definiens: means the actual cost of the Manufacture by [COMPANY] of the Product under the Manufacturing Process, including the related quality assurance and quality control activities as required by Applicable Laws, which actual cost shall be comprised of the cost of goods produced as recorded in accordance with GAAP, and shall include direct labor and direct material, including raw materials and packaging materials, and the allocable portion of the overhead of [COMPANY] attributable to the Manufacture of the Product . [COMPANY] Manufacturing Cost shall exclude ( i ) Territory Specific Manufacturing Costs, ( ii ) selling and research and development expenses and general and administrative expenses associated with selling and research and development or other functions other than manufacturing of the Product ; and ( iii ) those components of the actual cost of the Manufacture by [COMPANY] of the Product under the Manufacturing Process that may be identified from time to time as being associated solely with Product manufactured for sale outside the Territory, plus the allocable portion of the manufacturing overhead of [COMPANY] directly attributable thereto . Direct labor costs shall include the cost of all compensation paid to applicable employees, as well as the cost of all fringe benefits and administrative costs associated with the management and payment of these employees ; however, such costs shall not include the non - cash costs associated with incentive stock options granted to employees