Amgen Inc. Performance Award Program



 Exhibit 10.5 
  
 AMGEN INC. 
 PERFORMANCE AWARD PROGRAM 
 (Amended and Restated Effective December 6, 2004) 
  
 ARTICLE I 
  
 PURPOSE 
  
 The purpose of this document is to set forth the general terms and conditions applicable to the Performance Award Program
(the “Program”) established by the Compensation and Management Development Committee of the Board of Directors of Amgen Inc. (the “Company”) pursuant to, and in implementation of, Section 10(d) of the Company’s
Amended and Restated 1991 Equity Incentive Plan, as amended (the “1991 Plan”). The Program is intended to carry out the purposes of the 1991 Plan and provide a means to reinforce objectives for sustained long-term performance and
value creation by awarding selected key employees of the Company with payments in Company stock based on the level of achievement of pre-established performance goals during three-year performance cycles, subject to the restrictions and other
provisions of the Program and the 1991 Plan. The Program shall be effective as of December 9, 2003. 
  
 ARTICLE II 
  
 DEFINITIONS 
  
 Unless otherwise defined herein,
capitalized terms used herein shall have the same definitions as such terms are defined in the 1991 Plan. 
  
 “Award” shall mean the earned Performance Units payable in Common Stock under the Program for a Performance Cycle. 
  
 “Board” shall mean the Board of Directors of the Company.

  
 “Committee” shall mean the Compensation and
Management Development Committee of the Board, appointed by the Board from among its members to administer the 1991 Plan in accordance with Section 2 thereof. 
  

“Common Stock” shall mean the common stock, par value $0.0001 per share, of the Company. 
  
 “Determination Date” shall have the meaning ascribed to it
in Section 4.1. 
  
 “Participant” shall mean a
key employee of the Company or an Affiliate who participates in this Program pursuant to the provisions of Article III hereof. 
  
 “Peer Group” shall mean a list of companies selected by the Committee. 







 “Performance Cycle” shall mean each period of three consecutive fiscal years commencing
on the first day of the first fiscal year and ending on the last day of the third fiscal year. Performance Cycles may overlap. 
  
 “Performance Goal” shall have the meaning ascribed to it in Section 5.2. 
  
 “Performance Unit” shall mean a right granted to a Participant pursuant to the Program to receive Common
Stock, the payment of which is contingent upon achieving the Performance Goals. 
  
 “QDRO” shall mean a court order (i) that creates or recognizes the right of the spouse, former spouse or child (an “Alternate Payee”) of an individual who is granted an Award to an
interest in such Award relating to marital property rights or support obligations and (ii) that the 1991 Plan administrator determines would be a “qualified domestic relations order,” as that term is defined in Section 414(p) of the Code
and Section 206(d) of the Employee Retirement Income Security Act (“ERISA”), but for the fact that the 1991 Plan is not a plan described in Section 3(3) of ERISA. 
  
 “Retirement-Eligible” shall mean a Participant who is at least 60 years of age and has completed a minimum
of fifteen (15) years of service with the Company or an Affiliate. 
  
 “Section 162(m) Participant” shall mean any Participant designated by the Committee as a “covered employee” within the meaning of Section 162(m) of the Code whose compensation for the fiscal year in which the
Participant is so designated or a future fiscal year may be subject to the limit on deductible compensation imposed by Section 162(m) of the Code. 
  
 ARTICLE III 
  
 PARTICIPATION 
  
 3.1 Participants. Participants for any Performance Cycle shall be those active key employees of the Company or an Affiliate who are designated in writing as eligible for participation by the Committee within
the first ninety (90) days of such Performance Cycle. 
  
 3.2
No Right to Participate. No Participant or other employee of the Company or an Affiliate shall, at any time, have a right to participate in this Program for any Performance Cycle, notwithstanding having previously participated in this
Program. 
  
 ARTICLE IV 
  
 ADMINISTRATION 
  
 4.1 Generally. Within the first ninety (90) days of each Performance
Cycle, the Committee shall establish the basis for payments under this Program in relation to specified Performance Goals, as more fully described in Article V hereof. Following the end of each Performance Cycle, once all of the information
necessary for the Committee to determine the Company’s performance and comparative performance with the Peer Group is made available to 
  

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 the Committee, the Committee shall determine the amount of the Award payable to each Participant; provided,
however, that any such determination shall be made no later than six months following the end of such Performance Cycle (the date of such determination shall hereinafter be called the “Determination Date”). The Committee shall
have the power and authority granted it under Section 2 of the 1991 Plan, including, without limitation, the authority to construe and interpret this Program, to prescribe, amend and rescind rules, regulations and procedures relating to its
administration and to make all other determinations necessary or advisable for administration of this Program. Decisions of the Committee in accordance with the authority granted hereby shall be conclusive and binding. Subject only to compliance
with the express provisions hereof, the Committee may act in its sole and absolute discretion with respect to matters within its authority under this Program. 
  

4.2 Provisions Applicable to Section 162(m) Participants. Any Awards paid hereunder to a Section 162(m) Participant shall satisfy and shall be
interpreted in a manner that satisfies any applicable requirements as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and any provisions, application or interpretation of the Program or the 1991
Plan that is inconsistent with this intent shall be disregarded. 
  
 4.3 Provisions Applicable to Participants in Foreign Jurisdictions. Notwithstanding any provision of the Program to the contrary, in order to comply with the laws in other countries in which the Company and its Affiliates operate or
have employees, the Committee, in its sole discretion, shall have the power and authority to: 
  
 (i) modify the terms and conditions of any award of Performance Units granted to employees outside the United States to comply with applicable foreign laws; 
  
 (ii) condition the effectiveness of any award of Performance Units upon
approval or compliance with any necessary local governmental regulatory exemption or approvals; 
  
 (iii) provide for payment of any Award in cash or Common Stock, at the Company’s election, to the extent necessary to comply with applicable foreign
laws; and 
  
 (iv) take any other action, before or after an award
of Performance Units is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. 
  
 Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no award of Performance Units shall be granted, that would violate
the Exchange Act, the Code, any securities law or governing statute or any other applicable law. 
  
 ARTICLE V 
  
 AWARD DETERMINATIONS 
  
 5.1 Award of
Performance Units. Within the first ninety (90) days of each Performance Cycle, the Committee shall determine the number of Performance Units (rounded 
  

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 down to the nearest whole number) to be awarded under this Program to each Participant with respect to such Performance
Cycle and a date upon which the Performance Units shall be assigned a unit value based on the fair market value of a share of Common Stock on such specified date. Performance Units granted under the Program shall constitute stock bonuses under
Sections 7 and 10(d) of the 1991 Plan. 
  
 5.2 Performance
Requirements. Within the first ninety (90) days of each Performance Cycle, the Committee shall approve the performance goals (collectively, the “Performance Goals”) with respect to any of the business criteria permitted under
Section 10(d) of the 1991 Plan), each subject to such adjustments as the Committee may specify in writing at such time, and shall establish a formula, standard or schedule which aligns the level of achievement of the Performance Goals with the
earned Performance Units. The Performance Goals may not be changed during the Performance Cycle, but the thresholds and targets of the Performance Goals shall be subject to such adjustments as the Committee may specify in writing within the first
ninety (90) days of the Performance Cycle. 
  
 ARTICLE VI

  
 PAYMENT OF AWARDS 
  
 6.1 Form and Timing of Payment. Except as set forth in Section 8.1
below, any Award payable pursuant to this Program shall be paid as soon as practicable following the Determination Date in shares of Common Stock based on the average of the daily closing prices of a share of Common Stock on the Nasdaq National
Market for the thirty (30) trading days ending seven trading days immediately preceding the Determination Date; provided, however, that no Award shall be paid unless and until the Committee certifies, in writing, the extent to which the
Performance Goals have been achieved and the corresponding number of Performance Units earned. Shares of Common Stock issued in respect of an Award shall be deemed to be issued in consideration for future services to be rendered or past services
actually rendered to the Company or for its benefit, by the Participant, which the Committee deems to have a value not less than the par value thereof. 
  
 6.2 Tax Withholding. The Participant shall satisfy any federal, state and local tax withholding obligation relating to the payment of the Award by
authorizing the Company to withhold from the shares of the Common Stock otherwise issuable to the Participant as a result of the vesting or the payment of the Award a number of shares having a fair market value less than or equal to the amount of
the Company’s required minimum statutory withholding. Any shares of Common Stock withheld by the Company hereunder shall not be deemed to have been issued by the Company for any purpose under the 1991 Plan. In addition, the Participant shall
take any further actions and execute any additional documents as may be necessary to effectuate the provisions of this Section 6.2. Notwithstanding Section 6.1, no certificates representing the shares of Common Stock shall be delivered to a
Participant unless and until he or she shall have paid to the Company the full amount of all federal, state and local tax withholding or other employment taxes applicable to him or her resulting from the payment of the Award. 
  

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 ARTICLE VII 
  
 TERMINATION OF EMPLOYMENT 
  
 7.1 Termination of Employment During Performance Cycle. 
  

(a) In the event that a Participant’s employment with the Company or an Affiliate is terminated within six months following the commencement of a
Performance Cycle for any reason, all of such Participant’s rights to an Award for such Performance Cycle shall be forfeited. 
  
 (b) Subject to Section 7.1(a) above, in the event that a Participant’s employment with the Company or an Affiliate is terminated prior to the last
business day of a Performance Cycle by reason of such Participant’s voluntary retirement and such Participant is Retirement-Eligible on the date of such termination, the prorated amount of such Participant’s Award, if any, applicable to
such Performance Cycle shall be paid in accordance with the provisions of Article VI above. For purposes of the foregoing, the amount of the Participant’s Award (rounded down to the nearest whole number) shall be determined based on the
Company’s performance as compared to the Performance Goals for such Performance Cycle and the Award otherwise payable is multiplied by a fraction (rounded to two decimal places), the numerator of which is the number of complete months of
employment during the Performance Cycle, and the denominator of which is 36.  
  
 (c) Subject to Section 7.1(a) above, in the event that a Participant’s employment with the Company or an Affiliate is terminated prior to the last business day of a Performance Cycle by reason of such
Participant’s death or disability (within the meaning of Title II or XVI of the Social Security Act or comparable statute applicable to an Affiliate and such disability is certified by (i) the Social Security Administration, (ii) the comparable
governmental authority applicable to an Affiliate, (iii) such other body having the relevant decision-making power applicable to an Affiliate, or (iv) an independent medical advisor appointed by the Company, as applicable, prior to such
termination), the prorated amount of such Participant’s Award, if any, applicable to such Performance Cycle shall be paid in accordance with the provisions of Article VI above. For purposes of the foregoing, the amount of the Participant’s
Award (rounded down to the nearest whole number) shall be determined based on the Company’s performance as compared to the Performance Goals for such Performance Cycle and the Award otherwise payable is multiplied by a fraction (rounded to two
decimal places), the numerator of which is the number of complete months of employment during the Performance Cycle, and the denominator of which is 36.  
  

(d) In the event that a Participant’s employment with the Company or an Affiliate is terminated prior to the last business day of a Performance
Cycle for any reason other than as specified in Sections 7.1(a), (b) and (c) above, all of such Participant’s rights to an Award for such Performance Cycle shall be forfeited, unless the Committee approves, based upon the recommendation of the
Company’s Chief Executive Officer which are based on valid business reasons, the payment of a prorated amount of the Participant’s Award, if any, applicable to such Performance Cycle shall be paid in accordance with the provisions of
Article VI above. For purposes of the foregoing, the amount of the Participant’s Award (rounded down to the nearest whole number) shall be determined based on the Company’s performance as compared to the Performance Goals for such
Performance Cycle and the Award otherwise payable is multiplied by a fraction (rounded to two decimal places), the numerator of which is the number of complete months of employment during the Performance Cycle, and the denominator of which is 36.
 
  

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 7.2 Termination of Employment After End of Performance Cycle. In the event that a
Participant’s employment with the Company or an Affiliate is terminated after the end of the applicable Performance Cycle but prior to the Determination Date for any reason, the amount of any Award applicable to such Performance Cycle shall be
paid to the Participant in accordance with the provisions of Article VI above. 
  
 ARTICLE VIII 
  
 CHANGE
IN CONTROL 
  
 8.1 Change in Control During Performance
Cycle. 
  
 (a) Notwithstanding anything to the contrary in
the Program, in the event of a Change in Control that occurs during the first fiscal year of a Performance Cycle, such Performance Cycle shall be shortened and shall terminate as of the last business day of the last completed fiscal quarter
preceding the date of such Change in Control and each Participant employed by the Company immediately prior to such Change in Control shall be entitled to a payment equal to the amount of the Participant’s Award (rounded down to the nearest
whole number) he or she would have received for such Performance Cycle assuming that the targets of the Performance Goals are satisfied. Any such payment shall be made as soon as practicable following such Change in Control and, in the
Committee’s sole discretion, may be paid in cash. 
  
 (b)
Notwithstanding anything to the contrary in the Program, in the event of a Change in Control that occurs during the second or third fiscal year of a Performance Cycle, such Performance Cycle shall be shortened and shall terminate as of the last
business day of the last completed fiscal quarter preceding the date of such Change in Control and each Participant employed by the Company immediately prior to such Change in Control shall be entitled to a payment equal to the greater of (i) the
amount of the Participant’s Award (rounded down to the nearest whole number) he or she would have received for such Performance Cycle assuming that the targets of the Performance Goals are satisfied, or (ii) the amount of the Participant’s
Award (rounded down to the nearest whole number) he or she would have been entitled to receive for such Performance Cycle, determined based on the Company’s performance and comparative performance for such shortened Performance Cycle. Any such
payment shall be made as soon as practicable following such Change in Control and, in the Committee’s sole discretion, may be paid in cash. 
  
 8.2 Change in Control After End of Performance Cycle. Notwithstanding anything to the contrary in the Program, in the event of a Change in Control
that occurs after the end of the applicable Performance Cycle but prior to the Determination Date, the amount of any Award applicable to such Performance Cycle shall be paid to the Participant in accordance with the provisions of Article VI above.

  

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 ARTICLE IX 
  
 MISCELLANEOUS 
  
 9.1 Plan. The Program is subject to all the provisions of the 1991 Plan and its provisions are hereby made a part of the Program, including without
limitation the provisions of Sections 7 and 10(d) thereof (relating to stock bonuses) and Section 11 thereof (relating to adjustments upon changes in the Common Stock), and is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the 1991 Plan. In the event of any conflict between the provisions of the Program and those of the 1991 Plan, the provisions of the 1991 Plan shall control. Notwithstanding any
provision of the Program to the contrary, any earned Performance Units paid in cash rather than shares of Common Stock shall not be deemed to have been issued by the Company for any purpose under the 1991 Plan. 
  
 9.2 Amendment and Termination. Notwithstanding anything herein to the
contrary, the Committee may, at any time, terminate, modify or suspend this Program; provided, however, that, without the prior consent of the Participants affected, no such action may adversely affect any rights or obligations with respect
to any Awards theretofore earned but unpaid for a completed Performance Cycle, whether or not the amounts of such Awards have been computed and whether or not such Awards are then payable. 
  
 9.3 No Contract for Employment. Nothing contained in this Program or
in any document related to this Program or to any Award shall confer upon any Participant any right to continue as an employee or in the employ of the Company or an Affiliate or constitute any contract or agreement of employment for a specific term
or interfere in any way with the right of the Company or an Affiliate to reduce such person’s compensation, to change the position held by such person or to terminate the employment of such person, with or without cause. 
  
 9.4 Nontransferability. No benefit payable under, or interest in, this
Program shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge and any such attempted action shall be void and no such benefit or interest shall be, in any manner, liable for, or subject
to, debts, contracts, liabilities or torts of any Participant or beneficiary; provided, however, that, nothing in this Section 9.4 shall prevent transfer (i) by will, (ii) by applicable laws of descent and distribution or (iii) to an
Alternate Payee to the extent that a QDRO so provides. The assignment of an Award to an Alternate Payee pursuant to a QDRO shall not be treated as having caused a new grant. If an Award is assigned to an Alternate Payee, the Alternate Payee
generally has the same rights as the Participant under the terms of the Program; provided however, that (i) the Award shall be subject to the same vesting terms as if the Award were still held by the Participant, and (ii) an Alternate Payee
may not transfer an Award. In the event of the 1991 Plan administrator’s receipt of a domestic relations order or other notice of adverse claim by an Alternate Payee of a Participant, transfer of the proceeds of such Award may be suspended.
Such proceeds shall thereafter be transferred pursuant to the terms of a QDRO or other agreement between the Participant and Alternate Payee. A Participant’s ability to receive payment of an Award may be barred if the 1991 Plan administrator
receives a court order directing the 1991 Plan administrator not to make such payment. 
  

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 9.5 Nature of Program. No Participant, beneficiary or other person shall have any right, title or
interest in any fund or in any specific asset of the Company or any Affiliate by reason of any award hereunder. There shall be no funding of any benefits which may become payable hereunder. Nothing contained in this Program (or in any document
related thereto), nor the creation or adoption of this Program, nor any action taken pursuant to the provisions of this Program shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company or an
Affiliate and any Participant, beneficiary or other person. To the extent that a Participant, beneficiary or other person acquires a right to receive payment with respect to an Award hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Company or other employing entity, as applicable. All amounts payable under this Program shall be paid from the general assets of the Company or employing entity, as applicable, and no special or separate fund or
deposit shall be established and no segregation of assets shall be made to assure payment of such amounts. Nothing in this Program shall be deemed to give any employee any right to participate in this Program except in accordance herewith.

  
 9.6 Governing Law. This Program shall be construed in
accordance with the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof. 
  

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