2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 74 BAXTER INTERNATIONAL INC. 4 ProxyStatementHighlights 2017BoardandGovernanceHighlights DevelopmentorHighlight Further Information CompletedDeclassificationofBaxterBoard Seepage10 • Startingthisyear,thefullBoardwillbeupforreelectionforaoneyeartermattheAnnualMeetinginaccordance withthe2016stockholder-approvedamendmenttoBaxter’scertificateofincorporation • InconnectionwiththeamendmenttodeclassifytheBoard,allsupermajorityvotingprovisionsinBaxter’s organizationaldocumentshavebeeneliminated BoardRefreshmentActivities Seepage17 • ContinuedfocusbytheBoardonrefreshmentanddiversityledtotheappointmentoftwonewdirectorslastyear asdescribedbelow • RevisedCorporateGovernanceGuidelinesinFebruary2018asdescribedbelow DecreasedAverage DirectorTenure 2016 9.4 years 2017 8.3 * years ~40% ** DirectorsonBoard<3 years NewMandatory RetirementAge 75 As another componentof theBoard’s robust refreshmentprocesses, onFebruary 20, 2018, the Board revised its CorporateGovernance Guidelines to include a mandatory retirement age of 75, subject to certain exceptions (asdescribed in “BoardofDirectors— NominationofDirectors”) AppointedTwoNew IndependentDirectors February 2017 : AppointedDr.Stephen Oesterle, the former SeniorVicePresident, Medicine&Technologyof Medtronic July 2017 :AppointedMs. CathySmith, the ExecutiveVicePresident andChiefFinancialOfficer ofTarget * CalculatedaftergivingeffecttoMs.Smith’sappointment **AsofDecember31,2017 GovernancePractices Seepage31 • AtthedirectionoftheBoard,Baxterexpandeditsstockholderengagementprogram,withcontinuedinvolvement frommembersoftheBoardandseniormanagement • Sincethe2017AnnualMeeting,thecompanyhasapproachedinvestorsholdingover40%ofthecompany’s outstandingsharestoengageindiscussions.Thecompanyisintheprocessofhavingtheseconversationswith interestedinvestors • Topicsdiscussednowincludecompanystrategyandperformance,corporategovernancematters(including Boardcompositionandrefreshment),boardleadershipstructure,executivecompensationandcorporate responsibilityinitiatives |2018AnnualMeetingofStockholdersandProxyStatement Total of 08 pages in section ProxyStatementHighlights 3 Name PrimaryOccupation Age Director Since Independent Y/N KeyAttributes andSkills A C CG QCT José(Joe)E.Almeida Chairman,PresidentandChiefExecutive Officer,BaxterInternationalInc. 55 2016 N ✓ Significantexperienceinthe medicaldeviceindustry ✓ Extensiveexperienceleading global,multi-facetedcorporations ThomasF.Chen SeniorVicePresidentand PresidentofInternationalNutrition, AbbottLaboratories(retired) 68 2012 Y ✓ Extensiveinternationalbusiness experienceinhospitalproducts andpharmaceuticals ✓ Globalperspective JohnD.Forsyth ChairmanandCEO,WellmarkBlueCrossBlue Shield 70 2003 Y ✓ Significantexperienceinthe healthcareindustry,including withleadingpayors ✓ Understandingoflarge,complex organizations,including healthcarepayors JamesR.GavinIII,M.D.,Ph.D. ChiefExecutiveOfficerand ChiefMedicalOfficer HealingourVillage,Inc. 72 2003 Y ✓ Significantexperienceinthe healthcareindustry,including withleadinghealthcareproviders ✓ Extensivescientificandmedical expertise,includingasa practicingnephrologist PeterS.Hellman PresidentandChiefFinancial andAdministrativeOfficer NordsonCorporation(retired) 68 2005 Y ✓ Extensivefinancialandcapital marketsexperience ✓ Significantexperienceleading globalindustrialcompanies MunibIslam PartnerandHeadofEquitiesResearch,Third PointLLC 44 2015 Y ✓ Significantcapitalallocationand investmentmanagement experience MichaelF.Mahoney Chairman,PresidentandCEO,BostonScientific Corporation 53 2015 Y ✓ Extensiveexperienceleading global,medicalproducts companies New StephenN.Oesterle,M.D. HealthcareConsultant,formerSeniorVice President,MedicineandTechnology,Medtronic plc 67 2017 Y ✓ Significantexperienceinthe medicalproductsandhealthcare industries ✓ Strongscientificandmedical background,includingasa practicingphysician CaroleJ.Shapazian ExecutiveVicePresidentof MaytagCorporation(retired) 74 2003 Y ✓ Significantexperiencewithglobal supplyoperations,manufacturing anddistributionpractices New CathyR.Smith ExecutiveVicePresidentandChief FinancialOfficer,TargetCorporation 54 2017 Y ✓ Significantfinancialexpertiseand corporateleadershipexperience ThomasT.Stallkamp(LeadDirector) FounderandPrincipal, CollaborativeManagementLLC 71 2000 Y ✓ Extensiveexperienceleading globalcorporations,including globalmanufacturers ✓ Significantbusinessdevelopment andsupplychainexperience AlbertP.L.Stroucken ChairmanandChiefExecutiveOfficer,Owens- IllinoisInc.(retired) 70 2004 Y ✓ Extensiveexperienceleading large,complexorganizations ✓ Significantfinancialexpertise * Key CommitteeChairperson A AuditCommittee CG CorporateGovernanceCommittee CommitteeMember C CompensationCommittee QCT Quality,ComplianceandTechnology Committee * AlbertStrouckenhasbeenappointedasthenextAuditCommitteechairpersoneffectiveMay7,2018 investor.baxter.com 2 ProxyStatementHighlights Proxy Statement Highlights ToassistyouinreviewingtheproposalstobeacteduponattheAnnualMeeting,thissectionpresentsconcisedetailabouteach non-routinevotingitem.Formorecompleteinformation,pleasereviewourAnnualReportonForm10-KandthecompleteProxy Statement. PROPOSAL 1 Election of Directors WhatamIvotingon? Youareaskedtovoteforthereelectionofthe12directorssetforthbelowforatermofoneyear. WhatistheBoard’srecommendation? TheBoardrecommendsavote FOR theelectionofeachofthedirectornominees. TheBoardbelievesthatthe12directorsstandingforreelectionpossessadesirablemixofprofessional andindustryexperienceandqualifications,reflectiveoftheBoard’songoingboardrefreshmentefforts. TheBoardhasdemonstratedanabilitytoeffectivelyconsultwithmanagementonthecompany’sstrategic andoperationalplansandoverseethecompany’sperformance.Seebelowforadditionalinformation regardingthequalifications,experiencesandbackgroundsoftheBoard(includingthedirectornominees) andrecentBoarddevelopments. WherecanIfindmoreinformation? Concisesupportinginformationispresentedbelow. Seealso“Proposal1—ElectionofDirectors”foradditionalinformation. |2018AnnualMeetingofStockholdersandProxyStatement BIOGEN INC. Proxy Statement Summary (continued) Corporate Governance Matters We strive to maintain effective corporate governance practices to ensure that our company is managed for the long-term benefit of our stockholders. To that end, we continually review and refine our corporate governance policies, procedures andpractices.SeePart2–“CorporateGovernanceatBiogen”formoreinformation. CorporateGovernanceHighlights BoardandBoardCommittees NumberofIndependentDirectorNominees/TotalNumberofDirectorNominees 10/11 NumberofFemaleDirectorNominees/TotalNumberofDirectorNominees 3/11 AverageAgeofDirectorsStandingforElection(asofApril17,2018) 63 AllBoardCommitteesConsistofIndependentDirectors Yes RiskOversightbyFullBoardandCommittees Yes SeparateRiskCommittee Yes SeparateChairmanandCEO Yes RegularExecutiveSessionsofIndependentDirectors Yes AnnualBoardandCommitteeSelf-Evaluations Yes AnnualIndependentDirectorEvaluationofCEO Yes DirectorEducationandOrientation Yes AnnualEquityGranttoDirectors Yes Director-StockholderEngagementInitiative Yes StockholderRights,AccountabilityandOtherGovernancePractices AnnualElectionofAllDirectors Yes MajorityVotingforDirectorsandResignationPolicy Yes ProxyAccessBylaw(3%ownership,3years,nomineesforupto25%ofourBoard) Yes AnnualAdvisoryStockholderVoteonExecutiveCompensation Yes StockholderAbilitytoCallSpecialMeetings(25%Threshold) Yes StockholderAbilitytoActbyWrittenConsent Yes StockOwnershipGuidelinesforDirectorsandExecutives Yes ProhibitionfromHedgingandPledgingSecuritiesorOtherwiseEngaginginDerivativeTransactions Yes CompensationRecoveryinEquityandAnnualBonusPlans Yes AbsenceofaStockholderRightsPlan(referredtoas“PoisonPill”) Yes StrongCommitmenttoEnvironmentalandSustainabilityMatters Yes BoardOversightandExpandedDisclosureonWebsiteRelatedtoCorporatePoliticalContributionsandExpenditures Yes Director-StockholderEngagementInitiative Wevaluetheviewsofourstockholdersandotherstakeholders,andwesolicitinputthroughouttheyearontopicssuchas business strategy, capital allocation, corporate governance, executive compensation, sustainability and corporate social responsibilityinitiatives.Duringfiscal2017,independentmembersofourBoardofDirectorsconductedoutreachtocertain stockholderstodiscussavarietyofissues,includingbusiness,corporategovernanceandcompensationrelatedmatters. -v- Total of 05 pages in section Proxy Statement Summary (continued) Highlights of 2017 Company Performance Our mission is clear: We are pioneers in neuroscience. We believe that no other disease area holds as much need or as muchpromiseformedicalbreakthroughswithapproximatelyonebillionpeopleaffectedbyneurologicaldisordersworldwide. We are focused on discovering, developing and delivering worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases, including in our core growth areas of multiple sclerosis (MS) and neuro- immunology, Alzheimer’s disease and dementia, movement disorders and neuromuscular disorders, including spinal muscular atrophy (SMA) and amyotrophic lateral sclerosis. We also plan to invest in emerging growth areas such as pain, ophthalmology, neuropsychiatry and acute neurology. In addition, we are employing innovative technologies to discover potential treatments for rare and genetic disorders, including new ways of treating diseases through gene therapy in the previously mentioned areas. We also manufacture and commercialize biosimilars of advanced biologics. For additional information,pleaseseeour2017AnnualReportonForm10-K. 2017OperatingPerformanceHighlights • Full year total revenues of $12.3 billion, a 7% increase versus the prior year or a 15% increase excluding hemophilia revenues*. • We added seven clinical programs to our neuroscience pipeline in 2017, including BIIB098 (MMF prodrug) for MS, BIIB092 (anti-tau antibody) for both Alzheimer’s disease and progressive supranuclear palsy (PSP), BIIB076 (anti-tau antibody) for Alzheimer’s disease, BIIB080 (tau antisense oligonucleotide) for Alzheimer’s disease, BIIB093 (IV glibenclamide)forlargehemisphericinfarctionandnatalizumabfordrug-resistantfocalepilepsy. • WesuccessfullylaunchedSPINRAZA,thefirstandonlyapprovedtreatmentforSMA,inoneofthemostexcitingworld- widebiotechlaunchesoftheyear.AsofDecember31,2017,therewereapproximately3,200patientsontherapyacross thepost-marketingsetting,theexpandedaccessprogramandclinicaltrials. • Wewereawarded,withourcollaborationpartnerIonisPharmaceuticalsInc.(Ionis),the2017PrixGalienUSAAwardf r BestBiotechnologyProductforSPINRAZA. • We announced a new focused and well-articulated strategy with the longer term goal of becoming the leader in neuro- science. We defined priorities designed to drive future growth, including maximizing the resilience of our core MS busi- ness,acceleratingourprogressinSMAandcreatingaleanerandsimpleroperatingmodel.Thegoaloftheseprioritiesis todrivesignificantcashflowgenerationandinvestthosecashflowstocreatenewsourcesofvaluebeyondMSandSMA. • Throughout2017werepurchasedapproximately4.9millionsharesofourcommonstockforatotalvalueof$1.4billion. • During 2017 we appointed several new executives, each of whom has significant experience in the biopharmaceutcal industryandisaleaderinhisorherfunctionalarea.Theseappointmentsincluded: • MichelVounatsos,ChiefExecutiveOfficer • JeffreyD.Capello,ExecutiveVicePresidentandChiefFinancialOfficer • GingerGregory,ExecutiveVicePresidentandChiefHumanResourcesOfficer • ChirfiGuindo,ExecutiveVicePresidentandHeadofGlobalMarketing,MarketAccessandCustomerInnovation. * In Q1 2017 Biogen completed the spin-off of its global hemophilia business into a new company, known as Bioverativ Inc. The 15% increase in total revenues excludes all hemophilia revenues from 2016 through January 2017. Hemophilia revenues include ELOCTATE ® andALPROLIX ® productrevenuesaswellasroyaltyandcontractmanufacturingrevenuerelatedtoSobi. -iv- Proxy Statement Summary This summary highlights important information you will find in this Proxy Statement. As it is only a summary, pleasereviewthecompleteProxyStatementbeforeyouvote. Annual Meeting Information DATE: Tuesday,June12,2018 TIME: 9:00a.m.EasternTime LOCATION: BiogenInc. 225BinneyStreet Cambridge,Massachusetts02142 RECORDDATE: April17,2018 Voting Matters and Vote Recommendation VotingMatter Board Recommendation PageNumber formoredetail Item1—ElectionofDirectors FOReachnominee 11 Item2—RatificationoftheSelectionofourIndependentRegisteredPublicAccountingFirm FOR 25 Item3—AdvisoryVoteonExecutiveCompensation FOR 28 Item4—StockholderProposalRequestingCertainProxyAccessBylawAmendments AGAINST 64 Item5—StockholderProposalRequestingaReportontheExtenttoWhichRisksRelatedto PublicConcernOverDrugPricingStrategiesareIntegratedintoIncentiveCompensation Arrangements AGAINST 66 How to Vote VoteDuringMeeting VoteRightAwayThroughAdvanceVotingMethods Voteby Internet UsingYour Computer VotebyMail VoteDuring theMeeting SeePart1 - "G neral InformationAbout theMeeting" for detailson how to vote during theAnnualMeeting. Go to www.proxyvote.com andenter the 16-digit controlnumber provided on your proxy cardor voting instruction form. VotebyTelephone Call 800-690-6903 or thenumber on yourproxy card or voting instruction form.Youwillneed the16-digit control numberprovidedon yourproxy card or voting instruction form. Complete, sign and date the proxy card or voting instruction formandmail it in the accompanying pre-addressed envelope. -iii-