPOSE OF THE PLAN

     The Plan is intended to encourage ownership of shares of the Common Stock
by members of the Scientific Board of the Company and to provide an additional
incentive to those Scientific Board members to promote the success of the
Company and its Affiliates.

II.  DEFINITIONS

     1.   "Affiliate" means (a) 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; or (b) to the extent
not inconsistent with Section 424 of the Code, an unincorporated trade or
business controlled by the Company which has elected, for federal income tax
purposes, to be either (i) classified as an association taxable as a corporation
or (ii) disregarded as an entity separate from its owner (as provided in Section
301.7701-3 of the federal income tax regulations). For purposes of this
definition, the Company shall be deemed to control another entity if the Company
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through ownership of voting
securities, by contract or otherwise.

     2.   "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

     3.   "Committee" means the Stock and Option Plan Administration Committee
of the Board of Directors of the Company or, if such committee ceases to exist,
the Board of Directors of the Company or a committee thereof to which
responsibility for administering the Plan shall have been delegated.

     4.   "Common Stock" means the common stock of the Company, par value $0.01
per share.

     5.   "Company" means Biogen, Inc., a Massachusetts corporation.

     6.   "Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.

     7.   "Fair Market Value" shall have the meaning set forth in Section VI.A.

     8.   "Member" means a member of the Scientific Board of the Company.

     9.   "Option" means a stock option granted under the Plan.

     10.  "Option Certificate" means a certificate delivered to an Option holder
by the



                                   Page 1 of 7


Company pursuant to the Plan, in such form as the Committee shall approve, which
sets forth the terms and conditions of an Option.

     11.  "Plan" means this 1987 Scientific Board Stock Option Plan, as amended
and restated from time to time.

     12.  "Securities Act" means the United States Securities Act of 1933, as
amended from time to time.

III  SHARES SUBJECT TO THE PLAN

     The aggregate number of shares as to which Options may be granted from time
to time shall be 3,000,000 shares of the Common Stock.

     If any Option 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 the Plan 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, subject 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. The interpretation and construction by the
Committee of any provision of the Plan or of any Option granted under it shall
be final. The Committee's determinations under the Plan do not need to be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, Options under the Plan (whether or not such persons are
similarly situated). Subject to the provisions of the Plan, Options may be
granted upon such terms and conditions as the Committee may prescribe.

V.   ELIGIBILITY FOR PARTICIPATION

     The Committee shall determine which Members shall be eligible to
participate in the Plan. Without limited the generality of the foregoing,
Options may be awarded for reasons of performance, merit, bonus or upon new
Members joining the Scientific Board of the Company.

     The Committee may grant to one or more such Members one or more Options,
and shall


                                   Page 2 of 7


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.

VI.  TERMS AND CONDITIONS OF OPTIONS

     No Option issued pursuant to the Plan shall be an incentive stock option
under Section 422 of the Code. 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 the Plan or any amendments
thereto. Each Option shall be subject to at least the following terms and
conditions:

     A.   OPTION PRICE: Each Option Certificate shall state the Option price per
share of the Common Stock covered by such Option grant. 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
(the "Fair Market Value") 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
the Common Stock. Fair Market Value shall be calculated as follows: (i) if the
Common Stock is listed on a national securities exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market AND sale prices are regularly
reported for the Common Stock, then the Fair Market Value shall be the
arithmetic mean between the "high" and "low" sale prices for the Common Stock
reported on the applicable composite tape or other comparable reporting system
on the date of grant, or if the date of grant is not a trading day, on the most
recent trading day immediately prior to the date of grant; or (ii) if sale
prices are not regularly reported for the Common Stock as described in clause
(i) above but bid and asked prices for the Common Stock are regularly reported,
then the Fair Market Value shall be the arithmetic mean between the closing or
last bid and asked prices for the Common Stock on the date of grant or, if the
date of grant is not a trading day, on the most recent trading day immediately
prior to the date of grant; or (iii) if sale prices are not regularly reported
for the Common Stock as described in clause (i) or (ii) above, then the Fair
Market Value shall be such value as the Committee in good faith determines.

     B.   NUMBER OF SHARES: Each Option Certificate shall state the number of
shares of the Common Stock to which it pertains.

     C.   TERM OF OPTION: Each Option Certificate shall state the term of the
Option which shall be ten (10) years from the date of the grant thereof or at
such earlier or later time as the Committee shall expressly state in the Option
Certificate.

     D.   DATE OF EXERCISE: Each Option Certificate shall state 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 or events or through other
circumstances or programs approved by the Committee. The Committee shall have
the right to accelerate the date of exercise of any installment of any Option.


                                   Page 3 of 7

     E.   CANCELLATION AND REPURCHASE RIGHTS: An Option Certificate may
stipulate that an 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 and those provisions shall be set forth in the Option Certificate.

     F.   MEDIUM OF PAYMENT: The option price shall be payable upon the exercise
of the Option. It shall be payable (a) in United States dollars in cash or by
check, (b) if permitted by the Committee, in shares of the Common Stock held by
the Option holder for at least six months having a fair market value (determined
in the manner provided in Section VI.A as of the date of exercise) equal to the
cash exercise price of the Option, (c) at the discretion of the Committee, by
delivery of the Option holder's personal note, for full, partial or no recourse,
bearing interest payable not less than annually at market rate on the date of
exercise and no less than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, with or without the pledge of shares of the Common
Stock as collateral, (d) at the discretion of the Committee, in accordance with
a cashless exercise program established with a securities brokerage firm, or (e)
at the discretion of the Committee, by any combination of (a), (b), (c) and (d)
above.

     G.   EXERCISE OF OPTION AND ISSUE OF SHARES: Options shall be exercised by
giving written notice to the Company or its designee, together with provision
for payment of the Option price in accordance with Section VI.F. Such written
notice shall be signed by the person exercising the Option, shall state the
number of shares of the Common Stock 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 shares of the Common Stock upon exercise of the Option may
be delayed by the Company if any law or regulation 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 of the Common Stock if prohibited by law or applicable
regulation.

     The shares of the Common Stock shall, upon issuance, be paid-up,
non-assessable shares.

     H.   ASSIGNABILITY AND TRANSFERABILITY OF OPTION: By its terms, an Option
granted to an Option holder shall not be transferable by such Option holder
other than (i) by will or by the laws of descent and distribution, or (ii)
pursuant to a qualified domestic relations order, as defined by the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
or (iii) as otherwise determined by the Committee. The designation of a
beneficiary of an Option by an Option holder shall not be deemed a transfer
prohibited by this Section. Except as provided in the preceding sentence, an
Option shall be exercisable, during an Option holder's lifetime, only by the
Option holder (or his or her legal representative) and 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 Section, or the levy of any attachment or similar process upon an Option or
other such rights, shall be null and void.



                                   Page 4 of 7

     I.   OTHER PROVISIONS: The Option Certificates 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.

     J.   TAX WITHHOLDING: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act 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 Common Stock, is authorized by the Committee (and permitted
by law); provided, however, that with respect to persons subject to Section 16
of the Exchange Act, any such withholding arrangement shall be in compliance
with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the
Exchange Act. If the Committee allows withholding through use of shares of the
Common Stock, it shall be only to the statutory minimum amount. 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 as of 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.

     K.   RIGHTS AS A SHAREHOLDER: No Option holder shall have rights as a
shareholder with respect to any shares of the Common Stock 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 Securities 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 Securities Act,
in the absence of an effective registration under the Securities 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 Securities 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 securities represented by this certificate have not been
          registered


                                   Page 5 of 7

          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 Sates Securities Act of 1933, as amended, 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).

VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

     In the event that outstanding shares of the Common Stock are 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, 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 Option 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 a transaction 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 Certificates or agreements executed
prior to the effective date of termination.

XI.  AMENDMENT OF THE PLAN



                                   Page 6 of 7

     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 then such amendment shall require approval by the
shareholders. Any amendment shall not affect any Options theretofore granted and
any Option Certificates or 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 the consent of the
Option holder affected, the Committee may amend any outstanding Option
Certificate or 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 or consultancy of any Member, nor to
present any Member from terminating his employment or consultancy with the
Company or an Affiliate.

XIII. EFFECTIVE DATE

     The Plan first became effective on March 6, 1987.

XIV. GOVERNING LAW

     The Plan shall be construed and enforced in accordance with the laws of The
Commonwealth of Massachusetts.



                                   Page 7 of 7

EX-10.24

                                                                   EXHIBIT 10.24















                                  BIOGEN, INC.




                  VOLUNTARY EXECUTIVE SUPPLEMENTAL SAVINGS PLAN
               (As amended and restated through December 14, 2001)





                                TABLE OF CONTENTS


                                                                            Page

ARTICLE 1
         INTRODUCTION........................................................ 1
          1.1     Purpose and Effective Date................................. 1

ARTICLE 2
         DEFINITIONS......................................................... 1
          2.1     Base salary................................................ 1
          2.2     Biogen..................................................... 1
          2.3     Board...................................................... 1
          2.4     Bonus...................................................... 1
          2.5     Committee.................................................. 1
          2.6     Participant................................................ 1
          2.7     Plan....................................................... 1
          2.8     Savings Plan............................................... 1
          2.9     Plan Year.................................................. 1

ARTICLE 3
         PARTICIPATION....................................................... 1
          3.1     Eligibility and Participation.............................. 1
          3.2     End of Participation....................................... 2

ARTICLE 4
         SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS.................. 2
          4.1     Savings Deposits........................................... 2
          4.2     Employer Credits........................................... 3

ARTICLE 5
         PARTICIPANTS' ACCOUNTS.............................................. 3
          5.1     Participant Accounts....................................... 3
          5.2     Vesting.................................................... 4

ARTICLE 6
         DISTRIBUTIONS TO PARTICIPANT........................................ 4
          6.1     Distributions for Financial Hardship....................... 4
          6.1A    In-Service Distribution(s) at a Time Specified
                  by Participant............................................. 4
          6.2     Distribution Upon Participant's Retirement................. 5
          6.3     Distribution Upon Death of a Participant................... 5
          6.4     Distribution upon Participant's Other Termination
                  of Employment.............................................. 5
          6.5     Installment Distributions in Certain Cases................. 5

ARTICLE 7
         MISCELLANEOUS....................................................... 6
          7.1     Amendment or Termination of Plan........................... 6
          7.2     Benefits Not Currently Funded.............................. 6
          7.3     No Assignment.............................................. 7
          7.4     Responsibilities and Authority of Committee................ 7
          7.5     Limitation on Rights Created by Plan....................... 7
          7.6     Tax Withholding............................................ 7
          7.7     Text Controls.............................................. 7
          7.8     Applicable State Law....................................... 8





                                    ARTICLE 1
                                  INTRODUCTION

1.1    PURPOSE AND EFFECTIVE DATE. The purpose of this plan is to provide
certain designated key executives of Biogen (or its subsidiaries) with
additional tax-deferred savings opportunities supplementing those available
under the Savings Plan. This plan allows participants whose compensation exceeds
the amount of compensation that may be taken into account by the Savings Plan
for any plan year (the Code Section 401(a)(17) limits) to make savings deposits
hereunder from such excess compensation with matching Biogen contributions on
the same basis as is provided in the Savings Plan, and allows participants to
make additional, unmatched savings deposits from base salary or bonus if elected
by a participant. The effective date of this plan is April 18, 1994.

                                   ARTICLE 2
                                  DEFINITIONS

       This section contains definitions of terms used in the plan. Where the
context so requires, the masculine includes the feminine, the singular includes
the plural, and the plural includes the singular.

2.1    BASE SALARY means the base salary established for any participant by his
employer as in effect from time to time; the entire amount of a participant's
base salary will be taken into account in accordance with the terms of this plan
without regard to any dollar limitation on applicable compensation that may be
imposed under the Savings Plan.

2.2    BIOGEN means Biogen, Inc., a Massachusetts corporation, or any successor
to all or the major portion of its assets or business which assumes the
obligations of Biogen, Inc. under this plan.

2.3    BOARD means the Board of Directors of Biogen.

2.4    BONUS means the amount of compensation paid to a participant in addition
to his base salary and designated as such participant's bonus by his employer;
the entire amount of any such bonus will be taken into account in accordance
with the terms of this plan without regard to any dollar limitation on
applicable compensation that may be imposed under the Savings Plan.

2.5    COMMITTEE means the Savings Plan Committee constituted under the Savings
Plan.

2.6    PARTICIPANT means an employee of Biogen (or a subsidiary or affiliate)
who is eligible to participate in this plan in accordance with Section 3.1
hereof and who has made a savings deposit hereunder.

2.7    PLAN means the Biogen, Inc. Voluntary Executive Supplemental Savings
Plan, as set forth in this plan instrument, and as it may be amended from time
to time.

2.8    SAVINGS PLAN means the Biogen Savings Plan, as amended from time to time.
Any term defined in the Savings Plan will have the same meaning when used in
this plan unless otherwise defined herein.

2.9    PLAN YEAR means the period commencing April 18, 1994 and ending December
31, 1994, and the 12-month periods commencing on January 1, 1995 and on each
subsequent January 1 while the plan remains in effect.

                                   ARTICLE 3
                                 PARTICIPATION

3.1    ELIGIBILITY AND PARTICIPATION. A person (a) who is an employee of Biogen
(or a subsidiary or affiliate) and (b) who is designated by the committee will
be eligible to be a participant in this plan. His eligibility will be effective
as of the date specified by the committee. An eligible employee will become a
participant hereunder when he makes a savings deposit to this plan.
Participation in this plan is voluntary and no eligible employee will be
required to participate. An individual will not be considered an employee for
purposes of this plan if the individual is classified as a consultant or
contractor under Biogen's (or a subsidiary's or affiliate's) regular personnel
classifications and practices, or he is a party to an agreement to provide
services to Biogen (or a subsidiary or affiliate) without participating in this
plan, notwithstanding that such individual may be treated as a common law
employee for payroll tax or other legal purposes.



                                       1


3.2    END OF PARTICIPATION. A participant's participation in this plan will end
upon the termination of his service as an employee of Biogen (or a subsidiary or
affiliate) because of death, retirement, or any other reason.

       In addition, a participant's participation will end upon the committee's
specifying that he is no longer eligible to participate. In such event, his
participation will end effective as of the later of the date of the committee's
action or the date specified by the committee; provided that no such action will
retroactively deprive a participant of any amount credited to his account or any
benefit he was entitled to under this plan calculated as of the effective date
of his termination of participation.

       Upon the termination of a participant's participation in this plan in
accordance with this section, the participant may make no further savings
deposits hereunder and there will be no additional employer matching credits to
such participant's account. However, the participant will be entitled to receive
any amounts in his accounts in accordance with this plan.

       Notwithstanding the preceding provisions of this section, if a
participant's service as an employee of Biogen (or a subsidiary or affiliate)
ends but he continues in the position of Chairman of the Board of Directors of
Biogen, his participation in this plan will continue and he will be eligible to
continue making savings deposits hereunder in accordance with the plan, and for
this purpose his regular remuneration as Chairman will be deemed to be his base
salary and any bonus he receives as Chairman will be deemed to be his bonus.
However, he will not be eligible to receive any matching employer credits under
Section 4.2 based upon such savings deposits. He will not be considered to have
retired or terminated employment for purposes of Section 6.2 or Section 6.4
until his termination of service as Chairman.

                                   ARTICLE 4
               SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS

4.1    SAVINGS DEPOSITS.

       (a)    SAVINGS DEPOSITS. Each eligible employee may make savings deposits
to the plan from his base salary in any whole percentage of his base salary from
a minimum of 1% to a maximum of 100% by agreeing to reduce his base salary by
such amount. In addition, each eligible employee may make savings deposits to
the plan from his bonus in any whole percentage of his bonus from a minimum of
1% to a maximum of 100% by agreeing to reduce his bonus by such amount.

       All amounts by which a participant reduces his base salary or his bonus
hereunder are referred to herein as the participant's SAVINGS DEPOSITS. The
amount by which a participant's savings deposits for a plan year hereunder do
not exceed 6% of his applicable compensation (as defined in the Savings Plan)
are referred to herein as his MATCHABLE SAVINGS DEPOSITS; provided, however,
that a participant's matchable savings deposits for any plan year hereunder will
not exceed the limit on elective deferrals for such year under Code Section
402(g)(1) and (4) reduced by his basic savings deposits for such year under the
Savings Plan.

       (b)    SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. An eligible employee who
wishes to reduce his base salary and/or bonus with respect to a particular plan
year in order to make savings deposits must complete an enrollment form
specifying the amount of his savings deposits (with separate percentages for his
base salary and bonus if desired), agreeing to reduce his base salary and/or
bonus by the amount(s) desired, and providing such other information as the
committee may require.

       A participant's initial enrollment form will also specify the time for
payment (or the commencement of installment payments) under Section 6.2 or
Section 6.4 and the form of payment (lump sum or installments in accordance with
Section 6.5(a) below) of his accounts hereunder. The time specified for payment
may be anytime the participant indicates, but not later than the later of the
participant's termination of employment or the participant's 55th birthday. In
addition, a participant's initial enrollment form may (but is not required to)
specify one or more in-service distributions to the participant in accordance
with Section 6.1A if desired by the participant.

       A participant's enrollment form electing savings deposits for any plan
year must be filed with the committee at least two weeks before the start of
such plan year. A participant may change the amount of his savings deposits (but
not the time for payment or the form of payment of his accounts except as
provided in subsections (c) and (d) below) with respect to any subsequent plan
year by filing a new enrollment form at least two weeks before the start of such
subsequent plan year, and the change will become effective as of the first day
of such subsequent



                                       2



plan year. Once a participant has elected to defer base salary and/or bonus, his
enrollment form will remain in effect for future plan years unless the
participant changes or terminates his prior elections by filing a new enrollment
form in accordance with the preceding sentence.

         After a plan year has begun, a participant may not change the amount of
savings deposits (if any) he had elected for such plan year. However, if a
participant has an unforeseeable financial hardship (as defined in Section 6.1)
during a year, the participant may cancel his savings deposits election for the
balance of that year.

       (c)    SPECIAL ONE-TIME ELECTION. Notwithstanding any other provisions of
this plan, each participant who has an account hereunder as of December 1, 2001
may make a special one-time election to change the time for payment (or the
commencement of installment payments) of his account balance to an earlier date
specified by him or to elect one or more in-service distributions in accordance
with Section 6.1A if desired. Such special election must be made before June 30,
2002.

         If any participant makes the election provided for in the preceding
paragraph, the amount specified by the participant for accelerated payment or
in-service distribution under Section6.1A shall be reduced by ten percent.

       (d)    Notwithstanding subsection (b) above, at anytime prior to the date
for payment originally elected by the participant, if the participant is still
an employee of Biogen (or a subsidiary or affiliate) at such time, the
participant may elect to defer the time when his account(s) would otherwise be
payable (or installment payments would otherwise begin) to a subsequent date
specified by him (not later than the latest time permitted under subsection (b))
or may elect installments (or a greater number of installments). If such
election becomes effective as provided below, then the participant's account(s)
will be payable at the time specified in his subsequent election. The
participant's election under this subsection (d) will become effective if any of
the following criteria is satisfied: (i) the participant remains an employee of
Biogen (or a subsidiary or affiliate) for at least one year after making such
election, (ii) the participant's service as an employee of Biogen (or a
subsidiary or affiliate) ends due to disability (which means the participant's
inability to perform the material duties of his position because of a physical
or mental illness or condition), or (iii) the participant's employment as an
employee of Biogen (or a subsidiary or affiliate) is involuntarily terminated
without cause.

       A participant may make only one election under this subsection (d) to
further defer payment.

4.2      EMPLOYER CREDITS.

       (a)    AMOUNT OF MATCHING EMPLOYER CREDITS. For each calendar quarter (or
a shorter period of time specified by the committee) during a plan year, each
employer will credit a matching contribution amount to the account of each
participant employed by such employer who makes matchable savings deposits
during such calendar quarter (or such shorter period of time). The employer's
matching contribution credits will be equal to 25% of the participant's
matchable savings deposits during the calendar quarter (or such shorter period
of time).

       (b)    TIME FOR MAKING EMPLOYER MATCHING CREDITS. The employer's matching
amounts under subsection (a) will be credited to participants' accounts as soon
as practicable after each calendar quarter (or such shorter period of time
specified by the committee).

                                   ARTICLE 5
                             PARTICIPANTS' ACCOUNTS

5.1    PARTICIPANT ACCOUNTS.

       (a)    SAVINGS DEPOSITS ACCOUNTS. Savings deposits by a participant from
his base salary or bonus hereunder will be credited to an account in the name of
such participant. Such account will be called his savings deposits account.

       (b)    EMPLOYER MATCHING CREDITS ACCOUNTS. Employer credits on a
participant's behalf under Section 2(a) will be credited to an account in the
name of such participant. Such account will be called his employer matching
credits account.

       (c)    PARTICIPANT'S ACCOUNT VALUE. A participant's accounts will be
credited with deemed investment results as if participant savings deposits and
employer matching credits on a participant's behalf were invested in one



                                       3


or more designated investment funds and all dividends and distributions on
shares of a particular investment fund were reinvested in shares of such fund.
The investment funds available for this purpose will be those from time to time
available as investment options for participants' accounts under the Savings
Plan (other than the Biogen stock fund).

       Each participant will indicate with his initial enrollment form the
investment fund or funds (and the proportion in each fund when the participant
designates more than one) he wishes to designate for this purpose. Thereafter, a
participant may change his designation either with respect to the deemed
investment of future savings deposits and matching credits or the deemed
transfer of amounts from a previously designated investment fund to another
fund. The committee shall establish the frequency by which such a change may be
made, the method of making such a change, and the effective date of such a
change and shall prescribe such other rules and procedures as it deems
appropriate. Such designation will remain in effect until subsequently changed
by the participant in accordance with this paragraph.

       Deemed investment results under this subsection will be credited to a
participant's accounts effective as of the last day in each calendar quarter (or
such shorter time specified by the committee).

       The value of a participant's accounts at any point in time will be his
savings deposits and employer matching credits on his behalf, increased or
decreased by deemed investment results as provided in this subsection (c)
through the most recent calendar quarter (or such shorter time specified by the
committee), and reduced by any distributions from the participant's accounts.

       (d)    BOOKKEEPING ACCOUNTS. Participants' accounts and subaccounts
(including savings deposits accounts and employer matching credits accounts)
will be maintained on the books of the participant's employer for bookkeeping
purposes only; such accounts will not represent any interest in any trust or in
any segregated asset.

       In order to facilitate the administration of the plan, the committee may
arrange for a participant's savings deposits account and/or employer matching
credits account to be divided for record keeping purposes into two or more
subaccounts, in accordance with procedures established by the committee.

5.2    VESTING.

       (a)    SAVINGS DEPOSITS ACCOUNT. A participant will have a fully vested
              interest in his savings deposits account at all times.

       (b)    EMPLOYER MATCHING CREDITS ACCOUNT. A participant will have a fully
vested interest in his employer matching credits account at all times.

                                   ARTICLE 6
                          DISTRIBUTIONS TO PARTICIPANT

6.1    DISTRIBUTIONS FOR FINANCIAL HARDSHIP. If a participant has a serious
financial hardship, he may apply to the committee for a distribution from the
plan prior to his retirement, other termination of service with his employer or
other designated time for payment. If such application for a hardship
distribution is approved by the committee, the distribution will be made as soon
as practicable after the later of the date specified in the participant's
application or the date of approval by the committee. The amount of the
distribution will be the amount needed to alleviate the participant's financial
hardship, as determined by the committee, up to a maximum of the participant's
account balances. Such a distribution will be made from the participant's
accounts in a single lump-sum payment. If such a participant's account has two
or more subaccounts, the committee will determine which subaccounts will be
debited to reflect the financial hardship distribution.

       Financial hardship will be limited to the following: bankruptcy or
impending bankruptcy, unexpected and unreimbursed major expenses resulting from
illness to person or accident to person or property, and to other types of
unforeseeable and unreimbursed expenses of a major nature that normally would
not be budgetable. Financial hardship shall not include foreseeable expenses
such as down payments on a home or purchase of an auto or college or other
educational expenses.

6.1A   IN-SERVICE DISTRIBUTION(S) AT A TIME SPECIFIED BY PARTICIPANT. If, in his
initial enrollment form (or, if applicable, his one-time election under Section
4.1(c) or (d)), a participant designated payment of his account(s) (or



                                       4



a specified portion thereof) at a specified time(s) and he is still an employee
of Biogen (or a subsidiary or affiliate) at such time(s), the participant will
receive payment of the amount to be distributed in accordance with such
election, payable on or as soon as practicable after the designated date(s). A
participant's election for in-service distributions under this Section 6.1A may
be for a single payment or up to five annual payments, in each case in an amount
or portion specified by the participant in his enrollment or other election
form. Each payment will be the amount specified (or the entire balance remaining
in the participant's accounts, if less).

         Any amount in a participant's accounts hereunder not distributed to the
participant under this Section 6.1A will be distributed under Section 6.2, 6.3
or 6.4, whichever may be applicable, and Section 6.5, if applicable. If a
participant is receiving multiple payments under this Section 6.1A and retires,
dies or otherwise terminates employment, payments under this subsection will
cease and subsequent payments will be governed by Section 6.2, 6.3 or 6.4, as
the case may be.

6.2    DISTRIBUTION UPON PARTICIPANT'S RETIREMENT. Following the later of a
participant's retirement from his employer or the date specified by the
participant in his payment election (but not later than his 55th birthday), the
participant will receive a single sum payment equal to his account balance,
payable on a date determined by the committee, but not later than one year after
the specified date (or after the committee's receipt of satisfactory evidence of
the occurrence of his retirement).

6.3    DISTRIBUTION UPON DEATH OF A PARTICIPANT.

       (a)    IN GENERAL. If a participant dies while still an employee of
Biogen (or a subsidiary or affiliate) or after termination of such employment,
but before the complete distribution of his accounts hereunder, his beneficiary
will receive the total amount remaining in his accounts. Distribution will be
made in a single sum payment on a date determined by the committee, but not
later than one year after the committee receives such evidence of the
participant's death and of the right of any beneficiary to receive payment as it
deems necessary.

       (b)    BENEFICIARY. The beneficiary to receive the payment described in
subsection (a) above will be the same person or persons who are to receive
benefits payable upon the participant's death under the Savings Plan. If more
than one person is a beneficiary, death benefits hereunder will be paid to them
in the same proportions as under the Savings Plan. In the event that a
participant does not participate in the Savings Plan, the participant may
designate one or more beneficiaries to receive a distribution payable under
subsection (a) above and may revoke or change such a designation at any time. If
the participant names two or more beneficiaries, distribution to them will be in
such proportions as the participant designates or, if the participant does not
so designate, in equal shares. Any designation of beneficiary will be in writing
on such form as the committee may prescribe or deem acceptable, and will be
effective upon filing with the committee.

6.4    DISTRIBUTION UPON PARTICIPANT'S OTHER TERMINATION OF EMPLOYMENT.
Following the later of a participant's termination of employment for any reason
other than retirement or death or the date specified by the participant in his
payment election (but not later than his 55th birthday), the participant will
receive a single sum payment equal to his account balance, payable on a date
determined by the committee but not later than one year after the specified date
(or after the committee's receipt of satisfactory evidence of the termination of
the participant's employment).

6.5    INSTALLMENT DISTRIBUTIONS IN CERTAIN CASES.

       (a)    PARTICIPANT. Notwithstanding the provisions of Sections 6.2 and
6.4, a participant may, at the time of filing his initial enrollment form under
Section 4.1 (or, if applicable, in a subsequent election under Section 4.1(c) or
(d)), designate that the amount payable to him hereunder will be paid in a
number (minimum of two and maximum of ten) of annual installment payments, as
specified by the participant.

       (b)    BENEFICIARY. Notwithstanding Section 6.3, a participant may
designate that, if the participant dies before receiving the entire amount
payable to him hereunder, the beneficiary will receive either:

              (i)    A number of annual installment payments equal to:




                                       5


                     (A)    the number the participant elected for himself under
                            subsection (a) above (if the participant dies before
                            receiving any installment payments), or

                     (B)    the number of remaining installment payments due to
                            the participant under subsection (a) above (if the
                            participant dies after receiving one or more
                            installment payments); or

              (ii)   a single payment.

       Payment to the beneficiary will be made or begin as provided in Section
6.3(a).

       If the participant fails to designate the form of payment to the
beneficiary, the default form will be installments under (i) above. If
installment payments are payable to the beneficiary, with the consent of the
committee, a participant may subsequently change the form of payment to his
beneficiary (but not the form of payment to himself under Section 6.2 or 6.4) to
a single payment by filing a written instrument so specifying with the
committee.

       (c)    INSTALLMENT PAYMENTS. Where installment payments are due, the
first annual installment payment will be paid out on the date specified in
Section 6.2, 6.3 or 6.4 (whichever is applicable) and subsequent annual
installments will be paid approximately on succeeding anniversaries of the first
payment date. The amount of each annual installment payment will be determined
by multiplying the total amount to be paid by a fraction whose numerator is one
and whose denominator is the number of remaining annual installment payments.

       (d)    DEATH OF BENEFICIARY. If a participant's designated beneficiary is
receiving installment payments and dies before receiving payment of all the
annual installments, the designated beneficiary's estate will receive a lump-sum
payment of the amount remaining to be distributed to such deceased beneficiary.
Such payment will be made as soon as practicable after the committee's receipt
of satisfactory evidence of the death of the designated beneficiary.

                                   ARTICLE 7
                                  MISCELLANEOUS

7.1    AMENDMENT OR TERMINATION OF PLAN. Biogen, by action of the Board (or such
committee thereof or officer or officers of Biogen to whom the Board has
delegated this authority), at any time and from time to time, may amend or
modify any or all of the provisions of this plan or may terminate this plan
without the consent of any participant (or beneficiary or other person claiming
through a participant). No termination or amendment of the plan may reduce the
amounts credited to the accounts of any participant under the plan (including a
participant whose employment with the employer was terminated before such
termination or amendment). However, Biogen may change the deemed investment
options under Section 5.1(c), and Biogen may upon termination of this plan pay
participants' account balances to the participants regardless of the times
elected for payment (or the start of installment payments) elected by the
participants and may pay such amounts in single sum payments regardless of
whether participants have elected installment distributions under Section 6.5.

7.2    BENEFITS NOT CURRENTLY FUNDED.

       (a)    Nothing in this plan will be construed to create a trust or to
obligate Biogen to segregate a fund, purchase an insurance contract or other
investment, or in any other way currently to fund the future payment of any
benefits hereunder, nor will anything herein be construed to give any
participant or any other person rights to any specific assets of Biogen or any
other entity. However, in order to make provision for its obligations hereunder,
Biogen may in its discretion purchase an insurance contract or other investment;
any such contract or investment will be a general asset belonging to Biogen, and
no participant or beneficiary will have any rights to any such asset. The rights
of a participant or beneficiary hereunder will be solely those of a general,
unsecured creditor of his employer.

       (b)    Notwithstanding subsection (a) above, Biogen in its sole
discretion may establish a grantor trust of which it is treated as the owner
under Code Section 671 to provide for the payment of benefits hereunder, subject
to



                                       6



such terms and conditions as Biogen may deem necessary or advisable to ensure
that benefits are not includable, by reason of the trust, in the taxable income
of trust beneficiaries before actual distribution and that the existence of the
trust does not cause the plan or any other arrangement to be considered funded
for purposes of Title I of ERISA.

7.3    NO ASSIGNMENT. No participant or beneficiary will have any power or right
to transfer, assign, anticipate or otherwise encumber any benefit or amount
payable under this plan, nor shall any such benefit or amount payable be subject
to seizure or attachment by any creditor of a participant or a beneficiary, or
to any other legal, equitable or other process, or be liable for, or subject to,
the debts, liabilities or other obligations of a participant or beneficiary
except as otherwise required by law.

7.4    RESPONSIBILITIES AND AUTHORITY OF COMMITTEE. The committee will control
and manage the operation and administration of the plan except to the extent
that such responsibilities are specifically assigned hereunder to Biogen or the
Board.

       The committee will have all powers and authority necessary or appropriate
to carry out its responsibilities for the operation and administration of the
plan. It will have discretionary authority to interpret and apply all plan
provisions and may correct any defect, supply any omission or reconcile any
inconsistency or ambiguity in such manner as it deems advisable. It will make
all final determinations concerning eligibility, benefits and rights hereunder,
and all other matters concerning plan administration and interpretation. All
determinations and actions of the committee will be conclusive and binding upon
all persons, except as otherwise provided herein or by law, and except that the
committee may revoke or modify a determination or action previously made in
error. It is intended that any action or inaction by the committee will be given
the maximum possible deference by any reviewing body (whether a court or other
reviewing body), and will be reversed by such reviewing court or other body only
if found to be arbitrary and capricious.

       Biogen will be the "plan administrator" and the "named fiduciary" for
purposes of the Employee Retirement Income Security Act of 1974, as amended.

7.5    LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the plan will
be construed (a) to give any person any benefit, right or interest except as
expressly provided herein, or (b) to create a contract of employment or to give
any employee the right to continue as an employee or to affect or modify his
terms of employment in any way.

7.6    TAX WITHHOLDING. Any payment hereunder to a participant or beneficiary
will be subject to withholding of income and other taxes to the extent required
by law.

7.7    TEXT CONTROLS. Headings and titles are for convenience only, and the text
will control in all matters.

7.8    APPLICABLE STATE LAW. To the extent that state law applies, the
provisions of the plan will be construed, enforced and administered according to
the laws of the Commonwealth of Massachusetts.




                                       7

EX-10.27

                                                                   EXHIBIT 10.27















                                  BIOGEN, INC.




                    VOLUNTARY BOARD OF DIRECTORS SAVINGS PLAN
               (As amended and restated through December 14, 2001)





                                TABLE OF CONTENTS


                                                                            Page


ARTICLE 1 INTRODUCTION....................................................... 1
          1.1     Purpose and Effective Date................................. 1

ARTICLE 2 DEFINITIONS........................................................ 1
          2.1     Biogen..................................................... 1
          2.2     Board...................................................... 1
          2.3     Committee.................................................. 1
          2.4     Director................................................... 1
          2.5     Fees....................................................... 1
          2.6     Participant................................................ 1
          2.7     Plan....................................................... 1
          2.8     Retainer................................................... 1
          2.9     Savings Plan............................................... 1
          2.10    Plan Year.................................................. 1

ARTICLE 3 PARTICIPATION...................................................... 1
          3.1     Eligibility and Participation.............................. 1
          3.2     End of Participation....................................... 1

ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS................................... 2
          4.1     Savings Deposits........................................... 2

ARTICLE 5 PARTICIPANTS' ACCOUNTS............................................. 3
          5.1     Participant Accounts....................................... 3
          5.2     Vesting.................................................... 3

ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT....................................... 3
          6.1     Distributions for Financial Hardship....................... 3
          6.1.A   In-Service Distribution(s) at a Time Specified
                  by Participant ............................................ 5
          6.2     Distribution Upon Death of a Participant................... 4
          6.3     Other Distributions........................................ 4
          6.4     Installment Distributions in Certain Cases................. 4

ARTICLE 7 MISCELLANEOUS...................................................... 5
          7.1     Amendment or Termination of Plan........................... 5
          7.2     Benefits Not Currently Funded.............................. 5
          7.3     No Assignment.............................................. 6
          7.4     Responsibilities and Authority of Committee................ 6
          7.5     Limitation on Rights Created by Plan....................... 6
          7.6     Tax Withholding............................................ 6
          7.7     Text Controls.............................................. 6
          7.8     Applicable State Law....................................... 6




                                    ARTICLE 1
                                  INTRODUCTION

1.1    PURPOSE AND EFFECTIVE DATE. The purpose of this plan is to provide
members of the Board of Directors of Biogen with a tax-deferred savings
opportunity. This plan allows participants to defer all or a portion of their
directors' fees and retainer by so electing before such fees and retainer have
been earned. The effective date of this plan is October 1, 1994.

                                   ARTICLE 2
                                  DEFINITIONS

       This section contains definitions of terms used in the plan. Where the
context so requires, the masculine includes the feminine, the singular includes
the plural, and the plural includes the singular.

2.1    BIOGEN means Biogen, Inc., a Massachusetts corporation, or any successor
to all or the major portion of its assets or business which assumes the
obligations of Biogen, Inc. under this plan.

2.2    BOARD means the Board of Directors of Biogen.

2.3    COMMITTEE means the Savings Plan Committee constituted under the Savings
Plan.

2.4    DIRECTOR means an individual serving as a director of Biogen in
accordance with its articles and by-laws.

2.5    FEES means the amounts payable to a director as compensation for his or
her attendance at a meeting of the Board or a committee of the Board.

2.6    PARTICIPANT means a director who has made a savings deposit hereunder.

2.7    PLAN means the Biogen, Inc. Voluntary Board of Directors Savings Plan, as
set forth in this plan instrument, and as it may be amended from time to time.

2.8    RETAINER means the amount payable to a director as an annual retainer for
service in such capacity, as in effect from time to time.

2.9    SAVINGS PLAN means the Biogen Savings Plan, as amended from time to time.
Any term defined in the Savings Plan will have the same meaning when used in
this plan unless otherwise defined herein.

2.10   PLAN YEAR means the period commencing October 1, 1994 and ending December
31, 1994, and the 12-month periods commencing on January 1, 1995 and on each
subsequent January 1 while the plan remains in effect.

                                   ARTICLE 3
                                 PARTICIPATION

3.1    ELIGIBILITY AND PARTICIPATION. Each director will be eligible to be a
participant in this plan as long as he is a director. However, a director who is
also an employee of Biogen (or a subsidiary) will not be eligible to participate
in this plan unless he receives fees and/or retainer separate and apart from his
compensation as an employee, and in such event he will be eligible to
participate in this plan only with respect to such fees and retainer. A director
will become a participant hereunder when he makes a savings deposit to this
plan. Participation in this plan is voluntary and no director will be required
to participate.

3.2    END OF PARTICIPATION. A participant's participation in this plan will end
upon the termination of his service as a director of Biogen because of death,
retirement, resignation, failure of reelection, or any other reason.

       Upon the termination of a participant's participation in this plan in
accordance with this section, the participant may make no further savings
deposits hereunder. However, the participant will be entitled to receive any
amounts in his accounts in accordance with this plan.




                                       1


                                    ARTICLE 4
                        SAVINGS DEPOSITS BY PARTICIPANTS

4.1      SAVINGS DEPOSITS AND ELECTIONS.

       (a)    SAVINGS DEPOSITS. Each director may make savings deposits to the
plan from his fees and retainer in any whole percentage of such fees and/or such
retainer, from a minimum of 1% to a maximum of 100%, by agreeing to reduce his
fees and/or retainer by such amount in accordance with this plan.

       All amounts by which a participant reduces his fees and/or retainer
hereunder are referred to herein as the participant's SAVINGS DEPOSITS.

       (b)    SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. A director who wishes to
reduce his fees and/or retainer with respect to a particular plan year in order
to make savings deposits must complete an enrollment form specifying the amount
of his savings deposits (with separate percentages for his fees and retainer if
desired), agreeing to reduce his fees and/or retainer by the amount(s) desired,
and providing such other information as the committee may require.

       A director's initial enrollment form will also specify the time for
payment (or the commencement of installment payments) under Section 6.3 and the
form of payment (lump sum or installments in accordance with Section 6.4(a)
below) of his accounts hereunder. The time specified for payment may be anytime
the participant indicates, but not later than the latest of the participant's
termination of service as a director, the participant's termination of
employment (if the participant is an employee of Biogen or a subsidiary or
affiliate in addition to being a director), or the participant's 55th birthday.
In addition, a participant's initial enrollment form may (but is not required
to) specify one or more in-service distributions to the participant in
accordance with Section 6.1A if desired by the participant.

       A participant's enrollment form electing savings deposits for any plan
year must be filed with the committee at least two weeks before the start of
such plan year. A participant may change the amount of his savings deposits (but
not the time for payment or the form of payment of his account except as
provided in subsections (c) and (d) below) with respect to any subsequent plan
year by filing a new enrollment form at least two weeks before the start of such
subsequent plan year, and the change will become effective as of the first day
of such subsequent plan year. Once a participant has elected to defer fees
and/or retainer, his enrollment form will remain in effect for future plan years
unless the participant changes or terminates his prior elections by filing a new
enrollment form in accordance with the preceding sentence.

       After a plan year has begun, a participant may not change the amount of
savings deposits (if any) he had elected for such plan year. However, if a
participant has an unforeseeable financial hardship (as defined in Section 6.1)
during a year, the participant may cancel his savings deposits election for the
balance of that year.

       (c)    SPECIAL ONE-TIME ELECTION. Notwithstanding any other provisions of
this plan, each participant who has an account hereunder as of December 1, 2001
may make a special one-time election to change the time for payment (or the
commencement of installment payments) of his savings deposit account balance to
an earlier date specified by him or to elect one or more in-service
distributions in accordance with Section 6.1A if desired. Such special election
must be made before June 30, 2002.

       If any participant makes the election provided for in the preceding
paragraph, the amount specified by the participant for accelerated payment or
in-service distribution under Section 6.1A shall be reduced by ten percent.

       (d)    Notwithstanding subsection (b) above, at anytime prior to the date
for payment originally elected by the participant, if the participant is still a
director of Biogen at such time, the participant may elect to defer the time
when his account would otherwise be payable (or installment payments would
otherwise begin) to a subsequent date specified by him (not later than the
latest time permitted under subsection (b)) or may elect installments (or a
greater number of installments). If such election becomes effective as provided
below, then the participant's account will be payable at the time specified in
his subsequent election. The participant's election under this subsection (d)
will become effective if any of the following criteria is satisfied: (i) the
participant remains a director of Biogen for at least one year after making such
election, or (ii) the participant's service as a director of Biogen ends due to
failure of reelection or due to disability (which means the participant's
inability to perform the material duties of his position because of a physical
or mental illness or condition).



                                       2


       A participant may make only one election under this subsection (d) to
further defer payment.

                                   ARTICLE 5
                             PARTICIPANTS' ACCOUNTS

5.1    PARTICIPANT ACCOUNTS.

       (a)    SAVINGS DEPOSITS ACCOUNTS. Savings deposits by a participant from
his fees or retainer hereunder will be credited to an account in the name of
such participant. Such account will be called his savings deposits account.

       (b)    PARTICIPANT'S ACCOUNT VALUE. A participant's account will be
credited with deemed investment results as if his savings deposits were invested
in one or more designated investment funds and all dividends and distributions
on shares of a particular investment fund were reinvested in shares of such
fund. The investment funds available for this purpose will be those from time to
time available as investment options under the Savings Plan (other than the
Biogen stock fund).

       Each participant will indicate with his initial enrollment form the
investment fund or funds (and the proportion in each fund when the participant
designates more than one) he wishes to designate for this purpose. Thereafter, a
participant may change his designation either with respect to the deemed
investment of future savings deposits or the deemed transfer of amounts from a
previously designated investment fund to another fund. The committee shall
establish the frequency by which such a change may be made, the method of making
such a change, and the effective date of such a change and shall prescribe such
other rules and procedures as it deems appropriate. Such designation will remain
in effect until subsequently changed by the participant in accordance with this
paragraph.

       Deemed investment results under this subsection will be credited to a
participant's account effective as of the last day in each calendar quarter (or
such shorter time specified by the committee).

       The value of a participant's account at any point in time will be his
savings deposits, increased or decreased by deemed investment results as
provided in this subsection (b) through the end of the most recently completed
calendar quarter (or such shorter time specified by the committee), and reduced
by any distributions from the participant's account.

       (c)    BOOKKEEPING ACCOUNTS. Participants' accounts and subaccounts will
be maintained on Biogen's books for bookkeeping purposes only; such accounts
will not represent any interest in any trust or in any segregated asset.

       In order to facilitate the administration of the plan, the committee may
arrange for a participant's savings deposits account to be divided for
recordkeeping purposes into two or more subaccounts, in accordance with
procedures established by the committee.

5.2    VESTING. A participant will have a fully vested interest in his savings
deposits account at all times.

                                    ARTICLE 6
                          DISTRIBUTIONS TO PARTICIPANT

6.1    DISTRIBUTIONS FOR FINANCIAL HARDSHIP. If a participant has a serious
financial hardship, he may apply to the committee for a distribution from the
plan prior to his retirement, other termination of service as a director or
other designated time for payment. If such application for a hardship
distribution is approved by the committee, the distribution will be made as soon
as practicable after the later of the date specified in the participant's
application or the date of approval by the committee. The amount of the
distribution will be the amount needed to alleviate the participant's financial
hardship, as determined by the committee, up to a maximum of the participant's
account balance. Such a distribution will be made from the participant's account
in a single lump-sum payment. If such a participant's account has two or more
subaccounts, the committee will determine which subaccount(s) will be debited to
reflect the financial hardship distribution.



                                       3


       Financial hardship will be limited to the following: bankruptcy or
impending bankruptcy, unexpected and unreimbursed major expenses resulting from
illness to person or accident to person or property, and to other types of
unforeseeable and unreimbursed expenses of a major nature that normally would
not be budgetable. Financial hardship shall not include foreseeable expenses
such as down payments on a home or purchase of an auto or college or other
educational expenses.

6.1A.  IN-SERVICE DISTRIBUTION(S) AT A TIME SPECIFIED BY PARTICIPANT. If, in his
initial enrollment form (or, if applicable, his one-time election under Section
4.1(c) or (d)), a participant designated payment of his account(s) (or a
specified portion thereof) at a specified time(s) and he is still an employee of
Biogen (or a subsidiary or affiliate) at such time(s), the participant will
receive payment of the amount to be distributed in accordance with such
election, payable on or as soon as practicable after the designated date(s). A
participant's election for in-service distributions under this Section 6.1A may
be for a single payment or up to five annual payments, in each case in an amount
or portion specified by the participant in his enrollment or other election
form. Each payment will be the amount specified (or the entire balance remaining
in the participant's account, if less).

       Any amount in a participant's account hereunder not distributed to the
participant under this Section 6.1A will be distributed under Section 6.2 or
6.3, whichever may be applicable, and Section 6.4 (if applicable). If a
participant is receiving multiple payments under this Section 6.1A and retires,
dies or otherwise terminates service (or employment if he is also an employee of
Biogen or a subsidiary or affiliate), payments under this subsection will cease
and subsequent payments will be governed by Section 6.2 or 6.3, as the case may
be.

6.2      DISTRIBUTION UPON DEATH OF A PARTICIPANT.

(a)    IN GENERAL. If a participant dies before his entire account balance has
been distributed, his beneficiary will receive the amount remaining in the
participant's account. Distribution will be made in a single sum payment on a
date determined by the committee, but not later than one year after the
committee receives such evidence of the participant's death and of the right of
any beneficiary to receive payment as it deems necessary.

(b)    BENEFICIARY. A participant may designate one or more beneficiaries to
receive a distribution payable under subsection (a) above and may revoke or
change such a designation at any time. If the participant names two or more
beneficiaries, distribution to them will be in such proportions as the
participant designates or, if the participant does not so designate, in equal
shares. Any designation of beneficiary will be in writing on such form as the
committee may prescribe or deem acceptable, and will be effective upon filing
with the committee.

       Any portion of a distribution payable upon the death of a participant
that is not disposed of by a designation of beneficiary under the preceding
paragraph, for any reason whatsoever, will be paid to the participant's spouse
if living at his death, otherwise equally to the participant's natural and
adopted children (and the issue of a deceased child by right of representation),
otherwise to the participant's estate.

       The committee may direct payment in accordance with a prior designation
of beneficiary (and will be fully protected in so doing) if such direction (i)
is given before a later designation is received, or (ii) is due to the
committee's inability to verify the authenticity of a later designation. Such a
distribution will discharge all liability therefor under the plan.


6.3    OTHER DISTRIBUTIONS. Except in the case of the participant's death (in
which case distribution is made in accordance with Section 6.2), distribution of
a participant's account will be made at the time elected by the participant in
accordance with Section 4.1. In the absence of such an election, distribution of
the participant's account will be made following the latest of the participant's
termination of service as a director, the participant's termination of
employment (if the participant is an employee of Biogen or a subsidiary in
addition to being a director) or the participant's 55th birthday. Distribution
will be made in a single lump sum payment on a date determined by the committee,
but not later than one year after the committee's receipt of satisfactory
evidence of the occurrence of the event causing distribution.

6.4    INSTALLMENT DISTRIBUTIONS IN CERTAIN CASES.

       (a)    PARTICIPANT. Notwithstanding the provisions of Section 6.3, a
participant may, at the time of filing his initial enrollment form under Section
4.1 (or, if applicable) in a subsequent election under Section 4.1(c) or (d),




                                       4


designate that the amount payable to him hereunder will be paid in a number
(minimum of two and maximum of ten) of annual installment payments, as specified
by the participant.

       (b)    BENEFICIARY. Notwithstanding Section 6.2, a participant may
designate that, if the participant dies before receiving the entire amount
payable to him hereunder, the beneficiary will receive either:

              (i)    A number of annual installment payments equal to:

                     (A)    the number the participant elected for himself under
                            subsection (a) above (if the participant dies before
                            receiving any installment payments), or

                     (B)    the number of remaining installment payments due to
                            the participant under subsection (a) above (if the
                            participant dies after receiving one or more
                            installment payments); or

              (ii)   a single payment.

       Payment to the beneficiary will be made or begin as provided in Section
6.2(a).

       If the participant fails to designate the form of payment to the
beneficiary, the default form will be installments under (i) above. If
installment payments are payable to the beneficiary, with the consent of the
committee, a participant may subsequently change the form of payment to his
beneficiary (but not the form of payment to himself under Section 6.3), to a
single payment by filing a written instrument so specifying with the committee.

       (c)    INSTALLMENT PAYMENTS. Where installment payments are due, the
first annual installment payment will be paid out on the date specified in
Section 6.2 or 6.3 (whichever is applicable) and subsequent annual installments
will be paid approximately on succeeding anniversaries of the first payment
date. The amount of each annual installment payment will be determined by
multiplying the amount to be paid by a fraction whose numerator is one and whose
denominator is the number of remaining annual installment payments.

       (d)    DEATH OF BENEFICIARY. If a participant's designated beneficiary is
receiving installment payments and dies before receiving payment of all the
annual installments, the designated beneficiary's estate will receive a lump-sum
payment of the amount remaining to the distributed to such deceased beneficiary.
Such payment will be made as soon as practicable after the committee's receipt
of satisfactory evidence of the death of the designated beneficiary.

                                    ARTICLE 7
                                  MISCELLANEOUS

7.1    AMENDMENT OR TERMINATION OF PLAN. Biogen, by action of the Board (or such
committee thereof or officer or officers of Biogen to whom the Board has
delegated this authority), at any time and from time to time, may amend or
modify any or all of the provisions of this plan or may terminate this plan
without the consent of any participant (or beneficiary or other person claiming
through a participant). No termination or amendment of the plan may reduce the
amount credited to the account of any participant under the plan (including a
participant whose service as a director terminated before such plan termination
or amendment). However, Biogen may change the deemed investment options under
Section 5.1(c), and Biogen may upon termination of this plan pay participants'
account balances to the participants regardless of the times elected for payment
(or the start of installment payments) elected by the participants and may pay
such amounts in single sum payments regardless of whether participants have
elected installment distributions under Section 6.4.

7.2    BENEFITS NOT CURRENTLY FUNDED.

       (a)    Nothing in this plan will be construed to create a trust or to
obligate Biogen to segregate a fund, purchase an insurance contract or other
investment, or in any other way currently to fund the future payment of any
benefits hereunder, nor will anything herein be construed to give any
participant or any other person rights to any



                                       5



specific assets of Biogen or any other entity. However, in order to make
provision for its obligations hereunder, Biogen may in its discretion purchase
an insurance contract or other investment; any such contract or investment will
be a general asset belonging to Biogen, and no participant or beneficiary will
have any rights to any such asset. The rights of a participant or beneficiary
hereunder will be solely those of a general, unsecured creditor of Biogen.

       (b)    Notwithstanding subsection (a) above, Biogen in its sole
discretion may establish a grantor trust of which it is treated as the owner
under Code Section 671 to provide for the payment of benefits hereunder, subject
to such terms and conditions as Biogen may deem necessary or advisable to ensure
that benefits are not includable, by reason of the trust, in the taxable income
of trust beneficiaries before actual distribution and that the existence of the
trust does not cause the plan or any other arrangement to be considered funded
for purposes of Title I of ERISA.

7.3    NO ASSIGNMENT. No participant or beneficiary will have any power or right
to transfer, assign, anticipate or otherwise encumber any benefit or amount
payable under this plan, nor shall any such benefit or amount payable be subject
to seizure or attachment by any creditor of a participant or a beneficiary, or
to any other legal, equitable or other process, or be liable for, or subject to,
the debts, liabilities or other obligations of a participant or beneficiary
except as otherwise required by law.

7.4    RESPONSIBILITIES AND AUTHORITY OF COMMITTEE. The committee will control
and manage the operation and administration of the plan except to the extent
that such responsibilities are specifically assigned hereunder to Biogen or the
Board.

       The committee will have all powers and authority necessary or appropriate
to carry out its responsibilities for the operation and administration of the
plan. It will have discretionary authority to interpret and apply all plan
provisions and to correct any defect, supply any omission or reconcile any
inconsistency or ambiguity in such manner as it deems advisable. It will make
all final determinations concerning eligibility, benefits and rights hereunder,
and all other matters concerning plan administration and interpretation. All
determinations and actions of the committee will be conclusive and binding upon
all persons, except as otherwise provided herein or by law, and except that the
committee may revoke or modify a determination or action previously made in
error. It is intended that any action or inaction by the committee will be given
the maximum possible deference by any reviewing body (whether a court or other
reviewing body), and will be reversed by such reviewing court or other body only
if found to be arbitrary and capricious.

       Biogen will be the "plan administrator" and the "named fiduciary" for
purposes of the Employee Retirement Income Security Act of 1974, as amended.

7.5    LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the plan will
be construed (a) to give any person any benefit, right or interest except as
expressly provided herein, or (b) to create a contract of employment or to give
any director the right to continue in such capacity or to affect or modify the
terms of his service as a director in any way.

7.6    TAX WITHHOLDING. Any payment hereunder to a participant or beneficiary
will be subject to withholding of income and other taxes to the extent required
by law.

7.7    TEXT CONTROLS. Headings and titles are for convenience only, and the text
will control in all matters.

7.8    APPLICABLE STATE LAW. To the extent that state law applies, the
provisions of the plan will be construed, enforced and administered according to
the laws of the Commonwealth of Massachusetts.




                                       6

EX-10.42

                                                                   EXHIBIT 10.42


[BIOGEN LOGO]                                    VICE PRESIDENT, HUMAN RESOURCES
- --------------------------------------------------------------------------------
FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 * 617-679-2000 * FAX 617-679-3595

                                 June 21, 2000


Mr. Peter N. Kellogg
3617 Dartmouth Avenue
Dallas, Texas 75205


Dear Peter:

This letter supercedes my letter dated June 19 and represents Jim Mullen's offer
to you on behalf of Biogen. You are offered the position of Vice President and
Chief Financial Officer of Biogen at an annual salary of $325,000. You will
report directly to Jim Mullen and you will become a member of the Biogen
Operating Team. Consistent with Biogen's compensation policy, you will be
eligible for a pro-rated merit salary review at year-end 2000 and annually
thereafter. You will also be eligible to participate in Biogen's annual
incentive compensation plan with a 50% target bonus and assuming an August 1,
2000 start date, Biogen will guarantee a pro-rated target bonus of $68,250 for
year 2000. Your principal place of employment will be at Biogen's headquarters
in the Cambridge, Massachusetts area.

Upon employment you will receive $200,000 as a one-time special cash bonus,
which will be treated as an interest-free forgivable loan. The bonus will be
forgiven over a thirty-six month, straight-line schedule. In the event you
voluntarily terminate your employment, or Biogen terminates your employment for
poor performance or cause, prior to the thirty-six months from the date of the
loan, the unforgiven portion of the loan would be payable to Biogen within six
months of your termination date. If your employment is involuntarily terminated
for non-cause within the first three years, or there is a change of control that
results in your termination, the full balance of this loan will be forgiven.

As of the date you commence employment, you will be granted an option to
purchase 200,000 shares of the common stock of Biogen, Inc. The exercise price
per share will be the average of the high and low sale prices as reported in the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
on the date you commence employment. The option will have a ten-year term and
vest over a five-year period at the rate of 20% per year starting on the
anniversary of the date you commence employment. Based on your performance you
will be eligible for a merit stock option grant at year-end 2000 pursuant to
Biogen's merit stock option policy. This grant will be comparable with awards
granted to the three most senior executive officers reporting to Jim Mullen.

You will be able to choose from a menu of benefit options through our flexible
benefits program, BioChoice. These include health care, life, dependent life,
and disability insurance as well as two flexible spending accounts, Med-Flex and
D-Flex, for eligible medical or dependent-care expenses. At the beginning of the
calendar quarter following your date of hire you will be eligible to participate
in Biogen's pension and 401(k) savings plans. Biogen also offers a variety of
additional benefits including childcare and elder care referral service,
educational matching gifts, credit union, and group




[BIOGEN LOGO]                                    VICE PRESIDENT, HUMAN RESOURCES
- --------------------------------------------------------------------------------
Mr. Peter N. Kellogg
June 21, 2000
Page 2


homeowners and automobile insurance. You will receive more detailed information
regarding your benefits on your first day of employment.

Biogen will provide relocation benefits to facilitate your move from Dallas,
Texas. A relocation counselor will contact you to discuss the relocation
program, and will send you a package detailing the relocation policy to you.
These benefits will include the reimbursement of many of the costs associated
with both the sale of your current house and the purchase of a new house in the
Boston area; temporary living; return trips home; home finding; and movement of
your household goods. Please read the policy carefully as it will outline the
parameters of these benefits and detail the reimbursement process.

In addition, Biogen will also provide the following supplemental relocation
benefits:

- -    BRIDGE LOAN: We will provide a bridge loan on the equity of your home in
     Dallas, which will be in place for up to six months, if necessary. We will
     consider an extension beyond this period if unusual market conditions do
     not allow the sale of your home.

- -    MORTGAGE LOAN: Biogen will also provide you a fully subordinated
     interest-free mortgage loan of $1,000,000 (secured by real property of your
     choice and with prompt substitution of security permitted on your
     reasonable request, providing that the security shall consist of your
     principal residence in the Boston area once you acquire one). The mortgage
     loan will be repayable to Biogen the sooner of five years from your date of
     employment or eighteen months following the point in time the pre-tax
     profit of your vested stock options exceeds $5,000,000. In the event that
     the pre-tax profit of your vested options does not exceed $5,000,000 five
     years from your date of employment, the payment date of the mortgage loan
     will be extended for up to two years following your fifth anniversary date.

- -    MORTGAGE REIMBURSEMENT: If necessary, Biogen will reimburse you for the
     mortgage and other reasonable costs related to your property in Dallas for
     up to six months. This reimbursement will commence after you have purchased
     a home in the Boston area and will end on the earlier of (i) six months, or
     (ii) when you have closed on the sale of your Dallas property.

If you voluntarily terminate your employment or if your employment is terminated
by Biogen for cause, you will be required to repay Biogen the entire amount of
the loan the sooner of six months following the termination of your employment
or the closing on the sale of the property by which the loan is then secured. If
your employment is involuntarily terminated for non-cause within the first five
years, or there is a change of control that results in your termination, your
loan will be forgiven. The Company has the right to renegotiate this change of
control clause if there is a new change of control provision, but will guarantee
that it will be no less favorable than the agreement set forth in this
employment letter.




[BIOGEN LOGO]                                    VICE PRESIDENT, HUMAN RESOURCES
- --------------------------------------------------------------------------------
Mr. Peter N. Kellogg
June 21, 2000
Page 3


As an officer of the Company, you will be required to participate in our program
for executive stock ownership. We believe it is very important that our key
leaders have personal stock ownership. I will outline the program to you.

Additionally, in your new role you will be provided the following:

- -    VACATION: You are entitled, during your employment with Biogen, to four (4)
     weeks vacation, accrued on a monthly pro-rated basis.

- -    SUPPLEMENTAL SAVINGS PLAN: You are entitled, during your employment with
     Biogen, to participate in the Voluntary Executive Supplemental Savings
     Plan. This plan allows you to defer from your current taxation up to 50% of
     your base salary and 100% of your bonus, if there is one. I can outline the
     details of the program if you are interested in participating.

- -    LIFE INSURANCE: You will be provided, during your employment with Biogen,
     Biogen's Executive Term Life Insurance coverage for a total of $1,000,000.
     This coverage is based on your successfully meeting the medical standards
     as stated in the Executive Term insurance policy.

- -    TAX REVIEW/PREPARATION: You are entitled, during your employment with
     Biogen, to the preparation and/or review, including review of estimated
     taxes of your annual Federal and State tax returns, which is currently
     administered through Price WaterhouseCoopers. The cost of this service is
     covered by Biogen. In the event you choose to continue the services
     provided by your current tax advisor, Biogen will reimburse you the cost of
     these services up to but not exceeding the amount incurred by Biogen
     through Price WaterhouseCoopers.

- -    INVOLUNTARY TERMINATION: If your employment with Biogen is terminated by
     Biogen without cause, Biogen will protect you by paying you a supplementary
     amount (the "Supplementary Amount") equal to your then present base salary
     for a period (the "Extra Period") ending on the earlier of (i) the date
     twelve months from your termination and (ii) the date you start another
     job. During such period, Biogen will also pay to continue your health
     benefits (i.e., health and dental plan coverage), provided such benefits
     are accorded employees generally and Biogen can obtain the relevant
     coverage. If you need continued coverage to prevent a gap in health
     coverage between your Biogen coverage and that at your new job, Biogen will
     extend such coverage for up to 30 days (to the extent that the Extra Period
     is less than twelve months) after you start your new job. The Supplementary
     Amount will be paid on the same schedule as your salary would have been
     paid. You will not be an employee of Biogen during the time of such
     payments and will not accrue any benefits or other rights (such as, but not
     limited to, pension plan vesting or accrual, stock option




[BIOGEN LOGO]                                    VICE PRESIDENT, HUMAN RESOURCES
- --------------------------------------------------------------------------------
Mr. Peter N. Kellogg
June 21, 2000
Page 4


     vesting, vacation pay, etc.) during such period except health benefits as
     described above. You agree to notify us when you accept a new job.

Commencement of employment with Biogen is contingent on the satisfactory
completion of a pre-employment drug screening test at least five business days
prior to your start date. We require all new employees to sign an Intellectual
Property/Confidentiality Agreement on the first day of employment. You will also
be required to complete a medical history review with our occupational health
department, which is scheduled after your first day of employment.

It is Biogen'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 Biogen employees. Consistent with this policy, your normal
duties may require you from time to time to attend meetings or perform functions
in any or all of Biogen's facilities.

The Federal Government requires you to provide proper identification verifying
your eligibility to work in the United States. Please bring the appropriate
identification with you on your first day of employment.

On behalf of Jim Mullen, we very much look forward to your positive response and
to your joining us as early as practical. We are confident that you will make a
significant contribution to Biogen's future success.

Please confirm your acceptance by signing this offer letter and noting your
preferred start date. I also invite you to complete the enclosed invitation to
self-identify. Please complete the employment application and the drug screen
authorization forms and then return both signed documents to me in the enclosed
self addressed, stamped envelope. The other original offer letter is for your
records.


                                        Sincerely,



                                        /s/ Frank A. Burke, Jr.
                                        ------------------------------------
                                        Frank A. Burke, Jr.


FAB:bk
Attachments

cc: Mr. James C. Mullen




[BIOGEN LOGO]                                    VICE PRESIDENT, HUMAN RESOURCES
- --------------------------------------------------------------------------------
Mr. Peter N. Kellogg
June 21, 2000
Page 5


I am pleased to accept the offer of employment described above:

ACCEPTED:


/s/ Peter N. Kellogg                                               8/7/00
- --------------------------------------------------------------------------------
Peter N. Kellogg                                            Preferred Start Date

EX-10.43

                                                                   EXHIBIT 10.43

October 19, 2001


Peter Kellogg
14 Scotch Pine Circle
Wellesley, MA  02481

Dear Peter:

I am pleased to confirm Jim Mullen's conversation appointing you to Executive
Vice President & CFO. This appointment recognizes the increasing importance of
your role and your leadership capabilities. As an Executive Vice President of
Biogen, we know you will continue to be a key contributor to Biogen's mission,
vision, and values.

I am also pleased to note you are eligible for the following compensation and/or
benefits as outlined below.

TARGET BONUS:  Your incentive target is 50% of your base salary.

LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and
granting stock options to employees. You will be eligible for an annual merit
stock option grant, based on a design which emphasizes the future expected value
of the grant. The details of how we will communicate and value options will be
outlined in December.

CHANGE OF CONTROL: You have been designated as a "Designated Employee" for
purposes of Biogen's 1985 Non-Qualified 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.

VACATION: You are entitled to an additional week of vacation each year. This
week is over and above the company's normal vacation schedule (which is based
upon years of service).

SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary
Executive Supplemental Savings Plan. This plan allows participants to defer
[pretax] base salary and future bonuses. Enrollment in this plan takes place in
December each year. You will be provided additional information on the plan at
that time.

LIFE INSURANCE: You will have life insurance coverage that is the greater of
$1,000,000 or three times your annual salary and subject to the normal medical
standards of the life insurance policy. SEVERANCE: You will have a minimum
severance benefit that is the greater of the severance outlined in your letter
dated June 21, 2000 or the severance outlined in the Executive Severance
document, which has been included with this letter.

EXECUTIVE STOCK OWNERSHIP: You will be expected to acquire and maintain a
personal financial interest in BIOGEN. Ownership is defined as stock held
outright, stock held in the 401(k) plan and stock held under the Employee Stock
Purchase Plan. Vested but unexercised shares would also



be counted toward ownership guidelines. You will be required to maintain a
financial interest of six times base salary. You will have a five-year period
from the date of your appointment to Vice President to obtain this ownership
level.

TAX PREPARATION: You are eligible to have your federal and state income taxes
prepared by PricewaterhouseCoopers.

On behalf of Jim Mullen, please accept my sincere congratulations and best
wishes for future success with Biogen.



                                        Sincerely,



                                        /s/ Frank A. Burke, Jr.
                                        --------------------------------
                                        Frank A. Burke, Jr.

/bk
Attachment

EX-10.44

                                                                   EXHIBIT 10.44

                                        September 5, 2001

Burt Adelman, M.D.
210 Old Pickard Road
Concord, MA  01742


Dear Burt:

I am pleased to advise you that the Compensation and Management Resources
Committee has approved your appointment as Executive Vice President, Research
and Development, reporting to me. Effective September 1, 2001 your annual base
salary is increased to $350,000 and your target bonus is increased to 50% of
base salary under Biogen's management incentive plan. Effective August 8, 2001,
the Stock and Option Plan Administration Committee has granted you an option to
purchase up to 100,000 shares of Biogen's common stock, with a four year,
straight-line vesting schedule. You will next be eligible for both a salary
adjustment and merit stock option grant at year-end 2002.

On behalf of the Board of Directors, please accept our congratulations and best
wishes for success in this important new role. I look forward to your
significant leadership and contributions as we continue to build Biogen.

Best personal regards.



                                        Sincerely,



                                        /s/ James C. Mullen
                                        -------------------------------------
                                        James C. Mullen
                                        President and Chief Executive Officer

JCM:bk

cc: Personnel File

EX-10.45

                                                                   EXHIBIT 10.45


[BIOGEN LOGO]
- --------------------------------------------------------------------------------
FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 * 617-679-2000 * FAX 617-679-2838


                                        September 27, 2001



Sir Kenneth Murray
4 Mortonhall Road
Edinburgh EH9 2HW
Scottland, United Kingdom


Re: Renewal of Independent Consulting Agreement
    -------------------------------------------


Dear Ken:

     Your Independent Consulting Agreement with Biogen, Inc., dated June 29,
1979, as previously amended, (the "Agreement"), under which you serve as a
member of the Scientific Board of the Company expires on September 30, 2001.
Biogen greatly values your input on the Scientific Board, and would like to
renew the Agreement for an additional one-year period commencing as of October
1, 2001 and ending on September 30, 2002. The terms and conditions of the
Agreement will continue to apply during the renewal term except that
compensation for your services under the Agreement during the renewal term will
be as follows:

     1.   You will receive (i) a $20,000 per year retainer, (ii) $2,000 per day
          for attendance at Scientific Board meetings, plus reasonable travel
          and lodging expenses and (iii) $500 per day for time spent in Biogen's
          laboratories.

     As compensation for your service as a member of the Board of Directors you
will receive the standard board package and the following stock option grant:

     2.   Subject to approval by the Stock and Option Plan Administration
          Committee, on your renewal date, you will be granted an option to
          purchase 30,000 shares of Biogen Common Stock. The option will vest
          over three years (33-1/3% per year) and will be exercisable at a price
          equal to the average of the high and low sales prices on your renewal,
          as long as on such date you are still a member of the Board of
          Directors.

     If you agree to renewal of the Agreement on these terms, please sign both
copies of this renewal letter and return one copy to the attention of Stephen
McEvoy, Associate General Counsel, Biogen, Inc., 14 Cambridge Center, Cambridge,
MA 02142.



     We look forward to your continued participation on the Scientific Board.


                                     Very truly yours,


                                     BIOGEN, INC.


                                     By: /s/ James C. Mullen
                                         -------------------------------------
                                         James C. Mullen
                                         President and Chief Executive Officer



                                     AGREED TO AND ACCEPTED:



                                     /s/ Sir Kenneth Murray
                                     -----------------------------------------
                                     Sir Kenneth Murray

EX-10.46

                                                                   EXHIBIT 10.46







                               BIOGEN SAVINGS PLAN















                         As amended and restated by the
                              Thirteenth Amendment
































(December 31, 2001)

                               BIOGEN SAVINGS PLAN

                                Table of Contents

                                                                            Page
                                                                            ----


ARTICLE 1         INTRODUCTION..............................................  1
          1.1     Establishment of Plan.....................................  1
          1.2     Compliance with Code and ERISA............................  1
          1.3     Exclusive Benefit of Participants.........................  1
          1.4     Limitation on Rights Created By Plan......................  1
          1.5     Application of Plan's Terms...............................  1
          1.6     Benefits Not Guaranteed...................................  1

ARTICLE 2         DEFINITIONS...............................................  1
          2.1     Applicable compensation...................................  1
          2.2     Beneficiary...............................................  2
          2.3     Biogen....................................................  2
          2.4     Code......................................................  2
          2.5     Employee..................................................  2
          2.6     Employer..................................................  2
          2.7     ERISA.....................................................  2
          2.8     Participant...............................................  2
          2.9     Plan......................................................  2
          2.10    Plan administrator........................................  2
          2.11    Plan year.................................................  2
          2.12    Trust agreement...........................................  2
          2.13    Trust fund................................................  2
          2.14    Trustee...................................................  2

ARTICLE 3         PLAN SERVICE..............................................  2
          3.1     Plan Service..............................................  3
          3.2     Employment Defined........................................  3
          3.3     Service with Affiliated Companies.........................  3
          3.4     Affiliated Company Defined................................  3

ARTICLE 4         PARTICIPATION.............................................  3
          4.1     Eligible Class............................................  3
          4.2     Participation.............................................  4
          4.3     End of Participation......................................  4
          4.4     Reentry of Former Active Participant......................  4

ARTICLE 5         SAVINGS DEPOSITS BY PARTICIPANTS..........................  4
          5.1     Savings Deposits..........................................  4
          5.2     401(k) Limits.............................................  5
          5.3     Changes in Savings Deposits...............................  7
          5.4     Collection of Savings Deposits............................  8
          5.5     Rollover Contributions....................................  8

ARTICLE 6         EMPLOYER CONTRIBUTIONS....................................  8
          6.1     Matching Employer Contributions...........................  9
          6.2     401(m) Limits.............................................  9
          6.3     Form and Time of Contribution............................. 10
          6.4     Biogen Stock Defined...................................... 10




                                       i

          6.5     Return of Contribution Made in Error or Not Deductible.... 10

ARTICLE 7         ACCOUNTS AND CREDITS...................................... 10
          7.1     Establishment of Accounts................................. 10
          7.2     Crediting Participants' Savings Deposits.................. 11
          7.3     Crediting Matching Contributions and Forfeitures.......... 11
          7.4     Crediting Rollovers....................................... 11
          7.5     Charges to Accounts....................................... 11
          7.6     Maximum Additions......................................... 11

ARTICLE 8         INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE...... 12
          8.1     Investment Funds.......................................... 12
          8.2     Investment Directions and Transfers Among Funds........... 12
          8.3     Valuation of Assets and Crediting Investment Experience... 13

ARTICLE 9         LOANS TO PARTICIPANTS..................................... 14
          9.1     Loans to Participants..................................... 14
          9.2     Accounting for Loans...................................... 15

ARTICLE 10        WITHDRAWALS AND DISTRIBUTIONS............................. 15
          10.1    In-Service Withdrawals from Savings Deposits.............. 15
          10.2    In-Service Withdrawals from Rollover Account.............. 17
          10.3    Distribution Upon Retirement or Disability................ 17
          10.4    Distribution Upon Termination of Employment............... 17
          10.5    Right to Defer............................................ 18
          10.6    Distribution Upon Death of Participant.................... 18
          10.7    Manner of Payment......................................... 19
          10.8    Direct Rollovers.......................................... 19
          10.9    Rehire Before Distribution................................ 20

ARTICLE 11        AMENDMENT, MERGER AND TERMINATION OF PLAN................. 20
          11.1    Amendment of Plan......................................... 20
          11.2    Merger of Plans........................................... 20
          11.3    Termination............................................... 20
          11.4    Effect of Termination..................................... 21

ARTICLE 12        NAMED FIDUCIARIES......................................... 21
          12.1    Identity of Named Fiduciaries............................. 21
          12.2    Responsibilities and Authority of Plan Administrator...... 21
          12.3    Responsibilities and Authority of Trustee................. 21
          12.4    Responsibilities of Biogen................................ 21
          12.5    Responsibilities Not Shared............................... 22
          12.6    Dual Fiduciary Capacity Permitted......................... 22
          12.7    Actions by Biogen......................................... 22
          12.8    Procedure for Allocation and Delegation of
                  Responsibilities.......................................... 22
          12.9    Advice.................................................... 22
          12.10   Indemnification........................................... 22

ARTICLE 13        THE PLAN ADMINISTRATOR.................................... 22
          13.1    Appointment............................................... 22
          13.2    Notice to Trustee......................................... 23
          13.3    Administration of Plan.................................... 23
          13.4    Reporting and Disclosure.................................. 23
          13.5    Records................................................... 23



                                       ii

          13.6    Compensation and Expenses................................. 23
          13.7    Decisions, Rules and Regulations.......................... 23
          13.8    Secretary................................................. 23
          13.9    Claims Review Procedure................................... 24

ARTICLE 14        MISCELLANEOUS............................................. 24
          14.1    Qualified Domestic Relations Orders....................... 24
          14.2    Nonalienation of Benefits................................. 24
          14.3    Payment to Minors and Incompetents........................ 24
          14.4    Current Address of Payee; Unclaimed Payments.............. 25
          14.5    Disputes over Entitlement to Benefits..................... 25
          14.6    Payment of Benefits....................................... 25
          14.7    Top-Heavy Plan Provisions................................. 25
          14.8    Rules of Construction..................................... 26
          14.9    Text Controls............................................. 27
          14.10   Applicable State Law...................................... 27
          14.11   Paperless Administration.................................. 27
          14.12   Correction of Mistakes in Plan Operation.................. 27
          14.13   Veterans' Rights.......................................... 27






                                      iii


                                 INDEX OF TERMS
                                 --------------

       The items listed below are defined or explained in the plan sections or
articles indicated.

Accounts..........................................7.1
Affiliated........................................3.4
Applicable compensation...........................2.1

Beneficiary.......................................2.2
Biogen............................................2.3
Biogen stock......................................6.4

Claim............................................13.9
Claimant.........................................13.9
Code..............................................2.4

Deferral percentage............................5.2(c)
Defined benefit plan fraction..................7.6(c)
Defined contribution plan fraction.............7.6(c)
Direct Rollovers.................................10.8
Disability....................................10.3(b)

Eligible class....................................4.1
Employee..........................................2.5
Employer..........................................2.6
Employment........................................3.2
ERISA.............................................2.7

Financial hardship............................10.1(b)

Higher paid group..............................5.2(b)

Loans.............................................9.1
Lower paid group...............................5.2(c)

Matching contribution percentage...............6.2(b)
Matching employer contributions...................6.1
Maximum additions.................................7.6

Named fiduciaries....................Article 12, 12.1

Participant.......................................2.8
Participation.....................................4.2
Plan..............................................2.9
Plan Administrator.........................Article 13
Plan service......................................3.1
Plan year........................................2.11

Qualified domestic relations order...............14.1

Retirement....................................10.3(b)
Rollover contributions............................5.5

Savings deposits..................................5.1

Top-heavy........................................14.7
total compensation.............................7.6(a)
Trust agreement..................................2.12
Trust fund.......................................2.13
Trustee..........................................2.14

Valuation date....................................8.3
Vested interest...............................10.4(b)

Withdrawals................................10.1, 10.2



                                       iv

                                    ARTICLE 1
                                  INTRODUCTION

       1.1    ESTABLISHMENT OF PLAN. Biogen established this plan effective as
of January 1, 1987. The plan has subsequently been amended as specified in
Appendix A.

       1.2    COMPLIANCE WITH CODE AND ERISA. This plan is intended to qualify
as a profit-sharing plan under Section 401(a) of the Internal Revenue Code of
1986, as amended from time to time, and a qualified cash or deferred arrangement
described in Section 401(k) of said Code, and to comply with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
from time to time. This plan is also 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. The plan will be interpreted in a manner that comports with these
intentions.

       1.3    EXCLUSIVE BENEFIT OF PARTICIPANTS. The plan is for the exclusive
benefit of participants and their beneficiaries. Employer and employee
contributions are made to the trust fund for the purpose of accumulating a fund
for distribution to participants and their beneficiaries in accordance with the
plan. Except as provided in Section 6.5, no part of the trust fund or any
distribution therefrom will be used for or diverted to purposes other than for
the exclusive benefit of participants and their beneficiaries and defraying
those reasonable expenses of administering the plan and trust fund not paid by
the employers.

       1.4    LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the
plan will be construed (a) to give any person any benefit, right or interest
except as expressly provided herein, or (b) to create a contract of employment
or to give any employee the right to continue as an employee or to affect or
modify his terms of employment in any way.

       1.5    APPLICATION OF PLAN'S TERMS. The benefits and rights of a
participant and his beneficiaries under the plan will be determined in
accordance with the terms of the plan that are in effect on the date that
contributions on a participant's behalf are made or credited to his accounts, or
on the date of the participant's retirement, death or other termination of
employment, whichever may be applicable.

       1.6    BENEFITS NOT GUARANTEED. The employers, the trustee and the plan
administrator do not guarantee the payment of benefits hereunder. Benefits will
be paid only from the assets of the trust fund and are limited to the amount of
assets therein.

                                    ARTICLE 2
                                   DEFINITIONS

       This article contains a number of definitions of terms used in the plan.
Other terms are defined, explained or clarified in other articles. This is done
for convenience of plan administration. There is no other significance to the
location of a definition.

       2.1    APPLICABLE COMPENSATION of an employee for any calendar year or
other period of reference means his total compensation for services paid by his
employer during such period including wages, salary, overtime, cash bonuses and
shift differential. Applicable compensation also includes salary reduction
contributions made by his employer to this plan or any other employee benefit
program on behalf of the employee in accordance with a salary reduction
agreement under Code Section 401(k), 125 or, effective on and after January 1,
2001, 132(f)(4) with the employee. However, applicable compensation does not
include reimbursed expenses, life insurance premiums included in his
compensation for income tax purposes, stock options or stock bonuses, or any
other items not constituting direct compensation for services. Compensation also
does not include payments to or benefits received under this or any other public
or private employee benefit plan (other than salary reduction contributions
under this plan or other employee benefit program). The amount of applicable
compensation taken into account under the plan for any participant in a
particular plan year will not exceed $150,000 (as adjusted in




accordance with Code Section 401(a)(17)). Notwithstanding the foregoing,
effective January 1, 2002, the amount of applicable compensation taken into
account under the plan for any participant in a particular plan year will not
exceed the maximum provided for under Code Section 401(a)(17)(A) for such year
(as adjusted in accordance with Code Section 401(a)(17)(B)).

       2.2    BENEFICIARY means a person, class of persons or trust designated
by a participant or, if there is no such designation, by the plan to receive a
death benefit hereunder.

       2.3    BIOGEN means Biogen, Inc. (a Massachusetts corporation) or its
successor.

       2.4    CODE means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute enacted in its place.

       2.5    EMPLOYEE means an individual classified as an employee under the
regular personnel classifications and practices of his employer. An individual
is not an employee for purposes of this plan if the individual is classified as
a consultant or contractor under his employer's regular personnel
classifications and practices, or he is a party to an agreement to provide
services to his employer without participating in this plan, notwithstanding
that such individual may be treated as a common law employee for payroll tax or
other legal purposes.

       2.6    EMPLOYER means Biogen, Inc. or any successor organization to it,
or any subsidiary or affiliate of Biogen, Inc. or other entity that adopts the
plan for its employees with the consent of Biogen, Inc. upon such terms and
conditions as Biogen, Inc. determines. The terms EMPLOYER or EMPLOYERS may refer
to each employer individually, or to all the employers collectively, as the
context may require. Employers in addition to Biogen, Inc. are listed in
Appendix B.

       2.7    ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor statute enacted in its place.

       2.8    PARTICIPANT means an employee or former employee whose
participation in the plan has begun and has not yet ended.

       2.9    PLAN means the Biogen Savings Plan, as set forth in this plan
instrument, and as it may be amended from time to time.

       2.10   PLAN ADMINISTRATOR means the person, committee or entity appointed
by Biogen or otherwise designated under Article 13 to administer the plan.

       2.11   PLAN YEAR means the 12-month period beginning on each January 1
during the continuance of the plan.

       2.12   TRUST AGREEMENT means the instrument executed by Biogen and the
trustee, as amended from time to time, fixing the rights and responsibilities of
each party with respect to the holding, investment and administration of the
trust fund.

       2.13   TRUST FUND means the property held by the trustee for the purposes
of the plan.

       2.14   TRUSTEE means the person, individual or corporate, serving as sole
trustee, or the persons serving as co-trustees, at any time under the terms of
the trust agreement.

                                    ARTICLE 3
                                  PLAN SERVICE



                                       2


       3.1    PLAN SERVICE. Plan service of an employee means the sum of the
following: (a) any period of his employment on and after January 1, 1987,
whether or not continuous; and (b) each period, if any, between a termination of
his employment on and after January 1, 1987, and his earliest subsequent
reemployment, but only if such reemployment occurs within one year after such
termination of employment.

       To determine an employee's years of plan service, all periods of his plan
service will be aggregated, and each 365 days thereof will be one year of plan
service.

       3.2    EMPLOYMENT DEFINED.

       (a)    ACTIVE SERVICE. Employment of a person means his active service as
an employee (determined under the regular personnel policies, practices and
classifications of his employer).

       (b)    CERTAIN ABSENCES. A period of absence from active service will be
considered part of an employee's employment if he receives compensation from his
employer for such period or if such period falls in one of the following
categories (whether or not he receives compensation for such period):

              (i)    absence for military service for which his reemployment
       rights are protected by law; provided (but only for that part of the
       absence which exceeds one year in length) he returns to active service as
       an employee within the period when his reemployment rights are protected
       by law (or within such longer period as his employer in its discretion
       permits); and

              (ii)   leave of absence due to sickness, accident, disability or
       other reason, for the period authorized by the employer, provided (but
       only for that part of such leave of absence which exceeds one year in
       length) he returns to active service with his employer at the end of such
       period of authorized absence.

       3.3    SERVICE WITH AFFILIATED COMPANIES. An employee's plan service with
an affiliated company will be counted for purposes of this plan.

       3.4    AFFILIATED COMPANY DEFINED. Affiliated company means any
corporation (foreign or domestic) which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes the employer;
any trade or business (whether or not incorporated) which is under common
control (as defined in Code Section 414(c)) with the employer; any organization
(whether or not incorporated) which is a member of an affiliated service group
(as defined in Code Section 414(m)) which includes the employer; and any other
entity required to be aggregated with the employer pursuant to regulations under
Code Section 414(o).

                                    ARTICLE 4
                                  PARTICIPATION

       4.1    ELIGIBLE CLASS.

       (a)    GENERAL RULE. Each regular employee (determined under the regular
personnel policies, practices and classifications of the employer) is in the
class eligible to participate in the plan unless he is (a) a student (whether
high school, college or graduate) employed on a temporary or casual basis, (b)
except as provided in subsection (b) below, an employee of a non-U.S. subsidiary
or division of an employer or (c) a member of a collective bargaining unit. An
individual is not considered an employee or "regular employee" for purposes of
this plan if the individual is classified as a consultant or contractor under
his employer's regular personnel classifications and practices, or he is a party
to an agreement to provide services to his employer without participating in
this plan, notwithstanding that such individual may be treated as a common law
employee for payroll tax or other legal purposes.



                                       3


       (b)    ELIGIBILITY OF EMPLOYEES ON TEMPORARY FOREIGN ASSIGNMENT. An
otherwise eligible employee (under subsection (a) above) who is temporarily
assigned by the employer to work for the employer, an affiliated company, or on
a joint venture with the employer outside of the United States with the intent
on the part of the employer that such employee will return to work as an
eligible employee of the employer in the United States will be treated as an
employee in the class eligible to participate in the plan during such temporary
assignment. Accordingly, such employee will be eligible to make savings deposits
in accordance with the plan and to have employer matching contributions made
with respect to his basic savings deposits as provided in the plan (provided,
however, than any matching employer contributions that would otherwise be made
while the eligible employee is on temporary foreign assignment will be reduced -
but not below zero - to reflect any employer contributions on behalf of such
employee to a defined contribution program in which such employee participates
as a result of his temporary foreign assignment, unless it is reasonable to
expect that such employer contributions will later be forfeited by the employee.

       4.2    PARTICIPATION. Participation in the plan is voluntary and no
employee will be required to participate. Each employee in the eligible class
who has attained age 21 will be eligible to make savings deposits. The plan
administrator, pursuant to its authority under Article 13, may adopt rules and
procedures regarding the exact date when savings deposits will commence and what
forms, if any, participants must complete and file with the plan administrator
as prerequisites for such savings deposits to commence. Each employee who has
met the eligibility requirements of this section will become a participant when
a savings deposit by such employee is first credited to his account.

       4.3    END OF PARTICIPATION. A participant's active participation in the
plan will end upon the suspension of his savings deposits under Section 5.3 or
the termination of his service as an employee in the eligible class for any
reason. His participation will end when he has no further interest under the
plan.

       4.4    REENTRY OF FORMER ACTIVE PARTICIPANT. A former active participant
who suspends his savings deposits may resume active participation under Section
5.3. A former active participant who terminates his service as an employee in
the eligible class and who later returns to service as an employee in the
eligible class will be eligible to make savings deposits which, subject to the
applicable rules and procedures of the plan administrator, may start effective
as of his date of rehire or any subsequent entry date. He will be an active
participant again when a savings deposit by such employee is first credited to
his account.

                                    ARTICLE 5
                        SAVINGS DEPOSITS BY PARTICIPANTS

       5.1    SAVINGS DEPOSITS.

       (a)    SAVINGS DEPOSITS BY PARTICIPANTS. Subject to the various
limitations imposed by the plan, each eligible employee described in Section 4.2
may make savings deposits to the plan in a whole percentage of his applicable
compensation. Subject to such limitations, the plan administrator may establish
reasonable minimum or maximum percentages for savings deposits by participants
(or by a particular class of participants such as highly compensated
participants). Savings deposits may be made on an after-tax basis (by salary
deduction) as described in subsection (e) below or on a before-tax basis (by
salary reduction). An eligible employee may elect savings deposits in such
amount as he specifies, provided that his before-tax savings deposits do not
exceed the limits of Section 5.2 and provided further that his before-tax and
after-tax savings deposits do not result in a violation of the limitations of
Section 7.6 or violate any rules of the plan administrator. In addition, a
participant may make special catch-up savings deposits as described in
subsection (d) below, subject to the limitations described therein.

       The term SAVINGS DEPOSITS refers to a participant's after-tax and
before-tax savings deposits and catch-up savings deposits hereunder. A
participant's savings deposits under subsection (d) are referred to as his
catch-up savings deposits. A participant's savings deposits on an after-tax
basis are referred to as his AFTER-TAX SAVINGS DEPOSITS. A participant's
before-tax savings deposits up to six percent of his applicable compensation are
referred to as his BASIC SAVINGS DEPOSITS and any before-tax savings deposits
above this amount are referred to as his SUPPLEMENTAL SAVINGS DEPOSITS.



                                       4


       (b)    SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. The plan administrator,
pursuant to Article 13, may adopt procedures and forms which participants must
complete and file on a timely basis, as determined by the plan administrator, as
prerequisites to commence savings deposits. The plan administrator may prescribe
any and all notice requirements, deadlines, time periods, and election rules as
it deems appropriate to administer participant sign-up requirements.
Participants will be provided information regarding all sign-up requirements and
procedures by the plan administrator.

       (c)    CHARACTER OF SAVINGS DEPOSITS. For purposes of Code Section
414(h), it is specifically provided that basic savings deposits and supplemental
savings (that is, all before-tax savings deposits) deposits and catch-up savings
deposits are employer contributions.

       (d)    SPECIAL CATCH-UP SAVINGS DEPOSITS. Effective as of January 1,
2002, each participant who is eligible to make savings deposits (elective
deferrals) under this plan and who has attained age 50 before the close of the
plan year shall be eligible to make additional savings deposits (referred to
herein as "catch-up savings deposits") in accordance with, and subject to the
limitations of, Code Section 414(v) and any regulations promulgated thereunder,
as in effect for a particular plan year. Such catch-up savings deposits shall
not be taken into account for purposes of the provisions of the plan
implementing the required limitations of Code Sections 402(g) and 415. The plan
shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416, as applicable, by reason of the making of such catch-up savings
deposits.

       (e)    AFTER-TAX SAVINGS DEPOSITS. Notwithstanding any other provision of
the Plan to the contrary, effective January 1, 2002, each participant who is
eligible to make savings deposits (elective deferrals) under this plan, except
one who is also a participant in the Biogen, Inc. Voluntary Executive
Supplemental Savings Plan (or who is designated as eligible to participate in
such plan, regardless of whether he is actually participating or not), shall be
eligible to make after-tax savings deposits to the Plan subject to the
applicable limitations and restrictions on such after-tax savings deposits under
the plan.

       (f)    Notwithstanding the foregoing provisions of this Section 5.1, the
maximum amount a participant may defer in the form of basic savings deposits,
supplemental savings deposits, catch-up saving deposits and after-tax savings
deposits shall be limited to 40 percent of the participant's applicable
compensation, provided however that a participant's savings deposits will also
be subject to the plan's annual additions limits, 401(k) limits, 401(m) limits
and other applicable limits or nondiscrimination requirements under the Code.

       5.2    401(K) LIMITS.

       (a)    LIMITATIONS. A participant's basic and supplemental savings
deposits for a plan year may not exceed the limits of subsection (b) below or
result in a violation of Section 7.6. Also, a participant's basic and
supplemental savings deposits (when combined with any other elective deferrals -
as defined in regulations under Code Section 402(g) - under any other plan or
arrangement maintained by Biogen or any employer in a controlled group with
Biogen under Code Section 414(b) or (c), an affiliated service group with Biogen
under Code Section 414(m) or otherwise aggregated with Biogen under Code Section
414(o)) in any calendar year may not exceed the maximum amount provided for
under Code Section 402(g)(1) for such year (as adjusted periodically in
accordance with Code Section 402(g)(4)).

       (b)    HIGH-LOW TESTS.

              Basic  and supplemental savings deposits by highly-compensated
employees must not exceed amounts such that, as of the last day of each plan
year, the average of the individual deferral percentages of the
highly-compensated employees (the "highly-compensated deferral percentage" or
"HDP") for such plan year does not exceed the average of the individual deferral
percentages of lower-compensated employees (the "lower-compensated deferral
percentage" or "LDP") for the preceding plan year by more than the amount
specified under the following table. Notwithstanding the preceding sentence, if
elected by the plan administrator, the maximum HDP for a plan year may be
determined with reference to the LDP for that plan year (rather than the
preceding plan year). If the plan administrator makes an election under the
preceding sentence, the plan administrator may subsequently elect to determine
the maximum HDP for a plan year with reference to the LDP for the preceding plan



                                       5


year again. However, elections under the preceding two sentences may be made
only under circumstances prescribed in regulations or other rulings of the
Internal Revenue Service.



          IF LDP IS:                              HDP MAY NOT EXCEED:
          ---------                               ------------------

          Less than 2%                            2 times LDP

          At least 2% but                         2% more than LDP
          less than 8%

          8% or higher                            1.25 times LDP

       Compliance with the foregoing requirement will be determined after taking
into account any adjustments made to comply with the Code Section 415 limits
under Section 7.6 below. The plan administrator may elect to perform testing for
compliance with the foregoing requirement using any methodology (for example,
testing separately those eligible employees who have not completed one year of
service) available under regulations or rulings of the Internal Revenue Service,
provided that the plan administrator elects and applies such methodology in
accordance with such regulations or rulings.

       (c)    DEFINITIONS. For purposes of subsection (b) above, the following
definitions will apply.

              (i)    The DEFERRAL PERCENTAGE of a participant for a plan year
       means his basic and supplemental basic and supplemental savings deposits
       for such year computed as a percentage of his applicable compensation for
       such year. If an employee is eligible to be a participant under Section
       4.2 but has not elected to make basic and supplemental savings deposits,
       he will nevertheless be taken into account and his deferral percentage
       will be zero. In the plan administrator's discretion, basic and
       supplemental savings deposits of a participant in the lower paid group
       will not be included when determining his deferral percentage to the
       extent that the requirements of (b) above are met without taking such
       contributions into account.

              (ii)   HIGHLY-COMPENSATED EMPLOYEES DEFINED. An employee is
       considered a highly-compensated employee for a plan year if he or she:

                     (A)    owns (or is considered to own within the meaning of
              Code Section 318) more than 5% of the outstanding stock of an
              employer at any time during the plan year or the preceding plan
              year;

                     (B)    receives annual compensation from the employer in
              excess of $90,000 (before any reductions in his compensation in
              accordance with a salary reduction agreement) during the preceding
              plan year.

                     However, at the election of the plan administrator, an
              employee will be considered a highly compensated employee under
              subsection (B) above only if he or she also was a member of the
              top-paid group of employees for the preceding plan year. If the
              plan administrator so elects, the "top-paid group of employees" is
              the group consisting of the highest-paid 20% of employees of the
              employer for such preceding plan year. In determining the number
              of employees in the top-paid group, employees specified in Code
              Section 414(q)(5) will be excluded. The $90,000 amount in (B)
              above will be adjusted for cost-of-living increases in accordance
              with Code Section 414(q). In addition, the plan administrator may
              determine the highly-compensated employees for a plan year using
              any methodology available under regulations or rulings of the
              Internal Revenue Service, provided that the plan administrator
              elects and applies such methodology in accordance with such
              regulations or rulings.


                                       6


              (iii)  If an eligible employee under Section 4.2 is not a highly
       compensated employee for a plan year, then he is a lower-compensated
       employee for such year.

       (d)    MONITORING AND ADJUSTING EMPLOYEE BASIC AND SUPPLEMENTAL SAVINGS
DEPOSITS. The plan administrator will monitor (or will arrange with the employer
or a record keeper or service provider to monitor) participants' basic and
supplemental savings deposits elections and deferral percentages and will adjust
the amount of basic and supplemental savings deposits elected or made by
highly-compensated employees to the extent necessary to satisfy the requirements
of subsection (b) above. Any such adjustments may be made during a plan year in
accordance with the plan administrator's procedures. If following the end of a
plan year such requirements are not satisfied, the plan administrator will
determine the maximum permitted HDP and will determine the amount needed to
reduce the deferral percentage of each highly compensated employee whose
deferral percentage is above such maximum to the maximum. After the aggregate
dollar amount of all such reductions in the amount of basic and supplemental
savings deposits for a plan year by highly-compensated employees to satisfy such
subsection has been determined, the necessary reductions will be accomplished by
reducing the basic and supplemental savings deposits of the participant (or
participants) in the highly-compensated group with the highest dollar amount of
basic and supplemental savings deposits first, next the participant (or
participants) in such group with the second highest dollar amount of basic and
supplemental savings deposits, and so on until adjustments equal to such
aggregate dollar amount have been made.

       Such adjustments or reductions will be made by the plan administrator at
such time or times as the plan administrator determines, and will be made in
accordance with procedures established by the plan administrator. If basic and
supplemental savings deposits by a highly-compensated employee for a plan year
exceed the amount permitted under subsection (b) above, the necessary reduction
amount plus earnings on such amount (as determined in accordance with applicable
regulations under Code Section 401(k) but without any earnings for periods after
the end of the relevant plan year) will be paid to the affected participant.
Such payment will be made no later than the end of the succeeding plan year.

       The amount of earnings (or losses) to be distributed with a participant's
excess basic and supplemental savings deposits will be determined under Section
8.3 with the following special rules: (i) payments to correct excess basic and
supplemental savings deposits will be paid from each separate investment fund
under Section 8.1 in which the participant's supplemental and (if necessary)
basic savings deposits accounts are invested in accordance with the plan's
ordering rules for withdrawals (or pro rata from each investment fund if there
are no ordering rules); and (ii) the amount of earnings (or losses) will be the
earnings or losses of such investment fund for the plan year of the correcting
distribution multiplied by a fraction whose numerator is the amount of excess
basic and supplemental savings deposits being distributed and whose denominator
is the total of (i) the balance in such investment fund(s) at the beginning of
such plan year plus (ii) the total of the contributions allocated to such
investment fund(s) during such year.

       (e)    415 LIMITS. In addition, the plan administrator will monitor
participants' basic and supplemental savings deposits to insure that the annual
additions to each participant's accounts are within the limits specified in
Section 7.6. If additional basic and supplemental savings deposits by a
participant would cause a violation of such limits, his basic and supplemental
savings deposits will cease immediately.

       5.3    CHANGES IN SAVINGS DEPOSITS.

       (a)    INCREASE OR REDUCTION. A participant making savings deposits may
increase or reduce the rate of his savings deposits to any higher or lower rate
permitted under Section 5.1(a) provided he satisfies such rules and procedures
the plan administrator adopts for changes in participant savings deposits. The
effective date of the new rate will be determined by rules and procedures
adopted by the plan administrator.

       (b)    SUSPENSION. A participant may suspend his savings deposits
provided he satisfies such rules and procedures the plan administrator adopts
for suspensions of participant savings deposits. The suspension of savings




                                       7


deposits will become effective as soon as practicable upon fulfilling the
requirements established by the Plan administrator.

       (c)    RESUMPTION. Subject to Section 4.4 with respect to participants
described therein, a participant who suspended his savings deposits under
subsection (b) above may resume such deposits provided he satisfies such rules
and procedures the plan administrator adopts for resumption of savings deposits.
The effective date of such resumption will be determined in accordance with the
plan administrator's rules and procedures.

       (d)    PLAN ADMINISTRATOR RULES. The plan administrator may establish
such rules and procedures for savings deposits as the plan administrator deems
necessary for the efficient administration of the plan. The plan administrator's
rules may provide that any commencement or change in a participant's savings
deposits will be effective on the first day of the payroll period, may require a
specified reasonable minimum period of advance notice prior to a change in
savings deposits, and/or may provide for a minimum period of suspension prior to
the resumption of savings deposits by a participant.

       5.4    COLLECTION OF SAVINGS DEPOSITS. The employer will collect
participants' savings deposits through payroll or other procedures and will
deliver the amounts collected to the trustee as soon as practicable after
collection (but in no event later than the deadline specified in any applicable
regulations of the Department of Labor under ERISA).

       5.5    ROLLOVER CONTRIBUTIONS.

       (a)    With the approval of the plan administrator, an employee in the
eligible class (whether or not a participant hereunder) may make a rollover or a
direct rollover to the plan (or cause to be transferred to the plan directly
from a qualified trust, qualified annuity plan, individual retirement account or
individual retirement annuity) cash or property in an amount which constitutes
(i) an eligible rollover distribution (as defined in Code Section 402(c)(4) or
Code Section 403(a)(4), or (ii) a rollover contribution (as defined in Code
Section 408(d)(3)). However, no rollover to this plan of accumulated deductible
employee contributions made under another plan will be permitted, and a direct
or indirect transfer to this plan from another qualified plan will not be
permitted if such transfer would subject this plan to the qualified joint and
survivor rules of Code Section 401(a)(11).

       (b)    The employers, the plan administrator and the trustee have no
responsibility for determining the propriety of, proper amount or time of, or
status as a tax-free transaction of any transfer under subsection (a) above.

       (c)    If an employee who is not yet a participant makes a rollover
contribution under subsection (a) above, he will be considered to be a
participant with respect to such contribution only. He will not be a participant
for any other purpose of the plan until he completes the requirements for
participation under Article 4.

       (d)    A rollover will be credited to a separate rollover account in the
name of the employee making such rollover contribution.

       (e)    The plan administrator in its discretion may direct the return to
the employee (or the retransfer to another trustee or custodian designated by
the employee) of any rollover contribution to the extent the plan administrator
determines that such return may be necessary to insure the continued
qualification of this plan under Section 401(a) of the Code or that the holding
of such rollover contribution would be administratively burdensome.

       (f)    The plan administrator, in its discretion, may accept a rollover
contribution from a qualified trust or 403(b) arrangement through a
trustee-to-trustee transfer, which consists in whole or in part of an eligible
employee's after-tax contributions to such qualified trust or 403(b)
arrangement. The plan administrator shall separately account for such after-tax
contributions and any earnings thereon, including the portion of such rollover
contribution or transfer which is includible in gross income and the portion
which is not includible in gross income.

                                    ARTICLE 6
                             EMPLOYER CONTRIBUTIONS


                                       8


       6.1    MATCHING EMPLOYER CONTRIBUTIONS.

       (a)    GENERAL RULE. Periodically each employer will make a matching
contribution on behalf of each participant employed by such employer who makes
basic savings deposits. Subject to the limitations of Section 6.2, the
employer's matching contribution will be equal to 25% of the participant's basic
savings deposits. Matching contributions will be reduced by any forfeitures
under Section 10.4, subject to the prior use of such forfeitures under Section
10.4(c) or Section 14.4.

              Notwithstanding the foregoing, no matching contributions shall be
made to the plan on behalf of any participant based on special catch-up savings
deposits described in Section 5.1(d) of the plan or after-tax savings deposits
described in Section 5.1(e) of the plan made by such participant.

       (b)    TRUE-UP MATCHING CONTRIBUTIONS. Following the end of each plan
year (beginning with the 1999 plan year), an additional true-up matching
contribution may be made on behalf of an eligible participant who has made
savings deposits for the plan year equal to at least 6% of the participant's
applicable compensation for such plan year. The additional true-up matching
contribution, if any, made on behalf of an eligible participant for a plan year
shall equal (i) minus (ii) where:

              (i)    equals 1.5% of the participant's applicable compensation
       for such plan year; and

              (ii)   equals the total amount of matching contribution previously
       credited to such participant's account for such plan year (before
       application of this subsection (b)).

              (iii)  Participants eligible for an additional true-up matching
       contribution for the 1999 plan year shall include only those participants
       who are employed by the employer as of August 1, 2000. Participants
       eligible for an additional true-up matching contribution for each plan
       year thereafter shall include only those participants who are employed by
       the employer as of the April 1 following the end of such plan year.

       6.2    401(m) LIMITS.

       (a)    GENERAL LIMITS. Matching employer contributions (including true-up
       matching contributions, if any) and after-tax savings deposits (if any)
       on behalf of highly-compensated employees must not exceed such amounts
       that, as of the last day of each plan year, the average of the individual
       matching contribution percentages of the highly-compensated employees
       (the "highly-compensated matching contributions percentage" or "HMCP" may
       not exceed the average of the individual matching contribution
       percentages of the lower-compensated employees (the "lower-compensated
       matching contributions percentage" or "LMCP") by more than the amount
       specified in the following table. The maximum HMCP for a plan year will
       be determined by reference to the LMCP for the preceding plan year, or
       for that plan year (rather than the preceding plan year), in accordance
       with procedures described in Section 5.2(b).

                  IF LMCP IS:                        HMCP MAY NOT EXCEED:
                  ----------                         -------------------

                  Less than 2%                       2 times LMCP

                  At least 2% but                    2% more than LMCP
                  less than 8%

                  8% or higher                       1.25 times LMCP

       Compliance with the foregoing requirement will be determined after taking
into account any adjustments made to comply with the Code Section 415 limits
under Section 7.6 below.

       Highly compensated and lower-compensated employees are defined in Section
5.2(c).



                                       9


       The plan administrator will monitor and adjust matching contribution
percentages of highly compensated employees to the extent necessary to satisfy
this subsection. Such monitoring and adjustments will be accomplished under
procedures similar to those specified in Sections 5.2(b) and (d).

       (b)    MATCHING CONTRIBUTION PERCENTAGE. For purposes of this section,
the matching contribution percentage of a participant for a plan year means the
employer matching contribution (including true-up matching contribution, if any)
on his behalf for such year plus after-tax savings deposits (if any) by him
during such year, computed as a percentage of his applicable compensation for
such year. The plan administrator may in its discretion include savings deposits
of a participant in the lower compensated group in determining his matching
contribution percentage, to the extent that such savings deposits are not used
in determining his deferral percentage under Section 5.2(c)(i).

       6.3    FORM AND TIME OF CONTRIBUTION. The employers' contribution under
Section 6.1 will be paid to the trustee in cash (provided that, in the
discretion of Biogen, employer contributions under Section 6.1 or under Section
5.1(c) may be in the form of Biogen stock to the extent that, in accordance with
participants' investment instructions hereunder, such contributions are to be
invested in the Biogen stock fund). Such contributions will normally be paid at
periodic intervals (not less frequently than quarterly) determined by the
employers. In any event, such contributions will be paid to the trustee no later
than the due date (including extensions) for filing the employers' federal
income tax return for such year.

       6.4    BIOGEN STOCK DEFINED. Biogen stock means the common stock, $.01
par value, of Biogen. If the outstanding common stock of Biogen is changed into
or exchanged for a different kind of stock or other securities of Biogen or
another successor corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, change in par value or the
like, then Biogen stock means such other stock or security. If an employer
contribution is made in the form of Biogen stock under Section 6.3, for purposes
of determining the amount of such employer contribution, such Biogen stock will
be valued at its fair market value at the time of contribution to the trust
fund.

       6.5    RETURN OF CONTRIBUTION MADE IN ERROR OR NOT DEDUCTIBLE. Unless
specifically identified as a non-deductible contribution, each matching employer
contribution hereunder is specifically conditioned upon its deductibility on the
federal income tax return covering the employer making the contribution. If all
or part of a matching employer contribution is made because of a mistake of fact
or if the deduction under Code Section 404 of any portion of a matching employer
contribution is disallowed, the amount contributed because of a mistake of fact
or the amount for which the deduction is disallowed will be returned to the
contributing employer if demand therefor is made within the time allowed by law.

                                    ARTICLE 7
                              ACCOUNTS AND CREDITS

       7.1    ESTABLISHMENT OF ACCOUNTS. The plan administrator will establish
and maintain in the name of each participant such of the following accounts as
are appropriate for the participant:

       (a)    basic savings deposits account;

       (b)    supplemental savings deposits account;

       (c)    matching contributions account;

       (d)    catch-up savings deposits accounts;

       (e)    after-tax savings deposits account; and

       (f)    rollover account (with separate accounting for after-tax
contributions included in such rollover account as required under Section 5.5).


                                       10


Credits and charges to such accounts will be made as provided in the plan.

       7.2    CREDITING PARTICIPANTS' SAVINGS DEPOSITS. Basic and supplemental
savings deposits made by a participant will be credited to such participant's
basic or supplemental savings deposits account, as appropriate, when received
and processed by the trustee. Catch-up savings deposits and after-tax savings
deposits (if any) made by a participant will be credited to such participant's
catch-up savings deposits accounts or after-tax savings deposits account, as
appropriate, when received and processed by the trustee.

       7.3    CREDITING MATCHING CONTRIBUTIONS AND FORFEITURES. Matching
employer contributions on behalf of a participant and any forfeitures to be
credited to such participant under Section 6.1 will be credited to such
participant's matching contributions account when received and processed by the
trustee. To the extent that forfeitures during any period exceed the amount to
be credited under the preceding sentence during such period, the forfeitures
will be carried over and credited as a matching contribution for the next
processing period.

       7.4    CREDITING ROLLOVERS. Rollovers by or on behalf of an eligible
employee will be credited to the employee's rollover account when received and
processed by the trustee following receipt thereof by the trustee.

       7.5    CHARGES TO ACCOUNTS. Any amount distributed, paid, withdrawn or
transferred from an account will be a charge against such account as of the date
of distribution, payment, withdrawal or transfer. All distributions, payments,
withdrawals or transfers from an account will be based upon the amount in such
account as of the valuation date most recently preceding the date of such
distribution, payment, withdrawal or transfer.

       7.6    MAXIMUM ADDITIONS.

       (a)    The annual additions to a participant's accounts for any plan year
(which will be the LIMITATION YEAR for purposes of Code Section 415) may not
exceed the lesser of (i) $40,000 as adjusted periodically for cost-of-living
changes in accordance with Code Section 415 and any regulations thereunder, or
(ii) 100 percent of his total compensation for such year. For purposes of this
section, TOTAL COMPENSATION means a participant's total compensation from his
employer for a plan year, as defined in Code Section 415 and regulations
thereunder.

       (b)    If the annual additions to a participant's accounts would exceed
the limitations of subsection (a) above, after-tax savings deposits (if any)
made on his behalf for such year which would be credited to his account but for
the limitations of subsection (a) will be returned to him, but only to the
extent necessary to comply with subsection (a). If, following the application of
the preceding sentence (to the extent applicable), the annual additions to a
participant's accounts would still exceed the limitations of subsection (a)
above, the supplemental savings deposits first and then, to the extent
necessary, basic savings deposits made on his behalf for such year which would
be credited to his accounts but for the limitations of subsection (a) will be
returned to him, but only to the extent necessary to comply with subsection (a).
Any amount returned to a participant under this subsection (b) will include
interest or earnings on such amount as provided in regulations in Code Section
415.

       (c)    For purposes of this Section 7.6, ANNUAL ADDITIONS to a
participant's accounts for any plan year means the sum of the following amounts
credited to his accounts for such year: (i) basic savings deposits, (ii)
supplemental savings deposits, (iii) after-tax savings deposits, and (iv)
matching employer contributions and forfeitures.

       (d)    For any plan year, the sum of a participant's defined contribution
plan fraction and his defined benefit plan fraction may not exceed one, as
follows:

              (i)    His DEFINED CONTRIBUTION PLAN FRACTION for any plan year is
       the fraction (A) whose numerator is the sum of annual additions (as
       defined in Code Section 415(c)(2)) to his accounts under all qualified
       defined contribution plans maintained by Biogen (or any other employer
       that is included in a controlled group or under common control with
       Biogen within the meaning of Code Sections 414(b) and (c) and 415(h)) as
       of the close of such plan year, and (B) whose denominator is the sum of
       the lesser of the following amounts determined for such year and for each
       prior year of plan service with his employer: the




                                       11


       product of 1.25 (1.0 if the plan is top-heavy) and the dollar limitation
       in effect for such year, or the product of 1.4 and 25 percent of the
       participant's compensation for such year.

              (ii)   His DEFINED BENEFIT PLAN FRACTION for any plan year is a
       fraction (A) whose numerator is his aggregate projected annual benefit
       under all defined benefit plans sponsored by Biogen (or any other
       employer that is included in a controlled group or under common control
       with Biogen within the meaning of Code Sections 414(b) and (c) and
       415(h)) as of the close of such plan year, and (B) whose denominator is
       the lesser of the product of 1.25 (1.0 if the plan is top-heavy) and the
       dollar limitation in effect under Section 415(b)(1)(A) of the Code, or
       the product of 1.4 and the participant's highest average compensation as
       determined under Section 415(b)(1)(B) of the Code. For this purpose, the
       PROJECTED ANNUAL BENEFIT of a participant means the total normal
       retirement benefit to which he would be entitled on the assumptions that
       his employment continues until his normal retirement date and his annual
       earnings and all other relevant factors remain the same for all future
       years as in the year when the projection is made.

              (iii)  If the sum of such fractions would exceed one without the
       application of this section, his benefit under the defined benefit plan
       or plans will be reduced to a benefit that will produce a defined benefit
       plan fraction and a defined contribution plan fraction that equal one.

              (iv)   The provisions of this subsection (d) will not apply to any
       limitation year or plan year when combined defined contribution and
       defined benefit plan limitations are not applicable under Code Section
       415(e).

                                    ARTICLE 8
              INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE

       8.1    INVESTMENT FUNDS. The plan administrator may direct the trustee to
establish two or more separate investment funds within the trust fund and to
invest each such separate investment fund in different types or categories of
assets (e.g., equities or fixed-income securities, or shares of specified mutual
funds) or in accordance with investment objectives specified by the plan
administrator. One such separate investment fund will consist of Biogen stock
(as defined in Section 6.4), plus shares of a money market mutual fund (or
similar cash equivalent investment) as are necessary to facilitate the operation
of such Biogen stock investment fund. The plan administrator may add or delete
separate investment funds at its discretion.

         The plan administrator will maintain records that reflect the portion
of each account of a participant that is invested in each separate investment
fund. The plan administrator may delegate such record keeping responsibilities
or may contract with a service provider (which may be the trustee or an
affiliate of the trustee) for record keeping services. The existence of such
records and of participants' accounts will not be deemed to give any person any
right, title or interest in or to any specific assets or part of the trust fund
or any separate investment fund.

       8.2    INVESTMENT DIRECTIONS AND TRANSFERS AMONG FUNDS.

       (a)    INVESTMENT OF MATCHING CONTRIBUTIONS.

              (i)    Except as provided in subsection (ii) below, the matching
       contributions account of each participant will be invested in the Biogen
       stock fund.

              (ii)   A participant who is at least age 55 and who has four or
       more years of plan service may elect to transfer all or any of his
       matching contributions account invested in the Biogen stock fund to one
       or more of the other separate investment funds available for the
       investment of savings deposits accounts, and the participant may
       thereafter direct transfers of his matching contributions account among
       the investment funds available under the plan in accordance with the
       rules specified in subsection (c) below. In addition, an employee
       described in the preceding sentence may direct that any future matching
       contributions on his




                                       12


       behalf will be invested in one or more of the separate investment funds
       (other than the Biogen stock fund) available for the investment of
       savings deposits accounts.

       (b)    INVESTMENT OF SAVINGS DEPOSITS AND ROLLOVERS. Each participant may
direct the separate investment fund or funds in which his savings deposits
accounts and rollover account will be invested. A participant may direct
investment of these accounts on his behalf entirely in one investment fund or in
a combination of two or more of the investment funds. In addition, the
participant may direct transfers among the investment funds so that these
accounts are invested entirely in one investment fund or in a combination of two
or more of the investment funds.

       The participant will have sole responsibility for the investment of his
savings deposits accounts, rollover account and, to the extent provided for in
subsection (a) (ii) above, matching contribution account, and for transfers
among the available investment funds, and no named fiduciary or other person
will have any liability for any loss or diminution in value resulting from the
participant's exercise of such investment responsibility. It is intended that
Section 404(c) of ERISA will apply to a participant's exercise of investment
responsibilities under this subsection.

       (c)    MANNER AND TIME OF GIVING DIRECTIONS. A participant's directions
governing the investment of his accounts under subsection (a) or (b) will be
given in accordance with such rules and procedures as the plan administrator may
from time to time establish and communicate to participants. A participant must
give such investment directions when he first authorizes savings deposits or
makes a rollover contribution. A participant may give new investment directions,
changing the investment of his future savings deposits or rollovers or future
matching employer contributions on the participant's behalf, or directing
transfers among the investment funds, subject in each case to subsections (a)
and (b) above.

       8.3    VALUATION OF ASSETS AND CREDITING INVESTMENT EXPERIENCE.

       (a)    IN GENERAL. As of each valuation date, the trustee will determine
the fair market value of the plan's assets, relying upon such evidence of value
as it deems appropriate. In performing such valuations, the trustee may include
any accrued but unpaid dividends, interest or other items, but will not include
any contributions or forfeitures to be allocated as of such valuation date as an
asset of any participant's account. Investment income and gains and losses of
the trust fund will be credited or debited to participants' accounts in
proportion to the balances in such accounts as of the preceding valuation date,
reduced by any charges against any such account since such preceding valuation.

       The last day of each plan year will be a valuation date, and the plan
administrator may from time to time designate other valuation dates for all
accounts or for specified accounts only (such as, by way of example, daily or
monthly valuation dates for accounts invested exclusively in shares of open-end
mutual funds and annual valuation dates for all other accounts).

       (b)    OPEN-END MUTUAL FUNDS. Notwithstanding subsection (a) above, in
the case of accounts that are invested exclusively in shares of open-end mutual
funds, the valuation of such accounts will be performed separately from the
valuation of the other accounts, and the value of such mutual fund shares as of
any valuation date will be the net asset value as of such date determined by the
mutual fund (with such adjustments, if any, as the mutual fund may make in
accordance with its normal procedures as described in its prospectus). Any
dividends or capital gains or other distributions on shares of a mutual fund
allocated to a participant's account will be reinvested in shares and fractional
shares of such mutual fund.

       (c)    BIOGEN STOCK. Notwithstanding subsection (a) above, in the case of
accounts that are invested in the Biogen stock fund, the valuation of such
accounts will be performed separately from the valuation of the other accounts,
and the value of a share of Biogen stock or a unit in such fund as of any
valuation date will be its fair market value as determined in good faith by the
trustee (subject to the following paragraph). Any cash dividends on shares of
Biogen stock or a unit in such fund will be reinvested in additional shares of
Biogen stock or units in such fund.



                                       13


       (d)    At any time when Biogen stock (or any other employer security held
by the plan or proposed to be purchased by the plan) is not readily tradable on
an established securities market, all valuations of Biogen stock (or other
employer security) will be performed by an independent appraiser (meeting the
requirements of Code Section 401(a)(28)(C)), and the trustee's determination of
the fair market value of Biogen stock (or such other employer security) will be
based upon a valuation report of such independent appraiser.

                                    ARTICLE 9
                              LOANS TO PARTICIPANTS

       9.1    LOANS TO PARTICIPANTS.

       (a)    AVAILABILITY OF LOANS. Upon application by a participant, the
trustee may be directed to make a loan to the participant from his savings
deposits account(s) and rollover account. Loans will be available to each
eligible participant on a reasonably equivalent basis under uniform,
nondiscriminatory borrowing rules. Such borrowing rules must be formulated and
administered so that the requirements of Code Section 72(p) for non-taxable
loans, the applicable Department of Labor regulations on plan loans, and the
following provisions of this section are satisfied. Any loan hereunder will bear
a reasonable rate of interest and will be evidenced by a promissory note signed
by the participant in such form as the plan administrator may require. The
amount of any such loan will be withdrawn from the participant's accounts and
the investment fund or funds in which the participant's accounts are invested in
accordance with the borrowing rules.

       (b)    BORROWING RULES. The borrowing rules may contain such requirements
pertaining to loans as are deemed necessary or desirable and which are not
specified herein. The borrowing rules may govern the procedures and cut-off
dates for applying for loans hereunder and the terms of such loans, including
(i) the number of loans that a participant may request in any year and the
number of loans that may be outstanding at any time to a participant, (ii) any
restrictions on re-borrowing not stated in this section, (iii) the interest rate
in effect from time to time for loans or the method of ascertaining such
interest rate, and (iv) the repayment schedule for loans or the method for
determining the repayment schedule.

       (c)    AMOUNT OF LOANS. The minimum loan amount is $1,000 or such lesser
amount as the borrowing rules may from time to time provide. The maximum
aggregate loan amount is based upon the vested balance in the participant's
accounts. No participant loan will exceed the smallest of (i) the amount in the
participant's savings deposits accounts and rollover account, (ii) one-half of
the participant's vested account balances, or (iii) $50,000 (reduced by the
highest outstanding loan balance to the participant during the 12 months
preceding the loan). For purposes of applying such limits, account values as of
the valuation date immediately preceding the date when the loan is made will be
used.

       (d)    Maximum Repayment Period.

              (i)    OTHER THAN RESIDENTIAL LOANS. Except as provided in
       subsection (ii) below, the maximum term of a loan will be five years
       (provided that, if provided in the borrowing rules, there may be a
       shorter repayment period for small loans).

              (ii)   RESIDENTIAL LOANS. If a participant requests a loan for the
       acquisition or construction of his principal residence, maximum the
       repayment period will be determined by reference to bank loans for the
       same purpose but may not exceed 10 years.

       (e)    SECURITY FOR REPAYMENT. Each loan hereunder will be a
participant-directed investment for the benefit of the participant requesting
such loan; accordingly, any default in the repayment of principal or interest of
any loan hereunder will reduce the amount available for distribution to such
participant (or his beneficiary). Thus, any loan hereunder will be effectively
and adequately secured by the vested amount in the participant's accounts. To
the extent provided in the borrowing rules, other security for repayment of a
loan may be required in any




                                       14


instance. A participant receiving a loan must execute such instruments and must
pay any fees for filings required to perfect any security interest in the
participant's accounts or other security.

       (f)    REPAYMENT. A participant may be required to execute an agreement
to repay the principal and interest of a loan through regular payroll deduction
payments from the participant's compensation. Back-up repayment procedures may
be established for participants who do not make payroll deduction repayment.
Except as otherwise may be permitted under Treasury regulations, any such
back-up procedures will provide for substantially level amortization payments
made quarterly or more frequently. Any loan hereunder may be prepaid, in
accordance with the note or other document evidencing the loan. If a
participant's service as an employee is terminated for any reason, the entire
unpaid principal and interest of any loan then outstanding to such participant
may become immediately due and payable in accordance with the note or other
document evidencing the loan.

       (g)    ACTION UPON DEFAULT. If a participant defaults on any payment of
interest or principal of a loan hereunder or defaults upon any other obligation
relating to such loan, the plan administrator may take (or direct the trustee to
take) such action or actions as it determines to be necessary to protect the
interests of the plan. Such actions may include commencing legal proceedings
against the participant, or foreclosing on any security interest in the
participant's accounts or other security given in connection with a loan
hereunder; however, the plan administrator will not direct foreclosure on the
participant's savings deposits accounts at a time when the participant would not
be entitled to withdraw from such account under Section 10.1.

       (h)    DISTRIBUTION TO PARTICIPANT WITH LOAN. In the case of any
participant with a loan outstanding hereunder, the amount available for
distribution to such participant (or his beneficiary) will consist of the
portion of his accounts invested in the investment funds of the trust fund. In
addition, the participant's note will be distributed to him (or his
beneficiary), and the trustee will report the value of the note for income tax
purposes as the amount of unpaid principal and interest due thereon at the date
of distribution.

       9.2    ACCOUNTING FOR LOANS.

       (a)    SOURCE OF LOAN. The plan administrator will establish procedures
and ordering rules for liquidating the participant's accounts to make a loan to
him.

       (b)    LOAN ACCOUNT. The plan administrator will establish and maintain a
loan account for each borrowing participant. The unpaid principal and accrued
but unpaid interest on the loans to a participant will be reflected for plan
accounting purposes in the participant's loan account. Repayments by the
participant will be credited to his loan account, and will then be transferred
from his loan account to the participant's other accounts.

                                   ARTICLE 10
                          WITHDRAWALS AND DISTRIBUTIONS

       10.1   IN-SERVICE WITHDRAWALS FROM SAVINGS DEPOSITS.


       (a)    APPLICATION. A participant may apply to the plan administrator for
a withdrawal from his basic and supplemental savings deposits accounts. Except
as provided in subsection (d) below, such withdrawals will be available only in
cases of financial hardship. The participant will file an application setting
forth the specific immediate and heavy financial needs prompting his request and
the amount needed to meet such immediate financial need. The minimum withdrawal
amount is $100, and the maximum withdrawal amount is the lesser of (i) the total
amount in the participant's basic and supplemental savings deposits (excluding
any interest or earnings on such savings deposits--other than any such interest
or earnings in the participant's basic and supplemental savings deposits
accounts as of December 31, 1988 to the extent identifiable in the accounting
records of the plan) or (ii) the amount needed to alleviate his financial
hardship (including the amount reasonably expected to be needed for income taxes
and penalties payable on the amount withdrawn).

       (b)    FINANCIAL HARDSHIP DEFINED. Financial hardship means that a
participant has an immediate and heavy financial need and that the withdrawal is
necessary to meet the need.



                                       15


              (i)    IMMEDIATE AND HEAVY FINANCIAL NEED. A withdrawal for an
       immediate and heavy financial need must be occasioned by: (A) medical
       expenses incurred or needed by the participant or his spouse or any of
       his dependents; (B) tuition and related educational fees for the next 12
       months of post-secondary education for the participant, his spouse, child
       or dependent; (C) purchase of the participant's principal residence (not
       including mortgage payments); (D) rent or mortgage payments to prevent
       the participant's eviction from or the foreclosure of the mortgage on his
       principal residence; (E) such other event or circumstance as the Internal
       Revenue Service permits; or (F) any other extraordinary personal need
       which the plan administrator in its sole discretion may determine under
       uniform rules of general application. Financial need under (A) through
       (E) above will be deemed to be a financial hardship without evidence of
       the participant's other financial resources.

              (ii)   NECESSITY OF WITHDRAWAL. A withdrawal will be deemed
       necessary to satisfy the participant's immediate and heavy financial need
       if either (A) the participant has made all non-hardship withdrawals
       available under Section 10.2 and obtained all non-taxable loans available
       under Section 9.1, the participant does not make savings deposits
       hereunder (or salary reduction contributions to any other deferred
       compensation or other plan sponsored by Biogen or any other employer,
       except a health or welfare plan) for a period of six months following the
       date of the withdrawal, and following the participant's resumption of
       savings deposits after such six-month period, the participant does not
       make basic or supplemental savings deposits hereunder that, when added to
       his basic or supplemental savings deposits during the calendar year of
       the withdrawal, exceed any special rules or regulations for the
       application of the limitation in Code Section 402(g) following such
       resumption of savings deposits; or (B) the participant satisfies such
       other requirements as may be prescribed by the Internal Revenue Service.

              (iii)  EVIDENCE AND DETERMINATION OF FINANCIAL HARDSHIP. A
       participant must establish to the plan administrator's satisfaction both
       that the participant has an immediate and heavy financial need and that
       the withdrawal is necessary to meet the need. The participant may
       establish either need or necessity (or both) under the deemed method
       described in subsection (i) (A) through (E) and subsection (ii) above. If
       the participant does not elect to use the deemed method to determine
       immediate and heavy financial need under subsection (i) (A) through (E)
       above, the participant in his hardship withdrawal application must show
       facts and circumstances amounting to immediate and heavy financial need
       under subsection (i)(F) above. If the participant does not elect to use
       the deemed method to determine necessity under subsection (ii) above, the
       participant in his hardship withdrawal application must show that the
       participant lacks other reasonably available financial resources to meet
       the hardship need (for example, by borrowing on commercially reasonable
       terms or by reasonable liquidation of other assets of the participant) so
       that the participant has no reasonable recourse other than to satisfy
       such hardship need through a withdrawal from this plan.

              (iv)   PLAN ADMINISTRATOR DETERMINATIONS. A participant's
       application for a hardship withdrawal may be in writing or transmitted by
       electronic means, on such form and containing such information (or other
       evidence or materials establishing the participant's financial hardship)
       as the plan administrator may require. In determining whether a
       participant has a financial hardship, the plan administrator may
       reasonably rely upon the participant's representations, including
       representations concerning his inability to meet the need through other
       resources such as insurance proceeds, reasonable liquidation of other
       assets, distributions or non-taxable loans from other plans, or borrowing
       from other sources on reasonable terms, or through cessation of savings
       deposits hereunder. The plan administrator's determination of the
       existence of and the amount needed to meet a financial hardship will be
       binding on the participant.

       (c)    PAYMENT. If approved by the plan administrator, a hardship
withdrawal will be paid to the participant as soon as practicable after the
hardship withdrawal is approved by the plan administrator. Any such withdrawal
will be paid first from the participant's supplemental savings deposits account
and next from his basic savings deposits account.

       (d)    EXCEPTIONS. The requirement for financial hardship will not apply
to withdrawals requested by a participant in the following situations: (i) after
the participant has reached age 59 1/2, or (ii) to remove supplemental




                                       16


and basic savings deposits during a calendar year which, when added to savings
deposits under Code Section 401(k) or salary reduction contributions under Code
Section 403(b) during the same year to another plan, exceed the limits on
elective deferrals under Code Section 402(g). A request to remove excess
supplemental and basic savings deposits under (ii) above must be filed with the
plan administrator no later than the March 1 following such calendar year. Such
a withdrawal will be paid to the participant as soon as practicable after the
filing of his request and will include income and investment gain or loss
allocable to such withdrawn amount.

       10.2   IN-SERVICE WITHDRAWALS FROM ROLLOVER ACCOUNT.

       (a)    AMOUNT. A participant may elect to withdraw from his rollover
account any amount he specifies from a minimum of $1,000 (or the amount in his
rollover account if less) to a maximum of the total amount in that account. A
withdrawal request under this section will be made in accordance with applicable
rules and procedures adopted by the plan administrator.

       (b)    PAYMENT. Such an in-service withdrawal by a participant will be
paid to him as soon as practicable after the participant files the form
requesting the withdrawal.

       10.2A  IN-SERVICE WITHDRAWALS FROM AFTER-TAX SAVINGS DEPOSITS ACCOUNT.

       (a)    AMOUNT. A participant may elect to withdraw from his after-tax
savings deposits account any amount he specifies from a minimum of $1,000 (or
the amount in such account, if less) to a maximum of the total amount in such
account. A withdrawal request under this section will be made in accordance with
applicable rules and procedures adopted by the plan administrator.

       (b)    PAYMENT. Such an in-service withdrawal by a participant will be
paid to him as soon as practicable after the participant files the form
requesting the withdrawal.

       10.3   DISTRIBUTION UPON RETIREMENT OR DISABILITY.

       (a)    AMOUNT AND TIME OF DISTRIBUTION. A participant who retires from
service with his employer or terminates from such service because of disability
will receive the total amount in his account. Subject to Section 10.5,
distribution of his account will be made as soon as practicable after his
retirement or disability.

       For plan years beginning January 1, 1997, and thereafter, a participant
may elect to receive a distribution on the April 1 of the year following the
calendar year in which the participant reaches age 70-1/2, or, if still an
employee of Biogen, the participant may elect to defer receiving distributions
until he/she retires from the employer. Such elections will be made in
accordance with rules and procedures of the plan administrator. Notwithstanding
the preceding sentence, in the case of a participant who is a 5% or greater
stockholder of Biogen, distribution must be made no later than the April 1 of
the year following the calendar year in which the participant reaches age
70 1/2.

       (b)    RETIREMENT AND DISABILITY DEFINED. For purposes of this plan,
retirement means a participant's termination of employment on or after his 55th
birthday. Disability means a participant's inability to perform the normal
duties of his position with his employer because of a physical or mental
impairment.

       10.4   DISTRIBUTION UPON TERMINATION OF EMPLOYMENT.

       (a)    AMOUNT AND TIME OF DISTRIBUTION. A participant who terminates
employment for any reason other than retirement, disability or death will
receive the vested portion of his accounts. Subject to Section 10.5, his vested
accounts will be payable as soon as practicable after his termination of
employment.

       (b)    VESTED INTEREST. Except as provided in the next paragraph, a
participant will be fully vested in his accounts under the plan at all times.



                                       17


       A participant who is an active employee will be fully vested in his
matching contribution account on his 55th birthday. Before that date, such a
participant will have a vested interest in that percentage of his matching
contribution account specified in the following table based upon his number of
years of plan service:

              Years of
            Plan Service                              Vested Percentage
            ------------                              -----------------

             Less than 1                                      0%
                  1                                          25%
                  2                                          50%
                  3                                          75%
              4 or more                                     100%

       (c)    FORFEITURE OF NON-VESTED INTEREST. The non-vested portion of a
terminated participant's matching contribution account, if any, will be
forfeited by him on the day after his termination of employment. If a terminated
participant whose account was wholly or partially forfeited returns to
employment with an employer within six years of his termination, the amount
forfeited (without adjustment for interest or earnings) will be restored to his
account (out of current forfeitures to the extent available) as soon as
practicable after the date of his return. The dollar amount restored will equal
the dollar value of the separate investment fund shares or units forfeited on
the date of forfeiture, and such restored dollar amount will be invested in
shares or units of the available separate investment funds at their then fair
market value on the date of such restoration in accordance with the
participant's investment instructions in effect on such date.

       10.5   RIGHT TO DEFER. The plan administrator will notify a participant
of his right to receive payment of his vested account balance as soon as
practicable after his retirement, disability or other termination of employment.
Notwithstanding the foregoing provisions of this article, if his vested account
balance exceeds $5,000, the participant will be given the right to defer payment
of his accounts to a later date.

       Distribution of a participant's accounts may be deferred to a date no
later than the April 1 following the year in which such participant reaches age
70 1/2. A participant who deferred payment of his accounts may accelerate such
payment by filing a notice with the plan administrator specifying the earlier
distribution date.

       For purposes of determining whether a participant's account exceeds
$5,000 hereunder and application of the involuntary cash-out rules under the
plan, the participant's rollover contributions to the plan and any direct
rollovers or transfers on the participant's behalf to the plan shall not be
taken into account.

       10.6   DISTRIBUTION UPON DEATH OF PARTICIPANT.

       (a)    IN GENERAL. If a participant dies during employment (or after
retirement or disability but before distribution of his accounts), his
beneficiary will receive the total amount in his accounts. Distribution of such
amount will be made as soon as practicable after the date the plan administrator
receives such evidence of the participant's death and the right of any
beneficiary to receive such payment as it deems necessary, but in no event later
than the end of the year following the calendar year containing participant's
date of death.

       If a participant dies following termination of employment but before the
distribution of his vested interest, his beneficiary will receive the amount
owing to the participant under Section 10.4. Payment to the beneficiary will be
made in accordance with the last sentence of the preceding paragraph.

       (b)    DESIGNATION OF BENEFICIARY. A participant may designate one or
more beneficiaries to receive any distribution payable under subsection (a)
above and may revoke or change such a designation at any time. If the
participant names two or more beneficiaries, distribution to them will be in
such proportions as the participant designates or, if the participant does not
so designate, in equal shares. Any designation of beneficiary will be in writing
on such form as the plan administrator may prescribe and will be effective upon
filing with the plan administrator.


                                       18


       Notwithstanding the preceding paragraph, the sole beneficiary of a
participant who is married immediately before his death will be the
participant's surviving spouse unless the participant designated and the spouse
consented in writing to such designation of another person as beneficiary. The
spouse's consent must acknowledge the effect of such consent and be witnessed by
a plan representative or a notary public.

       (c)    NO DESIGNATION. Any portion of a distribution payable upon the
death of a participant which is not disposed of by a designation of beneficiary
under subsection (b) above, for any reason whatsoever, will be paid to the
participant's surviving spouse if living at his death, otherwise to the
participant's estate.

       (d)    PAYMENT UNDER PRIOR DESIGNATION. The plan administrator may direct
payment in accordance with a prior designation of beneficiary (and will be fully
protected in so doing) if such direction (i) is given before a later designation
is received, or (ii) is due to the plan administrator's inability to verify the
authenticity of a later designation. Such a distribution will discharge all
liability therefor under the plan.

       10.7   MANNER OF PAYMENT. Payments to a participant under the plan will
be distributed in cash. Notwithstanding the preceding sentence, at a
participant's election, the portion of the participant's accounts invested in
the Biogen stock fund will be paid to him or her in the form of whole shares of
Biogen stock (with the value of any fractional share paid in cash). The number
of shares of Biogen stock paid will be based upon the fair market value of a
share of Biogen stock determined by the trustee in good faith (subject to the
second paragraph of Section 8.3 (c)) as of the most recent practicable date
preceding payment.

       10.8   DIRECT ROLLOVERS.

       (a)    APPLICABILITY OF THIS SECTION. Notwithstanding any provision of
the plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover (a distributee may designate only one
eligible retirement plan to receive such a direct payment).

       (b)    DEFINITIONS. The following definitions apply for purposes of this
section.

              (i)    ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of
       all or any portion of the balance to the credit of the distributee under
       this plan, except that an eligible rollover distribution does not
       include: any distribution that is one of a series of substantially equal
       periodic payments (not less frequently than annually) made for the life
       (or life expectancy) of the distributee or the joint lives (or joint life
       expectancies) of the distributee and the distributee's designated
       beneficiary, or for a specified period of ten years or more; any
       distribution to the extent such distribution is required under Code
       Section 401(a)(9); and any distribution made on account of hardship. The
       portion of a distribution consisting of employee after-tax contributions
       constitutes part of an eligible rollover distribution to the extent
       provided in subsection (v) below. If the distributee receives a
       distribution in the form of Biogen stock and cash, the cash distribution
       may be directly rolled over to an eligible retirement plan if such cash
       distribution qualifies as an eligible rollover distribution, and the sock
       distribution may be retained by the distributee. Alternatively, the
       entire distribution (cash and stock) may be directly rolled over to an
       eligible retirement plan by the distributee. However, an eligible
       rollover distribution will not include any distribution that is below any
       threshold amount established by applicable regulations (including any
       threshold amount for direct rollovers when only a portion of a
       distributee's distribution is being rolled over).

              In general, subject to any thresholds established under the last
       sentence of the preceding paragraph, as long as Section 10.7 provides for
       distributions to participants or beneficiaries only in the form of a lump
       sum payment, all distributions from the plan will be eligible rollover
       distributions (except the portion, if any, of such payment that
       constitutes a required minimum distribution under Code Section
       401(a)(9)).



                                       19


              (ii)   ELIGIBLE RETIREMENT PLAN means an individual retirement
       account described in Code Section 408(a), an individual retirement
       annuity described in Code Section 408(b), an annuity plan described in
       Code Section 403(a), or a qualified trust described in Code Section
       401(a), an annuity contract or custodial account described in Code
       Section 403(b) and an eligible plan under Code Section 457 which is
       maintained by a state, political subdivision of a state, or any agency or
       instrumentality of a state or political subdivision of a state, which
       agrees to accept the distributee's eligible rollover distribution and to
       separately account for amounts transferred into such plan from this plan.

              (iii)  DISTRIBUTEE means an employee or former employee. In
       addition, an employee's or former employee's surviving spouse and an
       employee's or former employee's spouse or former spouse who is an
       alternate payee under a qualified domestic relations order, as defined in
       Code Section 414(p), is a distributee with regard to the interest of the
       spouse or former spouse.

              (iv)   DIRECT ROLLOVER means payment by this plan to the eligible
       retirement plan specified by the distributee, with such payment being
       made in any manner permitted by applicable regulations.

              (v)    For purposes of the direct rollover provisions contained in
       this Section 10.8(b) of the plan, a portion of a distribution shall not
       fail to be an eligible rollover distribution merely because the portion
       consists of after-tax employee contributions which are not includible in
       gross income; provided, however, such after-tax portion may be
       transferred only to an individual retirement account or annuity described
       in Code Section 408(a) or 408(b), or to a qualified defined contribution
       plan described in Code Section 401(a) or 403(a) which provides for
       separate accounting for such amounts transferred and earnings thereon,
       including the portion of such distribution which is includible in gross
       income and the portion which is not includible in gross income.

       10.9   REHIRE BEFORE DISTRIBUTION. If a former active participant is
rehired before distribution of his accounts has been made, such distribution
will be deferred until his subsequent termination of employment.

                                   ARTICLE 11
                    AMENDMENT, MERGER AND TERMINATION OF PLAN

       11.1   AMENDMENT OF PLAN. At any time and from time to time, Biogen may
amend or modify any or all of the provisions of the plan without the consent of
any person, provided that no amendment will reduce any participant's
nonforfeitable account balance as of the date such amendment is adopted (or its
effective date if later), and provided further that no amendment will permit any
part of the trust fund to revert to the employers or be used for or diverted to
purposes other than for the exclusive benefit of participants or their
beneficiaries, except as provided in Section 6.5. In addition, the plan
administrator may, subject to the provisos contained in the preceding sentence,
amend or modify any or all of the provisions of the plan other than an amendment
that would materially affect the benefits of participants or that would
materially increase the cost of maintaining the plan to the employers.

       11.2   MERGER OF PLANS. A merger or consolidation with, or transfer of
assets or liabilities to, any other plan will be permitted only if the benefit
each participant would receive if such plan were terminated immediately after
the merger, consolidation or transfer is not less than the benefit he would have
received if this plan had terminated immediately before the merger,
consolidation or transfer.

       11.3   TERMINATION. Biogen has established the plan and the employers are
maintaining the plan with the bona fide expectation and intention that they will
be able to continue the plan and contributions thereto indefinitely, but they
will not be under any obligation or liability whatsoever to continue
contributions or maintain the plan for any particular length of time.
Notwithstanding any other provision hereof, an employer in its discretion may
discontinue contributions to the plan indefinitely or temporarily and Biogen may
terminate this plan at any time. There will be no liability to any participant,
beneficiary or other person as a result of any such discontinuance or
termination.



                                       20


       An employer's failure to make contributions in any year or years will not
operate to terminate the plan in the absence of formal action by Biogen to
terminate the plan.

       11.4   EFFECT OF TERMINATION. Upon complete discontinuance of
contributions or termination or partial termination of the plan, the accounts of
affected participants will become nonforfeitable. After termination of the plan,
no employee will become a participant and no further savings deposits or
contributions will be made hereunder on behalf of participants.

       The trustee will continue to hold the assets of the trust fund for
distribution as directed by the plan administrator. The plan administrator will
determine whether to direct the trustee to disburse the plan's assets as
immediate benefit payments, to retain and disburse them in the future, or to
follow any other procedure which it deems advisable.

                                   ARTICLE 12
                                NAMED FIDUCIARIES

       12.1   IDENTITY OF NAMED FIDUCIARIES.

       (a)    NAMED FIDUCIARIES. Biogen, the trustee, any investment manager
appointed by Biogen, and the plan administrator will be the named fiduciaries
under the plan and will control and manage the plan and its assets to the extent
and in the manner indicated in this article and in the trust agreement. Any
responsibility assigned to a named fiduciary will not be deemed to be a duty of
a "fiduciary" (as defined in ERISA) solely because of such assignment.

       (b)    PLAN ADMINISTRATOR. Biogen will be the "plan administrator" as
defined in ERISA.

       12.2   RESPONSIBILITIES AND AUTHORITY OF PLAN ADMINISTRATOR. The plan
administrator will control and manage the operation and administration of the
plan except to the extent that such responsibilities are specifically assigned
hereunder to Biogen, to an investment manager or to the trustee. The
responsibilities and authority of the plan administrator are set forth in detail
in various articles of this plan and primarily in Article 13.

       12.3   RESPONSIBILITIES AND AUTHORITY OF TRUSTEE. The trustee will manage
and control the assets of the plan, except to the extent that such
responsibilities are specifically assigned hereunder or under the trust
agreement to Biogen or the plan administrator, or are delegated to one or more
investment managers by Biogen, or are performed by a participant with respect to
the investment of his accounts among the investment funds in the trust fund or
with respect to his taking a loan from his accounts in accordance with the plan.
The responsibilities and authority of the trustee are set forth in detail
primarily in the trust agreement.

       12.4   RESPONSIBILITIES OF BIOGEN. Biogen will have the following
responsibilities and authority with respect to control and management of the
plan and its assets:

       (a)    to amend or terminate the plan;

       (b)    to merge or consolidate the plan with, or transfer all or part of
the assets or liabilities to, any other plan;

       (c)    to appoint, remove and replace the trustee and the plan
administrator and to monitor their performances;

       (d)    to appoint, remove and replace one or more investment managers, or
to refrain from such appointments, and to monitor their performance;

       (e)    to communicate such information to the plan administrator, trustee
and investment managers as they may need for the proper performance of their
duties; and


                                       21


       (f)    to perform such additional duties as are imposed by the plan or by
law.

       The responsibilities and authority of Biogen are set forth in further
detail in the various articles of the plan and in the trust agreement.

       12.5   RESPONSIBILITIES NOT SHARED. Except as otherwise provided herein
or required by law, each named fiduciary will have only those responsibilities
that are specifically assigned to it hereunder, and no named fiduciary will
incur liability because of improper performance or nonperformance of
responsibilities assigned to another named fiduciary.

       12.6   DUAL FIDUCIARY CAPACITY PERMITTED. Any person or group of persons
may serve in more than one fiduciary capacity, including service both as trustee
and plan administrator.

       12.7   ACTIONS BY BIOGEN. Wherever the plan specifies that Biogen is
required or permitted to take any action, such action will be taken by its board
of directors, or by a duly authorized committee thereof, or by one or more
directors, officers, employees or other persons duly authorized to do so by the
board of directors.

       12.8   PROCEDURE FOR ALLOCATION AND DELEGATION OF RESPONSIBILITIES. The
plan administrator or the members of the board of directors of Biogen or of a
committee of such board may allocate their responsibilities among themselves in
any reasonable manner and may delegate any of their responsibilities to any
other person or persons by so specifying in a written instrument. No plan
administrator or director will be liable for the improper discharge or
nonperformance of any responsibility so allocated or delegated to another person
except to the extent liability is imposed by law.

       12.9   ADVICE. A named fiduciary may employ or retain such attorneys,
accountants, investment advisors, consultants, specialists and other persons or
firms as it deems necessary or desirable to advise or assist it in the
performance of its duties. Unless otherwise provided by law, the fiduciary will
be fully protected with respect to any action taken or omitted by him or it in
reliance upon any such person or firm rendered within his or its area of
expertise.

       12.10  INDEMNIFICATION. To the extent permitted by law and not prohibited
by Biogen's charter and by-laws, Biogen will indemnify and hold harmless every
individual serving as a fiduciary (whether a named fiduciary or otherwise), and
the estate of such an individual if he is deceased, from and against all claims,
loss, damages, liability, and reasonable costs and expenses, incurred in
carrying out his fiduciary responsibilities, unless due to the gross negligence,
bad faith or willful misconduct of such individual; provided that counsel fees
and amounts paid in settlement must be approved by Biogen and provided further
that this Section 12.10 will not apply to any claim, loss, damages, liability,
or costs and expenses which are covered by a liability insurance policy
maintained by Biogen, or by the plan or by an individual fiduciary. The
preceding sentence will not apply to a corporate trustee, an insurance company,
an investment manager or outside service provider (or to an employee of any of
the foregoing) unless Biogen otherwise specifies in writing.

                                   ARTICLE 13
                             THE PLAN ADMINISTRATOR

       13.1   APPOINTMENT. Biogen will appoint a plan administrator to perform
the duties of the plan administrator in accordance with the plan.

       The plan administrator may be an individual or the plan administrator may
be a committee. The individual plan administrator or the committee members may,
but need not, be plan participants or employees or officers of Biogen. If a
committee, the number of persons serving on the committee at any time will be
determined by Biogen, and may be changed from time to time by Biogen. Biogen may
remove any person serving as plan administrator or committee member at any time,
with or without cause, by filing written notice of his removal with such person
and the trustee. A person serving as plan administrator or committee member may
resign at any time by filing his written resignation with Biogen and the
trustee. If a person who is serving as plan administrator or committee



                                       22



member is an employee of Biogen, such person's appointment as plan administrator
or committee member will automatically terminate when such person is no longer
an employee of Biogen. A vacancy, however arising, will be filled by Biogen.

         In the event Biogen does not designate an individual as plan
administrator or appoint a committee pursuant to this section, the Director of
Human Resources (or the official performing the duties thereof) will be the plan
administrator hereunder shall have all the same functions of the plan
administrator.

       13.2   NOTICE TO TRUSTEE. Biogen will notify the trustee in writing of
the appointment of each person serving as plan administrator or committee
member, and the trustee may assume such appointment continues in effect until
written notice to the contrary is given by Biogen.

       13.3   ADMINISTRATION OF PLAN. The plan administrator will have all
powers and authority necessary or appropriate to carry out its responsibilities
with respect to the operation and administration of the plan. It will have
discretion to interpret and apply all plan provisions and may correct any
defect, supply and omission or reconcile any inconsistency or ambiguity in such
manner as it deems advisable. It will in its discretion make all final
determinations concerning eligibility, benefits and rights hereunder, and all
other matters concerning plan administration. All determinations and actions of
the plan administrator will be conclusive and binding upon all persons, except
as otherwise provided herein or by law, and except that the plan administrator
may revoke or modify a determination or action previously made in error. Any
action or omission by the plan administrator will be subject to review (by a
court or otherwise) only for an abuse of discretion.

       13.4   REPORTING AND DISCLOSURE. The plan administrator, acting as agent
of Biogen in its capacity as ERISA plan administrator, will prepare, file,
submit, distribute or make available any plan descriptions, reports, statements,
forms or other information to any government agency, employee, former employee,
or beneficiary as may be required by law or by the plan.

       13.5   RECORDS. The plan administrator will record its acts and
decisions, and keep all data, records, books of account and instruments
pertaining to plan administration, which will be subject to inspection or audit
by Biogen at any time. The employers will supply all information required by the
plan administrator to administer the plan, and the plan administrator may rely
upon the accuracy of such information.

       13.6   COMPENSATION AND EXPENSES. The plan administrator will serve
without compensation unless otherwise determined by Biogen, provided that in no
event will an employee of an employer be compensated for his services as a plan
administrator. All reasonable expenses of administering the plan will be paid
out of the trust fund unless paid by the employers at the option of Biogen (with
each employer bearing such share of the expenses that Biogen specifies). Such
expenses include the compensation of all persons employed or retained by the
plan administrator, premiums for bonds and insurance protecting the plan or
trust fund and required by law or deemed advisable by the plan administrator,
and all other costs of plan administration.

       13.7   DECISIONS, RULES AND REGULATIONS. When the plan administrator is a
committee, any action or decision concurred in by a majority of the members,
either at a meeting or in writing without a meeting, will constitute an action
or decision of the plan administrator.

       No plan administrator may act or vote on any matter which relates
exclusively to himself.

       The plan administrator may adopt and amend such rules for the conduct of
its business and may adopt, promulgate and amend any and all such rules relating
to the administration of the plan, including, but not limited to, rules relating
to plan enrollment periods, forms and procedures, elections, notice
requirements, claims other rules and procedures it deems, with the discretionary
powers granted to it under Section 13.3 of this Article, advisable to administer
the plan.

       13.8   SECRETARY. If the plan administrator is a committee, the committee
at its option may appoint any member or other person to serve as secretary, and
may remove him at any time. The committee will notify the trustee in writing of
such appointment, and the trustee may assume his appointment as secretary
continues until




                                       23


written notice to the contrary is given by the committee. The secretary, or a
majority of the committee members then in office, will have the authority to
execute all instruments or memoranda necessary or appropriate to carry out the
actions and decisions of the whole committee; and any person may rely upon any
instrument or memorandum so executed as evidence of the committee action or
decision indicated thereby.

       13.9   CLAIMS REVIEW PROCEDURE. Any request for benefits (the "CLAIM") by
a participant or his beneficiary (the "CLAIMANT") will be filed with the plan
administrator. Within a reasonable period after receipt of a claim, the plan
administrator will provide written notice to any claimant whose claim has been
wholly or partly denied, including: (a) the reasons for the denial, (b) the plan
provisions on which the denial is based, (c) any additional material or
information necessary to perfect the claim and the reasons it is necessary, and
(d) the plan's claims review procedure. A claimant will be given a full and fair
review by the plan administrator of the denial of his claim if he requests a
review in writing within 60 days after notification of the denial. The claimant
may review pertinent documents and may submit issues and comments orally, in
writing, or both. The plan administrator will render its decision on review
promptly and in writing and will include specific reasons for the decision and
reference to the plan provisions on which the decision is based.

                                   ARTICLE 14
                                  MISCELLANEOUS

       14.1   QUALIFIED DOMESTIC RELATIONS ORDERS.

       (a)    A qualified domestic relations order (QDRO) is a judgment, decree,
or order which meets the requirements of Code Section 414(p). An alternate payee
is an individual named in the QDRO who is to receive some or all of the
participant's benefit.

       (b)    Upon receipt of any domestic relations order, the plan
administrator will notify the participant involved and each alternate payee
under the order (and under any previous QDRO relating to the participant's
benefits). The plan administrator will determine whether the order is a QDRO and
will notify each affected individual of its determination. In general, subject
to the provisions of Code Section 414(p), the plan's claims procedure rules
under Section 13.9 apply to this determination and any subsequent determination
relating to the order. To the extent permitted by law, the plan administrator's
determination that an order is or is not a QDRO is final. Any subsequent change
in this determination is applied only prospectively unless the plan
administrator rules otherwise.

       (c)    If an order is determined to be a QDRO, the provisions of the QDRO
will take precedence over any conflicting provisions of the plan (including
Section 14.2 relating to non-alienation of benefits). To the extent provided in
a QDRO, a former spouse will be treated as the spouse or surviving spouse of a
participant for purposes of the death benefit provisions of Section 10.6 and any
other relevant provision of the plan. The plan administrator may carry out the
requirements of a QDRO and may make distribution to an alternate payee in
accordance with a QDRO regardless of the age of the participant and regardless
of whether the participant himself would be eligible to receive a distribution
at such time.

       14.2   NONALIENATION OF BENEFITS. No benefit, right or interest hereunder
of any person will be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, or to seizure, attachment or other
legal, equitable or other process, or be liable for, or subject to, the debts,
liabilities or other obligations of such person, except that the plan
administrator may prescribe rules for the payment of benefits in accordance with
a qualified domestic relations order as defined in Section 14.1, and except that
payments may be made from a participant's account to the extent required under
Code Section 410(a)(13) and the regulations thereunder.

       14.3   PAYMENT TO MINORS AND INCOMPETENTS. If the plan administrator
deems any person incapable of giving a binding receipt for benefit payments
because of his minority, illness, infirmity or other incapacity, it may direct
payment directly for the benefit of such person, or to any person selected by
the plan administrator to disburse it. Such payment, to the extent thereof, will
discharge all liability for such payment under the plan.


                                       24



       14.4   CURRENT ADDRESS OF PAYEE; UNCLAIMED PAYMENTS. Any person entitled
to benefits is responsible for keeping the plan administrator informed of his
current address at all times. The plan administrator, trustee and the employers
have no obligation to locate such person, and will be fully protected if all
payments and communications are mailed to his last known address as shown on the
records of his employer, or are withheld pending receipt of proof of his current
address and proof that he is alive.

       If a communication from the plan has been mailed to the participant's or
beneficiary's last known address and is returned with no forwarding address or
if the check for a plan distribution is not cashed, and if the participant (or
his beneficiary) makes no claim for such benefit, the participant's benefit will
be forfeited and reallocated to other participants when a period of three years
less one day has elapsed since such communication or benefit payment check was
mailed. If the participant (or his beneficiary) subsequently makes a claim for
such benefit, the amount that was forfeited (without investment earnings or
gains or losses) will be restored and such amount will be distributed to the
participant (or beneficiary). Such restoration will be made first using any
available forfeitures and second (to the extent necessary) using a contribution
by the participant's employer.

       14.5   DISPUTES OVER ENTITLEMENT TO BENEFITS. If two or more persons
claim entitlement to payment of the same benefit hereunder, the plan
administrator in its discretion may withhold payment of such benefit until the
dispute has been determined by a court of competent jurisdiction or has been
settled by the persons concerned.

       14.6   PAYMENT OF BENEFITS. Unless he elects otherwise (but subject to
the requirements of Section 10.5), a participant's benefit payments under the
plan will begin no later than 60 days after the close of the plan year in which
the latest of the following dates occurs: (a) the date he terminates service
with his employer; (b) his 65th birthday; and (c) the tenth anniversary of the
year in which he began participating in the plan.

       14.7   TOP-HEAVY PLAN PROVISIONS.

       (a)    APPLICABILITY OF SECTION. This section is included in the plan to
meet the requirements of Code Section 416, and the provisions of this section
will be operative only if, when and to the extent that Code Section 416 applies
to the plan. At such time as the requirements of Code Section 416 apply to the
plan because the plan is top-heavy as defined in subsection (b)(i) below, the
provisions of this section will apply and will govern over any contrary
provision of the plan.

       (b)    Definitions.

              (i)    The plan will be TOP-HEAVY for a plan year if, as of the
       determination date, the sum of the aggregate amount in the accounts of
       participants who are key employees exceeds 60 percent of such amount
       determined for all participants in this plan.

              Notwithstanding the preceding paragraph, if the plan is included
       within a required or permissive aggregation group, the plan will be top
       heavy for a plan year if, as of the determination date, the sum of (A)
       the aggregate amount in the accounts of participants who are key
       employees (including all defined contribution plans within such group)
       and (B) the aggregate present value of cumulative accrued benefits of
       participants who are key employees (including all defined benefit plans
       within such group), exceeds 60 percent of such amount determined for all
       participants in all such plans.

              In determining the amounts in participants' accounts and present
       values of accrued benefits under the preceding two paragraphs, (V) the
       present value of accrued benefits will be based on the actuarial
       assumptions used to determine the minimum funding requirements of Code
       Section 412(b); if there is more than one defined benefit plan in the
       aggregation group, each plan will use the same actuarial assumptions for
       purposes of the top heavy test, as determined by the actuary; (W)
       distributions made during the one-year period (five-year period in the
       case of any in-service withdrawal) ending on the determination date will
       be taken into account (X) rollover contributions after December 31, 1983,
       will be taken into account only to the extent provided in regulations
       under Code Section 416(g)(4)(A); (Y) account balances and accrued benefit
       values of a person who was but no longer is a key employee will be
       disregarded; and (Z) account balances and accrued benefit values of any
       individual who has not performed any services for an




                                       25


       employer and received compensation therefor (other than benefits under a
       deferred compensation plan) at any time during the one-year ending on the
       determination date will be disregarded.

              (ii)   THE DETERMINATION DATE for purposes of determining whether
       the plan is top-heavy under subsection (i) for a particular plan year is
       the last day of the preceding plan year. In the case of the first plan
       year, the determination date is the last day of that year.

              (iii)  A KEY EMPLOYEE is any employee or former employee
       (including a beneficiary of such an employee) who at any time during the
       plan year or any of the four preceding plan years was:

                     (A)    an officer of an employer having annual compensation
              greater than $130,000 (adjusted in accordance with Code Section
              416(i) and any regulations thereunder) for such plan year (but no
              more than the lesser of 50 employees or 10% of all employees will
              be taken into account under this subsection (A) as key employees);

                     (B)    a person owning (or considered as owning within the
              meaning of Code Section 318) more than 5% of the outstanding stock
              of his employer (or any direct or indirect parent of his employer)
              or stock possessing more than 5% of the total combined voting
              power of all such stock; or

                     (C)    a person who has annual compensation from his
              employer of more than $150,000 and who would be described in
              subsection (C) above if 1% were substituted for 5%.

                     For purposes of applying Code Section 318 to the provisions
       of this subsection (iii), subparagraph (C) of Code Section 318(a)(2) will
       be applied by substituting "five percent" for "50 percent". In addition,
       the rules of Code Section 414 (b), (c) and (m) will not apply for
       purposes of determining ownership under subsections (C) and (D) above.

              (iv)   A NON-KEY EMPLOYEE is any employee in the plan (including a
       beneficiary of such an employee) who is not a key employee under
       subsection (iii) above.

              (v)    A REQUIRED AGGREGATION GROUP includes all qualified plans
       of the employers in which a key employee participates and each other
       qualified plan of the employers that enables any of such plans to meet
       the requirements of Section 401(a)(4) or Section 410 of the Code. A
       permissive aggregation group includes (in addition to plans in a required
       aggregation group) any plan which Biogen designates for inclusion
       provided that inclusion of such plan does not cause the group to fail the
       requirements of Section 401(a)(4) or Section 410 of the Code.

       (c)    MINIMUM CONTRIBUTION. For any plan year in which the plan is
top-heavy, the employers will make a minimum contribution on behalf of each
non-key employee who has satisfied the requirements of Section 4.2 (and who is
therefore eligible to make savings deposits) equal to 3% of his total
compensation (as defined in Section 7.6(a)). However, the minimum contribution
called for under the preceding sentence will not exceed the contribution
(determined as a percentage of his total compensation) for such plan year under
this plan (and any other defined contribution plan included in an aggregation
group with this plan) on behalf of the key employee for whom such contribution
is the highest. Also, such minimum contribution will take into account any
savings deposits and matching contributions by such employee during such plan
year, and will be reduced as permitted under regulations under Code Section 416
to reflect contributions on behalf of or benefits accrued by such non-key
employee under any other plan maintained by the employers.

       14.8   RULES OF CONSTRUCTION.


                                       26


       (a)    A word or phrase defined or explained in any section or article
has the same meaning throughout the plan unless the context indicates otherwise.

       (b)    Where the context so requires, the masculine includes the
feminine, the singular includes the plural, and the plural includes the
singular.

       (c)    Unless the context indicates otherwise, the words "herein",
"hereof", "hereunder", and words of similar import refer to the plan as a whole
and not only to the section in which they appear.

       14.9   TEXT CONTROLS. Headings and titles are for convenience only, and
the text will control in all matters.

       14.10  APPLICABLE STATE LAW. To the extent that state law applies, the
provisions of the plan will be construed, enforced and administered according to
the laws of the Commonwealth of Massachusetts.

       14.11  PAPERLESS ADMINISTRATION. The plan administrator may establish
procedures whereby an electronic or voice recognized authorization or election
or election made by a participant may be acceptable under the plan in lieu of
filing a written form as may otherwise be required under the plan. In such
event, any reference in the plan to a written form shall be deemed to include
such other authorization or election.

       14.12  CORRECTION OF MISTAKES IN PLAN OPERATION. If as a result of a
mistake in plan operation or administration (including by way of illustration
and not by way of limitation, the omission of an employee who should have become
a participant, the inclusion of an employee as a participant who should not have
become a participant, the crediting of the wrong amount to a participant's
accounts, and similar mistakes), the plan administrator may take such steps as
the plan administrator determines are necessary or proper to correct the mistake
(i.e., to put the affected participant(s) in the same position he would have
been in if the mistake had never occurred). In so doing, the plan administrator
may apply a correction methodology promulgated in any program of the IRS such as
the Employee Plans Compliance Resolution System (EPCRS) or any successor or
replacing program or other similar program.

       14.13  VETERANS' RIGHTS. Notwithstanding any provision of this plan to
the contrary, contributions and service credit with respect to qualified
military service will be provided in accordance with Code Section 414(u).




Executed on December 31, 2001.



                                 BIOGEN, INC.


                                 By:  /s/ Frank A. Burke, Jr.
                                      ------------------------------------------
                                      Frank A. Burke, Jr.
                                      Executive Vice President - Human Resources






                                       27



                                   APPENDIX A
                                   ----------

                                 Plan Amendments
                                 ---------------

1.   The plan was amended by the First Amendment effective as of January 1,
     1987.

2.   The plan was amended by the Second Amendment effective as of December 30,
     1989.

3.   The plan was amended by the Third Amendment effective generally as of
     January 1, 1989.

4.   The plan was amended by the Fourth Amendment effective as of December 6,
     1991.

5.   The plan was amended by the Fifth Amendment effective generally as of April
     1, 1994.

6.   The plan was amended by the Sixth Amendment effective generally as of May
     1, 1995.

7.   The plan was amended by the Seventh Amendment effective as of January 1,
     1996

8.   The plan was amended and restated in its entirety by the Eighth Amendment,
     effective as of January 1, 1997.

9.   The plan was amended by the Ninth Amendment, effective as stated therein.

10.  The plan was amended by the Tenth Amendment with various effective dates
     recited therein (amendments to comply with SBJPA `96, TRA `97 and IRRA `98,
     and various other amendments.

     Notwithstanding Section 1.5, and the amendment to Section 10.5 (increasing
     the cash out threshold from $3,500 to $5,000) will apply to participants
     who terminated employment with the Employer before January 1, 1999 and
     whose vested account balances on January 1, 1999 do not exceed $5,000;
     under amended Section 10.5, such participants will receive payment of their
     vested account balances.

     The amendment to Section 4.1(a) (clarifying that an individual classified
     as a consultant or contractor, etc. is not considered an employee or
     regular employee for purposes of the plan and therefore is not eligible to
     participate in the plan) is a clarification of existing plan requirements,
     and it is not intended to and does not create any implication that, prior
     to the Tenth Amendment, such an individual might have been eligible to
     participate in the plan.

11.  The plan was amended by the Eleventh Amendment, effective as of April 1,
     1999 (changes related to entry dates).

12.  The plan was amended by the Twelfth Amendment effective August 1, 2000.

13.  The plan was amended and restated by the Thirteenth Amendment and
     Restatement, effective generally as of January 1, 2002 (with other
     effective dates as specified therein) (changes to reflect the Economic
     Growth and Tax Relief and Reconciliation Act of 2001 and other changes).






                                       28



                                   APPENDIX B
                                   ----------

                             Participating Employers
                             -----------------------

                             Biogen U.S. Corporation

                         Biogen U.S. Limited Partnership















                                       29

EX-10.47

                                                                   EXHIBIT 10.47

             EXECUTIVE SEVERANCE -- SENIOR/EXECUTIVE VICE PRESIDENT

     As a Senior Vice President or Executive Vice President, 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
at Biogen's expense of your participation in Biogen's group medical and dental
insurance plans. The lump sum payment, equivalent to at least nine months of
annual base salary and a prorated portion of your target annual performance
bonus, will be calculated as follows:

                      [9 + (A x 2)] x B = lump sum payment

where: A  is number of full years of service with Biogen, but (A x 2) not more
          than 9
       B  is monthly annual compensation (i.e., one-twelfth of sum of annual
          base salary plus target annual performance bonus modified by 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 participation in
Biogen's group medical and dental insurance plans will continue until the
earlier of (x) the date you become eligible to participate in the medical and
dental insurance plans of a third party employer or (y) the date that is [9 + (A
x 2)] 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 example:

          If your employment with Biogen is terminated after two months, you
          will receive a lump sum payment equal to nine months of your monthly
          annual compensation and continue to participate in Biogen's group
          medical and dental plans for nine months, unless you become eligible
          to participate in a third party employer's medical and dental plans
          before that date.

          If your employment with Biogen is terminated after five years, you
          will receive a lump sum payment equal to 18 months of your monthly
          annual compensation and continue to participate in Biogen's group
          medical and dental plans for 18 months, unless you become eligible to
          participate in a third party employer's medical and dental plans
          before that date.

For purposes of the severance arrangement, "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.

EX-10.48

                              [BIOGEN LETTERHEAD]

                                                                   EXHIBIT 10.48

                                         May 19, 1998
                                                           REVISED

Ms. Sylvie Gregoire
78 rue Charles Laffitte
92200 Neuilly Sur Seine
FRANCE


Dear Sylvie:

This letter confirms our discussion regarding your temporary transfer to the US
headquarters in the role of Program Executive. Your annual salary will be
$140,000 with continued participation in the Executive Bonus Plan. As in the
past, you will be eligible to receive a target bonus of fifteen (15) percent of
base salary.

To facilitate your move from Paris to Boston, a relocation package will be
provided which includes the movement of your household/personal effects, the
services of a relocation firm, and reimbursement of all reasonable expenses
associated with your move. This includes real-estate agent, legal and other
closing costs associated with the purchase of your new residence in the Boston
area; and up to 60 days temporary living in the Boston area pending the
availability of your new residence. To further assist you with your relocation,
Biogen will provide you with a one time relocation payment of $20,000.

You will be entitled to participate in the US benefits program and you will be
able to choose from a menu of benefit options through our flexible benefits
program, BioChoice. These include health care, life, dependent life, and
disability insurance as well as two flexible spending accounts, Med-Flex and
D-Flex, for eligible medical or dependent care expenses. At the beginning of the
calendar quarter following your date of transfer, you will be eligible to
participate in Biogen's pension and 401(k) savings plans. You are also entitled
to fifteen (15) vacation days. Biogen also offers a variety of additional
benefits including group homeowners and automobile insurance. As part of your
benefits package, Biogen will provide you assistance for tax planning and
support of your 1998 tax returns. Your eligibility for and participation in the
European benefit programs will cease upon your transfer to the US headquarters.

As discussed, upon your transfer to Cambridge, the Company will subsidize the
tuition costs for your son to attend the French school for up to two years
($8,500 per year).

To facilitate your temporary transfer to the US headquarters, Biogen will
provide counsel and assistance to you and your household members in securing the
necessary documentation to reside and work in the United States. I understand
Biogen's immigration counsel already has contacted you to address this matter.

On behalf of Jim Tobin, congratulations and best wishes for continued success at
Biogen.


                                        Sincerely,

                                        /s/ Frank A. Burke, Jr.
                                        ----------------------------------------
                                        Frank A. Burke, Jr.
                                        Vice President, Human Resources

/bk
cc: Mr. James R. Tobin

EX-10.49

                              [BIOGEN LETTERHEAD]

                                                                   EXHIBIT 10.49

                                                August 8, 2001

Ms. Sylvie Gregoire
9 Prospect Street
Winchester, MA 01890


Dear Sylvie:

I am pleased to advise you that the Compensation and Management Resources
Committee has approved your appointment as Executive Vice President, Technical
Operations, reporting to me. Effective July 19, 2001, your annual base salary is
increased to $325,000 and your target bonus is increased to 50% of base salary
under Biogen's management incentive plan. Effective August 8, 2001, the Stock
and Option Plan Administration Committee has granted you an option to purchase
up to 150,000 shares of Biogen's common stock, with a four year, straight-line
vesting schedule. You will next be eligible for both a salary adjustment and
merit stock option grant at year-end 2002.

On behalf of the Board of Directors, please accept our congratulations and best
wishes for success in this important new role. I look forward to your
significant leadership and contributions as we continue to build Biogen.


Best personal regards.

                                        Sincerely,


                                        /s/ James C. Mullen
                                        ----------------------------------------
                                        James C. Mullen
                                        President and Chief Executive Officer


JCM:bk
cc: Personnel File

EX-10.50

                                                                   EXHIBIT 10.50

                                                 VICE PRESIDENT, HUMAN RESOURCES

                                                October 19, 2001



Sylvie Gregoire
9 Prospect Street
Winchester, MA 01890


Dear Sylvie:

On July 19, 2001, you were promoted to the Executive Vice President level of
Biogen. At that time we were in the process of conducting a comprehensive review
of the compensation and benefits associated with your promotion.

I am pleased to confirm the full list of benefits that accompany this promotion.

TARGET BONUS: Your incentive target is 50% of your base salary.

LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and
granting stock options to employees. You will be eligible for an annual merit
stock option grant, based on a design which emphasizes the future expected value
of the grant. The details of how we will communicate and value options will be
outlined in December.

CHANGE OF CONTROL: You have been designated as a "Designated Employee" for
purposes of Biogen's 1985 Non-Qualified 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.

VACATION: You are entitled to an additional week of vacation each year. This w~k
is over and above the company's normal vacation schedule (which is based upon
years of service).

SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary
Executive Supplemental Savings Plan. This plan allows participants to defer
[pretax] base salary and future bonuses. Enrollment in this plan takes place in
December each year. You will be provided additional information on the plan at
that time.

LIFE INSURANCE: You will have life insurance coverage that is the greater of
$1,000,000 or three times your annual salary and subject to the normal medical
standards of the life insurance policy.



SEVERANCE: You will have a minimum severance benefit that is the greater of the
severance outlined in your letter dated January 7, 2000 or the severance
outlined in the Executive Severance document, which has been included with this
letter.

EXECUTIVE STOCK OWNERSHIP: You will be expected to acquire and maintain a
personal financial interest in Biogen. Ownership is defined as stock held
outright, stock held in the 401(k) plan and stock held under the Employee Stock
Purchase Plan. Vested but unexercised shares would also be counted toward
ownership guidelines. You will be required to maintain a financial interest of
six times base salary. You will have a five-year period from the date of your
appointment to Vice President to obtain this ownership level.

TAX PREPARATION: You are eligible to have your federal and state income taxes
prepared by PricewaterhouseCoopers.

On behalf of Jim Mullen, please accept my sincere congratulations and best
wishes for future success with Biogen.




                                                Sincerely,


                                                /s/ Frank A. Burke, Jr.

                                                Frank A. Burke, Jr.


/bk
Attachment

EX-13

exv13                         

EX-21

                                                                               .
                                                                               .
                                                                               .
                                   EXHIBIT 21

                         SUBSIDIARIES OF THE REGISTRANT

                                                   
Biogen Canada, Inc.                                   Delaware
Bio Holding I, Inc.                                   Delaware
Bio Holding II, Inc.                                  Delaware
Biogen Realty Corporation                             Massachusetts
Biogen Realty Limited Partnership                     Massachusetts
Biogen U.S. Corporation                               Massachusetts
Biogen U.S. Limited Partnership                       Massachusetts
Biogen (RTP) Realty LLC                               Delaware
Biogen (Denmark) Manufacturing ApS                    Denmark
Biogen Australia Pty Ltd                              Australia
Biogen Belgium S.A./N.V.                              Belgium
Biogen B.V.                                           The Netherlands
Biogen France S.A.                                    France
Biogen Farmaceutica SL                                Spain
Biogen GmbH                                           Austria
Biogen GmbH                                           Germany
Biogen International B.V.                             The Netherlands
Biogen (Bermuda) Investments, Ltd.                    Bermuda
Biogen Japan Ltd.                                     Japan
Biogen Limited                                        United Kingdom
Biotech Manufacturing CV                              The Netherlands
Biotech Manufacturing Limited                         Channel Islands
Biogen Norway AS                                      Norway
Biogen Sweden AB                                      Sweden
Biogen Denmark A/S                                    Denmark
Biogen Finland Oy                                     Finland

EX-23

                                   EXHIBIT 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (Nos. 33-51639 and 333-71695) and in the Registration
Statements on Form S-8 (Nos. 33-63013, 33-71647, 33-37312, 33-69174, 33-63015,
333-42887, 333-70701, 333-53598 and 333-81668) of Biogen, Inc. of our report
dated January 17, 2002 relating to the financial statements, which appears in
the Annual Report to Shareholders, which is incorporated in this Annual Report
on Form 10-K. We also consent to the incorporation by reference of our report
dated January 17, 2002 relating to the financial statement schedule, which
appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
March 29, 2002