UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑K/A

(Amendment No. 1)

Commission file number: 001‑37859

Bioverativ Inc.

(Exact name of Registrant as Specified in its Charter)

(781) 663‑4400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐  No ☒

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): 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 the 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. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b‑2) of the Act. Yes ☐  No ☒

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was $6,433.3 million.

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of February 9, 2018 was 108,223,644.

TABLE OF CONTENTS

EXPLANATORY NOTE

Amendment No. 1 to Form 10-K

Bioverativ Inc. is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “Original Form 10-K Filing), which was originally filed with the SEC on February 14, 2018, solely to set forth information required by Items 10, 11, 12, 13 and 14 of Part III of Form 10-K. This Amendment amends and restates in its entirety Items 10, 11, 12, 13 and 14 of Part III. In addition, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Item 15 of Part IV of the Original Form 10-K Filing has been amended solely to include as exhibits new certifications by our principal executive officer and principal financial officer.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

Executive Officers

The following sets forth information regarding our executive officers, including their positions and age as of March 1, 2018. Biographical information for Mr. Cox is contained below in this Item 10 under the caption entitled “Board of Directors.”

John T. Greene became Executive Vice President, Chief Financial Officer of Bioverativ in November 2016. Prior to joining Bioverativ, Mr. Greene served as the Chief Financial Officer of Willis Group Holdings (Willis), a multinational risk advisory, insurance and reinsurance brokerage firm, from June 2014 until January 2016. Following the merger of Willis with Towers Watson in January 2016, Mr. Greene served as a transition advisor to the new management team until May 2016. Before joining Willis, he served for over eight years in senior executive roles at HSBC, a global financial services company, including as Chief Financial Officer of HSBC Retail Bank and Wealth Management from May 2011 to May 2014, Chief Financial Officer of HSBC Insurance from August 2009 until May 2011 and Chief Financial Officer of HSBC’s Consumer and Mortgage Lending business prior to August 2009. Before joining HSBC, Mr. Greene served for 12 years in various roles at General Electric Company, including as Chief Financial Officer for GE Global Business Finance.

Rogério Vivaldi Coelho, M.D. became Executive Vice President, Chief Global Therapeutic Operations Officer of Bioverativ in October 2016. Prior to joining Bioverativ, Dr. Vivaldi Coelho served as Chief Commercial Officer of Spark Therapeutics, Inc. (Spark) from December 2014 to October 2016. Prior to joining Spark, Dr. Vivaldi Coelho was Chief Executive Officer and President of Minerva Neurosciences, Inc. from November 2013 to December 2014. Prior to joining Minerva, Dr. Vivaldi Coelho served as Senior Vice President—Head of the Rare Diseases business unit at Genzyme Corporation (Genzyme), from October 2011 to October 2013. From July 2010 to September 2011, he was the Senior Vice President—Head of the Renal and Endocrinology business unit at Genzyme and from January 2004 to June 2010 he was the Senior Vice President—Head of Genzyme Latin America. Previously, Dr. Vivaldi Coelho founded Genzyme Brazil in 1997. Dr. Vivaldi Coelho served on Spark’s board of directors from April 2014 to December 2014 and served on the board of directors of Minerva Neurosciences from November 2013 to December 2014. Dr. Vivaldi Coelho holds a medical degree from the University of Rio de Janeiro and his M.B.A. from Federal University of Rio de Janeiro. Dr. Vivaldi Coelho completed his residency in metabolism and endocrinology at Rio de Janeiro State University and his fellowship at Mount Sinai Hospital Center in New York, department of genetics, with an emphasis on Gaucher’s disease.

Richard Brudnick became the Executive Vice President, Business Development of Bioverativ in January 2017. Prior to that, Mr. Brudnick served as Biogen’s Senior Vice President of Corporate Development since 2014. Mr. Brudnick joined Biogen in 2001 and held senior positions in the areas of Portfolio Strategy & Business Development and Corporate Development. Before joining Biogen, Mr. Brudnick was the Chief Executive Officer of a regional pharmaceutical distribution business, a co‑founder of two companies and a strategy consultant at Bain & Company.

Lucia Celona became Executive Vice President, Chief Human Resources and Corporate Communications Officer of Bioverativ in January 2017. Prior to that, Ms. Celona served as the Vice President of Human Resources for the Pharmaceutical Operations and Technology function of Biogen from 2013 through June 2016. Ms. Celona joined Biogen in 2006 and held senior level positions including Vice President, Talent Acquisition & Global Mobility, interim Vice President of Compensation & Benefits, Chief of Staff to the Executive Vice President of Human Resources and Executive Vice President of Global Therapeutic Operations. Before joining Biogen, Ms. Celona was head of human resources for Sentillion Inc., a privately held company that focused on single‑sign on solutions for healthcare providers, and the human resources director for two manufacturing sites at Philips Medical Systems in Andover, Massachusetts.

Andrea DiFabio became Executive Vice President and Chief Legal Officer of Bioverativ in January 2017. Prior to that, Ms. DiFabio served as Biogen’s Senior Vice President, Chief Research and Business Development Counsel since 2015. Ms. DiFabio joined Biogen in 2006 and held various positions including serving as Chief U.S. Counsel, Interim Chief Compliance Officer and Chief Research and Business Development Counsel. Prior to Biogen, she was Corporate Vice President and Deputy General Counsel at Parexel International, a global contract research organization. Prior to her work at Parexel International, Ms. DiFabio was a trial lawyer for two Boston law firms, Brown Rudnick and Robins, Kaplan Miller & Ceresi.

Timothy J.R. Harris, Ph.D., D.Sc. joined Bioverativ in February 2017 as interim Head of Research & Development, and was appointed Executive Vice President, Research and Development in April 2017. Prior to joining Bioverativ, Dr. Harris was a venture partner at SV Health Investors, since March 2016. Prior to that, Dr. Harris was Senior Vice President for Precision Medicine at Biogen from March 2015 until February 2016. Prior to such position, he was Senior Vice President for Translational Medicine and Technology at Biogen from June 2011 to February 2015. Before joining Biogen, he was the Chief Technical Officer and Director of the Advanced Technology Program at SAIC-Frederick in Maryland from January 2007 to June 2011. His professional experience includes senior executive positions at a number of companies, including Novasite Pharmaceuticals, where he served as President and Chief Executive Officer from 2005 to September 2006. Dr. Harris founded SGX Pharmaceuticals, Inc. (formerly Structural GenomiX Inc.) (SGX) in 1999, and was Chief Executive Officer of that company until 2005. Before founding SGX, Dr. Harris was Senior Vice President, Research and Development at Axys Pharmaceuticals Inc. (formerly Sequana Therapeutics Inc.). Dr. Harris serves on the Board of Directors of Opgen Inc. and during the past five years, previously served on the board of directors of BG Medicine, Inc. He is a visiting Professor at Columbia University. Dr. Harris is a molecular biologist and biochemist and an executive with nearly 40 years of scientific and leadership expertise in the biotechnology industry. He holds a Ph. D in molecular virology and a D.Sc., both from the University of Birmingham, UK, and is credited with over 100 publications and five issued patents. 

Board of Directors

The following table sets forth information with respect to our board of directors as of March 1, 2018.

John G. Cox became a director and the Chief Executive Officer of Bioverativ in August 2016. Previously, from June 2010 through June 2016, Mr. Cox served on Biogen’s executive committee as Executive Vice President,

Pharmaceutical Operations & Technology, where he oversaw Biogen’s global manufacturing facilities, supply chain operations, technical development, quality and engineering. Mr. Cox also had responsibility for the development and commercialization of Biogen’s biosimilar business. From October 2015 to May 2016, Mr. Cox also served as interim Executive Vice President, Global Therapeutic Operations, responsible for Biogen’s therapeutic groups of Specialty Medicines and Rare Diseases, which included responsibility for the global commercial performance of Biogen’s marketed products. Mr. Cox joined Biogen in 2003, holding several senior executive positions including Senior Vice President of Technical Operations, Senior Vice President of Global Manufacturing and Vice President of Manufacturing and General Manager of Biogen’s operations in Research Triangle Park, North Carolina. He reported to Biogen’s Chief Executive Officer as a member of Biogen’s executive committee, since 2010. Mr. Cox’s qualifications for service on our board of directors include his substantial executive, operational, business and technical experience and acumen in the biotechnology industry. Mr. Cox serves on the board of directors of Repligen Corporation, a life sciences company.

Alexander J. Denner, Ph.D. became a director of Bioverativ in January 2017. Dr. Denner is a founding partner and Chief Investment Officer of Sarissa Capital Management LP (Sarissa Capital). Sarissa Capital focuses on improving the strategies of companies to enhance stockholder value. From 2006 to 2011, Dr. Denner served as a Senior Managing Director at Icahn Capital. Prior to that, he served as a portfolio manager at Viking Global Investors and Morgan Stanley Investment Management. He is currently a member of the boards of directors of Biogen and The Medicines Company, and within the past five years, served on the boards of directors of Amylin Pharmaceuticals, Inc., Ariad Pharmaceuticals Inc., Vivus, Inc. and Enzon Pharmaceuticals, Inc. Dr. Denner’s qualifications for service on our board of directors include his significant experience overseeing the operations and research and development of healthcare companies and evaluating corporate governance matters. He also has extensive experience as an investor, particularly with respect to healthcare companies, and possesses broad healthcare industry knowledge.

Geno Germano became a director of Bioverativ in May 2017. He most recently served as President of Intrexon Corporation, having held that position from June 2016 through March 2017.  Mr. Germano previously served as Group President, Global Innovative Pharma Business at Pfizer Inc., a global pharmaceutical corporation, from 2014 to February 2016, and as President and General Manager, Specialty Care and Oncology at Pfizer, from 2009 through 2013.  Prior to that, he held various senior leadership positions at Wyeth Pharmaceuticals and Johnson & Johnson.  He is currently a member of the board of directors of Sage Therapeutics, Inc. and The Medicines Company, and within the past five years, served on the board of directors of Zoetis Inc.  He is a member of Group of Fifty (G50) and previously served on the Board of the Biotechnology Innovation Organization where he chaired the International Committee and was a member of the Executive Committee.  He serves on the Advisory Board of the Healthcare Businesswomen’s Association and was a Trustee of the Albany College of Pharmacy for the past nine years until he reached the term limit, where he received his B.S. in Pharmacy.  Mr. Germano’s qualifications to sit on the Board of Bioverativ include his extensive experience working for various pharmaceutical and biotechnology companies.

Louis J. Paglia became a director of Bioverativ in January 2017. Mr. Paglia is the founding member of Oakstone Capital LLC, a private investment firm. He previously founded Customer Choice LLC in April 2010, a data analytics company serving the electric utility industry. He previously served as Executive Vice President of UIL Holdings Corporation (UIL), an electric utility, contracting and energy infrastructure company. Mr. Paglia also served as UIL’s Chief Financial Officer and as President of its investment subsidiaries. Prior to joining UIL, Mr. Paglia was Executive Vice President and Chief Financial Officer of eCredit.com, a credit evaluation software company. Prior to that, Mr. Paglia served as the Chief Financial Officer both for TIG Holdings Inc., a property and casualty insurance and reinsurance holding company, and for Emisphere Technologies, Inc., a specialty pharmaceutical company. He is currently a member of the board of directors of Arch Capital Group Ltd., and within the past five years, Mr. Paglia served on the board of directors of NorthStar Realty Finance Corp. and NorthStar Asset Management Group Inc. Mr. Paglia’s qualifications for service on our board of directors include his strong financial background, experience in investment banking and extensive executive management and operating experience in publicly‑held companies.

Brian S. Posner became a director and Chairman of the Board of Bioverativ in January 2017. Mr. Posner is President of Point Rider Group LLC, a consulting and advisory services firm within the financial services industry, and has served as private investor since 2008. From 2005 to March 2008, Mr. Posner served as the President, Chief Executive Officer and Co‑Chief Investment Officer of ClearBridge Advisors, LLC, an asset management company and a wholly owned subsidiary of Legg Mason. Prior to that, Mr. Posner co‑founded Hygrove Partners LLC, a private

investment fund, in 2000 and served as its Managing Member for five years. He served as a portfolio manager and an analyst at Fidelity Investments, a financial services company, from 1987 to 1996 and, from 1997 to 1999, at Warburg Pincus Asset Management/Credit Suisse Asset Management where he also served as co‑Chief Investment Officer and Director of Research. Mr. Posner currently serves on the boards of directors of Biogen and Arch Capital Group Ltd. and he is a trustee of the AQR Funds. During the past five years, Mr. Posner previously served on the board of directors of BG Medicine, Inc. Mr. Posner’s qualifications for service on our board of directors include his substantial experience as a leading institutional investment manager and advisor and significant management and financial expertise.

Anna Protopapas became a director of Bioverativ in February 2017. Since March 2015, Ms. Protopapas has served as President, Chief Executive Officer and a Director of Mersana Therapeutics, Inc., a publicly‑held biotechnology company focused on engineering antibody drug conjugates. Prior to joining Mersana, from October 2010 to October 2014, Ms. Protopapas served as a member of the Executive Committee of Takeda Pharmaceutical Company Limited (Takeda), a global pharmaceutical company, and held various senior management positions at the company, including serving as President of Millennium Pharmaceuticals, a wholly owned subsidiary of Takeda focused on oncology, where she was responsible for leading Takeda’s oncology business, and Executive Vice President of Global Business Development, where she was responsible for global acquisitions, partnering, licensing and venture investing. From October 1997 to October 2010, Ms. Protopapas served in various positions at Millennium Pharmaceuticals, including as the Senior Vice President of Strategy and Business Development and a member of the Executive Committee, where she led the company’s business development initiatives. Ms. Protopapas previously served on the board of directors of Ariad Pharmaceutics Inc., a life sciences company, until its acquisition in February 2017. Ms. Protopapas’ qualifications for service on our board of directors include her extensive transactional and senior management experience in the biopharmaceutical industry.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers, directors and greater than 10% stockholders to file initial reports of ownership and changes of ownership of our common stock. As a practical matter, we assist our directors and executive officers by monitoring transactions and completing and filing Section 16 forms on their behalf. Based solely on our review of the copies of such forms furnished to us or written representations that no reports were required to be filed, we believe that each of our executive officers, directors and greater than 10% beneficial owners complied with all Section 16(a) filing requirements applicable to them with respect to transactions during the 2017 fiscal year.

Code of Conduct

We have adopted a code of conduct setting forth standards applicable to all of our companies and our directors, officers and employees. The code of conduct is available on Bioverativ’s website at www.bioverativ.com. Any amendment to the code, or any waiver of its requirements, that applies to our Chief Executive Officer, Chief Financial Officer, Controller or persons performing similar functions will be disclosed on our website.

Committees of the Board of Directors

Our board of directors has the following standing committees: an Audit Committee, a Compensation Committee and a Corporate Governance Committee. Each committee is governed by a written charter, all of which are posted on our website, www.bioverativ.com.

Audit Committee

The Audit Committee is comprised of Dr. Denner, Mr. Paglia and Mr. Posner, each of whom is independent under the listing standards of the Nasdaq Global Select Market and Rule 10A‑3 under the Exchange Act. Mr. Paglia is the chair of the Audit Committee. Each member of the Audit Committee is financially literate and has accounting or related financial management expertise, as such terms are interpreted by our board of directors in its business judgment. Additionally, the board of directors has determined that each of the members of the Audit Committee is an “audit

committee financial expert” under SEC rules and the NASDAQ Global Select Market listing standards applicable to audit committees.

The responsibilities of the Audit Committee, which are more fully described in our Audit Committee Charter, include, among other duties:

Compensation Committee

The Compensation Committee is comprised of Mr. Germano, Mr. Paglia and Mr. Posner, each of whom is independent under the listing standards of the NASDAQ Global Select Market, and each of whom qualifies as a “non‑employee director” (within the meaning of Rule 16b‑3 of the Exchange Act) and an “outside director” (within the meaning of Section 162(m) of the Code). Mr. Posner is the chair of the Compensation Committee.

The responsibilities of the Compensation Committee, which are more fully described in our Compensation Committee Charter, include, among other duties:

The Compensation Committee has the sole and direct responsibility for the appointment, compensation and oversight of the work of any advisor retained by the Compensation Committee.

Corporate Governance Committee

The Corporate Governance Committee is comprised of Dr. Denner, Mr. Paglia and Ms. Protopapas, each of whom meets the independence requirements under the listing standards of the NASDAQ Global Select Market. Dr. Denner is the chair of the Corporate Governance Committee.

The responsibilities of the Corporate Governance Committee, which are more fully described in our Corporate Governance Committee Charter, include, among other duties:

Item 11.  Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes our compensation strategy, philosophy, policies, and practices underlying our executive compensation program for 2017. It also provides information regarding the manner and context in which compensation was earned by and awarded to our 2017 named executive officers listed below, whom we refer to collectively as “Named Executive Officers” or “NEOs”.

During a portion of 2017, Bioverativ was part of Biogen Inc. On February 1, 2017, we separated from Biogen and became an independent public company. Due to the timing of the separation, Biogen’s compensation and management development committee made many of the compensation decisions for 2017 regarding the Company's executives.

Following the separation of Bioverativ from Biogen, the Compensation Committee of the Board of Directors of Bioverativ (the “Compensation Committee”) adopted compensation and benefit programs that were based on Biogen’s determinations.  In 2017, the Compensation Committee further reviewed the decisions made by Biogen and developed its own executive compensation philosophy, objectives, programs, and peer group. 

On January 21, 2018, Bioverativ entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Sanofi (“Parent” or “Sanofi”), a French société anonyme, and Blink Acquisition Corp. (“Merger Sub”), a Delaware corporation and indirect wholly-owned subsidiary of Parent.  Following completion of the transactions contemplated by the Merger Agreement, we will no longer be a public company. 

Compensation Program

Compensation Philosophy

Our compensation program is intended to align management to a common long-term goal of creating significant shareholder value. 

The guiding principles of our executive compensation program are as follows:

Role of the Compensation Committee

The Compensation Committee oversees and administers our executive compensation programs. The roles and responsibilities of the Compensation Committee are set forth in its written charter adopted by our Board of Directors, which can be found on our website, www.bioverativ.com, under the “Corporate Governance” subsection of the site.

Role of the Independent Compensation Consultant

The Compensation Committee believes that independent advice is important in developing our executive compensation programs.

In 2016, Biogen engaged Pay Governance to assist it in developing a compensation program for Bioverativ as a stand-alone company. Pay Governance, among other things, provided advice to:

In 2017, our Compensation Committee continued to engage Pay Governance as its independent compensation consultant. Pay Governance does not provide any other services to Bioverativ.

Reporting directly to the Compensation Committee, Pay Governance provides guidance on executive compensation matters, including trends in CEO, executive and non-employee director compensation, the development of specific executive compensation programs, and recommendations on the composition of the Company’s compensation peer group.

Using the information provided by Pay Governance and other similar information, the Compensation Committee recommends, and our Board of Directors approves, the elements and target levels of our CEO’s compensation. Pay Governance also engages in other matters as needed and as directed solely by the Compensation Committee.

During 2017, Bioverativ paid Pay Governance approximately $335,000 in consulting fees directly related to these services. The Compensation Committee assesses Pay Governance’s independence annually and confirmed that Pay Governance’s work did not raise any conflicts of interest and that Pay Governance is independent under applicable rules.

Role of our CEO

Our CEO provides an assessment of the performance of each executive officer, other than himself, during the prior year and recommends to the Compensation Committee the compensation to be awarded to each executive. Our CEO’s recommendations are based on numerous factors including:

To understand external market competitiveness of the compensation for our executive officers, our CEO and the Compensation Committee review a report analyzing publicly available information and surveys prepared by Pay Governance and reviewed by our internal compensation group. The report compares the compensation of each executive officer, other than our CEO, relative to data for comparable positions at companies in our peer group, by compensation element (see “External Market Competitiveness and Peer Group” below for further details). The Compensation Committee considers all of the information presented, discusses the recommendations with our CEO and with Pay Governance, and applies its judgment to determine the elements of compensation and target compensation levels for each executive officer other than the CEO.

Our CEO also provides a summary of his achievements for the prior year. The Compensation Committee reviews and considers this in determining the CEO’s performance, and in recommending for approval by the Board of Directors, the compensation of our CEO. Our CEO does not participate in the deliberations regarding his own compensation.

External Market Competitiveness and Peer Group

Market practices are one of our considerations when determining executive compensation levels and program designs at Bioverativ. We do not target a specific market percentile or simply replicate the market practice. Instead, we review external market practices as a reference point to assist us in providing programs designed to attract, retain and inspire extraordinary talent. The Compensation Committee also uses a peer group to provide context for its executive compensation decision-making.  Our compensation consultant reviews the external market landscape and evaluates the composition of our peer group for appropriateness.

The Compensation Committee reviews the information provided from internal sources as well as the information provided by our compensation consultant to select our peer group. 

In 2016, in preparation of the spinoff of Bioverativ, Biogen worked with Pay Governance to identify a peer group of publicly-traded companies to be used for purposes of benchmarking pay levels and pay practices for our senior executives and director pay.  Pay Governance recommended a peer group based on the following factors:  industry, size, location, research and development spend, business focus, and location, including several peers in the hemophilia space and/or in Massachusetts. 

Based on the sales and market capitalization of the recommended peer companies, as well as the nature of their businesses, histories, industries and the availability of relevant comparative compensation data, the Biogen compensation and management development committee selected the following core group of peer companies:

Following the separation, our Compensation Committee further reviewed the peer group.  In so doing, Pay Governance assisted in reviewing our peer group, with a focus on industry and market cap, as well as minimum size, research spend and product stage.  In choosing the peer group, Pay Governance recommended selecting between 15-20 companies to provide sufficient sample size, with appropriately sized companies, and with Bioverativ at or around the

median market cap. Companies with revenues as well as those with operations covering late-stage clinical through commercialization were considered, with a preference for companies developing or offering products in the hemophilia or blood disorder field and for companies with expected revenue growth, as these types of companies are with whom we compete for executive talent. 

Based on these factors, the Compensation Committee selected the following peer group to be used in connection with future compensation decisions: 

For each of the companies in our peer group, where available, we analyze the company’s Compensation Discussion and Analysis and other data publicly filed to identify the executives at such companies whose positions are comparable to those held by our executive officers. We then compile and analyze the data for each comparable position. Our competitive analysis includes the structure and design of the compensation programs as well as the targeted value of the compensation.

Compensation Elements

Biogen’s compensation and management development committee initially determined the elements of compensation we provide to our executive officers. Our Compensation Committee has continued to review these elements.  Specifically, the elements of our executive compensation programs and their objectives are as follows:

Compensation Pay Mix

The Compensation Committee determines the general mix of the elements of our executive compensation programs. It does not target a specific mix of value for our compensation elements in either the program design or pay decisions. Rather, the Compensation Committee reviews the pay mix to ensure an appropriate level of performance-based compensation is apportioned to the short-term and even more to the long-term to ensure alignment with our business goals and performance.

Additionally, the Compensation Committee believes the greater the leadership responsibilities, the greater the potential impact an individual will have on Bioverativ’s future strategic direction. Therefore, for our executive officers, including our NEOs, additional emphasis is placed on performance-based compensation.

The 2017 pay mix for our CEO and our other NEOs was highly performance-based and at-risk; 90% performance-based compensation for our CEO and an average of 76% performance-based compensation for our other NEOs.

2017 Base Salary

In 2017, in determining Mr. Cox’s base salary, the Biogen compensation and management development committee reviewed the base salaries of comparable chief executive officers in our peer group and considered Mr. Cox’s pay mix, capabilities, performance and future expected contributions and risks relating to launch of a new public company resulting from the separation from Biogen.

The Biogen compensation and management development committee undertook a similar review when approving the base salaries for the other NEOs which positioned them, on average, at approximately the median compared to persons with comparable jobs within the peer group selected by Biogen. Our CEO’s base salary was below the median of the peer group selected by Biogen.

Our Compensation Committee reviewed and made modifications to the compensation decisions made by the Biogen compensation and management development committee with respect to our NEOs based on updated peer data provided by Pay Governance.  The base salary of each of our NEOs in 2017 was as follows:

2017 Performance-Based Plans and Goal Setting

We maintain a short-term incentive plan, known as our annual bonus plan, as well as a long-term incentive plan. Awards to our NEOs under our annual bonus plan are made under our 2017 Performance-Based Management Incentive Plan, and awards under our long-term incentive plan are granted under our 2017 Omnibus Equity Plan (“2017 Equity Plan”).

Awards under our annual bonus plan are directly tied to the achievement of our annual operating goals, which are aligned with the Company’s short- and long-term strategic plans. Our long-term incentives are directly tied to the performance of the price of shares of our common stock, which align our executives’ long-term interests with the interests of our stockholders.

In setting our annual goals, we establish challenging targets that result in payouts at target levels only when Company performance warrants it. The Compensation Committee is responsible for reviewing and approving our annual

Company goals, targets and levels of payout and for reviewing and determining actual performance results at the end of the performance period.

In setting and approving the performance goals under both the short- and long-term plans, the Compensation Committee considers the alignment of such goals to our business plan and the degree of difficulty of attainment and the potential for the goals to encourage inappropriate risk-taking. The Compensation Committee has determined that the structures of our executive compensation programs do not put our patients, investors or the Company at any material risk.

2017 Annual Bonus Plan

Our 2017 annual bonus plan is a cash incentive plan that rewards near-term financial, strategic and operational performance.

The target annual bonus opportunity as a percent of year-end base salary for each of our NEOs in 2017 was as follows:

The approved annual target bonus opportunities for 2017 were generally at the median target amounts provided by companies in the peer group selected by Biogen as our compensation programs place a greater emphasis on long-term incentives.  Our CEO’s total target cash bonus was below the median of the peer group selected by Biogen.

2017 Annual Bonus Plan Design 

Awards for our NEOs under our 2017 annual bonus plan were based solely on the achievement of Company goals. The 2017 annual bonus plan provided for a payout multiplier ranging from 0% to 200% for each Company goal based on the determination of the level of achievement of each goal and application of the weighting previously assigned to each goal, which determined the Company performance multiplier applied to the bonus calculation.

2017 Company Performance Goals and Results 

Company goals were established in early 2017 following our separation from Biogen, with assigned weightings that reflected the Company’s focus on financial, pipeline and life cycle and strategic priorities.

Set forth below is a summary of the Company goals and weightings that the Compensation Committee established for the 2017 annual bonus plan, the degree to which we attained these goals, and the overall company multiplier.

*Numbers may not recalculate due to rounding.

Notes to 2017 Company Performance Goals and Results Table 

2017 Annual Bonus Plan Awards

The Compensation Committee determined that the final bonus awards under the 2017 annual bonus plan were as follows: 

Long-Term Incentives (LTI)

Our 2017 Plan is a comprehensive long-term incentive compensation plan that permits us to grant equity-based compensation awards to employees intended to reward long-term Company performance.

Prior to our separation from Biogen, the Biogen compensation and management development committee established an annual long-term incentive target for each of our NEOs for 2017 based on external benchmarks for similar positions in the peer companies selected by Biogen, as well as in commercially available compensation surveys. In February 2017, shortly following our separation from Biogen, the annual long-term incentive values were delivered to the NEOs, other members of our executive team and other eligible employees of Bioverativ through a mix of 50% stock options and 50% restricted stock units (RSUs). The annual long-term incentive values delivered to our NEOs in 2017 are as follows:

In addition to the annual LTI grant, in recognition of the substantial efforts to complete the separation from Biogen, in February 2017 certain employees, including our NEOs and other members of our executive team, received a one-time founders’ grant of stock options.  The one-time founders’ grant of stock options delivered to our NEOs are as follows:

Further, in recognition of very strong 2016 individual performance certain NEOs received an additional one-time LTI grant of stock options in February 2017, as follows:

Stock Options. All stock options granted to the NEOs were made under and subject to the terms of the 2017 Equity Plan.  The annual stock options and one-time LTI awards granted in February 2017 had an exercise price equal to $44.51 (the fair market value on the date of grant) and are subject to vesting in three equal annual installments from the date of grant.  The founders’ stock options granted in February 2017 had an exercise price equal to $44.51 (the fair market value on the date of grant) and do not vest until the third anniversary of the grant date.

We view stock options as a form of long-term incentive that reward executives for increasing our stock price. If the stock price does not increase from the level at the date of the grant, the stock options will have no value to the executives. We believe that stock options encourage our executives to focus on decisions that will lead to increases in the stock price for the long-term and are an effective retention tool, since executives must remain with the company for a period of time before they can exercise the stock options and the options have a ten-year term from the date of grant.

Restricted Stock Units. The RSUs granted in February 2017 provide executives with the right to receive shares of our common stock over a three-year annual vesting period. We view RSUs as being effective in achieving several objectives:

RSUs complement stock options by encouraging executives to guard against downside risk to the stock price as well as focus on increasing the stock price.

Treatment of Biogen Long-Term Incentives upon Our Separation from Biogen.  Upon our separation from Biogen, Biogen equity awards held by NEOs were converted into Bioverativ equity awards.  The Biogen equity awards were adjusted with the intent to maintain, immediately following the separation date, the vesting terms and economic value of the award immediately before the separation date. All converted awards were issued under and are subject to the terms of the 2017 Equity Plan.

Retirement Plans

Following our separation from Biogen, we maintained a 401(k) Plan, and a  Supplemental Savings Plan (SSP), a non-qualified deferred compensation plan covering our executive officers and other management employees in the U.S.  Following the separation, the SSP was terminated effective in June 2017.  

Other Benefits

In addition to eligibility for the benefit programs generally provided to all employees, such as our employee stock purchase plan and medical, dental, vision, life and disability insurance, we provide certain supplemental benefits to our executives. These benefits include:

Life Insurance

All our U.S. employees, including our NEOs, receive Company-paid term life insurance equal to two times their annual base salary, up to a maximum benefit of $500,000. The cost of Company-paid life insurance in excess of a $50,000 insurance level is taxable income to U.S. employees and is not grossed up by the Company.

Executive Physicals

All of our executive officers, including our CEO, are eligible for reimbursement of up to $5,500 for the cost of their executive physicals. This benefit provides our executives with flexibility to proactively manage their health and wellness.   None of our NEOs utilized this benefit during 2017.

CEO Pay Ratio

In 2017, the compensation of Mr. Cox, our CEO, was approximately 72 times the median pay of our employees.

We identified our median employee by examining 2017 total compensation for all individuals, excluding Mr. Cox, who were employed as of December 31, 2017. We included all of our employees in this process, whether employed on a full-time or part-time basis. We annualized the compensation for any employees that were not employed by us for all of 2017 and we adjusted compensation paid to our non-U.S. employees based on the exchange rates as of December 31, 2017 between the local currencies in which such employees are paid and U.S dollars. We define “total compensation” as the aggregate of base salary (plus overtime, as applicable), commissions (as applicable), cash bonus and the grant date fair value of long-term incentive compensation awards.

After identifying the median employee based on total compensation, we calculated total compensation in 2017 for such employee using the same methodology we use for our named executive officers as set forth below in the Summary Compensation Table for 2017.

As illustrated in the table below, our 2017 CEO Pay Ratio is 72:1:

Notes to the CEO Pay Ratio Table

Post-Termination Compensation and Benefits

We provide severance benefits to our executives if they are terminated without cause or in certain other instances following a corporate transaction or a corporate change in control. The terms of these arrangements and the amounts payable under them are described below for each NEO in the subsection titled “Potential Payments Upon Employment Termination Table.” We provide these benefits because we believe that some severance protection is necessary to help our executives maintain their focus on the best interests of the Company when providing advice to the Company and making strategic decisions about a potential corporate transaction or change in control, and encourages effective leadership in the closing and integration of significant transactions affecting the Company.

Share Ownership Guidelines

We maintain share ownership guidelines for our executive officers to strengthen and reinforce the link our compensation programs create between our executives and our stockholders. A summary of our share ownership guidelines are set forth below.

Executive officers have five years from their initial appointment to meet the requirement. In the event the requirement is not met within that time, 100% of vested shares are required to be held until the requirement is satisfied. Only shares owned outright or otherwise earned are credited toward the share ownership requirement. Unvested restricted stock units are not included in the calculation. All of our executive officers currently meet the share ownership requirement or are still within the five-year period to meet such requirement.

Recoupment of Compensation

We may recover compensation from our employees who engage in detrimental or competitive activity. Detrimental activity includes any action or failure to act that constitutes financial malfeasance that is materially injurious to the Company, violates our Code of Conduct, results in a restatement of our earnings or financial results or results in a violation or breach of law or contract. Competitive activity includes any action or failure to act that violates non-disclosure, non-competition and/or non-solicitation agreements. Our 2017 Performance-Based Management Incentive Plan allows for the forfeiture and/or repayment of cash-based awards, and 2017 Equity Plan allows for the cancellation of LTI grants in these circumstances. In addition, cash sign-on bonuses to our NEOs may be forfeited if they voluntarily resign from the Company within a pre-determined period of time.

Insider Trading, Hedging and Pledging Policy Prohibitions

We maintain a Global Insider Trading Policy that prohibits our employees and directors from, among other things, engaging in hedging or derivative transactions with respect to the Company’s equity securities, purchasing Company stock on margin or pledging Company securities as collateral for a loan, or engaging in short sales of the Company’s securities.

Tax-Deductibility of Compensation

Section 162(m) of the Internal Revenue Code (Section 162(m)) limits the amount a company may deduct for compensation paid to its chief executive officer and any of its other three named executive officers (excluding its chief financial officer) to $1.0 million. This limitation does not, however, apply to compensation meeting the definition of qualifying performance-based compensation.  

Management regularly reviews the provisions of our plans and programs, monitors legal developments, and works with our Compensation Committee and its consultant to review and consider Section 162(m) tax deductibility of compensation payments. Our Compensation Committee, however, believes that a compensation program that attracts, retains, and rewards executive talent and achievement is necessary for our success and, therefore, is in the best interests of the Company and our stockholders and that, in establishing the cash and equity incentive compensation program for the Company’s executive officers, the potential deductibility of the compensation payable under that program should only be one of a number of relevant factors taken into consideration. Consequently, our Compensation Committee may pay or provide, and has paid or provided, compensation in excess of $1.0 million that is not exempt from the deduction limitations under Section 162(m).

Amounts of base salary above $1.0 million are not deductible by the Company. Our annual bonus plan payouts in 2017 for our 2016 plan year and our 2017 stock option grants are intended to fall within the exception for qualifying performance-based compensation (and therefore to be tax-deductible compensation) under Section 162(m).

Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), effective for our taxable year beginning January 1, 2018, the exception under Section 162(m) for performance-based compensation will no longer be available, subject to transition relief for certain grandfathered arrangements in effect as of November 2, 2017.  In addition, the covered employees will be expanded to include our CFO, and once one of our NEOs is considered a covered employee, the NEO will remain a covered employee so long as he or she receives compensation from us.  Given the lack of regulatory guidance to date, the Compensation Committee is not yet able to determine the full impact of the TCJA’s changes to Section 162(m) on the Company and our compensation programs.

Compensation Committee Report

The Compensation Committee furnishes the following report:

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with Bioverativ management. Based on this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Form 10-K.

Submitted by,

Brian Posner (Chair)

Geno Germano

Louis Paglia

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table

The following table shows the compensation paid to or earned by our NEOs during the years ended December 31, 2017 and December 31, 2016, for the year(s) in which they were a named executive officer.

Notes to the Summary Compensation Table

2017 Grants of Plan-Based Awards

The following table shows additional information regarding all grants of plan-based awards made to our NEOs for the year ended December 31, 2017.

Notes to the 2017 Grants of Plan-Based Awards Table 

2017 Outstanding Equity Awards at Fiscal Year-End Table

The following table summarizes the equity awards that were outstanding as of December 31, 2017 for each of our NEOs.

Notes to the 2017 Outstanding Equity Awards at Fiscal Year End Table 

2017 Option Exercises and Stock Vested

The following table shows information regarding option exercises and vesting of stock awards for each NEO during the year ended December 31, 2017.

Notes to the 2017 Option Exercises and Stock Vested Table 

2017 Non-Qualified Deferred Compensation

In connection with the separation from Biogen, on February 1, 2017, we adopted a Supplemental Savings Plan (“Bioverativ SSP”), a non-qualified deferred compensation plan covering our executive officers and certain other management employees in the U.S.   Executive officers and other management employees of Biogen who joined Bioverativ had their balances that were previously held in the Biogen supplemental savings plan (“Biogen SSP”) transferred to the Bioverativ SSP on February 1, 2017.

Under the Bioverativ SSP, executive officers and other management employees in the U.S. whose base salary and annual cash incentives for the year exceed a specified limit ($270,000 in 2017) receive a Company-paid restoration match on the portion of their base salary, and annual cash incentive that exceeds this limit; the restoration match equals 6% of this excess compensation. The restoration match feature is intended to replace the amount of matching employer contributions that the participant would otherwise have been eligible to receive under our 401(k) plan but for the $270,000 limit imposed by Section 401(a)(17) of the Internal Revenue Code. In addition, eligible employees may make voluntary contributions of up to 80% of their base salary and 100% of their annual cash incentives to the Bioverativ SSP, and thereby defer income taxes on such amounts until distribution is made from the Bioverativ SSP. The Company does not match participants’ voluntary contributions to the Bioverativ SSP. The Bioverativ SSP provides for immediate vesting of the restoration match consistent with our immediate vesting of the Company match provided under our 401(k) plan.

Under the Bioverativ SSP, notional SSP accounts are maintained for each participant. Accounts include employee and employer contributions and reflect the performance of notional investments selected by the employee or a default investment if the employee does not make a selection. These notional investment options only included the mutual funds offered under our 401(k) plan.

In March 2017, the Bioverativ SSP Plan was terminated effective June 30, 2017. 

The following “2017 Non-Qualified Deferred Compensation Table” summarizes activity during 2017 and account balances in the Bioverativ SSP for our NEOs as of December 31, 2017.

Notes to the 2017 Non-Qualified Deferred Compensation Table 

Potential Payments Upon Employment Termination Table

In connection with our separation from Biogen, Biogen had entered into offer letter agreements with our NEOs (the “Offer Letters”), which provided for certain payments and benefits in the event of certain terminations of employment. In the event that, within one year following the separation, the NEO is involuntarily terminated other than for cause or resigns his or her employment following adverse changes to his or her terms and conditions of employment under certain circumstances following a change in control (and subject to execution of a release of claims), the NEO will be entitled to receive (i) a lump sum severance payment equal to 18 months (24 months for Mr. Cox) of base salary and target bonus, (ii) up to 9 months (12 months for Mr. Cox) of outplacement services and (iii) continued subsidized health benefits for up to 18 months (21 months for Mr. Cox). Mr. Cox’s Offer Letter further provides that no gross-up payment would be made in the event that a severance payment or benefit due to Mr. Cox is subject to a “golden parachute” excise tax, and specifies that if the amounts payable to Mr. Cox otherwise would be subject to such an excise tax, the payment amount will be reduced to the maximum amount that will not trigger the excise tax.

The following “Potential Payments upon Employment Termination Table” shows the estimated benefits payable to our NEOs upon a hypothetical qualifying termination of employment under their Offer Letters and 2017 Equity Plan under various termination scenarios as of December 31, 2017. Severance benefits are subject to the execution of a release agreement.