**Exhibit 10.27**

 

MILLENNIUM PHARMACEUTICALS, INC.

 

NONQUALIFIED DEFERREDCOMPENSATION PLAN

 

EFFECTIVE APRIL 1, 2006

 

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**TABLE OF CONTENTS**

 
| ** **     | ** **                                                                        | **Page** |
|----------------|-----------------------------------------------------------------------------------|----------|
|           |                                                                              |     |
| ARTICLE 1 | DEFINITIONS                                                                       | 1        |
|           |                                                                              |     |
| ARTICLE 2 | SELECTION, ENROLLMENT, ELIGIBILITY                                                | 5        |
| 2.1            | Selection by Committee                                                            | 5        |
| 2.2            | Enrollment Requirements                                                           | 5        |
| 2.3            | Eligibility Commencement of Participation                                         | 5        |
| 2.4            | Termination of Participation and/or Deferrals                                     | 5        |
|           |                                                                              |     |
| ARTICLE 3 | DEFERRAL COMMITMENT/CREDITING OF EARNINGS.                                        | 6        |
| 3.1            | Deferred Compensation                                                             | 6        |
| 3.2            | Election to Defer Compensation                                                    | 6        |
| 3.3            | Withholding of Deferral Amounts                                                   | 7        |
| 3.4            | Company Contributions                                                             | 7        |
| 3.5            | Selection of Deemed Investments                                                   | 7        |
| 3.6            | Crediting of Earnings, Gains, Losses, and Changes in Value  of Deemed Investments | 7        |
| 3.7            | FICA and Other Taxes                                                              | 7        |
| 3.8            | Vesting                                                                           | 7        |
|           |                                                                              |     |
| ARTICLE 4 | UNFORESEEABLE FINANCIAL EMERGENCIES                                               | 9        |
| 4.1            | Withdrawal Payout/Suspensions for Unforeseeable Financial  Emergencies            | 9        |
|           |                                                                              |     |
| ARTICLE 5 | RETIREMENT BENEFIT                                                                | 9        |
| 5.1            | Retirement Benefit                                                                | 9        |
| 5.2            | Payment of Retirement Benefits                                                    | 9        |
| 5.3            | Death Prior to Completion of Retirement Benefits                                  | 10       |
|           |                                                                              |     |
| ARTICLE 6 | TERMINATION BENEFIT                                                               | 10       |
| 6.1            | Termination Benefits                                                              | 10       |
| 6.2            | Payment of Termination Benefit                                                    | 10       |
| 6.3            | Death Prior to Completion of Termination Benefits                                 | 10       |
|           |                                                                              |     |
| ARTICLE 7 | SURVIVOR BENEFIT                                                                  | 10       |
| 7.1            | Survivor Benefit                                                                  | 10       |
| 7.2            | Payment of Survivor Benefits                                                      | 11       |
|           |                                                                              |     |
| ARTICLE 8 | CHANGE IN CONTROL BENEFIT                                                         | 11       |
| 8.1            | Change In Control                                                                 | 11       |
|           |                                                                              |     |
| ARTICLE 9 | DISABILITY WAIVER AND BENEFIT                                                     | 11       |
| 9.1            | Disability Waiver                                                                 | 11       |

 

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| ** **      | ** **                                       | **Page** |
|-----------------|--------------------------------------------------|----------|
|            |                                             |     |
| 9.2             | Benefit Eligibility                              | 11       |
| 9.3             | Nonqualified Deferred Compensation Plan Rules    | 11       |
|            |                                             |     |
| ARTICLE 10 | BENEFICIARY DESIGNATION                          | 12       |
| 10.1            | Beneficiary                                      | 12       |
| 10.2            | Beneficiary Designation; Change; Spousal Consent | 12       |
| 10.3            | Acknowledgement                                  | 12       |
| 10.4            | No Beneficiary Designation                       | 12       |
| 10.5            | Doubt as to Beneficiary                          | 12       |
| 10.6            | Discharge of Obligations                         | 12       |
|            |                                             |     |
| ARTICLE 11 | LEAVE OF ABSENCE                                 | 12       |
| 11.1            | Paid leave of Absence                            | 12       |
| 11.2            | Unpaid Leave of Absence                          | 13       |
|            |                                             |     |
| ARTICLE 12 | TERMINATION, AMENDMENT, OR MODIFICATION          | 13       |
| 12.1            | Termination                                      | 13       |
| 12.2            | Amendment                                        | 13       |
| 12.3            | Effect of Payment                                | 13       |
|            |                                             |     |
| ARTICLE 13 | ADMINISTRATION                                   | 13       |
| 13.1            | Committee Duties                                 | 13       |
| 13.2            | Agents                                           | 14       |
| 13.3            | Binding Effect of Decisions                      | 14       |
| 13.4            | Indemnity of Committee                           | 14       |
| 13.5            | Employer Information                             | 14       |
|            |                                             |     |
| ARTICLE 14 | ADMINISTRATION UPON CHANGE IN CONTROL            | 14       |
| 14.1            | Committee                                        | 14       |
| 14.2            | Benefit Review Committee                         | 15       |
|            |                                             |     |
| ARTICLE 15 | CLAIMS PROCEDURE                                 | 15       |
| 15.1            | Presentation of Claim                            | 15       |
| 15.2            | Notification of a Denied Claim                   | 15       |
| 15.3            | Review of a Denied Claim                         | 16       |
| 15.4            | Decision on Review                               | 16       |
| 15.5            | Legal Action                                     | 16       |
| 15.6            | Arbitration                                      | 16       |

 

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| ** **      | ** **                                           | **Page** |
|-----------------|------------------------------------------------------|----------|
|            |                                                 |     |
| ARTICLE 16 | TRUST                                                | 18       |
| 16.1            | Establishment of Trust                               | 18       |
| 16.2            | Interrelationship of the Plan and the Trust          | 18       |
|            |                                                 |     |
| ARTICLE 17 | MISCELLANEOUS                                        | 18       |
| 17.1            | Unsecured General Creditor                           | 18       |
| 17.2            | Employer’s Liability                            | 18       |
| 17.3            | Non-Assignability                                    | 18       |
| 17.4            | Coordination with Other Benefits                     | 19       |
| 17.5            | Not a Contract of Employment                         | 19       |
| 17.6            | Furnishing Information                               | 19       |
| 17.7            | Terms                                                | 19       |
| 17.8            | Captions                                             | 19       |
| 17.9            | Governing  Law                                       | 19       |
| 17.10           | Notice                                               | 19       |
| 17.11           | Successors                                           | 19       |
| 17.12           | Spouse’s Interest                               | 19       |
| 17.13           | Validity                                             | 20       |
| 17.14           | Incompetent                                          | 20       |
| 17.15           | Court Order                                          | 20       |
| 17.16           | Legal Fees To Enforce Rights After Change in Control | 20       |

 

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PURPOSE

 

Thepurpose of this Nonqualified Deferred Compensation Plan (this “Plan”) is toprovide specified benefits to a select group of management or highlycompensated employees who contribute materially to the continued growth,development and future business success of Millennium Pharmaceuticals, Inc., a Delawarecorporation, and its subsidiaries, if any. This Plan shall be unfunded for taxpurposes and for purposes of Title I of ERISA.

 

**ARTICLE 1**Definitions

** **

Forpurposes hereof, unless otherwise clearly apparent from the context, thefollowing phrases or terms shall have the following indicated meanings:

 

1.1       “Account Balance” shall mean, withrespect to a Participant, the sum of (a) his or her Elective DeferralAccount plus (b) his or her Company Contribution Account, if any, plus (c) earnings,gains, losses, and changes in value of the Deemed Investments hereon credited(or debited) in accordance with Section 3.6, net of all distributions. Thisaccount shall be a bookkeeping entry only and shall be utilized solely as adevice for the measurement and determination of the amounts to be paid to or inrespect of a Participant pursuant to the Plan.

 

1.2       “Annual Bonus” shall mean anycompensation, in addition to Base Annual Salary, paid in respect of a Plan Yearto a Participant as an employee under the Company’s Incentive Plan, orotherwise as a bonus in the discretion of the Company. A performance-basedbonus may have special meaning under the terms of this Plan solely forpurposes of a Participant’s timing of elections, as defined in Section 3.2.

 

1.3       “Annual Deferral Amount” shall meanthat portion of a Participant’s Base Annual Salary and/or Annual Bonus that aParticipant elects to have, and is, deferred, in accordance with Article 3for any one Plan Year. In the event of Retirement, Disability, death or a Terminationof Employment prior to the end of a Plan Year, such year’s Annual DeferralAmount shall be the actual amount withheld prior to such event.

 

1.4       “Annual Installment Method” shall meanthe payment of a Participant’s benefit in annual installments to be paid, if soelected by a Participant as follows:  (i) duringthe calendar year in which payment begins, such payment shall equal (a) theAccount Balance as of the Retirement Date; divided by (b) the total numberof installment payments to be made; and (ii) during the benefit paymentperiod, the amount of each installment to be paid during each calendar yearthereafter shall be recalculated, and shall be equal to (a) the remainingamount payable to the Participant as of such January 1; divided by (b) thenumber of installment payments to be made in or after such subsequent calendaryear. The first such installment shall be made as of the Retirement Date andsubsequent installments shall be as of January 1 of each subsequentcalendar year. The final installment payment shall be equal to the remainingamount payable to the Participant. In no event shall the amount of anyinstallment payment exceed the remaining amount payable to the Participant.

 

1.5       “Base Annual Salary” shall mean theannual compensation (excluding bonuses, commissions, overtime, incentivepayments, non-monetary awards, Directors Fees and other fees, stock options,phantom stock grants, restricted stock, moving expenses, severance payments,and car allowances) paid to a Participant for services rendered to anyEmployer, before reduction for compensation deferred pursuant to alltax-qualified, non-qualified and Code Section 125 plans (other thancompensation deferred under individual employment Contracts) of any Employer. TheCommittee may,

 

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in its discretion, with respect to any one or moreParticipants establish for any Plan Year a limit on the amount of Base AnnualSalary to be taken into account under this Plan.

 

1.6       “Beneficiary” shall mean one or morepersons, trusts, estates or other entities, designated in accordance with Article 10,that are entitled to receive benefits under the Plan upon death of aParticipant.

 

1.7       “Beneficiary Designation Form” shallmean the form established from time to time by the Committee that aParticipant completes, signs, and returns to the Committee to designate one ormore Beneficiaries.

 

1.8       “Board” shall mean the board ofdirectors of the Company.

 

1.9       “Change in Control” shall meana change in ownership, effective control or a change in the ownership of asubstantial portion of the assets of the corporation, determined objectively,pursuant to the rules of Section 409A of the Internal Revenue Codeand transitional guidance, through any of the following transactions;  On the date that any one person or personsacting as a group (within the meaning of Section 13(d)(3) or 14(d)(2) ofthe Securities Exchange Act of 1934) acquires beneficial ownership of theCompany’s capital stock equal to 50% or more of either: (X) thethen-outstanding shares of the Company’s common stock or (Y) the combinedvoting power of the Company’s then-outstanding securities to vote generally inthe election of directors; (ii) upon the consummation by the Company of(X) a reorganization, merger or consolidation, provided that, in each case, thepersons who were the Company’s stockholders immediately prior to thereorganization, merger or consolidation do not, immediately after, own morethan 50% of the combined voting power entitled to vote generally in theelection of directors of the reorganized, merged or consolidated company’s thenoutstanding voting securities, or (Y) a liquidation or dissolution of theCompany or the sale of all or substantially all of the Company’s assets; (iii) whenthe Continuing Directors (as defined below) do not constitute a majority of theBoard of Directors (or, if applicable, the Board of Directors of a successorcorporation to the Company), where the term “Continuing Director” means at anydate a member of the Board of Directors (X) who was a member of the Board ofDirectors on the date of the initial adoption of this provision by the Board ofDirectors or (Y) who was nominated or elected subsequent to such date by atleast a majority of the directors who were Continuing Directors at the time ofsuch nomination or election or whose election to the Board of Directors wasrecommended or endorsed by at least a majority of the directors who wereContinuing Directors at the time of such nomination or election. But, anyindividual whose initial assumption of office occurred as a result of an actualor threatened election contest with respect to the election or removal ofdirectors or other actual or threatened solicitation of proxies or consents, byor on behalf of a person other than the Board of Directors, is excluded fromclause (iii)(Y) above; or (iv) upon the occurrence of any other eventwhich a majority of the Continuing Directors, in its sole discretion,determines constitutes a Change in Control. Should the Company in itsdiscretion decide to terminate the Plan within 12 months of the Change inControl date, subsequent Plan payments will be deemed made for reason of Changeof Control.

 

1.10     “Claimant” shall have the meaning setforth in Section 13.1.

 

1.11     “Code” shall mean the Internal RevenueCode of 1986, as amended; inclusive of Section 409A as promulgated under Section 885of the American Jobs Creation Act of 2004 and as interpreted by the TreasuryDepartment and Internal Revenue Service guidance and regulations.

 

1.12     “Committee” shall mean theadministrative Committee appointed to manage and administer the Plan inaccordance with its provision and pursuant to Article 13.

 

1.13     “Company” shall mean MillenniumPharmaceuticals, Inc.,a Delaware corporation.

 

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1.14     “Company Contribution Account” shallmean the Participant’s share of (a) Discretionary Company Matching Contributionsplus (b) Discretionary Company Contributions plus (c) earnings,gains, losses, and changes in value of the Deemed Investments hereon credited(or debited) in accordance with Section 3.6, net of all distributions fromsuch account. This Account shall be a bookkeeping entry only and shall beutilized solely as a device for the measurement and determination of theamounts to be paid to the Participant pursuant to the Plan.

 

1.15     “Discretionary Company MatchingContribution” shall mean any contribution made and credited to CompanyContribution Accounts by the Company in accordance with Section 3.4(a) below.

 

1.16     “Deemed Investments” shall mean one ormore of the investment vehicles selected by the Committee pursuant to Section 3.5.

 

1.17     “Deduction Limitation” shall mean thefollowing described limitation on the annual benefit that may bedistributed pursuant to the provisions of this Plan. The limitation shall beapplied to distributions under this Plan as expressly set forth in this Plan. Ifthe Company determines in good faith prior to a Change in Control that there isa reasonable likelihood that any compensation paid to a Participant for ataxable year of the Company would not be deductible by the Company solely byreason of the limitation under Code Section 162(m), then to the extentdeemed necessary by the Company to ensure that the entire amount of anydistribution to the Participant pursuant to this Plan prior to the Change inControl is deductible, the Company may, in its sole discretion, defer all orany portion of the distribution. Any amounts deferred pursuant to this limitationshall continue to be credited (or debited) with earnings, gains, losses, andchanges in value of the Deemed Investments in accordance with Section 3.7.The amounts so deferred and interest thereon shall be distributed to theParticipant or his or her Beneficiary (in the event of the Participant’s death)at the earliest possible date, as determined by the Company in good faith, onwhich the deductibility of compensation paid or payable to the Participant forthe taxable year of the Company during which the distribution is made will notbe limited by Section 162(m), or if earlier, the effective date of aChange in Control. In the event this Section 1.17 fails to meet thelimitations or requirements of the Code, then this Section 1.17 shall bemodified by action of the Committee to the extent necessary to satisfy therequirements of the Code and transitional relief provided with respect to Code Section 409A.

 

1.18     “Deferral Amount” shall mean the sumof all of a Participant’s Annual Deferral Amounts.

 

1.19     “Director” shall mean any non-employeemember of the Board.

 

1.20     “Discretionary Company Contribution”shall mean any contribution made and credited to Company Contribution Accountsby the Company in accordance with Section 3.4 (b) below.

 

1.21     “Disability” shall exist if theParticipant (a) is unable to engage in any substantial gainful activity byreason of any medically determinable physical or mental impairment that can beexpected to result in death or can be expected to last for a continuous periodof not less than 12 months, or (b) is, by reason of any medicallydeterminable physical or mental impairment that can be expected to result indeath or can be expected to last for a continuous period of not less than 12months, receiving income replacement benefits for a period of not less thanthree months under an accident and health policy covering employees of theParticipant’s Employer.

 

1.22     “Election Form” shall mean the form establishedfrom time to time by the Committee that a Participant completes, signs, andreturns to the Committee to make an election under the Plan.

 

1.23     “Elective Deferral Account” shall meanthe sum of (a) a Participant’s Deferral Amount, plus (b) earnings,gains, losses, and changes in value of the Deemed Investments hereon credited(or debited) in accordance with Section 3.6, net of all distributions fromsuch Account. This account shall be

 

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a bookkeeping entry only and shall be utilizedsolely as a device for the measurement and determination of the amounts to bepaid to the Participant pursuant to the Plan.

 

1.24     “Employers” shall mean the Companyand/or any of its subsidiaries and partners that have been selected by theBoard to participate in the Plan.

 

1.25     “ERISA” shall mean the EmployeeRetirement Income Security Act of 1974, as amended from time to time.

 

1.26     “In-Service Distribution” shall meanthe payout set forth in Section 4.1.

 

1.27     “Participant” shall mean any employee (a) whois selected to participate in the Plan, (b) who elects to participate inthe Plan, (c) who signs a Plan Agreement, an Election Form, and aBeneficiary Designation Form, (d) whose signed Plan Agreement, ElectionForm, and Beneficiary Designation Form are accepted by the Committee, (e) whocommences participation in the Plan, and (f) whose Plan Agreement has notterminated.

 

1.28     “Plan” shall mean the Company’s DeferredCompensation Plan which shall be evidenced by this instrument and, with respectto each Participant, by his or her Plan Agreement, as each may be amendedfrom time to time.

 

1.29     “Plan Agreement” shall mean a writtenagreement, as may be amended from time to time, which is entered into byand between one or more Employers and a Participant. Each Plan Agreementexecuted by a Participant shall provide for the entire benefit to which suchParticipant is entitled to under the Plan, and shall specify, the Employer orEmployers liable for the Participant’s benefits hereunder and the magnitude orextent of such liability. The Plan Agreement bearing the latest date ofacceptance by the Committee shall govern such entitlement and each Employer’sliability. Upon the complete payment of a Participant’s Account Balance, eachindividual’s Plan Agreement and his or her status as a Participant shallterminate.

 

1.30     “Plan Year” shall be the calendar yearstarting with 2006.

 

1.30     “Pre-Retirement Survivor Benefit”shall mean the benefit set forth in Article 6.

 

1.31     “Retirement,” “Retire,” “Retires,” “or“Retired” shall mean severance from employment or service with all Employersfor any reason other than a leave of absence, death or Disability on or afterthe attainment of age sixty-five (65).

 

1.32     “Retirement Benefit” shall mean thebenefit set forth in Article 5.

 

1.33     “Subsidiary” shall mean anycorporation (other than the Employer) in an unbroken chain of corporations orother entities beginning with the Employer, if each of the entities other thanthe last entity in the unbroken chain owns stock, partnership rights or otherownership interest possessing fifty percent (50%) or more of the total combinedvoting power of all classes of stock, partnership rights or other ownershipinterest in one of the other entities in such chain.

 

1.34     “Termination Benefit” shall mean thebenefit set forth in Article 7.

 

1.35     “Termination of Employment” shall meanthe ceasing of employment with all Employers, voluntary or involuntary, for anyreason other than Retirement, death, or an authorized leave of absence. Notwithstandingthe foregoing, no Termination of Employment shall occur merely by reason of thetransfer of employment of a Participant from an Employer to any entity directlyor indirectly controlled by or under common control with the Company and whichis not an Employer (a “Non-Participating

 

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Entity”). Rather, such a Participant’s Terminationof Employment shall occur on the ceasing of the Participant’s employment withall Non-Participating Entities and all Employers.

 

1.36     “Trust” shall mean the trust establishedpursuant to that certain Trust Agreement between the Company and the trusteenamed therein, as amended from time to time.

 

1.37     “Unforeseeable Financial Emergency” shallbe defined as a severe financial hardship to the Participant resulting fromillness or accident of the Participant, the Participant’s spouse or a dependent(as defined in section 152(a) of the Code) of the Participant, lossof the Participant’s property due to casualty, or other similar extraordinaryand unforeseeable circumstances arising as a result of events beyond thecontrol of the Participant. The amount of the distribution upon UnforeseeableEmergency may not exceed the amounts necessary to satisfy the emergencyand pay taxes reasonably anticipated as a result of the distribution, aftertaking into account the extent to which such hardship is or may berelieved through reimbursement or compensation by insurance or by liquidationof the Participant’s assets (to the extent such liquidation would not itselfcause severe financial hardship).

 

1.38     “Yearsof Service” shall mean the total number of years in which a Participant hasbeen employed by or in the service of an Employer. For purposed of thisdefinition only, a year of employment or service shall be a 365 day period (or366 day period in the case of a leap year) that, for the first year ofemployment, commences on the Participant’s date of hire (or engagement) andthat, for any subsequent year, commences on an anniversary of that hiring date.

 

**ARTICLE 2**Selection, Enrollment, Eligibility

** **

2.1       Selection by Committee. Participation in the Plan shall be limitedto employees of an Employer who are part of a select group of managementor highly compensated employees. From the foregoing, the Committee shallselect, in its sole and absolute discretion, individuals to participate in thePlan.

 

2.2       Enrollment Requirements. As a condition to participation, eachselected individual shall complete, execute, and return to the Committee a PlanAgreement, an Election Form, and a Beneficiary Designation Form. In addition,the Committee shall establish from time to time such other enrollmentrequirements as it determines in its sole and absolute discretion arenecessary.

 

2.3       Eligibility Commencement of Participation. Provided an individual selected toparticipate in the Plan has met all enrollment requirements set forth in thisPlan and required by the Committee, including returning all required documentsto the Committee within 30 days of selection, that individual shall commenceparticipation in the Plan upon the timely completion of those requirements andthe Committee’s acceptance of all submitted documents. If a Participant’sinitial election to defer Compensation pursuant to Section 3.3 is notreceived by the Committee within the required 30 day period, such Participantshall not be eligible to participate in the Plan until the first day of thePlan Year following the delivery to and acceptance by the Committee of therequired documents.

 

2.4       Termination of Participation and/or Deferrals. If the Committee determines in good faiththat a Participant no longer meets the requirement of Section 2.1 hereof,the Committee shall have the right, in its sole discretion, to (i) terminateany deferral election the Participant has made for the Plan Year in which theParticipant’s membership status changes, (ii) prevent the Participant frommaking future deferral elections and/or (iii) terminate the Participant’sparticipation in the Plan. The Participant’s Account Balance shall bedistributed in accordance with the Participant’s prior elections and any

 

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overriding provisions of the Plan. If the Committeechooses not to terminate the Participant’s participation in the Plan, the Committeemay, in its sole discretion, reinstate the Participant to full Planparticipation at such time in the future as the Participant again meets therequirements of Sections 2.1. In the event this Section 2.4 fails to meetthe limitations or requirements of Code, then this Section 2.4 shall bemodified by action of the Committee to the extent necessary to satisfy therequirements of the Code inclusive of transitional relief provided with respectto Code Section 409A.

 

**ARTICLE 3**Deferral Commitment/Crediting of Gains,Earnings, Losses, Etc.

** **

3.1       Deferred Compensation

 

(a)           Minimum. For each Plan Year, a Participant may elect to defer Base AnnualSalary and/or Annual Bonus paid in respect of such Plan Year in the followingminimum amounts for each deferral elected:

 
| **Deferral**       | ** ** | **Minimum Amount** | ** ** |
|--------------------|------------|-------------------------|------------|
|               |       |                    |       |
| Base Annual Salary |       | 1                       | %          |
|               |       |                    |       |
| Annual Bonus       |       | 1                       | %          |

 

Ifno election is made, the amount deferred shall be zero.

 

(b)           Maximum. For each Plan Year, a Participant may elect to defer base salaryand/or Annual Bonus up to the following maximum amounts:

 
| **Deferral**       | ** ** | **Maximum Amount** | ** ** |
|--------------------|------------|-------------------------|------------|
|               |       |                    |       |
| Base Annual Salary |       | 60                      | %          |
|               |       |                    |       |
| Annual Bonus       |       | 100                     | %          |

 

(c)           Short Plan Year. If a Participant first becomes aParticipant after the first day of a Plan Year, the minimum Base Annual Salaryand/or Annual Bonus deferral shall be an amount equal to the minimum set forthabove, multiplied by a fraction, the numerator of which is the number ofcomplete months remaining in the Plan Year and the denominator of which is 12.

 

3.2       Election to Defer Compensation. In connection with a Participant’scommencement of participation in the Plan, the Participant shall make adeferral election by delivering to the Committee a completed and signedDeferral Election Form, which must be accepted by the Committee for a validelection to exist. For each succeeding Plan Year, a new Election Form mustbe delivered to the Committee, in accordance with its rule and procedures,before the end of the Plan Year preceding the Plan Year for which the electionis made. If no Election Form is timely delivered for a Plan Year, noAnnual Deferral Amount shall be withheld for that Plan Year. However, in thecase of performance-based compensation based on services performed over aperiod of at least 12 months, an election to defer such Annual Bonuscompensation may be made, subject to the discretion of the Company, nolater than 6

 

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months before the end of the performance-basedperiod assuming such election currently complies with the Code and transitionalrelief offered thereunder.

 

3.3       Withholding of Deferral Amounts. For each Plan Year, the Base Annual Salaryportion of the Annual Deferral Amount shall be withheld each payroll period inequal amounts from the Participant’s Base Annual Salary. The Annual Bonus portionof the Annual Deferral Amount shall be withheld at the time the Annual Bonus isor otherwise would be paid to the Participant. The Annual Deferral Amount shallbe credited to the Participant’s Elective Deferral Account. A Participant shallat all times have a fully vested and non-forfeitable interest in his or herElective Deferral Account.

 

3.4       Company Contributions.

 

(a)           Discretionary Company Matching Contribution. Each Plan Year, the Company may, in itssole discretion, but is not required to, make a Company Matching Contributionon behalf of any or all Participants. Such Company Matching Contribution shallbe equal to a percentage of the Participant’s Annual Base Salary deferred andthe Participant’s Annual Bonus deferred for such year.

 

(b)           Discretionary Company Contribution. Each Plan Year, the Company, in its solediscretion, may, but is not required to, credit any amount it desires to anyParticipant’s Company Contribution Account under this Plan. The amount socredited to a Participant may be smaller or larger than the amountcredited to any other Participant, and the amount credited to any Participantfor a Plan Year may be zero (0). The Discretionary Company Contribution,if any, shall be credited as of the last day of a Plan Year. If a Participantis not employed by an Employer as of the last day of a Plan Year other than byreason of his or her Retirement, Disability or death while employed, theDiscretionary Company Contribution for that Plan Year shall be zero.

 

3.5       Selection of Deemed Investments. The Committee shall select the DeemedInvestments whose performance will measure the amounts to be credited under Section 3.6to the Account Balances of Participants. The selection of Deemed Investmentsshall be for bookkeeping purposes only, and the Company shall not be obligatedactually to invest any money in the Deemed Investments, or to acquire ormaintain any actual investment.

 

3.6       Crediting of Earnings, Gains, Losses, andChanges in Value of Deemed Investments. The Committee shall determine, in its discretion, the exact times andmethods for crediting or charging each Participant’s Account Balance (and suchParticipant’s Elective Deferral Account, Company Contribution Account, and anyAnnual Deferral Amount paid as a In-Service Distribution under Section 4.1)with the earnings on Deemed Investments. The Committee may, at any time, changethe timing or methods for crediting earnings to Annual Deferral Amounts, CompanyMatching Contributions, Discretionary Company Contributions, and payments ofbenefits and withdrawals under this Plan; provided, however, that the times andmethods for crediting or debiting such items in effect at any particular timeshall be uniform among all Participants and Beneficiaries.

 

3.7       FICA and Other Taxes. For each Plan Year in which a Participantelects an Annual Deferral Amount, the Participant’s Employer(s) shall ratablywithhold from that portion of the Participant’s Base Annual Salary and/or AnnualBonus that is not being deferred, the Participant’s share of FICA taxes ondeferred amounts and any other taxes, which may be required or appropriate.If necessary, the Committee shall reduce the Annual Deferral Amount in order tocomply with this Section.

 

3.8       Vesting.

 

(a)           A Participant shall at all times be one hundredpercent (100%) vested in his or her Annual Deferral Amount and ElectiveDeferral Account.

 

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(b)           A Participant shall be vested in his or herCompany Contribution Account, if any, in accordance with schedules establishedby the Committee in its sole discretion which may vary among differenttypes of contributions held in a Participant’s Company Contribution Account.

 

(c)           Notwithstanding anything to the contrarycontained in this Section 3.8, in the event of a Change in Control,Retirement, or death a Participant’s Company Contribution Account shallimmediately become one hundred percent (100%) vested (if it is not alreadyvested in accordance with the above vesting schedules).

 

(d)           Notwithstanding anything contained in thisPlan to the contrary, in the event that any payment or benefit to a Participantor for a participant’s benefit paid or payable or distributed or distributablepursuant to the terms of this Plan or otherwise in connection with, or arisingout of, a Change of Control, or any other event which constitutes a “change incontrol” within the meaning of Section 280G of the Code (a “Payment” or “Payments”),would be subject to the excise tax imposed by Section 4999 of the Code(the “Excise Tax”), then the benefits payable under this Plan shall be reduced(but not below zero), but only to the extent necessary so that no portion ofthe Payments shall be subject to the excise tax imposed by Section 4999 ofthe Code (the “Section 4999 Limit”). Unless otherwise determined by the Committeein its discretion, the Company shall reduce or eliminate the benefits payableunder this Plan by first reducing or eliminating those benefits beginning withbenefits which are to be paid the farthest in time from the Determination (ashereinafter defined).

 

(i)            All determinations required to be made underthis Section 3.8(d) (each, a “Determination”) shall be made by theCompany. The calculations shall be provided to the Participant upon request(provided that the Company or the Participant believe in good faith that any ofthe Payments may be subject to the Excise Tax); provided, however, that ifthe Company determines that no Excise tax is payable by the Participant withrespect to a Payment or Payments, Participant may request that anationally recognized accounting firm designated by the Company and reasonably acceptableto the Participant (the “Accounting Firm”) furnish the Participant with anopinion reasonably acceptable to the Participant that no Excise Tax will be imposedwith respect to any such Payment or Payments. Within ten (10) calendardays of delivery of the Determination to the Participant, the Participant shallhave the right to dispute the Determination (the “Dispute”). The existence ofany Dispute shall not in any way affect the Participant’s right to receive thebenefits under this Plan in accordance with the Determination. If there is noDispute, the Determination by the Accounting Firm shall be final, binding, andconclusive upon the Company and the Participant, subject to the application of Section 3.8(d)(ii).

 

(ii)           As a result of the uncertainty in theapplication of Sections 409A, 4999 and 280G of the Code, it is possible thatthe Payments either will have been made or will not have been made by the Company,in either case in a manner inconsistent with the limitations provided in this Section 3.10(d) (an“Excess Payment” or “Underpayment,” respectively). If it is establishedpursuant to (i) a final determination of a court for which all appealshave been taken and finally resolved or the time for all appeals has expired,or (ii) an Internal Revenue Service (the “IRS”) proceeding which has beenfinally and conclusively resolved, that an Excess Payment has been made, suchExcess Payment shall be deemed for all purposes to be a loan to the Participantmade on the date the Participant received the Excess Payment and theParticipant shall repay the Excess payment to the Company on demand, togetherwith interest on the Excess Payment to the Company on demand, together withinterest on the Excess Payment at one hundred twenty percent (120%) of theapplicable federal rate (as defined in Section 1274(d) of the Code)compounded semi-annually from the date of the participant’s receipt of such ExcessPayment until the date of such repayment. If it is determined (i) by theAccounting Firm, the Company (which shall include the position taken by theCompany, together with its consolidated group, on its federal income taxreturn) or the IRS, (ii) pursuant to a determination by a court, or

 

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(iii) upon the resolution to the Participant’s satisfaction of theDispute, that an Underpayment has occurred, the Company shall pay an amountequal to the Underpayment to the Participant within ten (10) calendar daysof such determination or resolution, together with interest on such amount atone hundred twenty percent (120%) of the applicable federal rate compoundedsemi-annually from the date such amount should have been paid to the Participantpursuant to the terms of this Plan or otherwise, but for the operation of this Section 3.10(d),until the date of payment.

 

**ARTICLE 4**Unforeseeable Financial Emergencies

** **

4.1       Withdrawal Payout/Suspensions forUnforeseeable Financial Emergencies. If the Participant experiences an Unforeseeable Financial Emergency,the Participant may petition the Committee to (a) suspend anydeferrals required to be made by a Participant and/or (b) receive partialor full payout from the Plan. The payout shall not exceed the lesser of theParticipant’s Account Balance, calculated as if such Participant were receivinga Termination Benefit, or the amount reasonably needed to satisfy theUnforeseeable Financial Emergency. If, subject to the sole and absolutediscretion of the Committee, the petition for a suspension and/or payout isapproved, suspension shall take effect upon the date of approval and any payoutshall be made within sixty (60) days of the date of approval. *In the event this Section 4.1 fails tomeet the limitations or requirements of section 409A of the Code andregulations promulgated thereunder, then this Section 4.1 shall bemodified by action of the Committee to the extent necessary to satisfy therequirements of the Code and*transitional relief providedwith respect to Code Section 409A.

 

**ARTICLE 5**Retirement Benefit

** **

5.1       Retirement Benefit. Subject to the Deduction Limitation, aParticipant who retires shall receive, as a Retirement Benefit, his or herAccount Balance.

 

5.2       Payment of Retirement Benefits. A Participant, in connection withhis or her commencement of Participation in the Plan, shall elect on anElection Form to receive the Retirement Benefit in a lump sum or pursuantto an Annual Installment Method over a period of up to 15 years, with theportion of the Retirement Benefit which is yet to be distributed being creditedwith earnings as set forth in Section 3.6. The Participant may changethis election to an allowable alternative payout period by submitting a newElection Form to the Committee, provided that (i) any such Election Form issubmitted at least twelve (12) months prior to the Participant’s Retirement(and complies with the Code and 409A transitional relief provided thereunder) (ii) theelection takes effect at least twelve (12) months after the date on which theelection is made and (iii) the first payment to which the election appliesmust be deferred for a period of not less than five (5) years from thedate such payment would otherwise have been made; provided, however, no subsequentchange in the method of payout may be made to the extent such changeresults in the acceleration of a distribution. For example, if a Participanthas elected an Annual Installment Method, the Participant may not submit anew Election Form to the Committee to change the method of payment to alump sum. The Election Form most recently accepted by the Committee shallgovern the payout of the Retirement Benefit. The lump sum payment shall bemade, or installment payments shall commence, no later than sixty (60) daysfrom the date the Participant Retires. However,if the Participant is a “Key Employee” as defined in Code Section 416(i),as applied by Code Section 409A, and the stock of the Company ispublicly-traded, the Participant’s Retirement Benefit shall not be paid soonerthan six (6) months following the Participant’s separation of service asit may be defined with reference to Section 409A of the Code andtransitional relief provided thereunder.****Despite the foregoing, if the Participant’s Account Balanceat the time of his or her Retirement is less than

 

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$10,000,payment of the Retirement Benefit will be made in a lump sum within 60 daysfollowing Retirement.*****In the event this Section 5.2 fails tomeet the limitations or requirements of the Code and 409A transitional reliefprovided thereunder, then this Section 5.2 shall be modified by action ofthe Committee to the extent necessary to satisfy the requirements of the Codeand transitional relief provided with respect to Code Section 409A.*

 

5.3       Death Prior to Completion of RetirementBenefits. If a Participantdies after Retirement but before the Retirement Benefit is paid in full, theParticipant’s unpaid Retirement Benefit payments shall continue and shall bepaid to the Participant’s Beneficiary over the remaining number of years and inthe same amounts as that benefit would have been paid to the Participant hadthe Participant survived.

 

**ARTICLE 6**Termination Benefit

** **

6.1       Termination Benefits. Subject to the Deduction Limitation, if aParticipant experiences a Termination of Employment prior to his or herRetirement, the Participant shall receive a Termination Benefit, which shall beequal to the Participant’s vested Account Balance, valued as of the Terminationdate and credited with earnings in accordance with Section 3.6.

 

6.2       Payment of Termination Benefit. A Participant’s Termination Benefit shallbe paid in a lump sum no later than sixty (60) days following the date of theParticipant’s Termination of Employment or pursuant to an AnnualInstallment Method over a period of up to 15 years, with the portion of theTermination Benefit which is yet to be distributed being credited with earningsas set forth in Section 3.6. TheParticipant may change this election to an allowable alternative payoutperiod by submitting a new Election Form to the Committee, provided that (i) anysuch Election Form is submitted at least twelve (12) months prior to theParticipant’s Retirement (and complies with the Code and 409A transitionalrelief provided thereunder) (ii) the election takes effect at least twelve(12) months after the date on which the election is made and (iii) thefirst payment to which the election applies must be deferred for a period ofnot less than five (5) years from the date such payment would otherwisehave been made; provided, however, no subsequent change in the method of payoutmay be made to the extent such change results in the acceleration of adistribution. For example, if a Participant has elected an Annual InstallmentMethod, the Participant may not submit a new Election Form to theCommittee to change the method of payment to a lump sum. The Election Form mostrecently accepted by the Committee shall govern the payout of the TerminationBenefit. The lump sum payment shall be made, or installment payments shallcommence, no later than sixty (60) days from the date the ParticipantTerminates.

 

6.3       Death Prior to Completion of TerminationBenefits. If a Participantdies after Termination of Employment, but before the Termination Benefit ispaid, the Participant’s unpaid Termination Benefit shall be paid to theParticipant’s Beneficiary.

 

**ARTICLE 7**

** **

**Survivor Benefit**

** **

7.1       SurvivorBenefit. If a Participant dies before he or she Retires or Terminates, theParticipant’s Beneficiary shall receive a Survivor Benefit equal to theParticipant’s Account Balance.

 

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7.2       Paymentof Survivor Benefits. The Survivor Benefit shall be paid in the paymentperiod previously elected by the Participant for payment of the Retirement orTermination Benefit. The first (or only payment, if made in lump sum) shall bemade within sixty (60) days of the Committee’s receiving proof of theParticipant’s death.

 

**ARTICLE 8**Change In Control Benefit

** **

8.1       Change In Control. Notwithstanding anything herein to thecontrary, upon a Change in Control of the Employer, each Participant shallbecome fully vested in his or her Account Balance.

 

**ARTICLE 9**Disability Waiver and Benefit

** **

9.1       Disability Waiver.

 

(a)           Eligibility. By participating in the Plan, all Participants are eligible for thiswaiver.

 

(b)           Waiver of Deferral: Credit for Plan Year ofDisability. A Participantwho is determined by the Committee to be suffering from a Disability shall beexcused from fulfilling that portion of the Annual Deferral Amount commitmentthat would otherwise have been withheld from a Participant’s Base Annual Salaryand/or Annual Bonus for the Plan Year during which the Participant first suffersa Disability. During the period of Disability, the Participant shall not beallowed to make any additional deferral elections.

 

(c)           Return to Work. If a Participant returns to employment withan Employer after a Disability ceases, the Participant may elect to deferan Annual Deferral Amount for the Plan Year following his or her return toemployment and for every Plan Year thereafter while a Participant in the Plan;provided such deferral elections are otherwise allowed and an Election Form isdelivered to and accepted by the Committee for each such election in accordancewith Section 3.3 above.

 

9.2       Benefit Eligibility. A Participant suffering a Disability shall,for benefit purposes under this Plan but subject to Section 9.1, above,continue to be considered to be employed and shall be eligible for the benefitsprovided for in Articles 4, 5, 6, and 7 in accordance with the provisions ofthose Articles. Notwithstanding the above, the Committee shall have the right,in its sole and absolute discretion and for purposes of this Plan only, to deema Participant’s employment or service terminated for purposes of this Plan atany time after such Participant is determined to be permanently and totallydisabled under the Employer’s long-term disability plan or would have beendetermined to be permanently and totally disabled had he or she participated insuch plan.

 

**9.3****      ****Nonqualified DeferredCompensation Plan Rules****. In the event this Article 9fails to meet the limitations or requirements of the Code, inclusive of**transitionalrelief provided under Section 409A, **then this Article 9 shall bemodified by action of the Committee to the extent necessary to satisfy therequirements of the Code.**

 

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**ARTICLE 10**Beneficiary Designation

** **

10.1     Beneficiary. Each Participant shall have the right, at any time, to designate hisor her Beneficiary (both primary as well as contingent) to receive any benefitspayable under the Plan to a Beneficiary upon the death of a Participant. TheBeneficiary designated under this Plan may be the same as or differentfrom the Beneficiary designation under any other plan of an Employer in whichthe Participant participates.

 

10.2     Beneficiary Designation; Change; SpousalConsent. A Participant shalldesignate his or her Beneficiary by completing and signing the BeneficiaryDesignation Form, and returning it to the Committee or its designated agent. AParticipant shall have the right to change a Beneficiary by completing,signing, and otherwise complying with the terms of the Beneficiary Designation Form andthe Committee’s rules and procedures, as in effect from time to time. Whererequired by law or by the Committee, in its sole and absolute discretion, ifthe Participant names someone other than his or her spouse as a Beneficiary, aspousal consent, in the form designated by the Committee, must be signedby that Participant’s spouse and returned to the Committee. Upon the acceptanceby the Committee of a new Beneficiary Designation Form, all Beneficiarydesignations previously filed shall be canceled. The Committee shall beentitled to rely on the last Beneficiary Designation Form filed by theParticipant and accepted by the Committee prior to his or her death.

 

10.3     Acknowledgement. No designation or change in designation ofa Beneficiary shall be effective until received, accepted and acknowledged inwriting by the Committee or its designated agent.

 

10.4     NoBeneficiary Designation. If a Participant fails to designate a Beneficiaryas provided in Sections 10.1, 10.2, and 10.3 above, or, if all designatedBeneficiaries predecease the Participant or die prior to complete distributionof the Participant’s benefits, then the Participant’s designated Beneficiaryshall be his or her surviving spouse. If the Participant has no survivingspouse, the benefits remaining under the Plan shall be paid to the Participant’schildren (including adopted children) per stirpes or if there are no children,to the Participant’s estate.

 

10.5     Doubt as to Beneficiary. If the Committee has any doubt as to theproper Beneficiary to receive payments pursuant to this Plan, the Committeeshall have the right, exercisable in its sole and absolute discretion, to causethe Participant’s Employer to withhold such payments until this matter isresolved to the Committee’s satisfaction.

 

10.6     Discharge of Obligations. The payment of benefits under the Plan to aBeneficiary shall fully and completely discharge all Employers and the Committeefrom all further obligations under this Plan with respect to the Participant,and that Participant’s Plan Agreement shall terminate upon such full payment ofbenefits.

 

**ARTICLE 11**Leave of Absence

** **

11.1     Paid leave of Absence. If a Participant is authorized by theParticipant’s Employer for any reason to take a paid leave of absence from theemployment of the Employer, the Participant shall continue to be consideredactively employed by or in the service of the Employer for purposes hereof andthe Annual Deferral Amount shall continue to be withheld during such paid leaveof absence in accordance with Section 3.3.

 

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11.2     Unpaid Leave of Absence. If a Participant is authorized by theParticipant’s Employer for any reason to take an unpaid leave of absence fromthe employment of the Employer, the Participant shall continue to be consideredactively employed by the Employer for purposes hereof. Upon the earlier of thedate the leave of absence expires or the date the Participant returns to paidemployment, deferrals shall resume for the remaining portion of the Plan Yearin which the expiration or return occurs, based on the deferral election, ifany, made for that Plan Year. If no election was made for that Plan Year, nodeferral shall be withheld for the remainder of the Plan Year.

 

**ARTICLE 12**Termination, Amendment, or Modification

** **

12.1     Termination. Each Employer reserves the right to terminate the Plan at any timewith respect to Participants employed by the Employer. Upon the termination ofthe Plan the Participant’s Account Balance shall be paid out in accordance withthe Participant’s prior elections and any overriding provisions of the Plan. Notwithstandingthe foregoing, upon and for twelve months following the occurrence of a Changein Control, an Employer shall have the right, in its sole and absolutediscretion, to terminate the Plan and, notwithstanding any elections made bythe Participants, to pay all such benefits in a lump sum, subject to thelimitations of the Code and transitional relief provided with respect to Code Section 409A.

 

12.2     Amendment. Any Employer may, at any time, amend or modify the Plan in whole orin part with respect to that Employer; provided, however, that noamendment or modification shall be effective to decrease a Participant’sAccount Balance at the time of such amendment, calculated as though theParticipant had experienced a Termination of Employment as of the effectivedate of the amendment or modification, or, if the amendment or modificationoccurs after the date upon which the Participant was eligible to Retire, theParticipant had Retired as of the effective date of the amendment ormodification. In addition, no amendment or modification of the Plan shallaffect the right of any Participant or Beneficiary who was eligible to or didRetire on or before the effective date of such amendment or modification toreceive benefits in the manner he or she elected. However, no such amendmentshall violate the limitations of the Code and transitional relief provided withrespect to Code Section 409A.

 

12.3     Effect of Payment. The full payment of the applicable benefitunder Articles 4, 5, 6, or 7 of the Plan shall completely discharge allobligations to a Participant under this Plan and the Participant’s PlanAgreement shall terminate.

 

**ARTICLE 13**Administration

** **

13.1     Committee Duties. This Plan shall be administered by a Committee,to be known as the Millennium Pharmaceuticals, Inc., Deferred Compensation Plan Committee, whichshall consist of individuals approved by the Board, or, after the occurrence ofa Change in Control, a third party who, before the occurrence of such Change inControl, was appointed by the Board or to act as the Plan Administrator in theevent of a Change in Control, and accepted such appointment. Members of the Committeemay be Participants under this Plan. The Committee shall also have thediscretion and authority to make, amend, interpret, and enforce all appropriaterules and regulations for the administration of this Plan and decide orresolve any and all questions, including but not limited to,

 

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interpretations of this Plan and entitlement to oramount of benefits under this Plan, as may arise in connection with thePlan. Any Committee member must recuse himself or herself on any matter ofpersonal interest to such member that comes before the Committee.

 

13.2     Agents. In the administration of this Plan, the Committee may, from time totime, employ agents and delegate to them such administrative duties as it seesfit and may from time to time consult with counsel who may be counselto any Employer.

 

13.3     Binding Effect of Decisions. The decision or action of the Committeewith respect to any question arising out of or in connection with theadministration, interpretation and application of the Plan and the rules andregulations promulgated hereunder shall be final and conclusive and bindingupon all persons having any interest in the Plan.

 

13.4     Indemnity of Committee. All Employers shall indemnify and holdharmless the members of the Committee against any and all claims, losses,damages, expenses, or liabilities arising from any action or failure to actwith respect to this Plan, except in the case of gross negligence or willfulmisconduct by the Committee or any of its members.

 

13.5     Employer Information. To enable the Committee to perform itsfunctions, each Employer shall supply full and timely information to the Committeeon all matters relating to the compensation of its Participants, the date and circumstancesof the Retirement, Disability, death or Termination of Employment of itsParticipants, and such other pertinent information as the Committee may reasonablyrequire.

 

**ARTICLE 14**

** **

**Administration Upon Changein Control**

 

14.1 Committee. Forpurposes of this Plan, the Committee shall be the administrator at all timesprior to the occurrence of a Change in Control. Upon and after the occurrenceof a Change in Control, the administrator shall be an independent third partyselected by the individual who, immediately prior to such event, was theCompany’s CEO or, if not so identified, the Company’s highest ranking officer(the “Ex-CEO”); provided, however, the Committee, as constituted immediatelyprior to a Change in Control, shall continue to act as the administrator ofthis Plan until the date on which the independent third party selected by the Ex-CEOaccepts the responsibilities of administrator under this Plan. Upon and after aChange in Control, the administrator shall have the discretionary power todetermine all questions arising in connection with the administration of thePlan and the interpretation of the Plan and Trust except benefit entitlementdeterminations upon appeal; provided, however, upon and after the occurrence ofa Change in Control, the administrator shall have no power to direct theinvestment of Plan or Trust assets or select any investment manager orcustodial firm for the Plan or Trust. Upon and after the occurrence of a Changein Control, the Company must: (1) pay all reasonable administrativeexpenses and fees of the administrator; (2) indemnify the administratoragainst any costs, expenses and liabilities including, without limitation,attorney’s fees and expenses arising in connection with the performance of the administratorhereunder, except with respect to matters resulting from the gross negligenceor willful misconduct of the administrator or its employees or agents; and (3) supplyfull and timely information to the administrator on all matters relating to thePlan, the Trust, the Participants and their Beneficiaries, the Account Balancesof the Participants, the date and circumstances of the Disability, death orTermination of Employment of the Participants, and such other pertinentinformation as the administrator may reasonably require. Upon and after aChange in Control, the administrator may only be terminated (and areplacement appointed) by the Ex-CEO prior to the Change in Control. Upon andafter a Change in Control, the administrator may not be terminated by theCompany.

 

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14.2 Benefit Review Committee.Upon and after the occurrence of a Change in Control, the Benefits Review Committee,as constituted immediately prior to a Change in Control, shall continue toreview denied claims as provided in Article 14 of this Plan. In the eventany member of the Benefits Review Committee resigns or is unable to perform theduties of a member of the Benefits Review Committee, successors to such membersshall be selected by the Ex-CEO. Upon and after a Change in Control, theBenefits Review Committee shall have the discretionary power and authority todetermine all questions arising in connection with the review of a denied claimas provided in Section 15.3. Upon and after the occurrence of a Change inControl, the Company must: (1) pay all reasonable administrative expensesand fees of the Benefits Review Committee; (2) indemnify the BenefitsReview Committee against any costs, expenses and liabilities including, withoutlimitation, attorney’s fees and expenses arising in connection with theperformance of the Benefits Review Committee hereunder, except with respect tomatters resulting from the gross negligence or willful misconduct of theBenefits Review Committee or its employees or agents; and (3) supply fulland timely information to the Benefits Review Committee on all matters relatingto the Plan, the Trust, the Participants and their Beneficiaries, the AccountBalances of the Participants, the date and circumstances of the Disability,death or Termination of Employment of the Participants, and such otherpertinent information as the Benefits Review Committee may reasonablyrequire. Upon and after a Change in Control, a member of the Benefits Review Committeemay not be removed by the Company but may only be removed (and areplacement appointed) by the Ex-CEO.

 

**ARTICLE 15**Claims Procedure

** **

15.1     Presentation of Claim. Any Participant or Beneficiary of adeceased Participant (such Participant or Beneficiary being referred to belowas a “Claimant”) may deliver to the Committee a written claim for adetermination with respect to the amounts distributable to such Claimant fromthe Plan. If such a claim relates to the contents of a notice received by theClaimant, the claim must be made within sixty (60) days after such notice wasreceived by the Claimant. The claim must state with particularity thedetermination desired by the Claimant. All other claims must be made within onehundred eighty (180) days of the date on which the event that caused the claimto arise occurred.

 

15.2     Notification of Decision. The Committee shall consider a Claimant’sclaim within a reasonable time, and shall notify the Claimant in writing butnot later than ninety (90) days (one hundred eighty (180) days if the Committeedetermines special circumstances apply):

 

(a)           That the Claimant’s requested determinationhas been made, and that the claim has been allowed in full; or

 

(b)           That the Committee has reached a conclusioncontrary, in whole or in part, to the Claimant’s requested determination, andsuch notice must set forth in a manner calculated to be understood by theClaimant:

 

(i)            the specific reason(s) for the denial if theclaim, or any part of it;

 

(ii)           specific reference(s) to pertinent provisionsof the Plan upon which such denial was based;

 

(iii)          a description of any additional material orinformation necessary for the Claimant to perfect the claim, and an explanationof why such material or information is necessary; and

 

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(iv)          an explanation of the claim review procedureset forth in Section 15.3 below.

 

15.3     Review of a Denied Claim. Within sixty (60) days after receiving anotice from the Committee that a claim has been denied, in whole or in part, aClaimant (or the Claimant’s duly authorized representative) may file withthe Committee a written request for a review of the denial of the claim. Thereafter,the Claimant (or the Claimant’s duly authorized representative):

 

(a)           may review pertinent documents;

 

(b)           may submit written comments or otherdocuments;

 

(c)           may request a hearing, which the Committee,in its sole discretion, may grant; and

 

(d)           will be provided, upon request, reasonableaccess to, and copies of, all documents, records and other information relevantto the Claimant’s claim.

 

The Committee will provide adecision on review within sixty (60) days following the filing, or one hundredtwenty (120) days if special circumstances exist.

 

15.4     Decision on Review. The Committee shall render its decision onreview promptly, and not later than sixty (60) days after the filing of awritten request for review of the denial, unless a hearing is held or otherspecial circumstances require additional time, in which case the Committee’sdecision must be rendered within one hundred twenty (120) days after such date.Such decision must be written in a manner calculated to be understood by theClaimant, and it must contain:

 

(a)           specific reasons for the decision;

 

(b)           specific reference(s) to the pertinent Planprovisions upon which the decision was based; and

 

(c)           such other matters as the Committee deemsrelevant.

 

15.5     Legal Action. A Claimant’s compliance with the foregoingprovisions of this Article 15 is a mandatory prerequisite to a Claimant’sright to commence any arbitration proceeding with respect to any claim forbenefits under this Plan.

 

15.6     Arbitration. Any claim or controversy between Millennium and a Participant or Beneficiary which theparties are unable to resolve themselves, and which is not resolved through theclaims procedure set forth in Article 15, including any claim arising outof a Participant’s employment or the termination of that employment, andincluding any claim arising out of, connected with, or related to theformation, interpretation, performance, or breach of any provision of thisPlan, and any claim or dispute as to whether a claim is subject to arbitration,shall be submitted to and resolved exclusively by expedited binding arbitrationby a single arbitrator in accordance with the following procedures:

 

(a)           In the event of a claim or controversysubject to this arbitration provision, the complaining party shall promptlysend written notice to the other party identifying the matter in dispute andthe proposed remedy. Following the giving of such notice, the parties shallmeet and attempt in good faith to resolve the matter. In the event the partiesare unable to resolve the matter within twenty one (21) days, the parties shallmeet and attempt in good faith to select a single arbitrator acceptable to bothparties. If a single arbitrator is not selected by mutual consent within ten (10) businessdays following the giving of the written notice of dispute, an arbitrator shallbe selected from a list of nine persons each of

 

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whom shall be an attorney who is either engaged inthe active practice of law or a recognized arbitrator and who, in either event,is experienced in serving as an arbitrator in disputes between employers andemployees, which list shall be provided by the main office of either JAMS, theAmerican Arbitration Association (“AAA”) or the Federal Mediation andConciliation Service. If, within three business days of the parties’ receipt ofsuch list, the parties are unable to agree upon an arbitrator from the list,then the parties shall each strike names alternatively from the list, with thefirst to strike being determined by the flip of a coin. After each party hashad four strikes, the remaining name on the list shall be the arbitrator. Ifsuch person is unable to serve for any reason, the parties shall repeat thisprocess until an arbitrator is selected.

 

(b)           Unless the parties agree otherwise, withinsixty (60) days of the selection of the arbitrator, a hearing shall beconducted before such arbitrator at a time and a place agreed upon by theparties. In the event the parties are unable to agree upon the time or place ofthe arbitration, the time and place shall be designated by the arbitrator afterconsultation with the parties. Within thirty (30) days of the conclusion of thearbitration hearing, the arbitrator shall issue an award, accompanied by awritten decision explaining the basis for the arbitrator’s award.

 

(c)           In any arbitration hereunder, the Companyshall pay all administrative fees of the arbitration and all fees of thearbitrator. Each party shall pay its own attorneys’ fees, costs, and expenses,unless the arbitrator orders otherwise. The prevailing party in sucharbitration, as determined by the arbitrator, and in any enforcement or othercourt proceedings, shall be entitled, to the extent permitted by law, toreimbursement from the other party for all of the prevailing party’s costs(including but not limited to the arbitrator’s compensation), expenses, andattorneys’ fees. The arbitrator shall have no authority to add to or to modifythis Plan, shall apply all applicable law, and shall have no lesser and nogreater remedial authority than would a court of law resolving the same claimor controversy. The arbitrator shall, upon an appropriate motion, dismiss anyclaim without an evidentiary hearing if the party bringing the motionestablishes that it would be entitled to summary judgment if the matter hadbeen pursued in court litigation. The parties shall be entitled to discovery asfollows. Each party may take no more than three depositions. Company may deposethe Participant or Beneficiary plus two other witnesses, and Participant orBeneficiary may depose Company, within the meaning of Rule 30(b)(6) ofthe Federal Rules of Civil Procedure, plus two other witnesses. Each partymay make such reasonable document discovery requests as are allowed in thediscretion of the arbitrator.

 

(d)           The decision of the arbitrator shall befinal, binding, and non-appealable, and may be enforced as a finaljudgment in any court of competent jurisdiction.

 

(e)           This arbitration provision of the Plan shallextend to claims against any parent, Subsidiary, or affiliate of each party,and, when acting within such capacity, any officer, director, shareholder,Participant, Beneficiary, or agent of each party, or of any of the above, andshall apply as well to claims arising out of state and federal statutes andlocal ordinances as well as to claims arising under the common law or underthis Plan.

 

(f)            Notwithstanding the foregoing, and unlessotherwise agreed between the parties, either party may, in an appropriatematter, apply to a court for provisional relief, including a temporaryrestraining order or preliminary injunction, on the ground that the arbitrationaward to which the applicant may be entitled may be renderedineffectual without provisional relief.

 

(g)           Any arbitration hereunder shall be conductedin accordance with the Federal Arbitration Act; provided, however, that, in theevent of any inconsistency between the rules and procedures of the Act andthe terms of this Plan, the terms of this Plan shall prevail.

 

(h)           If any of the provisions of this Section 15.6are determined to be unlawful or otherwise unenforceable, in whole or in part,such determination shall not affect the validity of the

 

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remainder of this Section 15.6, and this Section 15.6shall be reformed to the extent necessary to carry out its provisions to thegreatest extent possible and to insure that the resolution of all conflictsbetween the parties, including those arising out of statutory claims, shall beresolved by neutral, binding arbitration. If a court should find that theprovisions of this Section 15.6 are not absolutely binding, then theparties intend any arbitration decision and award to be fully admissible inevidence in any subsequent action, given great weight by any finder of fact,and treated as determinative to the maximum extent permitted by law.

 

(i)            The parties do not agree to arbitrate anyputative class action or any other representative action. The partiesagree to arbitrate only the claim(s) of a single Participant.

 

**ARTICLE 16**Trust

** **

16.1     Establishment of Trust. The Company shall establish the Trust, andthe Employer(s) shall transfer over to the Trust such assets, if any, as the Committeedetermines, from time to time and in its sole discretion, are appropriate.

 

16.2     Interrelationship of the Plan and the Trust. The provisions of the Plan shall govern therights of a Participant to receive distributions pursuant to the Plan. Theprovisions of the Trust shall govern the rights of the Participant and thecreditors of the Employers to the assets transferred to the Trust. The Employer(s)shall at all times remain liable to carry out their obligations under the Plan.The Employers’ obligations under the Plan may be satisfied with Trustassets distributed pursuant to the terms of the Trust. Any such distributionshall reduce the Employer’s obligations under this Agreement.

 

**ARTICLE 17**Miscellaneous

** **

17.1     Unsecured General Creditor. Participants and their Beneficiaries,heirs, successors, and assigns shall have no legal or equitable right, interestor claim in any property or assets of an Employer. Any and all of an Employer’sassets shall be, and remain, the general, un-pledged, and unrestricted assetsof the Employer. An Employer’s obligation under the Plan shall be merely thatof an unfunded and unsecured promise to pay money in the future and the soleinterest of a Participant and a Participant’s beneficiaries shall be as anunsecured general creditor of the Company and any Employer.

 

17.2     Employer’s Liability. An Employer’s liability for the payment ofbenefits shall be defined only by the Plan. An Employer shall have noobligation to a Participant under the Plan except as expressly provided in thePlan.

 

17.3     Non-Assignability. Neither a Participant nor any other personshall have any right to commute, sell, assign, transfer, pledge, anticipate,mortgage, or otherwise encumber, transfer, hypothecate, or convey in advance ofactual receipt, the amounts, if any, payable hereunder, or any part thereof,which are, and all rights to which are expressly declared to be un-assignableand non-transferable. No part of the amounts payable shall, prior toactual payments be subject to seizure or sequestration for the payment of anydebts, judgments, alimony, or separate maintenance owed by a Participant or anyother person, nor be transferable by operation of law in the event of aParticipant’s or any other person’s bankruptcy or insolvency.

 

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17.4     Coordination with Other Benefits. The benefits provided for a Participant andParticipant’s Beneficiary under the Plan are in addition to any other benefitsavailable to such Participant under any other plan or program for employees ofthe Participant’s Employer. The Plan shall supplement and shall not supersede,modify, or amend any other such plan or program except as may otherwise beexpressly provided.

 

17.5     Not a Contract of Employment. The terms and conditions of this Plan shallnot be deemed to constitute a contract of employment between any Employer andthe Participant. Such employment is hereby acknowledged to be an “at will”employment relationship that can be terminated at any time for any reason, withor without cause, unless expressly provided in a written employment agreement. Nothingin this Plan shall be deemed to give a Participant the right to be retained inthe service of any Employer, either as an employee or a director, or tointerfere with the right of any Employer to discipline, demote, discharge orchange the terms of employment at any time, with or without cause, of theParticipant at any time.

 

17.6     Furnishing Information. A Participant or his or her Beneficiarywill cooperate with the Committee by furnishing any and all informationrequested by the Committee and take such other actions as may be requestedin order to facilitate the administration of the Plan and the payments ofbenefits hereunder, including but not limited to taking such physicalexaminations as the Committee may deem necessary.

 

17.7     Terms. Whenever any words are used herein in the singular or in the plural,they shall be construed as though they were used in the plural or the singular,as the case may be, in all cases where they would so apply. The masculinepronoun shall be deemed to include the feminine and *vice versa*,unless the context clearly indicates otherwise.

 

17.8     Captions. The captions of the articles, sections, and paragraphs of this Planare for convenience only and shall not control or affect the meaning orconstruction of any of its provisions.

 

17.9     Governing Law. Subject to ERISA, the provisions of thisPlan shall be construed and interpreted according to the laws of the State of Delaware.

 

17.10   Notice. Any notice or filing required or permitted to be given to the Committeeunder this Plan shall be sufficient if in writing and hand-delivered, or sentby registered or certified mail to:

 

Millennium Pharmaceuticals, Inc.

Benefits

40 Landsdowne Street,

Cambridge, MA 02139

 

Such notice shall be deemed given as of the date of delivery or, ifdelivery is made by mail, as of the date shown on the postmark on the receiptfor registration or certification.

 

Any notice or filing required or permitted to be given to a Participantunder this Plan shall be sufficient if in writing and hand-delivered, or sentby, mail, to the last known address of the Participant.

 

17.11   Successors. The provisions of this Plan shall bind and inure to the benefit ofthe Participant’s Employer and its successors and assigns and the Participant,the Participant’s Beneficiaries, and their permitted successors and assigns.

 

17.12   Spouse’s Interest. A Participant’s Beneficiarydesignation shall be deemed automatically revoked if the Participant names aspouse as Beneficiary and the marriage is later dissolved or the spouse dies. Withoutlimiting the generality of the foregoing, the interest in the benefitshereunder of a spouse of

 

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aParticipant who has predeceased the Participant or whose marriage with theParticipant has been dissolved shall automatically pass to the Participant andshall not be transferable by such spouse in any manner, including but notlimited to such spouse’s will, or under the laws of intestate succession. Notwithstandingthe above, nothing herein is intended to preclude compliance with a validdomestic relations order that meets the qualifications of at Qualified DomesticRelations Order as defined in ERISA.

 

17.13   Validity. In case any provision of this Plan shall be illegal or invalid forany reason, said illegality or invalidity shall not affect the remaining partshereof, but this Plan shall be construed and enforced as if such illegal orinvalid provision had never been inserted herein.

 

17.14   Incompetent. If the Committee determines in its discretion that a benefit underthis Plan is to be paid to a minor, a person declared incompetent or to aperson incapable of handling the disposition of that person’s property, the Committeemay direct payment of such benefit to the guardian, legal representative,or person having the care and custody of such minor, incompetent, or incapableperson. The Committee may require proof of minority, incompetency,incapacity, or guardianship, as it may deem appropriate prior todistribution of the benefit. Any payment of a benefit shall be a payment forthe account of the Participant and the Participant’s Beneficiary, as the case may be,and shall be a complete discharge of any liability under the Plan for suchpayment amount.

 

17.15   Court Order. The Committee is authorized to make any payments directed by courtorder in any action in which the Plan or Committee has been named as a party.

 

17.16   Legal Fees To Enforce Rights After Change inControl.  The Companyis aware that upon the occurrence of a Change in Control, the Board (whichmight then be composed of new members) or a shareholder of the Company, or ofany successor corporation might then cause or attempt to cause the Company orsuch successor to refuse to comply with its obligations under the Plan andmight cause or attempt to cause the Company to institute, or may institute,litigation seeking to deny Participants the benefits intended under the Plan. Inthese circumstances, the purpose of the Plan could be frustrated. Accordingly,if, following a Change in Control, it should appear to any Participant that theCompany or its Employer has failed to comply with any of its obligations underthe Plan or any agreement thereunder or, if the Company or any other persontakes any action to declare the Plan void or unenforceable or institutes anylitigation or other legal action designed to deny, diminish or to recover fromany Participant the benefits intended to be provided, then the Companyirrevocably authorizes such Participant to retain counsel of his or her choiceat the expense of the Company to represent such Participant in connection withthe initiation or defense of any litigation or other legal action, whether byor against the Company or any director, officer, shareholder or other personaffiliated with the Company or any successor thereto in any jurisdiction.

 

IN WITNESS WHEREOF, the Companyhas signed this Plan Document as of March 3, 2006.

 

 
|   | Millennium Pharmaceuticals, Inc. |
|--------|---------------------------------------|
|   |                                  |
|   | a Delaware corporation.               |
|   |                                  |
|   | By:                                   | /s/ Laurie B. Keating |   |
|   |                                  |
|   | Title:                                | Senior Vice President and General Counsel |   |
|        |                                       |  |  |  |

 

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