Exhibit 10.1

 

Celgene Corporation

2017 Stock Incentive Plan

(Amended and Restated as of April 19, 2017)

 

Article 1.

PURPOSE

 

The purpose of this Celgene Corporation 2017 Stock Incentive Plan (Amended and
Restated as of April 19, 2017) (the “Plan”) (formerly known as the 2008 Stock
Incentive Plan, and, prior to April 16, 2008, as the 1998 Stock Incentive Plan,
and, prior to April 23, 2003, as the 1998 Long-Term Incentive Plan), with
certain designated provisions being subject to stockholder approval at the 2017
annual meeting of stockholders on June 14, 2017, is to enhance the profitability
and value of the Company and its Affiliates for the benefit of its stockholders
by enabling the Company to offer selected management and other employees of the
Company and its Affiliates and Non-Employee Directors of the Company, stock
based incentives and other equity interests in the Company, thereby creating a
means to raise the level of stock ownership by employees and directors in order
to attract, retain and reward such individuals and strengthen the mutuality of
interests between such individuals and the Company’s stockholders.

 

Article 2.

DEFINITIONS

 

For purposes of this Plan, the following terms shall have the following
meanings:

 

2.1   “2015 Restatement Effective Date” shall mean April 15, 2015.

 

2.2   “Affiliate” shall mean other than the Company, (i) any Subsidiary, (ii)
any corporation in an unbroken chain of corporations ending with the Company
which owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain, (iii) any
corporation, trade or business (including, without limitation, a partnership or
limited liability company) which is controlled 50% or more (whether by ownership
of stock, assets or an equivalent ownership interest or voting interest) by the
Company or one of its Affiliates, or (iv) any other entity, approved by the
Committee as an Affiliate under the Plan, in which the Company or any of its
Affiliates has a material equity interest and which is designated as an
“Affiliate” by resolution of the Committee; provided that the Common Stock
subject to any Award constitutes “service recipient stock” for purposes of
Section 409A of the Code or otherwise does not subject the Award to Section 409A
of the Code.

 

2.3   “Award” shall mean any award under this Plan of any Stock Option,
Restricted Stock, Stock Appreciation Right, Other Stock-Based Award or
Performance-Based Award. All Awards, shall be granted by, confirmed by, and
subject to the terms of, a written agreement executed by the Company and the
Participant.

 

2.4   “Board” or “Board of Directors” shall mean the Board of Directors of the
Company.

 

2.5   “Cause” shall mean, with respect to a Participant’s Termination of
Employment: (i) in the case where there is no employment agreement, consulting
agreement, change in control agreement or similar agreement in effect between
the Company or an Affiliate and the Participant at the time of the relevant
grant or Award, or where there is an employment agreement, consulting agreement,
change in control agreement or similar agreement in effect at the time of the
relevant grant or Award but such agreement does not define “cause” (or words of
like import), termination due to a Participant’s dishonesty, fraud,
insubordination, willful misconduct, refusal to perform services (for any reason
other than illness or incapacity) or materially unsatisfactory performance of
his or her duties for the Company or an Affiliate or (ii) in the case where
there is an employment agreement, consulting agreement, change in control
agreement or similar agreement in effect between the Company or an Affiliate and
the Participant at the

 

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time of the relevant grant or Award that defines “cause” (or words of like
import) and a “cause” termination would be permitted under such agreement at
that time, termination that is or would be deemed to be for “cause” (or words of
like import) as defined under such agreement; provided, that with regard to any
agreement that conditions “cause” on occurrence of a change in control, such
definition of  “cause” shall not apply until a change in control actually takes
place and then only with regard to a termination thereafter. With respect to a
Non-Employee Director’s Termination of Directorship, “Cause” shall mean (i) a
Non-Employee Director’s conviction of, or plea of guilty or nolo contendere to,
a felony or (ii) dishonesty, fraud or willful misconduct by the Non-Employee
Director in fulfilling the Non-Employee Director’s duties to the Company.

 

2.6   “Change in Control” shall have the meaning set forth in Article 13.

 

2.7   “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

2.8   “Committee” shall mean the Compensation Committee of the Board or such
other committee or subcommittee appointed from time to time by the Board, which
shall be intended to consist of two (2) or more non-employee directors, each of
whom shall be, to the extent required by Rule 16b-3 (as defined herein), a
“non-employee director” as defined in Rule 16b-3 and, to the extent required by
Section 162(m) of the Code and any regulations thereunder, an “outside director”
as defined under Section 162(m) of the Code and to the extent required by Rule
5605(a)(2) of the Nasdaq Listing Rules or such other applicable stock exchange
rule, an independent director. Notwithstanding the foregoing, if and to the
extent that no Committee exists which has the authority to administer the Plan,
the functions of the Committee shall be exercised by the Board. If for any
reason the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance with the requirements of Rule
16b-3 or Section 162(m) of the Code shall not affect the validity of the Awards,
grants, interpretations or other actions of the Committee.

 

2.9   “Common Stock” shall mean the common stock, $.01 par value per share, of
the Company.

 

2.10   “Company” shall mean Celgene Corporation, a Delaware corporation, and its
successors by merger, consolidation or otherwise.

 

2.11   “Disability” shall mean, with respect to a Participant, a permanent and
total disability as defined in Section 22(e)(3) of the Code. A Disability shall
only be deemed to occur at the time of the determination by the Committee or the
Board, as the case may be, of the Disability. Notwithstanding the foregoing, for
Awards that are subject to Section 409A of the Code, Disability shall mean that
a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

 

2.12   “Effective Date” shall mean April 19, 2017, subject to Article 17.

 

2.13   “Eligible Employees” shall mean the employees of the Company and its
Affiliates who are eligible pursuant to Article 5 to be granted Awards under
this Plan.

 

2.14   “Exchange Act” shall mean the Securities Exchange Act of 1934.

 

2.15   “Fair Market Value” for purposes of this Plan, unless otherwise required
by any applicable provision of the Code or any regulations issued thereunder,
shall mean, as of any date the last sales price reported for the Common Stock on
the applicable date (i) as reported by the principal national securities
exchange in the United States on which it is then traded, or (ii) if not traded
on any such national securities exchange, as quoted on an automated quotation
system sponsored by the Financial Industry Regulatory Authority. For purposes of
the exercise of any Award, the applicable date shall be the date a notice of
exercise is received by the Committee or, if not a day on which the applicable
market is open, the next day that it is open.

 

2.16   “Family Member” shall mean, with respect to any Participant, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in- law, including adoptive
relationships, any person sharing the Participant’s household (other than a
tenant or employee), a trust in which these persons have more than 50% of the

 

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beneficial interest, a foundation in which these persons (or the Participant)
control the management of assets, and any other entity in which these persons
(or the Participant) own more than 50% of the voting interests.

 

2.17   “Incentive Stock Option” shall mean any Stock Option awarded under this
Plan intended to be and designated as an “Incentive Stock Option” within the
meaning of Section 422 of the Code.

 

2.18   “Limited Stock Appreciation Right” shall mean an Award made pursuant to
Section 8.5 of the Plan which may be a Tandem Stock Appreciation Right or a
Non-Tandem Stock Appreciation Right.

 

2.19   “Named Executive Officer” shall mean a “named executive officer” (as such
term is defined under the Securities Act of 1933) of the Company listed in the
Company’s most recent proxy statement for its annual meeting of stockholders.

 

2.20   “Non-Employee Director” shall mean a director of the Company who is not
an active employee of the Company or an Affiliate.

 

2.21   “Non-Qualified Stock Option” shall mean any Stock Option awarded under
this Plan that is not an Incentive Stock Option.

 

2.22   “Other Stock-Based Award” shall mean an Award under Article 9 of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock, including, without limitation, a Restricted
Stock Unit.

 

2.23   “Participant” shall mean an Eligible Employee or Non-Employee Director to
whom an Award has been made pursuant to this Plan.

 

2.24   “Performance-Based Award” shall mean an Award made pursuant to Article 10
of this Plan of a right to receive awards of Common Stock and other Awards
(including awards of cash) that are valued in whole or in part by reference to,
or are payable in or otherwise based on, Common Stock or attainment of
pre-established performance goals.

 

2.25   “Performance Criteria” has the meaning set forth in Exhibit A.

 

2.26   “Performance Goal” shall mean the objective performance goals established
by the Committee and, if desirable for purposes of Section 162(m) of the Code,
based on one or more Performance Criteria.

 

2.27   “Performance Period” shall mean three consecutive fiscal years of the
Company, or such shorter period as determined by the Committee in its
discretion.

 

2.28   “Restricted Stock” shall mean an award of shares of Common Stock under
this Plan that is subject to restrictions under Article 7.

 

2.29   “Restricted Stock Unit” shall mean a type of Other Stock-Based Award
granted under Article 9 which represents the right to receive cash, shares of
Common Stock or a combination thereof as determined by the Committee in its sole
discretion.

 

2.30   “Restriction Period” shall have the meaning set forth in Subsection
7.3(a) with respect to Restricted Stock for Eligible Employees.

 

2.31   “Retirement” shall mean, with respect to any Award granted on or after
April 17, 2013, an Eligible Employee’s Termination of Employment due to a
voluntary resignation at or after the earlier of: (1) the attainment of age
fifty-five (55) and the completion of five (5) years of service, and (2) the
attainment of an age plus completed years of service that equals sixty-five (65)
and the completion of a minimum of two (2) years of service; provided, however,
that unless otherwise determined by the Committee at the time of grant or
thereafter, an Eligible Employee must provide the Committee or its designee with
not less than six (6) months written notice of the Eligible Employee’s intent to
terminate the Eligible Employee’s service with the Company and its Affiliates by
reason of

 

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Retirement. Notwithstanding the foregoing, with respect to any Award granted on
or after June 18, 2002 and prior April 17, 2013, “Retirement” shall mean an
Eligible Employee’s Termination of Employment due to a voluntary resignation at
or after the attainment of age fifty-five (55) and the completion of five (5)
years of service. For purposes of determining a Participant’s eligibility for
Retirement, “years of service” shall be determined by the Committee based on the
Eligible Employee’s completed years of service from his or her hire date (after
taking into account any breaks in service), or such other methodology as
determined by the Committee in its sole discretion, provided that with respect
to an Award that is subject to Section 16.15(b) of the Plan, such alternate
methodology must be specified by the Committee in writing no later than the date
of grant. With respect to a Non-Employee Director’s Termination of Directorship,
Retirement means the Non-Employee Director’s failure to stand for reelection or
the failure to be re-elected.

 

2.32   “Rule 16b-3” shall mean Rule 16b-3 under Section 16(b) of the Exchange
Act as then in effect or any successor provisions.

 

2.33   “Section 162(m) of the Code” shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any Treasury
regulations thereunder.

 

2.34   “Stock Appreciation Right” shall mean the right (pursuant to an Award
granted under Article 8). A Tandem Stock Appreciation Right shall mean the right
to surrender to the Company all (or a portion) of a Stock Option in exchange for
an amount in Common Stock equal to the excess of  (i) the Fair Market Value, on
the date such Stock Option (or such portion thereof) is surrendered, of the
Common Stock covered by such Stock Option (or such portion thereof), over (ii)
the aggregate exercise price of such Stock Option (or such portion thereof). A
Non-Tandem Stock Appreciation Right shall mean the right to receive an amount in
Common Stock equal to the excess of  (x) the Fair Market Value of a share of
Common Stock on the date such right is exercised, over (y) the aggregate
exercise price of such right, otherwise than on surrender of a Stock Option.

 

2.35   “Stock Option” or “Option” shall mean any option to purchase shares of
Common Stock granted to Eligible Employees pursuant to Article 6 and to
Non-Employee Directors pursuant to Article 11.

 

2.36   “Subsidiary” shall mean any subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code.

 

2.37   “Ten Percent Stockholder” shall mean a person owning stock of the Company
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or its Subsidiaries or its parent corporations,
as defined in Section 424(e) of the Code.

 

2.38   “Termination of Directorship” shall mean that the Non-Employee Director
has ceased to be a director of the Company. Notwithstanding the foregoing, the
Committee may, in its sole discretion, otherwise define Termination of
Directorship in the Award agreement or, if no rights of a Participant are
reduced, may otherwise define Termination of Directorship thereafter.

 

2.39   “Termination of Employment” shall mean (i) a termination of service (for
reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Affiliates or (ii) when an
entity which is employing a Participant ceases to be an Affiliate, unless the
Participant thereupon becomes employed by the Company or another Affiliate.

 

2.40   “Transfer” or “Transferred” or “Transferable” shall mean anticipate,
alienate, attach, sell, assign, pledge, encumber, charge, hypothecate or
otherwise transfer.

 

Article 3.

ADMINISTRATION

 

3.1   The Committee.   The Plan shall be administered and interpreted by the
Committee.

 

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3.2   Awards.   The Committee shall have full authority to grant to Eligible
Employees, pursuant to the terms of this Plan: (i) Stock Options, (ii)
Restricted Stock, (iii) Stock Appreciation Rights, (iv) Other Stock-Based Awards
and (v) Performance-Based Awards. In addition, the Committee shall have full
authority to grant to Non-Employee Directors, pursuant to the terms of this
Plan: (i) Non-Qualified Stock Options and (ii) Restricted Stock Units in
accordance with Article 11. In particular, the Committee shall have the
authority:

 

(a)   to select the Eligible Employees to whom Stock Options, Restricted Stock,
Stock Appreciation Rights, Other Stock-Based Awards and Performance-Based Awards
may from time to time be granted hereunder;

 

(b)   to determine whether and to what extent Stock Options, Restricted Stock,
Stock Appreciation Rights, Other Stock-Based Awards and Performance-Based Awards
or any combination thereof, are to be granted hereunder to one or more Eligible
Employees;

 

(c)   to select the Non-Employee Directors to whom Non-Qualified Stock Options
and Restricted Stock Units may from time to time be granted hereunder and
determine whether and to what extent Non-Qualified Stock Options and Restricted
Stock Units or any combination thereof, are to be granted hereunder to
Non-Employee Directors;

 

(d)   to determine, in accordance with the terms of this Plan, the number of
shares of Common Stock to be covered by each Award to an Eligible Employee or
Non-Employee Director granted hereunder;

 

(e)   to determine the terms and conditions, not inconsistent with the terms of
this Plan, of any Award granted hereunder to an Eligible Employee or
Non-Employee Director (including, but not limited to, the exercise or purchase
price, any restriction or limitation, any vesting schedule or acceleration
thereof, or any forfeiture restrictions or waiver thereof, regarding any Stock
Option or other Award, and the shares of Common Stock relating thereto, based on
such factors, if any, as the Committee shall determine, in its sole discretion);

 

(f)   to determine whether and under what circumstances a Stock Option may be
settled in cash and/or Common Stock under Section 6.3(d);

 

(g)   to the extent permitted by applicable law, to determine whether, to what
extent and under what circumstances to provide loans (which may be on a recourse
basis and shall bear interest at the rate the Committee shall provide) to
Eligible Employees in order to exercise Options under this Plan;

 

(h)   to determine whether to require an Eligible Employee or Non-Employee
Director, as a condition of the granting of any Award, to not sell or otherwise
dispose of shares acquired pursuant to the exercise of an Option or as an Award
for a period of time as determined by the Committee, in its sole discretion,
following the date of the acquisition of such Option or Award; and

 

(i)   to determine whether a Stock Appreciation Right is a Tandem Stock
Appreciation Right or Non-Tandem Stock Appreciation Right.

 

3.3   Guidelines.   Subject to Article 14 hereof, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing this Plan and perform all acts, including the delegation of
its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Award issued under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any agreement relating thereto in the manner and to the extent it shall deem
necessary to carry this Plan into effect but only to the extent any such action
would be permitted under the applicable provisions of Rule 16b-3 and Section
162(m) of the Code. The Committee may adopt special guidelines and provisions
for persons who are residing in, or subject to, the taxes of, countries other
than the United States to comply with applicable tax and securities laws and may
impose any limitations and restrictions that they deem necessary to comply with
the applicable tax and securities laws of such countries other than the United
States. Without limiting the generality of the foregoing, the French Addendum to
the Plan previously adopted by the Committee for purposes of the grant of Stock
Options to Participants who reside in, or are subject to taxation in, France,
continues to be in full force and effect under the Plan as amended and restated
herein. To the extent applicable, the Plan is intended to comply with the
applicable requirements of Rule 16b-3 and the exception for

 

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performance-based compensation under Section 162(m) of the Code with regard to
Options, Stock Appreciation Rights and certain awards of Other Stock-Based
Awards and Performance-Based Awards and shall be limited, construed and
interpreted in a manner so as to comply therewith.

 

3.4   Decisions Final.   Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, binding and conclusive on the Company and all employees
and Participants and their respective heirs, executors, administrators,
successors and assigns.

 

3.5   Reliance on Counsel.   The Company, the Board or the Committee may consult
with legal counsel, who may be counsel for the Company or other counsel, with
respect to its obligations or duties hereunder, or with respect to any action or
proceeding or any question of law, and shall not be liable with respect to any
action taken or omitted by it in good faith pursuant to the advice of such
counsel.

 

3.6   Procedures.   If the Committee is appointed, the Board shall designate one
of the members of the Committee as chairman and the Committee shall hold
meetings, subject to the By-Laws of the Company, at such times and places as it
shall deem advisable. A majority of the Committee members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of the
members present. Any decision or determination reduced to writing and signed by
all the Committee members in accordance with the By-Laws of the Company, shall
be fully as effective as if it had been made by a vote at a meeting duly called
and held. The Committee shall keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.

 

3.7   Designation of Consultants/Liability.

 

(a)   To the extent permitted by applicable law and applicable exchange rules,
the Committee may designate employees of the Company and professional advisors
to assist the Committee in the administration of the Plan and may grant
authority to employees to execute agreements or other documents on behalf of the
Committee.

 

(b)   The Committee may employ such legal counsel, consultants, appraisers and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel, appraiser or consultant and any
computation received from any such consultant, appraiser or agent. Expenses
incurred by the Committee in the engagement of any such counsel, consultant,
appraiser or agent shall be paid by the Company. The Board, the Committee, its
members and any employee of the Company designated pursuant to paragraph (a)
above shall not be liable for any action or determination made in good faith
with respect to the Plan. To the maximum extent permitted by applicable law, no
officer or employee of the Company or member or former member of the Committee
or of the Board shall be liable for any action or determination made in good
faith with respect to the Plan or any Award granted under it. To the maximum
extent permitted by applicable law and the Certificate of Incorporation and
By-Laws of the Company and to the extent not covered by insurance, each officer,
employee of the Company and member or former member of the Committee or of the
Board shall be indemnified and held harmless by the Company against any cost or
expense (including reasonable fees of counsel reasonably acceptable to the
Company) or liability (including any sum paid in settlement of a claim with the
approval of the Company), and advanced amounts necessary to pay the foregoing at
the earliest time and to the fullest extent permitted, arising out of any act or
omission to act in connection with the Plan, except to the extent arising out of
such officer’s, employee’s, member’s or former member’s own fraud or bad faith.
Such indemnification shall be in addition to any rights of indemnification the
officers, employees, directors or members or former officers, employees,
directors or members may have under applicable law or under the Certificate of
Incorporation or By-Laws of the Company or Affiliates. Notwithstanding anything
else herein, this indemnification will not apply to the actions or
determinations made by an individual with regard to Awards granted to him or her
under this Plan.

 

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Article 4.

SHARE AND OTHER LIMITATIONS

 

4.1   Shares.

 

(a)   General Limitation.   The aggregate number of shares of Common Stock which
may be issued or used for reference purposes under this Plan or with respect to
which all Awards may be granted shall not exceed 275,263,282 shares effective
upon, and subject to, stockholder approval at the Company’s 2017 annual meeting
of stockholders (265,263,282 shares (adjusted to reflect the two-for-one stock
split approved by stockholders on June 18, 2014) in the event such approval is
not obtained), in each case, subject to any increase or decrease pursuant to
Section 4.2. Any shares of Common Stock that are subject to Restricted Stock
Awards or Other Stock-Based Awards or Performance-Based Awards denominated in
shares of Common Stock granted on or after the date of the Company’s 2015 annual
meeting of stockholders, shall be counted against this limit as 2.15 shares for
every share granted. If any Option or Stock Appreciation Right granted under
this Plan expires, terminates or is canceled for any reason without having been
exercised in full, the number of shares of Common Stock underlying any
unexercised Stock Appreciation Right or Option shall again be available for the
purposes of Awards under the Plan. If a share of Restricted Stock or an Other
Stock-Based Award or a Performance-Based Award denominated in shares of Common
Stock granted under this Plan is forfeited for any reason on or after the date
of the Company’s 2015 annual meeting of stockholders, 2.15 shares of Common
Stock shall again be available for the purposes of Awards under the Plan. If a
Tandem Stock Appreciation Right or a Limited Stock Appreciation Right is granted
in tandem with an Option, such grant shall only apply once against the maximum
number of shares of Common Stock which may be issued under this Plan. The number
of shares of Common Stock available for the purpose of Awards under this Plan
shall be reduced by (i) the total number of Options or Stock Appreciation Rights
exercised, regardless of whether any of the shares of Common Stock underlying
such Awards are not actually issued to the Participant as the result of a net
settlement and (ii) any shares of Common Stock used to pay any exercise price or
tax withholding obligation with respect to any Award. Shares of Common Stock
repurchased by the Company on the open market with the proceeds of an Option
exercise price shall not be added to the aggregate share reserve described
herein.

 

(b)   Individual Participant Limitations.   (i) The maximum number of shares of
Common Stock subject to any Option or any Other Stock-Based Award or
Performance-Based Award denominated in shares of Common Stock for any
Performance Period which may be granted under this Plan during any fiscal year
of the Company to each Eligible Employee shall be 3,000,000 shares (as adjusted
to reflect the two-for-one stock split approved by stockholders on June 18,
2014, subject to any increase or decrease pursuant to Section 4.2); provided,
however, that with respect to any Performance-Based Award or Other Stock-Based
Award with a Performance Period that is less than three consecutive fiscal
years, the maximum number of shares of Common Stock subject to any Other
Stock-Based Award or Performance-Based Award shall be determined by multiplying
3,000,000 by a fraction, the numerator of which is the number of days in the
Performance Period and the denominator of which is 1095.

 

(ii)   The maximum number of shares of Common Stock subject to any Stock
Appreciation Right which may be granted under this Plan during any fiscal year
of the Company to each Eligible Employee shall be 3,000,000 shares (as adjusted
to reflect the two-for-one stock split approved by stockholders on June 18,
2014, subject to any increase or decrease pursuant to Section 4.2). If a Tandem
Stock Appreciation Right or Limited Stock Appreciation Right is granted in
tandem with an Option it shall apply against the Eligible Employee’s individual
share limitations for both Stock Appreciation Rights and Options.

 

(iii)   The maximum payment under any Performance-Based Awards denominated in
dollars under this Plan to each Eligible Employee for any Performance Period
shall be $15,000,000, provided, however, that if the Performance Period is less
than three consecutive fiscal years, the maximum value at grant of
Performance-Based Awards under this subparagraph (iii) shall be determined by
multiplying $15,000,000 by a fraction, the numerator of which is the number of
days in the Performance Cycle and the denominator of which is 1095.

 

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(iv)   There are no annual individual participant limitations on Restricted
Stock or Other Stock-Based Awards that are not intended to comply with the
requirements of Section 162(m) of the Code.

 

(v)   To the extent that shares of Common Stock for which Awards are permitted
to be granted to a Participant pursuant to Section 4.1(b) during a fiscal year
of the Company are not covered by an Award in the Company’s fiscal year, such
shares of Common Stock shall not be available for grant or issuance to the
Participant in any subsequent fiscal year during the term of this Plan.

 

4.2   Changes.

 

(a)   The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company’s capital structure or its business, any merger or
consolidation of the Company or its Affiliates, any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting Common Stock, the
dissolution or liquidation of the Company or its Affiliates, any sale or
transfer of all or part of its assets or business or any other corporate act or
proceeding.

 

(b)   In the event of any such change in the capital structure or business of
the Company by reason of any stock dividend or distribution, stock split or
reverse stock split, recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares, distribution with respect to its
outstanding Common Stock or capital stock other than Common Stock,
reclassification of its capital stock, conversion of the Company’s preferred
stock, issuance of warrants or options to purchase any Common Stock or
securities convertible into Common Stock, any sale or Transfer of all or part of
the Company’s assets or business, or any similar change affecting the Company’s
capital structure or business, then the aggregate number and kind of shares
which thereafter may be issued under this Plan, the number and kind of shares or
other property (including cash) to be issued upon exercise of an outstanding
Option or other Awards granted under this Plan and the purchase price thereof
shall be appropriately adjusted consistent with such change in such manner as
the Committee may deem equitable to prevent substantial dilution or enlargement
of the rights granted to, or available for, Participants under this Plan, and
any such adjustment determined by the Committee in good faith shall be binding
and conclusive on the Company and all Participants and employees and their
respective heirs, executors, administrators, successors and assigns.

 

(c)   Fractional shares of Common Stock resulting from any adjustment in Options
or Awards pursuant to Section 4.2(a) or (b) shall be aggregated until, and
eliminated at, the time of exercise by rounding-down for fractions less than
one-half  (1/2) and rounding-up for fractions equal to or greater than one-half 
(1/2). No fractional shares of Common Stock shall be issued under the Plan, and
no cash settlements shall be made with respect to fractional shares eliminated
by rounding. Notice of any adjustment shall be given by the Committee to each
Participant whose Option or Award has been adjusted and such adjustment (whether
or not such notice is given) shall be effective and binding for all purposes of
the Plan.

 

(d)   In the event of a merger or consolidation in which the Company is not the
surviving entity or in the event of any transaction that results in the
acquisition of substantially all of the Company’s outstanding Common Stock by a
single person or entity or by a group of persons and/or entities acting in
concert, or in the event of the sale or transfer of all or substantially all of
the Company’s assets (all of the foregoing being referred to as “Acquisition
Events”), then the Committee may, in its sole discretion, terminate all
outstanding Options, Stock Appreciation Rights and Other Stock-Based Awards
requiring exercise or similar action by a Participant, effective as of the date
of the Acquisition Event, by delivering notice of termination to each such
Participant at least twenty (20) days prior to the date of consummation of the
Acquisition Event; provided, that during the period from the date on which such
notice of termination is delivered to the consummation of the Acquisition Event,
each such Participant shall have the right to exercise in full all of his or her
Options and Stock Appreciation Rights that are then outstanding (without regard
to any limitations on exercisability otherwise contained in the Option or Award
Agreements) but contingent on occurrence of the Acquisition Event, and, provided
that, if the Acquisition Event does not take place within a specified period
after giving such notice for any reason whatsoever, the notice and exercise
shall be null and void.

 

 8 

 

 

If an Acquisition Event occurs, to the extent the Committee does not terminate
the outstanding Options, Stock Appreciation Rights and Other Stock-Based Awards
pursuant to this Section 4.2(d), then the provisions of Section 4.2(b) shall
apply.

 

4.3   Purchase Price.   Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.

 

4.4   Dividends and Dividend Equivalents.   Any rights granted hereunder after
the Effective Date to a Participant under an Award to receive or retain
dividends or dividend equivalents with respect to the Shares of Common Stock
underlying such Award shall be subject to the same vesting and/or forfeiture
conditions as are applicable to such Award, and the holder of any Stock Option
or Stock Appreciation Right granted after the Effective Date shall not be
entitled to receive dividends or dividend equivalents with respect to the number
of Shares of Common Stock subject to such Stock Option or Stock Appreciation
Right.

 

Article 5.

ELIGIBILITY

 

All management and other employees of the Company and its Affiliates are
eligible to be granted Options, Restricted Stock, Stock Appreciation Rights,
Other Stock-Based Awards and Performance-Based Awards under this Plan.
Non-Employee Directors of the Company are eligible to be granted Non-Qualified
Stock Options and Restricted Stock Units to the extent provided in Article 11.
Participation under this Plan shall be determined by the Committee in its sole
and absolute discretion.

 

Article 6.

STOCK OPTIONS

 

6.1   Options.   Each Stock Option granted hereunder shall be one of two types:
(i) an Incentive Stock Option intended to satisfy the requirements of Section
422 of the Code or (ii) a Non-Qualified Stock Option.

 

6.2   Grants.   The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights). To the extent that any Stock Option does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of its
exercise or otherwise), such Stock Option or the portion thereof which does not
qualify, shall constitute a separate Non-Qualified Stock Option. Notwithstanding
any other provision of this Plan to the contrary or any provision in an
agreement evidencing the grant of an Option to the contrary, any Option granted
to an Eligible Employee of an Affiliate (other than one described in Section
2.1(i) or (ii)) shall be a Non-Qualified Stock Option.

 

6.3   Terms of Options.   Options granted under Article 6 of this Plan shall be
subject to Article 12 and the following terms and conditions, and shall be in
such form and contain such additional terms and conditions, not inconsistent
with the terms of this Plan, as the Committee shall deem desirable:

 

(a)   Option Price.   The option price per share of Common Stock purchasable
under an Incentive Stock Option or a Non-Qualified Stock Option shall be
determined by the Committee at the time of grant but shall not be less than 100%
of the Fair Market Value of the share of Common Stock at the time of grant;
provided, however, if an Incentive Stock Option is granted to a Ten Percent
Stockholder, the purchase price shall not be less than 110% of the Fair Market
Value of the share of Common Stock at the time of grant.

 

(b)   Option Term.   The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10) years
after the date the Option is granted; provided, however, that the term of an
Incentive Stock Option granted to a Ten Percent Stockholder may not exceed five
(5) years.

 

 9 

 

 

(c)   Exercisability.   Stock Options shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the Committee
at grant; provided, however, that Stock Options shall be subject to a minimum
vesting schedule of at least one year from the date of grant, except that the
Committee may provide (but shall have no obligation to do so) for accelerated
vesting prior to the completion of such one-year period upon a Change in Control
or the Participant’s Retirement, Disability, death, layoff pursuant to a
reduction in workforce or Termination of Employment pursuant to a business
acquisition. Notwithstanding the foregoing sentence, subject to the limitations
set forth in Section 4, Awards with respect to up to five percent (5%) of the
total number of shares of Common Stock reserved for Awards under the Plan may be
granted to any Participant (including a Named Executive Officer) without regard
to any minimum vesting requirements.

 

(d)   Method of Exercise.   Subject to whatever installment exercise and waiting
period provisions apply under subsection (c) above, Stock Options may be
exercised in whole or in part at any time during the Option term, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the purchase
price as follows: (i) in cash or by check, bank draft or money order payable to
the order of Company, (ii) if the Common Stock is traded on a national
securities exchange, the Nasdaq Stock Market, Inc. or quoted on a national
quotation system sponsored by the Financial Industry Regulatory Authority,
through the delivery of irrevocable instructions to a broker to deliver promptly
to the Company an amount equal to the purchase price to the extent permitted by
law, (iii) by payment in full or part in the form of Common Stock owned by the
Participant (and for which the Participant has good title free and clear of any
liens and encumbrances) based on the Fair Market Value of the Common Stock on
the payment date as determined by the Committee or the Board or (iv) on such
other terms and conditions as may be acceptable to the Committee or the Board,
as applicable. No shares of Common Stock shall be issued until payment therefor,
as provided herein, has been made or provided for.

 

(e)   Incentive Stock Option Limitations.   To the extent that the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an Eligible Employee during any calendar year under the Plan and/or any other
stock option plan of the Company or any Subsidiary or parent corporation (within
the meaning of Section 424(e) of the Code) exceeds $100,000, such Options shall
be treated as Options which are not Incentive Stock Options. In addition, if an
Eligible Employee does not remain employed by the Company, any Subsidiary or
parent corporation (within the meaning of Section 424(e) of the Code) at all
times from the time the Option is granted until three (3) months prior to the
date of exercise (or such other period as required by applicable law), such
Option shall be treated as an Option which is not an Incentive Stock Option.

 

Should the foregoing provision not be necessary in order for the Stock Options
to qualify as Incentive Stock Options, or should any additional provisions be
required, the Committee may amend the Plan accordingly, without the necessity of
obtaining the approval of the stockholders of the Company.

 

Without the written consent of the Company, no Common Stock acquired by a
Participant upon the exercise of an Incentive Stock Option granted hereunder may
be disposed of by the Participant within two (2) years from the date such
Incentive Stock Option was granted, nor within one (1) year after the transfer
of such Common Stock to the Participant; provided, however, that a transfer to a
trustee, receiver, or other fiduciary in any insolvency proceeding, as described
in Section 422(c)(3) of the Code, shall not be deemed to be such a disposition.

 

(f)   Form of Options.   Subject to the terms and conditions and within the
limitations of the Plan, an Option shall be evidenced by such form of agreement
or grant as is approved by the Committee.

 

(g)   Form of Settlement.   In its sole discretion, the Committee may provide,
at the time of grant, that the shares to be issued upon the exercise of a Stock
Option shall be in the form of Restricted Stock, or may, in the Option
agreement, reserve a right to so provide after the time of grant.

 

(h)   Other Terms and Conditions.   Options may contain such other provisions,
which shall not be inconsistent with any of the foregoing terms of the Plan, as
the Committee shall deem appropriate. With regard to “reloads”, the Committee
shall have the authority (but not an obligation) to include within any Option

 

 10 

 

 

agreement a provision entitling the optionee to a further Option (a “Reload
Option”) if the optionee exercises the Option evidenced by the Option agreement,
in whole or in part, by surrendering other shares of the Company held by the
optionee for at least six (6) months prior to such date of surrender in
accordance with the Plan and the terms and conditions of the Option agreement.
Any Reload Option shall not be an Incentive Stock Option, shall be for a number
of shares equal to the number of surrendered shares, the exercise price thereof
shall be equal to the Fair Market Value of the Common Stock on the date of
exercise of such original Option, shall become exercisable if the purchased
shares are held for a minimum period of time established by the Committee, and
shall be subject to such other terms and conditions as the Committee may
determine. Notwithstanding the foregoing, Stock Options granted on or after
October 1, 2004 shall not permit reloads.

 

(i)   Repricing or Repurchase of Stock Options Prohibited.   Notwithstanding any
other provision of the Plan to the contrary, an outstanding Stock Option may not
be (a) modified to reduce the exercise price thereof nor may a new Stock Option
at a lower price be substituted for a surrendered Stock Option (other than
adjustments or substitutions in accordance with Section 4.2), or (b) repurchased
by the Company if the per share option price of the Stock Option is less than
the Fair Market Value of a share of Common Stock (other than a cancellation for
no value in accordance with Section 4.2(d)), unless such action is approved by
the stockholders of the Company.

 

Article 7.

RESTRICTED STOCK AWARDS

 

7.1   Awards of Restricted Stock.   Shares of Restricted Stock may be issued to
Eligible Employees either alone or in addition to other Awards granted under the
Plan. The Committee shall determine the eligible persons to whom, and the time
or times at which, grants of Restricted Stock will be made, the number of shares
to be awarded, the price (if any) to be paid by the recipient (subject to
Section 7.2), the time or times within which such Awards may be subject to
forfeiture, the vesting schedule and rights to acceleration thereof, and all
other terms and conditions of the Awards. The Committee may condition the grant
of Restricted Stock upon the attainment of specified performance goals or such
other factors as the Committee may determine, in its sole discretion.

 

7.2   Awards and Certificates.   An Eligible Employee selected to receive
Restricted Stock shall not have any rights with respect to such Award, unless
and until such Participant has delivered a fully executed copy of the Restricted
Stock Award agreement evidencing the Award to the Company and has otherwise
complied with the applicable terms and conditions of such Award. Further, such
Award shall be subject to the following conditions:

 

(a)   Purchase Price.   The purchase price of Restricted Stock shall be fixed by
the Committee. Subject to Section 4.3, the purchase price for shares of
Restricted Stock may be the minimum permitted by applicable law.

 

(b)   Acceptance.   Awards of Restricted Stock must be accepted within a period
of ninety (90) days (or such shorter period as the Committee may specify at
grant) after the Award date, by executing a Restricted Stock Award agreement and
by paying whatever price (if any) the Committee has designated thereunder.

 

(c)   Legend.   Each Participant receiving a Restricted Stock Award shall be
issued a stock certificate in respect of such shares of Restricted Stock, unless
the Committee elects to use another system, such as book entries by the transfer
agent, as evidencing ownership of a Restricted Stock Award. Such certificate
shall be registered in the name of such Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:

 

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the Celgene Corporation (the
“Company”) 2008 Stock Incentive Plan, as may be amended from time to time, and
an Agreement entered into between the registered owner and the Company dated
___. Copies of such Plan and Agreement are on file at the principal office of
the Company.”

 

 11 

 

 

(d)   Custody.   The Committee may require that any stock certificates
evidencing such shares be held in custody by the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted Stock
Award, the Participant shall have delivered a duly signed stock power, endorsed
in blank, relating to the Common Stock covered by such Award.

 

7.3   Restrictions and Conditions on Restricted Stock Awards.   The shares of
Restricted Stock awarded pursuant to this Plan shall be subject to Article 12
and the following restrictions and conditions:

 

(a)   Restriction Period; Vesting and Acceleration of Vesting.   (i) The
Participant shall not be permitted to Transfer shares of Restricted Stock
awarded under this Plan during a period set by the Committee (the “Restriction
Period”) commencing with the date of such Award, as set forth in the Restricted
Stock Award agreement and such agreement shall set forth a vesting schedule and
any events which would accelerate vesting of the shares of Restricted Stock;
provided, however, that shares of Restricted Stock shall be subject to a minimum
vesting schedule of at least one year from the date of grant, except that the
Committee may provide (but shall have no obligation to do so) for accelerated
vesting prior to the completion of such one-year period upon a Change in Control
or the Participant’s Retirement, Disability, death, layoff pursuant to a
reduction in workforce or Termination of Employment pursuant to a business
acquisition. Notwithstanding the foregoing sentence, subject to the limitations
set forth in Section 4, Awards with respect to up to five percent (5%) of the
total number of shares of Common Stock reserved for Awards under the Plan may be
granted to any Participant (including a Named Executive Officer) without regard
to any minimum vesting requirements.

 

(ii)   Performance Goals, Formulae or Standards.   If the lapse of restrictions
is based on the attainment of Performance Goals, the Committee shall establish
the Performance Goals and the applicable vesting percentage of the Restricted
Stock Award applicable to each Participant or class of Participants in writing
prior to the beginning of the applicable fiscal year or at such later date as
otherwise determined by the Committee and while the outcome of the Performance
Goals is substantially uncertain. Such Performance Goals may incorporate
provisions for disregarding (or adjusting for) changes in accounting methods,
corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances.

 

(b)   Rights as Stockholder.   Except as provided in this subsection (b) and
subsection (a) above and as otherwise determined by the Committee, the
Participant shall have, with respect to the shares of Restricted Stock, all of
the rights of a holder of shares of Common Stock of the Company including,
without limitation, the right to receive any dividends, the right to vote such
shares and, subject to and conditioned upon the full vesting of shares of
Restricted Stock, the right to tender such shares. Notwithstanding the
foregoing, the payment of dividends shall be deferred until, and conditioned
upon, the expiration of the applicable Restriction Period. Notwithstanding the
foregoing, with respect to any Restricted Stock Award for which vesting is based
on the attainment of Performance Goals, the payment of dividends shall be
deferred until, and conditioned upon, the attainment of the Performance Goals.

 

(c)   Lapse of Restrictions.   If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to such Restriction
Period, the certificates for such shares shall be delivered to the Participant.
All legends shall be removed from said certificates at the time of delivery to
the Participant except as otherwise required by applicable law.

 

Article 8.

STOCK APPRECIATION RIGHTS

 

8.1   Tandem Stock Appreciation Rights.   Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a “Reference Stock
Option”) granted under this Plan (“Tandem Stock Appreciation Rights”). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the grant
of such Reference Stock Option.

 

 12 

 

 

8.2   Terms and Conditions of Tandem Stock Appreciation Rights.   Tandem Stock
Appreciation Rights granted hereunder shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article 12 and the
following:

 

(a)   Term.   A Tandem Stock Appreciation Right or applicable portion thereof
granted with respect to a Reference Stock Option shall terminate and no longer
be exercisable upon the termination or exercise of the Reference Stock Option,
except that, unless otherwise determined by the Committee, in its sole
discretion, at the time of grant, a Tandem Stock Appreciation Right granted with
respect to less than the full number of shares covered by the Reference Stock
Option shall not be reduced until and then only to the extent the exercise or
termination of the Reference Stock Option causes the number of shares covered by
the Tandem Stock Appreciation Right to exceed the number of shares remaining
available and unexercised under the Reference Stock Option.

 

(b)   Exercisability.   Tandem Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Reference Stock Options to
which they relate shall be exercisable in accordance with the provisions of
Article 6 and Article 8.

 

(c)   Method of Exercise.   A Tandem Stock Appreciation Right may be exercised
by an optionee by surrendering the applicable portion of the Reference Stock
Option. Upon such exercise and surrender, the Participant shall be entitled to
receive an amount determined in the manner prescribed in this Section 8.2. Stock
Options which have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent the related Tandem Stock Appreciation Rights have been
exercised.

 

(d)   Payment.   Upon the exercise of a Tandem Stock Appreciation Right a
Participant shall be entitled to receive up to, but no more than, an amount in
Common Stock equal in value to the excess of the Fair Market Value of one share
of Common Stock over the Option price per share specified in the Reference Stock
Option multiplied by the number of shares in respect of which the Tandem Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.

 

(e)   Deemed Exercise of Reference Stock Option.   Upon the exercise of a Tandem
Stock Appreciation Right, the Reference Stock Option or part thereof to which
such Stock Appreciation Right is related shall be deemed to have been exercised
for the purpose of the limitation set forth in Article 4 of the Plan on the
number of shares of Common Stock to be issued under the Plan.

 

8.3   Non-Tandem Stock Appreciation Rights.   Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan.

 

8.4   Terms and Conditions of Non-Tandem Stock Appreciation Rights.   Non-Tandem
Stock Appreciation Rights granted hereunder shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article 12 and the
following:

 

(a)   Term.   The term of each Non-Tandem Stock Appreciation Right shall be
fixed by the Committee, but shall not be greater than ten (10) years after the
date the right is granted.

 

(b)   Exercisability.   Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at grant; provided, however, that Stock
Appreciation Rights shall be subject to a minimum vesting schedule of at least
one year from the date of grant, except that the Committee may provide (but
shall have no obligation to do so) for accelerated vesting prior to the
completion of such one-year period upon a Change in Control or the Participant’s
Retirement, Disability, death, layoff pursuant to a reduction in workforce or
Termination of Employment pursuant to a business acquisition. Notwithstanding
the foregoing sentence, subject to the limitations set forth in Section 4,
Awards with respect to up to five percent (5%) of the total number of shares of
Common Stock reserved for Awards under the Plan may be granted to any
Participant (including a Named Executive Officer) without regard to any minimum
vesting requirements. If the Committee provides, in its discretion, that any
such right is exercisable subject to certain limitations (including, without
limitation, that it is exercisable only in installments or within certain time
periods), the Committee may waive such limitation on the exercisability

 

 13 

 

 

at any time at or after grant in whole or in part (including, without
limitation, that the Committee may waive the installment exercise provisions or
accelerate the time at which rights may be exercised), based on such factors, if
any, as the Committee shall determine, in its sole discretion.

 

(c)   Method of Exercise.   Subject to whatever installment exercise and waiting
period provisions apply under subsection (b) above, Non-Tandem Stock
Appreciation Rights may be exercised in whole or in part at any time during the
option term, by giving written notice of exercise to the Company specifying the
number of Non-Tandem Stock Appreciation Rights to be exercised.

 

(d)   Payment.   Upon the exercise of a Non-Tandem Stock Appreciation Right a
Participant shall be entitled to receive, for each right exercised, up to, but
no more than, an amount in Common Stock equal in value to the excess of the Fair
Market Value of one share of Common Stock on the date the right is exercised
over the Fair Market Value of one (1) share of Common Stock on the date the
right was awarded to the Participant.

 

8.5   Limited Stock Appreciation Rights.   The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a Limited Stock Appreciation Right.
Limited Stock Appreciation Rights may be exercised only upon the occurrence of a
Change in Control or such other event as the Committee may, in its sole
discretion, designate at the time of grant or thereafter. Upon the exercise of
Limited Stock Appreciation Rights, except as otherwise provided in an Award
agreement, the Participant shall receive in cash or Common Stock, as determined
by the Committee, an amount equal to the amount (i) set forth in Section 8.2(d)
with respect to Tandem Stock Appreciation Rights or (ii) set forth in Section
8.4(d) with respect to Non-Tandem Stock Appreciation Rights.

 

8.6   Repricing of Stock Appreciation Rights Prohibited.   Notwithstanding any
other provision of the Plan to the contrary, an outstanding Stock Appreciation
Right may not be modified to reduce the exercise price thereof nor may a new
Stock Appreciation Right at a lower price be substituted for a surrendered Stock
Appreciation Right (other than adjustments or substitutions in accordance with
Section 4.2), unless such action is approved by the stockholders of the Company.

 

Article 9.

OTHER STOCK-BASED AWARDS

 

9.1   Other Awards.   The Committee, in its sole discretion, is authorized to
grant to Eligible Employees Other Stock-Based Awards that are payable in, valued
in whole or in part by reference to, or otherwise based on or related to shares
of Common Stock, including, but not limited to, shares of Common Stock awarded
purely as a bonus and not subject to any restrictions or conditions, shares of
Common Stock in payment of the amounts due under an incentive or performance
plan sponsored or maintained by the Company or an Affiliate, performance units,
dividend equivalent units, stock equivalent units, Restricted Stock Units and
deferred stock units. To the extent permitted by law, the Committee may, in its
sole discretion, permit Eligible Employees to defer all or a portion of their
cash compensation in the form of Other Stock-Based Awards granted under this
Plan, subject to the terms and conditions of any deferred compensation
arrangement established by the Company, which shall be intended to comply with
Section 409A of the Code. Other Stock-Based Awards may be granted either alone
or in addition to or in tandem with other Awards granted under the Plan.

 

Subject to the provisions of this Plan, the Committee shall, in its sole
discretion, have authority to determine the Eligible Employees to whom, and the
time or times at which, such Awards shall be made, the number of shares of
Common Stock to be awarded pursuant to such Awards, and all other conditions of
the Awards. The Committee may also provide for the grant of Common Stock under
such Awards upon the completion of a specified Performance Period.

 

The Committee may condition the grant or vesting of Other Stock-Based Awards
upon the attainment of specified Performance Goals as the Committee may
determine, in its sole discretion; provided that to the extent that such Other
Stock-Based Awards are intended to comply with Section 162(m) of the Code, the
Committee shall

 

 14 

 

 

establish the objective Performance Goals for the vesting of such Other
Stock-Based Awards based on a Performance Period applicable to each Participant
or class of Participants in writing prior to the beginning of the applicable
Performance Period or at such later date as permitted under Section 162(m) of
the Code and while the outcome of the Performance Goals are substantially
uncertain. Such Performance Goals may incorporate, if and only to the extent
permitted under Section 162(m) of the Code, provisions for disregarding (or
adjusting for) changes in accounting methods, corporate transactions (including,
without limitation, dispositions and acquisitions) and other similar type events
or circumstances. To the extent any such provision would create impermissible
discretion under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The applicable
Performance Goals shall be based on one or more of the Performance Criteria set
forth in Exhibit A hereto.

 

9.2   Terms and Conditions.   Other Stock-Based Awards made pursuant to this
Article 9 shall be subject to the following terms and conditions:

 

(a)   Non-Transferability.   Subject to the applicable provisions of the Award
agreement and this Plan, shares of Common Stock subject to Awards made under
this Article 9 may not be Transferred prior to the date on which the shares are
issued, or, if later, the date on which any applicable restriction, performance
or deferral period lapses.

 

(b)   Dividends.   The recipient of an Award under this Article 9 shall not be
entitled to receive, currently or on a deferred basis, dividends or dividend
equivalents with respect to the number of shares of Common Stock covered by the
Award.

 

(c)   Vesting.   Any Award under this Article 9 and any Common Stock covered by
any such Award shall vest or be forfeited to the extent so provided in the Award
agreement, as determined by the Committee, in its sole discretion; provided,
however, that Other Stock-Based Awards not granted upon completion of a
Performance Period shall be subject to a minimum vesting schedule of at least
one year from the date of grant, except that the Committee may provide (but
shall have no obligation to do so) for accelerated vesting prior to the
completion of such one-year period upon a Change in Control or the Participant’s
Retirement, Disability, death, layoff pursuant to a reduction in workforce or
Termination of Employment pursuant to a business acquisition. Notwithstanding
the foregoing sentence, subject to the limitations set forth in Section 4,
Awards with respect to up to five percent (5%) of the total number of shares of
Common Stock reserved for Awards under the Plan may be granted to any
Participant (including a Named Executive Officer) without regard to any minimum
vesting requirements.

 

(d)   Price.   Common Stock issued on a bonus basis under this Article 9 may be
issued for no cash consideration; Common Stock purchased pursuant to a purchase
right awarded under this Article 9 shall be priced, as determined by the
Committee in its sole discretion.

 

(e)   Payment.   Form of payment for the Other Stock-Based Award shall be
specified in the Award agreement, and may consist of cash, shares of Common
Stock or a combination thereof as determined by the Committee in its sole
discretion.

 

Article 10.

PERFORMANCE-BASED AWARDS

 

10.1   Performance-Based Awards.   Performance-Based Awards may be granted
either alone or in addition to or in tandem with Stock Options, Stock
Appreciation Rights, or Restricted Stock. Subject to the provisions of this
Plan, the Committee shall have authority to determine the persons to whom and
the time or times at which such Awards shall be made, the number of shares of
Common Stock or dollar amount to be awarded pursuant to such Awards, and all
other conditions of the Awards. The Committee may also provide for the grant of
Common Stock or payment of dollar amount under such Awards upon the completion
of a specified Performance Period.

 

For each Participant, the Committee may specify a targeted performance award.
The individual target award may be expressed, at the Committee’s discretion, as
a fixed dollar amount, a percentage of base pay or total pay

 

 15 

 

 

(excluding payments made under the Plan), or an amount determined pursuant to an
objective formula or standard. Establishment of an individual target award for a
Participant for a calendar year shall not imply or require that the same level
individual target award (if any such award is established by the Committee for
the relevant Participant) be set for any subsequent calendar year. At the time
the Performance Goals are established, the Committee shall prescribe a formula
to determine the percentages (which may be greater than one-hundred percent
(100%)) of the individual target award which may be payable based upon the
degree of attainment of the Performance Goals during the calendar year.
Notwithstanding anything else herein, the Committee may, in its sole discretion,
elect to pay a Participant an amount that is less than the Participant’s
individual target award (or attained percentage thereof) regardless of the
degree of attainment of the Performance Goals; provided that no such discretion
to reduce an Award earned based on achievement of the applicable Performance
Goals shall be permitted for the calendar year in which a Change in Control of
the Company occurs, or during such calendar year with regard to the prior
calendar year if the Awards for the prior calendar year have not been made by
the time of the Change in Control of the Company, with regard to individuals who
were Participants at the time of the Change in Control of the Company.

 

10.2   Terms and Conditions.   Performance-Based Awards made pursuant to this
Article 10 shall be subject to the following terms and conditions:

 

(a)   Dividends.   Upon the expiration of the Performance Period and conditioned
upon the attainment of the Performance Goals, the recipient of an Award under
this Article 10 shall be entitled to receive dividends that are issued during
the Performance Period, or dividend equivalents with respect thereto, with
respect to the number of shares of Common Stock covered by the Award, unless the
Committee determines that no dividends shall be paid.

 

(b)   Vesting.   Any Award under this Article 10 and any Common Stock covered by
any such Award shall vest or be forfeited to the extent so provided in the Award
agreement, as determined by the Committee, in its sole discretion; provided,
however, that such Awards of Common Stock not granted upon completion of a
Performance Period shall be subject to a minimum vesting schedule of at least
one year from the date of grant, except that the Committee may provide (but
shall have no obligation to do so) for accelerated vesting prior to the
completion of such one-year period upon a Change in Control or the Participant’s
Retirement, Disability, death, layoff pursuant to a reduction in workforce or
Termination of Employment pursuant to a business acquisition. Notwithstanding
the foregoing sentence, subject to the limitations set forth in Section 4,
Awards with respect to up to five percent (5%) of the total number of shares of
Common Stock reserved for Awards under the Plan may be granted to any
Participant (including a Named Executive Officer) without regard to any minimum
vesting requirements.

 

(c)   Waiver of Limitation.   Subject to the limitations of Section 10.2(b), in
the event of a Change in Control or the Participant’s Retirement, Disability,
death or involuntary termination without Cause, the Committee may, in its sole
discretion, waive in whole or in part any or all of the limitations imposed
hereunder (if any) with respect to any or all of an Award under this Article.

 

(d)   Purchase Price.   Subject to Section 4.3, Common Stock issued on a bonus
basis under this Article 10 may be issued for no cash consideration; Common
Stock purchased pursuant to a purchase right awarded under this Article 10 shall
be priced as determined by the Committee.

 

(e)   Performance Goals, Formulae or Standards.   (i) The Committee shall
establish the Performance Goals and the individual target award (if any) in
writing prior to the beginning of the applicable Performance Period or at such
later date as otherwise determined by the Committee and while the outcome of the
Performance Goals is substantially uncertain. Such Performance Goals may
incorporate provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. To the extent any
Performance-Based Award is intended to comply with the provisions of Section
162(m) of the Code, if any provision would create impermissible discretion under
Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such
provision shall be of no force or effect.

 

(ii)   The measurements used in Performance Goals set under the Plan shall be
determined in accordance with Generally Accepted Accounting Principles (“GAAP”),
except, to the extent that any

 

 16 

 

 

objective Performance Goals are used, if any measurements require deviation from
GAAP, such deviation shall be at the discretion of the Committee at the time the
Performance Goals are set or at such later time to the extent permitted under
Section 162(m) of the Code.

 

(f)   Committee Certification.   At the expiration of the Performance Period,
the Committee shall determine and certify in writing the extent to which the
Performance Goals have been achieved.

 

Article 11.

AWARDS FOR NON-EMPLOYEE DIRECTORS

 

The terms and conditions of this Article 11 shall apply to Awards granted to
Non-Employee Directors under the Plan.

 

11.1   Grants to Non-Employee Directors.

 

(a)   General.   The Committee may grant Non-Qualified Stock Options and
Restricted Stock Units to Non-Employee Directors from time to time as determined
in its sole and absolute discretion, subject to any limitations set forth in
Section 11.1(b).

 

(b)   Non-Employee Director Award Limitations.   During each Compensation Year
(as defined below) that commences in calendar years 2015 through 2018, Awards of
Non-Qualified Stock Options and Restricted Stock Units that are granted to
Non-Employee Directors under the Plan shall have an aggregate value not in
excess of the equivalent of 7,500 Restricted Stock Units (subject to any
increase or decrease pursuant to Section 4.2) (treating each Restricted Stock
Unit solely for this purpose as having the equivalent value of one Non-Qualified
Stock Option to purchase three (3) shares of Common Stock). As used herein, a
“Compensation Year” means the period beginning immediately after the occurrence
of the annual meeting of the Company’s stockholders in a given calendar year and
ending immediately prior to the occurrence of the annual meeting of the
Company’s stockholders in the immediately subsequent calendar year.

 

11.2   Deferral Election.

 

(a)   General.   A Non-Employee Director may elect to defer the payment of
Restricted Stock Units (“Deferral Election”) in a manner specified by the
Committee and in accordance with this Section 11.2. If a Deferral Election is
not timely made in accordance with this Section 11.2, such Deferral Election
shall be considered void and shall have no effect, and a Non-Employee Director’s
Restricted Stock Units shall be paid in the form of shares of Common Stock on
the earliest to occur: (i) a Non-Employee Director’s death; (ii) a Non-Employee
Director’s Disability; (iii) a Non-Employee Director’s Retirement; (iv) a
Non-Employee Director’s “separation from service” within the meaning of Code
Section 409A; and (v) a Change in Control.

 

(b)   Deferral Election.   Unless otherwise determined by the Committee, but
subject to the requirements of Code Section 409A, any Deferral Election must be
made on or prior to the date of grant of Restricted Stock Units and thereafter,
such Deferral Election shall become irrevocable. Notwithstanding the foregoing,
a Non-Employee Director may modify a Deferral Election provided that: (i) a
subsequent Deferral Election does not take effect for at least twelve (12)
months after the modification is made; (ii) the modification is made at least
twelve (12) months prior to the date the Restricted Stock Units would otherwise
have been paid pursuant to the initial Deferral Election; and (iii) the payment
date of the Restricted Stock Units is at least five (5) years beyond the payment
date specified in the initial Deferral Election.

 

(c)   Payment.   Restricted Stock Units deferred in accordance with this Section
11.2 shall be paid in the form of shares of Common Stock on the earliest to
occur: (i) the payment date specified in a Deferral Election; (ii) a
Non-Employee Director’s death; (iii) a Non-Employee Director’s Disability; (iv)
a Non-Employee Director’s Retirement; (v) a Non-Employee Director’s “separation
from service” within the meaning of Code Section 409A; and (vi) a Change in
Control. Any dividends or dividend equivalents payable that a Non-Employee may
be entitled to receive pursuant to an Award of Restricted Stock Units shall be
paid at the same time as the applicable Restricted Stock Units are paid to the
Non-Employee Director.

 

 17 

 

 

11.3   Vesting.

 

(a)   Options.   With respect to Non-Qualified Stock Options granted to a
Non-Employee Director:

 

(i)   Any grant made to a Non-Employee Director upon the date of the
Non-Employee Director’s initial election or appointment as a member of the Board
(an “Initial Option Grant”) shall vest in four (4) equal annual installments,
with the first (1st) installment vesting on the first (1st) anniversary of the
date of grant and the remaining installments vesting on each of the next three
(3) anniversaries of the date of grant; provided that the holder thereof has
been a Non-Employee Director of the Company at all times through such date.
Notwithstanding the forgoing, if a Non-Employee Director fails to stand for
election at an annual meeting of the Company’s stockholders and such annual
meeting occurs prior to the vesting date for the annual installment of such
Initial Option Grant that otherwise would have vested in the year of such annual
meeting, then such installment shall vest on the day preceding such annual
meeting; provided that the holder thereof has been a Non-Employee Director of
the Company at all times through such date.

 

(ii)   Any grants made on and after an annual meeting to the Non-Employee
Directors who were elected at such annual meeting and are continuing as members
of the Board as of the completion of such annual meeting (an “Annual Option
Grant”) shall vest in full on the earlier of  (A) the day preceding the date of
the first (1st) annual meeting held following the date of grant; and (B) the
first (1st) anniversary of the date of grant of the Award, provided that, in
each case, the holder thereof has been a Non-Employee Director of the Company at
all times through such date.

 

(iii)   Notwithstanding the foregoing, any Initial Option Grant and Annual
Option Grant made to a Non-Employee Director shall become fully vested and
exercisable effective upon: (A) the Non-Employee Director’s Disability or death
or, subject to the Committee’s approval (which it may give in its sole
discretion), upon any other “separation from service” (within the meaning of
Code Section 409A) of the Non-Employee Director; (B) solely with respect to any
Initial Option Grant and Annual Option Grant made to a Non-Employee Director on
or following the 2015 Restatement Effective Date, the Non-Employee Director’s
Termination of Directorship, due to the failure to stand for reelection, failure
to be reelected or removal or resignation at the request or instruction of a
person or entity effecting the Change in Control, in each case occurring on or
after the occurrence of a Change in Control; or (C) solely with respect to any
Initial Option Grant and Annual Option Grant made to a Non-Employee Director
prior the 2015 Restatement Effective Date, the occurrence of a Change in
Control.

 

(b)   Restricted Stock Units.   One-third (1/3) of the Restricted Stock Units
granted to Non-Employee Directors shall vest on each of the first (1st), second
(2nd) and third (3rd) anniversaries of the date of grant, provided that the
holder thereof has not had a Termination of Directorship at any time prior to
each such date; provided, however, that unvested Restricted Stock Units shall
become fully vested effective upon: (i) the Non-Employee Director’s Retirement,
Disability or death or, subject to the Committee’s approval (which it may give
in its sole discretion), upon any other “separation from service” (within the
meaning of Code Section 409A) of the Non-Employee Director; (ii) solely with
respect to any Restricted Stock Units granted to a Non-Employee Director on or
following the 2015 Restatement Effective Date, the Non-Employee Director’s
Termination of Directorship, due to the failure to stand for reelection, failure
to be reelected or removal or resignation at the request or instruction of a
person or entity effecting the Change in Control, in each case occurring on or
after the occurrence of a Change in Control,; or (iii) solely with respect to
any Restricted Stock Units granted made to a Non-Employee Director prior the
2015 Restatement Effective Date, the occurrence of a Change in Control.
Notwithstanding the foregoing sentence, subject to the limitations set forth in
Section 4, Awards with respect to up to five percent (5%) of the total number of
shares of Common Stock reserved for Awards under the Plan may be granted to any
Participant without regard to any limit on accelerated vesting.

 

(c)   Impact of Change in Control and Substitution of Awards.   Solely with
respect to Awards granted to Non-Employee Directors on or after the 2015
Restatement Effective Date, in the event of a Change in Control, such Awards,
whether or not then vested, shall be continued, assumed, have new rights
substituted therefor or

 

 18 

 

 

be treated in accordance with Section 4.2(d) hereof, and to the extent such
Awards are not so continued, assumed, substituted therefor or treated in
accordance with Section 4.2(d), such Awards shall be purchased by the Company or
an Affiliate of the Company for cash in accordance with Section 13.1(b)(ii).
Solely with respect to Awards granted to Non-Employee Directors prior to the
2015 Restatement Effective Date, such Awards shall be treated in accordance with
Section 13.1, subject to full vesting on a Change in Control in accordance with
Section 11.3(a)(3)(C) and Section 11.3(b)(iii).

 

11.4   Exercisability; Method of Exercise.

 

(a)   Unless otherwise determined by the Committee at the time of grant, vested
Stock Options shall be exercisable by the Non-Employee Director (or by the
Non-Employee Director’s legal representative or the legal representative of the
Non-Employee Director’s estate, as applicable) at any time following the
applicable vesting date to the extent permitted in Section 12.3.

 

(b)   To the extent vested, a Stock Option may be exercised in whole or in part
at any time during the Option term (subject to Section 12.3), by giving written
notice of exercise to the Committee (or its designee) specifying the number of
shares of Common Stock to be purchased. Such notice shall be in a form
acceptable to the Committee and shall be accompanied by payment in full of the
purchase price as follows: (i) in cash or by check, bank draft or money order
payable to the order of the Company; (ii) solely to the extent permitted by
applicable law and authorized by the Committee, if the Common Stock is traded on
a national securities exchange or quoted on a national quotation system
sponsored by the Financial Industry Regulatory Authority, through a procedure
whereby the Non-Employee Director (or by the Non-Employee Director’s legal
representative or the legal representative of the Non-Employee Director’s
estate, as applicable, and as permitted by Section 12.3) delivers irrevocable
instructions to a broker reasonably acceptable to the Committee to deliver
promptly to the Company an amount equal to the purchase price; or (iii) on such
other terms and conditions as may be acceptable to the Committee (including the
relinquishment of Stock Options or by payment in full or in part in the form of
Common Stock owned by the Non-Employee Director (for which the Non-Employee
Director has good title free and clear of any liens and encumbrances)). No
shares of Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided for.

 

11.5   Terms.   Except as otherwise provided in this Article 11, any
Non-Qualified Stock Option granted under this Article 11 shall be subject to the
terms and conditions set forth in Sections 6.3 and 12.3, and any Restricted
Stock Unit granted under this Article 11 shall be subject to the terms and
conditions set forth in Sections 9.2 and 12.3.

 

Article 12.

NON-TRANSFERABILITY AND TERMINATION PROVISIONS

 

The terms and conditions of this Article 12 shall apply to Awards under this
Plan as follows:

 

12.1   Nontransferability.   No Stock Option, Stock Appreciation Right or
Performance-Based Award shall be Transferable by the Participant otherwise than
by will or by the laws of descent and distribution. All Stock Options and all
Stock Appreciation Rights shall be exercisable, during the Participant’s
lifetime, only by the Participant or his or her legal guardian or
representative. Tandem Stock Appreciation Rights shall be Transferable, solely
to the extent permitted above, only with the underlying Stock Option. In
addition, except as provided above, no Stock Option shall be Transferred
(whether by operation of law or otherwise), and no Stock Option shall be subject
to execution, attachment or similar process. Upon any attempt to Transfer any
Stock Option, or in the event of any levy upon any Stock Option by reason of any
execution, attachment or similar process contrary to the provisions hereof, such
Stock Option shall immediately terminate and become null and void.
Notwithstanding the foregoing, the Committee may determine at the time of grant
or thereafter that a Non-Qualified Stock Option that is otherwise not
Transferable pursuant to this Article 12 is Transferable to a Family Member in
whole or in part and in such circumstances, and under such conditions, as
specified by the Committee. A Non-Qualified Stock Option which is Transferred to
a Family Member pursuant to the preceding sentence may not be subsequently
Transferred by such Family Member. Shares of Restricted Stock under Article 7
may not be Transferred prior to the date on which shares are issued, or, if
later, the date on which any applicable restriction, performance or deferral
period lapses. No Award shall, except as otherwise specifically provided by law
or herein, be Transferable in any manner, and any attempt to

 

 19 

 

 

Transfer any such Award shall be void, and no such Award shall in any manner be
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any person who shall be entitled to such Award, nor shall it be subject to
attachment or legal process for or against such person.

 

12.2   Termination of Employment.   The following rules apply with regard to the
Termination of Employment of a Participant:

 

(a)   Termination by Reason of Death.   If a Participant’s Termination of
Employment is by reason of death, any Stock Option or Stock Appreciation Right
held by such Participant, unless otherwise determined by the Committee at grant
or, if no rights of the Participant’s estate are reduced, thereafter, may be
exercised, to the extent exercisable at the Participant’s death, by the legal
representative of the estate, at any time within a period of one (1) year from
the date of such death, but in no event beyond the expiration of the stated term
of such Stock Option or Stock Appreciation Right.

 

(b)   Termination by Reason of Retirement or Disability.   If a Participant’s
Termination of Employment is by reason of Retirement or Disability, any Stock
Option or Stock Appreciation Right held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant are
reduced, thereafter, may be exercised, to the extent exercisable at the
Participant’s termination (or solely with respect to Stock Options or Stock
Appreciation Rights granted on or after September 1, 2007, to the extent
exercisable at the Participant’s termination or thereafter if the Participant
provides the Committee or its designee with not less than six (6) months written
notice of the Participant’s intent to terminate the Participant’s service with
the Company and its Affiliates by reason of Retirement, such Stock Options or
Stock Appreciation Rights continue to become exercisable (vested) following the
Participant’s Termination of Employment by reason of Retirement as if the
Participant had remained an employee of the Company), by the Participant (or the
Participant’s legal representative to the extent permitted under Section 16.11
or the legal representative of the Participant’s estate if the Participant dies
after termination) at any time within a period (the “Retirement or Disability
Period”) which is the shorter of  (i) up to ten (10) years after the date of
grant of such Stock Option or Stock Appreciation Right, such period to be set on
a case by case basis by the Committee, or (ii) three (3) years from the date of
such termination; provided, however, that, if the Participant dies within such
Retirement or Disability Period, any unexercised Stock Option or Stock
Appreciation Right held by such Participant shall thereafter be exercisable, to
the extent to which it was exercisable at the time of death, for a period of one
(1) year (or such other period as the Committee may specify at grant or, if no
rights of the Participant’s estate are reduced, thereafter) from the date of
such death, but in no event beyond the expiration of the stated term of such
Stock Option or Stock Appreciation Right.

 

(c)   Voluntary Resignation or Involuntary Termination Without Cause.   If a
Participant’s Termination of Employment is due to a voluntary resignation or by
involuntary termination without Cause and such termination occurs prior to, or
more than ninety (90) days after, the occurrence of an event which would be
grounds for Termination of Employment by the Company for Cause (without regard
to any notice or cure period requirements), any Stock Option or Stock
Appreciation Right held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant are reduced, thereafter,
may be exercised, to the extent exercisable at termination, by the Participant
at any time within a period of ninety (90) days from the date of such
termination, but in no event beyond the expiration of the stated term of such
Stock Option or Stock Appreciation Right.

 

(d)   Termination for Cause.   Unless otherwise determined by the Committee at
grant or, if no rights of the Participant are reduced, thereafter, if a
Participant’s Termination of Employment is for Cause for any reason, any Stock
Option or Stock Appreciation Right held by such Participant shall thereupon
terminate and expire as of the date of termination. In the event the termination
is an involuntary termination without Cause or is a voluntary resignation within
ninety (90) days after occurrence of an event which would be grounds for
Termination of Employment by the Company for Cause (without regard to any notice
or cure period requirement), any Stock Option or Stock Appreciation Right held
by the Participant at the time of occurrence of the event which would be grounds
for Termination of Employment by the Company for Cause shall be deemed to have
terminated and expired upon occurrence of the event which would be grounds for
Termination of Employment by the Company for Cause.

 

 20 

 

 

(e)   Termination of Employment for Restricted Stock.   Subject to the
applicable provisions of the Restricted Stock Award agreement and this Plan,
upon a Participant’s Termination of Employment for any reason during the
relevant Restriction Period, all Restricted Stock still subject to restriction
will vest or be forfeited in accordance with the terms and conditions
established by the Committee at grant or thereafter.

 

(f)   Termination of Employment for Other Stock-Based Awards and
Performance-Based Awards.   Subject to the applicable provisions of the Award
agreement and this Plan, upon a Participant’s Termination of Employment for any
reason, the Other Stock-Based Award or Performance-Based Award in question will
vest or be forfeited or be payable in accordance with the terms and conditions
established by the Committee at grant or thereafter. Notwithstanding the
foregoing, unless otherwise determined by the Committee at grant, or, if no
rights of the Participant are reduced, thereafter, if the Participant’s
Termination of Employment is by reason of Retirement and the Participant
provides the Committee or its designee with not less than six months written
notice of the Participant’s intent to terminate the Participant’s service with
the Company, the unvested portion, if any, of the Participant’s Award of
Restricted Stock Units shall be deemed to be vested in full on the date of the
Participant’s Termination of Employment by reason of Retirement, provided, that
payment of the Restricted Stock Unit shall not be made on such date, but shall
be made in accordance with the payment schedule set forth in the applicable
Award agreement.

 

12.3   Termination of Directorship.

 

(a)   Termination of Directorship other than for Cause.   Unless otherwise
determined by the Committee at grant, or if no rights of the Participant are
reduced, thereafter, upon a Non-Employee Director’s Termination of Directorship
for any reason, any unvested Stock Option or Restricted Stock Unit held by such
Non-Employee Director shall thereupon terminate and expire as of the date of
Termination of Directorship, except as expressly set forth in Article 11.
Notwithstanding the foregoing, in the event of a Non-Employee Director’s
Termination of Directorship for any reason other than due to a Termination of
Directorship for Cause, a Non-Employee Director (or the Non-Employee Director’s
legal representative to the extent permitted under Section 16.11 or the legal
representative of the Non-Employee Director’s estate, as the case may be) may
exercise any Stock Option that was exercisable on the date of such Termination
of Directorship for a period of three (3) years from such Termination of
Directorship, but in no event beyond the expiration of the stated term of such
Stock Option.

 

(b)   Termination of Directorship for Cause.   In the event of a Non-Employee
Director’s Termination of Directorship for Cause, all outstanding Awards
(whether vested or unvested) shall be forfeited and cancelled for no
consideration.

 

Article 13.

CHANGE IN CONTROL PROVISIONS

 

13.1   Benefits.   In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Award:

 

(a)   Awards granted to Participants prior to July 1, 2011, shall be treated in
accordance with the terms of the Plan as in effect prior to such date; and

 

(b)   Awards granted to Participants on or after July 1, 2011, shall not vest
upon a Change in Control and upon the Change in Control a Participant’s Awards
shall be treated in accordance with one of the following methods as determined
by the Committee in its sole discretion:

 

(i)   Awards, whether or not then vested, shall be continued, assumed, have new
rights substituted therefor or be treated in accordance with Section 4.2(d)
hereof, as determined by the Committee in its sole discretion, and restrictions
to which any shares of Restricted Stock or any other Award granted prior to the
Change in Control are subject shall not lapse upon a Change in Control and the
Restricted Stock or other Award shall, where appropriate in the sole discretion
of the Committee, receive the same distribution as other Common Stock on such
terms as determined by the Committee; provided that, the

 

 21 

 

 

Committee may, in its sole discretion, decide to award additional Restricted
Stock or other Award in lieu of any cash distribution. Notwithstanding anything
to the contrary herein, for purposes of Incentive Stock Options, any assumed or
substituted Stock Option shall comply with the requirements of Treasury
Regulation § 1.424-1 (and any amendments thereto).

 

(ii)   The Committee, in its sole discretion, may provide for the purchase of
any Awards by the Company or an Affiliate for an amount of cash equal to the
excess of the Change in Control Price (as defined below) of the shares of Common
Stock covered by such Awards, over the aggregate exercise price of such Awards.
For purposes of this Section 13.1(b)(ii), “Change in Control Price” shall mean
the highest price per share of Common Stock paid in any transaction related to a
Change in Control of the Company; provided, however, that such price shall not
exceed the fair market value of the Common Stock at the time of purchase as
determined in accordance Section 409A of the Code.

 

(iii)   The Committee may, in its sole discretion, provide for the cancellation
of any Appreciation Awards (as defined below) without payment, if the Change in
Control Price is less than the exercise price of such Appreciation Award.
“Appreciation Award” shall mean any Award under this Plan of any Stock Option,
Stock Appreciation Right or Other Stock-Based Award, provided that such Other
Stock-Based Award is based on the appreciation in value of a share of Common
Stock in excess of an amount equal to at least the Fair Market Value of the
Common Stock on the date such Other Stock-Based Award is granted.

 

(iv)   Notwithstanding anything else herein, in the event an Award is not
continued, assumed or have new rights substituted therefor, the Committee may,
in its sole discretion, provide for accelerated vesting or lapse of restrictions
of such Award at any time; provided, that, if such Award is subject to vesting
based on the attainment of Performance Goals, any vesting and/or payout of such
Award shall be determined based on the higher of  (A) the Committee’s
determination and certification of the extent to which such Performance Goals
have been achieved and (B) deemed achievement of all relevant Performance Goals
at the “target” level prorated based on service during the performance period
that has elapsed prior to the Change in Control.

 

(c)   Notwithstanding anything herein to the contrary, if a Participant has an
involuntary Termination without Cause at any time during the two (2) year period
commencing on a Change in Control, then all outstanding Awards of such
Participant that were granted to the Participant on or after July 1, 2011 and
prior to the Change in Control (including any Award granted to the Participant
in substitution of any such Award pursuant to Section 13.1(b)(i) above) shall be
fully vested on the date of such Termination and any such Awards that provide
for Participant elected exercise (i.e. Stock Options) shall be immediately
exercisable in their entirety on the date of such Termination; provided,
however, if any Award is subject to vesting based on the attainment of
Performance Goals, the vesting and/or payout of such Award shall be determined
based on the higher of  (A) the Committee’s determination and certification of
the extent to which such Performance Goals have been achieved, and (B) deemed
achievement of all relevant Performance Goals at the “target” level prorated
based on service during the performance period that has elapsed prior to the
Change in Control.

 

13.2   Change in Control.   A “Change in Control” shall mean the occurrence of
any of the following:

 

(a)   any person (as defined in Section 3(a)(9) of the Exchange Act and as used
in Sections 13(d) and 14(d) thereof), excluding the Company, any subsidiary of
the Company and any employee benefit plan sponsored or maintained by the Company
or any subsidiary of the Company (including any trustee of any such plan acting
in his capacity as trustee), becoming the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act) of securities of the Company representing thirty
percent (30%) of the total combined voting power of the Company’s then
outstanding securities;

 

(b)   the merger, consolidation or other business combination of the Company (a
“Transaction”), other than (A) a Transaction involving only the Company and one
or more of its subsidiaries, or (B) a Transaction immediately following which
the stockholders of the Company immediately prior to the Transaction continue to
have a majority of the voting power in the resulting entity and no person (other
than those covered by the

 

 22 

 

 

exceptions in (a) above) becomes the beneficial owner of securities of the
resulting entity representing more than twenty-five percent (25%) of the voting
power in the resulting entity;

 

(c)   during any period of two (2) consecutive years beginning on or after the
Effective Date, the persons who were members of the Board immediately before the
beginning of such period (the “Incumbent Directors”) ceasing (for any reason
other than death) to constitute at least a majority of the Board or the board of
directors of any successor to the Company, provided that, any director who was
not a director as of the Effective Date shall be deemed to be an Incumbent
Director if such director was elected to the board of directors by, or on the
recommendation of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors either actually or by prior operation
of the foregoing unless such election, recommendation or approval occurs as a
result of an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act or any
successor provision) or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than a member of the Board; or

 

(d)   the approval by the stockholders of the Company of any plan of complete
liquidation of the Company or an agreement for the sale of all or substantially
all of the Company’s assets other than the sale of all or substantially all of
the assets of the Company to a person or persons who beneficially own, directly
or indirectly, at least fifty percent (50%) or more of the combined voting power
of the outstanding voting securities of the Company at the time of such sale.

 

Notwithstanding any other provision of the Plan to the contrary, to the extent
that Awards under the Plan subject to Section 409A of the Code are payable upon
a Change in Control, an event shall not be considered to be a Change in Control
under the Plan with respect to such Awards unless such event is also a “change
in ownership,” a “change in effective control” or a “change in the ownership of
a substantial portion of the assets” of the Company within the meaning of
Section 409A of the Code. Notwithstanding any other provision of the Plan to the
contrary other than the foregoing sentence, for purposes of the payment of
Restricted Stock Units under Sections 11.2(a) and 11.2(c), a Change in Control
shall mean a “change in control” as such term is defined in the Celgene
Corporation 2005 Deferred Compensation Plan, as amended.

 

Article 14.

TERMINATION OR AMENDMENT OF THE PLAN

 

Notwithstanding any other provision of this Plan, the Board may at any time, and
from time to time, amend, in whole or in part, any or all of the provisions of
the Plan, or suspend or terminate it entirely, retroactively or otherwise;
provided, however, that, unless otherwise required by law or specifically
provided herein, the rights of a Participant with respect to Awards granted
prior to such amendment, suspension or termination, may not be impaired without
the consent of such Participant and, provided further, without the approval of
the stockholders of the Company in accordance with the laws of the State of
Delaware and the exchange or system on which the Company’s securities are then
listed or traded, to the extent required by the applicable provisions of Rule
16b-3 or Section 162(m) of the Code, or, with regard to Incentive Stock Options,
Section 422 of the Code, no amendment may be made which would (i) increase the
aggregate number of shares of Common Stock that may be issued under this Plan or
the maximum individual Participant limitations under Section 4.1(b), (ii) change
the classification of employees eligible to receive Awards under this Plan,
(iii) decrease the minimum option price of any Stock Option, (iv) extend the
maximum option period under Section 6.3, (v) require stockholder approval in
order for the Plan to continue to comply with the applicable provisions of Rule
16b-3 or Section 162(m) of the Code, or, with regard to Incentive Stock Options,
Section 422 of the Code or (vi) materially alter the Performance Criteria set
forth in Exhibit A. In no event may the Plan be amended without the approval of
the stockholders of the Company in accordance with the applicable laws or other
requirements to increase the aggregate number of shares of Common Stock that may
be issued under the Plan, other than adjustments or substitutions in accordance
with Section 4.2, decrease the minimum option price of any Stock Option, or to
make any other amendment that would require stockholder approval under the rules
of any exchange or system on which the Company’s securities are listed or traded
at the request of the Company.

 

 23 

 

 

The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article 4 above or as otherwise
specifically provided herein, no such amendment or other action by the Committee
shall impair the rights of any holder without the holder’s consent.

 

Article 15.

UNFUNDED STATUS OF PLAN

 

This Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company.

 

Article 16.

GENERAL PROVISIONS

 

16.1   Legend.   The Committee may require each person receiving shares of
Common Stock pursuant to an Award under the Plan to represent to and agree with
the Company in writing that the Participant is acquiring the shares without a
view to distribution thereof, and that any subsequent offer for sale or sale of
any such shares of Common Stock shall be made either pursuant to (i) a
registration statement on an appropriate form under the Securities Act of 1933,
which registration statement shall have become effective and shall be current
with respect to the shares of Common Stock being offered and sold, or (ii) a
specific exemption from the registration requirements of the Securities Act of
1933, and that in claiming such exemption the Participant will, prior to any
offer for sale or sale of shares of Common Stock, obtain a favorable written
opinion, satisfactory in form and substance to the Company, from counsel
acceptable to the Company as to the availability of such exception. In addition
to any legend required by this Plan, the certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on Transfer.

 

All certificates for shares of Common Stock delivered under the Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

 

16.2   Other Plans.   Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and, such arrangements may be
either generally applicable or applicable only in specific cases.

 

16.3   No Right to Employment/Directorship.   Neither this Plan nor the grant of
any Award hereunder shall give any Participant or other employee or Non-Employee
Director any right with respect to continuance of employment or directorship by
the Company or any Affiliate, nor shall there be a limitation in any way on the
right of the Company or any Affiliate by which a Participant is employed or
retained to terminate his employment or directorship at any time.

 

16.4   Withholding of Taxes.   The Company shall have the right to deduct from
any payment to be made to a Participant, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Upon the vesting of Restricted Stock (or other
Award that is taxable upon vesting), or upon making an election under Section
83(b) of the Code, a Participant shall pay all required withholding to the
Company.

 

At the discretion of the Committee, any such statutorily required withholding
obligation with regard to any Participant may be satisfied by reducing the
number of shares of Common Stock otherwise deliverable or by delivering shares
of Common Stock already owned. Any fraction of a share of Common Stock required
to satisfy such tax obligations shall be disregarded and the amount due shall be
paid instead in cash by the Participant.

 

 24 

 

 

16.5   Listing and Other Conditions.

 

(a)   As long as the Common Stock is listed on a national securities exchange or
system sponsored by a national securities association, the issue of any shares
of Common Stock pursuant to an Award shall be conditioned upon such shares being
listed on such exchange or system. The Company shall have no obligation to issue
such shares unless and until such shares are so listed, and the right to
exercise any Option with respect to such shares shall be suspended until such
listing has been effected.

 

(b)   If at any time counsel to the Company shall be of the opinion that any
sale or delivery of shares of Common Stock pursuant to an Award is or may in the
circumstances be unlawful or result in the imposition of excise taxes on the
Company, in either case, under the statutes, rules, or regulations of any
applicable jurisdiction, governmental authority or national securities exchange,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act of 1933, as amended, or otherwise with respect to
shares of Common Stock or Awards, and the right to exercise any Option shall be
suspended until, in the opinion of said counsel, such sale or delivery shall be
lawful or will not result in the imposition of excise taxes on the Company.

 

(c)   Upon termination of any period of suspension under this Section 16.5, any
Award affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all shares available before such suspension
and as to shares which would otherwise have become available during the period
of such suspension, but no such suspension shall extend the term of any Option.

 

(d)   A Participant shall be required to supply the Company with any
certificates, representations and information that the Company requests and
otherwise cooperate with the Company in obtaining any listing, registration,
qualification, exemption, consent or approval the Company deems necessary or
appropriate.

 

16.6   Governing Law.   This Plan shall be governed and construed in accordance
with the laws of the State of Delaware (regardless of the law that might
otherwise govern under applicable Delaware principles of conflict of laws).

 

16.7   Construction.   Wherever any words are used in this Plan in the masculine
gender they shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever any words are used
herein in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.

 

16.8   Other Benefits.   No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its Affiliates nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation, except to the extent expressly set
forth in any such retirement or other benefit plan.

 

16.9   Costs.   The Company shall bear all expenses included in administering
this Plan, including expenses of issuing Common Stock pursuant to any Awards
hereunder.

 

16.10   No Right to Same Benefits.   The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.

 

16.11   Death/Disability.   The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant’s death or Disability and to supply it with a copy of the will (in
the case of the Participant’s death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require the agreement of the transferee to be bound by all of
the terms and conditions of the Plan. If the Committee shall find, without any
obligation or responsibility of any kind to do so, that any person to whom
payment is payable under this Plan is unable to care for his or her affairs
because of disability, illness or accident, any payment due may be paid to such
person’s duly appointed legal representative in such

 

 25 

 

 

manner and proportions as the Committee may determine, in its sole discretion.
Any such payment shall be a complete discharge of the liabilities of the
Committee and the Board under this Plan.

 

16.12   Section 16(b) of the Exchange Act.   All elections and transactions
under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable exemptive
condition under Rule 16b-3. The Committee may establish and adopt written
administrative guidelines, designed to facilitate compliance with Section 16(b)
of the Exchange Act, as it may deem necessary or proper for the administration
and operation of the Plan and the transaction of business thereunder.

 

16.13   Severability of Provisions.   If any provision of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and the Plan shall be construed and enforced as if
such provisions had not been included.

 

16.14   Headings and Captions.   The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.

 

16.15   Section 409A of the Code.

 

(a)   Although the Company does not guarantee the particular tax treatment of an
Award granted under the Plan, Awards made under the Plan are intended to comply
with, or be exempt from, the applicable requirements of Section 409A of the
Code, and the Plan and any Award agreement hereunder shall be limited, construed
and interpreted in accordance with such intent. In no event whatsoever shall the
Company or any of its Affiliates be liable for any additional tax, interest or
penalties that may be imposed on a Participant by Section 409A of the Code or
any damages for failing to comply with Section 409A of the Code.

 

(b)   Notwithstanding anything in the Plan or in an Award to the contrary,
solely with respect to any Award granted under the Plan that constitutes
“non-qualified deferred compensation” pursuant to Section 409A of the Code, the
following provisions shall apply:

 

(i)   A termination of employment shall not be deemed to have occurred for
purposes of any provision of the Award providing for payment upon or following a
termination of the Participant’s employment unless such termination is also a
“separation from service” within the meaning of Code Section 409A and, for
purposes of any such provision of the Award, references to a “termination,”
“termination of employment” or like terms shall mean a “separation from service”
within the meaning of Code Section 409A. Notwithstanding any provision to the
contrary in the Plan or the Award, if the Participant is deemed on the date of
the Participant’s Termination of Employment to be a “specified employee” within
the meaning of that term under Section 409A(a)(2)(B) of the Code and using the
identification methodology selected by the Company from time to time, or if
none, the default methodology set forth in Code Section 409A, then with regard
to any such payment under the Award, to the extent required to be delayed in
compliance with Section 409A(a)(2)(B) of the Code, such payment shall not be
made prior to the earlier of  (i) the expiration of the six (6)-month period
measured from the date of the Participant’s “separation from service” within the
meaning of Code Section 409A, and (ii) the date of the Participant’s death. All
payments delayed pursuant to this Section 16.15(b)(i) shall be paid to the
Participant on the first day of the seventh month following the date of the
Participant’s “separation from service” within the meaning of Code Section 409A
or, if earlier, on the date of the Participant’s death.

 

(ii)   Whenever a payment under the Award specifies a payment period with
reference to a number of days, the actual date of payment within the specified
period shall be within the sole discretion of the Company.

 

16.16   Successor and Assigns.   The Plan shall be binding on all successors and
permitted assigns of a Participant, including, without limitation, the estate of
such Participant and the executor, administrator or trustee of such estate.

 

16.17   Payments to Minors, Etc.   Any benefit payable to or for the benefit of
a minor, an incompetent person or other person incapable of receipt thereof
shall be deemed paid when paid to such person’s guardian or to the party

 

 26 

 

 

providing or reasonably appearing to provide for the care of such person, and
such payment shall fully discharge the Committee, the Board, the Company, its
Affiliates and their employees, agents and representatives with respect thereto.

 

Article 17.

APPROVAL OF BOARD AND STOCKHOLDERS

 

The Plan shall not be effective unless and until approved by the Board and,
solely to the extent required by any applicable law (including without
limitation, approval required under Rule 16b-3, Section 162(m) of the Code or
Section 422 of the Code) or registration or stock exchange rule, approved by the
stockholders of the Company in the manner set forth in such law, regulation or
rule.

 

Article 18.

TERM OF PLAN

 

No Award shall be granted pursuant to the Plan on or after April 18, 2027, but
Awards granted prior to such date may, and the Committee’s authority to
administer the terms of such Awards shall, extend beyond that date; provided,
however, that no Award (other than a Stock Option or Stock Appreciation Right)
that is intended to be “performance-based” under Section 162(m) of the Code
shall be granted on or after the first meeting of the stockholders in the fifth
year following the year in which the stockholders approve the Performance Goals
set forth on Exhibit A unless the Performance Goals set forth on Exhibit A are
reapproved (or other designated performance goals are approved) by the
stockholders no later than the first stockholder meeting that occurs in the
fifth year following the year in which stockholders approve the Performance
Goals set forth on Exhibit A.

 

Article 19.

NAME OF PLAN

 

This Plan shall be known as the Celgene Corporation 2017 Stock Incentive Plan
(Amended and Restated as of April 19, 2017) (formerly known as the 2008 Stock
Incentive Plan, and, prior to April 16, 2008, as the 1998 Stock Incentive Plan,
and, prior to April 23, 2003, as the 1998 Long-Term Incentive Plan).

 

 27 

 

 

EXHIBIT A

 

PERFORMANCE CRITERIA

 

 

 

Performance Goals established for purposes of an Award of Other Stock-Based
Awards or Performance-Based Awards intended to comply with Section 162(m) of the
Code shall be based on one or more of the following performance criteria
(“Performance Criteria”): (i) the attainment of certain target levels of, or a
specified percentage increase in, revenues, earnings, income before taxes and
non-recurring items, net income, operating income, earnings before income tax,
earnings before interest, taxes, depreciation and amortization or a combination
of any or all of the foregoing; (ii) the attainment of certain target levels of,
or a percentage increase in, after-tax or pre-tax profits including, without
limitation, that attributable to continuing and/or other operations; (iii) the
attainment of certain target levels of, or a specified increase in, operational
cash flow; (iv) the achievement of a certain level of, reduction of, or other
specified objectives with regard to limiting the level of increase in, all or a
portion of, the Company’s bank debt or other long-term or short-term public or
private debt or other similar financial obligations of the Company, which may be
calculated net of such cash balances and/or other offsets and adjustments as may
be established by the Committee; (v) earnings per share or the attainment of a
specified percentage increase in earnings per share or earnings per share from
continuing operations; (vi) the attainment of certain target levels of, or a
specified increase in return on capital employed or return on invested capital;
(vii) the attainment of certain target levels of, or a percentage increase in,
after-tax or pre-tax return on stockholders’ equity; (viii) the attainment of
certain target levels of, or a specified increase in, economic value added
targets based on a cash flow return on investment formula; (ix) the attainment
of certain target levels in, or specified increases in, the fair market value of
the shares of the Company’s common stock; (x) the growth in the value of an
investment in the Company’s common stock assuming the reinvestment of dividends;
(xi) the filing of a new drug application (“NDA”) or the approval of the NDA by
the Food and Drug Administration; (xii) the achievement of a launch of a new
drug; (xiii) research and development milestones; (xiv) the successful
completion of clinical trial phases, (xv) the attainment of a certain level of,
reduction of, or other specified objectives with regard to limiting the level in
or increase in, all or a portion of controllable expenses or costs or other
expenses or costs; (xvi) gross or net sales, revenue and growth of sales revenue
(either before or after cost of goods, selling and general administrative
expenses, research and development expenses and any other expenses or interest);
(xvii) total stockholder return; (xviii) return on assets or net assets; (xix)
return on sales; (xx) operating profit or net operating profit; (xxi) operating
margin; (xxii) gross or net profit margin; (xxiii) cost reductions or savings or
other expense control targets; (xxiv) productivity or productivity ratios; (xxv)
operating efficiency; (xxvi) customer satisfaction; (xxvii) working capital;
(xxviii) market share; (xxix) strategic business criteria, consisting of one or
more objectives based on meeting specified revenue, market penetration,
geographic business expansion goals, objectively identified project milestones,
production volume levels, cost targets, and goals relating to acquisitions or
divestitures; (xxx) aggregate product price and other product price measures;
(xxxi) safety record; (xxxii) personal management objectives or achievement of
objective business and operational goals, such as market share, new products,
and/or business development; (xxxiii) achievement of specified milestones in the
manufacturing or commercialization of one or more of our products.

 

In addition, such Performance Criteria may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations.

 

To the extent permitted under Section 162(m) of the Code, but only to the extent
permitted under Section 162(m) of the Code (including, without limitation,
compliance with any requirements for stockholder approval), the Committee may:
(i) designate additional business criteria on which the Performance Criteria may
be based or (ii) adjust, modify or amend the aforementioned business criteria.
Without limiting the generality of the foregoing, each applicable performance
criteria may be structured with respect to an Award to provide for appropriate
adjustment for one or more of the following items or any similar item or event:
(A) asset impairments or write-downs; (B) litigation and governmental
investigation expenses and judgments, verdicts or claim settlements; (C) the
effect of changes in tax law, accounting principles or other laws, regulations
or provisions affecting reported results; (D) the effect of exchange rates for
non-US dollar denominated net sales or goals based on operating profit, earnings
or income; (E) accruals for reorganization and restructuring programs; (F) any
unusual in nature or infrequently

 

 28 

 

 

occurring items, as determined in accordance with applicable financial
accounting principles; (G) items of income, gain, loss or expense attributable
to the operations of any business acquired by the Company (or any parent or
subsidiary of the Company) or of any joint venture established by the Company
(or any parent or subsidiary of the Company); (H) costs and expenses incurred in
connection with business combinations and divestitures, and other mergers and
acquisitions; (I) items of income, gain, loss or expense attributable to one or
more business operations divested by the Company (or any parent or subsidiary of
the Company) or the gain or loss realized upon the sale of any such divested
business or the assets thereof; (J) share-based compensation expense; (K)
collaboration-related upfront expenses; (L) research and development asset
acquisition expense; or (M) costs associated with restructuring initiatives,
including plant closings and employee layoffs; (N) costs and expenses for
significant fair value adjustments to equity investments, significant
litigation-related loss contingency accruals and expenses to settle other
disputed matters; (O) net income tax impact of the non-tax adjustments provided
herein or other significant income tax items not associated with the Company’s
normal, recurring operations; (P) the effect of any change in the outstanding
shares of Common Stock effected by reason of a stock split, stock dividend,
stock repurchase, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other similar corporate change or
any distributions to the Company’s stockholders other than regular cash
dividends; or (Q) any other items that are not normal, recurring, cash operating
expenses.

 

 29