a5915319-ex1031.htm


    Exhibit
10.31

    


     

    


     

    


     

     

     

    


     

    


     

    


     

    


     

    ARIAD
PHARMACEUTICALS, INC.

     

    2005
EXECUTIVE COMPENSATION PLAN

     

    (AS
AMENDED AND RESTATED EFFECTIVE AS OF OCTOBER 1, 2005)

     

    


     

    


     

    


     

    


     

    


     

    


     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    ARIAD
PHARMACEUTICALS, INC.

     

    2005
EXECUTIVE COMPENSATION PLAN, AS AMENDED AND RESTATED

     

    TABLE
OF CONTENTS

     

    


     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        ARTICLE I - PURPOSE

                                      	
                                        1

                                      
	 	 
	
                                        ARTICLE II - DEFINITIONS

                                      	
                                        1

                                      
	 	 
	
                                        ARTICLE III - PARTICIPATION

                                      	
                                        3

                                      
	 	 
	
                                        ARTICLE IV - DEFERRALS

                                      	
                                        4

                                      
	 	 
	
                                        ARTICLE V - AWARDS

                                      	
                                        4

                                      
	 	 
	
                                        ARTICLE VI – ACCOUNTS AND ACCOUNTING

                                      	
                                        6

                                      
	 	 
	
                                        ARTICLE VII – PAYMENT OF ACCOUNTS

                                      	
                                        6

                                      
	 	 
	
                                        ARTICLE VIII – DEATH BENEFITS

                                      	
                                        9

                                      
	 	 
	
                                        ARTICLE IX - PLAN ADMINISTRATION

                                      	
                                        9

                                      
	 	 
	
                                        ARTICLE X - PARTICIPANTS’ RIGHTS

                                      	
                                        11

                                      
	 	 
	
                                        ARTICLE XI - MISCELLANEOUS

                                      	
                                        11

                                      
	 	 
	
                                        EXHIBIT A – INITIAL PARTICIPANTS

                                      	
                                        15

                                      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


     

    


    
      
         

      

      
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    ARIAD
PHARMACEUTICALS, INC.

     

    2005
EXECUTIVE COMPENSATION PLAN, AS AMENDED AND RESTATED

     

    


     

    ARIAD
Pharmaceuticals, Inc. (the “Company”) hereby amends and restates the 2005 ARIAD
Pharmaceuticals, Inc. Executive Compensation Plan (the “Plan”) effective as of
October 1, 2005 (the “Effective Date”).

     

    ARTICLE I

     

    PURPOSE

     

    1.1           Purpose.  The
purpose of the Plan is to assist the Company and any Affiliate (as defined
below) to recruit, motivate and retain executive officers, key employees and key
advisors who will contribute to the Company’s long range success by providing
incentives in a form that will reward superior performance and provide
tax-advantaged savings opportunities.

     

    1.2           Intent.  The
Plan is intended to be an unfunded deferred compensation arrangement for the
benefit of a select group of management and highly compensated employees of the
Company and its Affiliates, within the meaning of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).  As such, the Plan is
intended to be a “top hat” plan exempt from the provisions of Parts 2, 3 and 4
of Title I of ERISA.  Any obligation of the Company or its Affiliates
to pay benefits hereunder shall be deemed to be an unsecured promise, and any
right of a Participant (as defined below) or Beneficiary (as defined below) to
enforce such obligation shall be solely as a general creditor of the
Company.

     

    ARTICLE II

     

    DEFINITIONS

     

    2.1           “Account” means one or more
bookkeeping entries maintained by the Committee with respect to each
Participant.

     

    2.2           “Affiliate” means any
corporation or other form of entity of which the Company owns, directly or
indirectly, fifty percent or more of the total combined voting power of all
classes of stock or other equity interests, provided that such entity is
designated by the Committee as a participating entity hereunder.

     

    2.3           “Award” means a credit made
to a Participant’s Account in accordance with the provisions of Article V
hereof, as the case may be.  An Award may either be an Annual Award
under Section 5.1 or an Initial Award under Section 5.2.

     

    2.4           “Beneficiary” means the
person, persons, entity or entities designated by a Participant in accordance
with Article VIII of the Plan.  If no Beneficiary is designated with
respect to the Plan, a Participant’s designation made under the Prior Plan shall
control; if there is no such designation or such designation cannot be
administered, a Participant’s designation under the ARIAD Retirement Savings
Plan (or the default provisions thereof) shall control.

     

    2.5           “Board” or “Board of Directors” means
the Board of Directors of the Company.

     

    2.6           “Bonus” means remuneration
that (i) is “performance-based compensation,” as defined by Section
409A(a)(4)(B)(iii) of the Code, (ii) is designated as a Bonus by the Committee
and (iii) relates to services performed by a Participant during a performance
period of at least twelve months.  A Bonus shall not include an Award
granted under Article V of the Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.7           “Change of Control” means any
one of the following events:

     

    (a)            any “person” (as such
term is defined in Section 3(a)(9) of Securities and Exchange Act of 1934, as
amended (the “Exchange Act”), and as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act), or more than one person acting as a group (within the meaning
of Section 409A of the Code), acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) directly or indirectly securities of the Company representing more
than 50% of the combined voting power of the Company’s securities;
provided, however, that the
event described in this clause (a) shall not be deemed to be a Change in Control
by virtue of any of the following acquisitions: (i) by the Company or any of its
subsidiaries, (ii) by any employee benefit plan sponsored or maintained by the
Company or any of its subsidiaries, or (iii) by any underwriter temporarily
holding securities pursuant to an offering of such securities.

     

     

    (b)            the date a majority of
the members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of
the members of the Board (not including an endorsement by any individual
whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company) before the date of
the appointment or election.

     

     

    (c)           the
consummation of a merger, consolidation, or other similar form of corporate
reorganization of the Company, other than a merger, consolidation or
reorganization which would result in the voting securities of the Company
outstanding immediately prior to such merger, consolidation or reorganization
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity or any parent thereof) at
least 50% of the combined
voting power or the total fair market value of the securities of the Company or
such surviving entity or parent thereof outstanding immediately after such
merger or consolidation; or

     

     

    (d)           a
sale of all or substantially all of the Company’s assets is
consummated.

     

    2.8           “Code” means the Internal
Revenue Code of 1986, as amended, related regulations and, in the absence of
regulations, revenue rulings, revenue procedures, notices or transition guidance
from the IRS.

     

    2.9           “Committee” means the
Compensation Committee of the Board, which shall act as the administrator of the
Plan.

     

    2.10           “Company” means ARIAD
Pharmaceuticals, Inc. or its successor.

     

    2.11           “Compensation” means the
Participant’s Salary and Bonus.

     

    2.12           “Deferrals” means the portion
of Compensation that a Participant elects to defer under the Plan in accordance
with Section 4.1.

     

    2.13           “Deferral Election” means the
separate written agreement, submitted to the Committee, by which a Participant
agrees to participate in the Plan and make Deferrals.

     

    2.14           “Installment Period” means
the period for paying installments as elected by the Participant under a Payment
Election Form that complies with Section 7.3(a).

     

    2.15           “Investment Funds” means the
investment funds designated by the Committee from time to time for the purpose
of determining the investment return to be credited to each Participant’s
Account.  Participants shall not have the right to designate
Investment Funds.

     

    
      
         

      

      
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    2.16           “Participant” means an
executive officer, key employee or key advisor of the Company or its Affiliates
for whom an Account is maintained hereunder.

     

    2.17           “Payment Date” means the last
day of the first calendar month that is at least sixty (60) days after the date
or event triggering payment under the Plan, or as soon as practicable
thereafter.

     

    2.18           “Payment Election Form” means
a form required to be used by Participants to elect the time and form of benefit
payments under Section 7.1 of the Plan.

     

    2.19           “Plan” means this 2005 ARIAD
Pharmaceuticals, Inc. Executive Compensation Plan, as the same may be amended or
restated from time to time.

     

    2.20           “Plan Year” means the 12-month
period beginning each January 1st and ending each December 31st; provided,
however, that the first Plan Year means the period from October 1, 2005 to
December 31, 2005.

     

    2.21           “Prior Plan” means the ARIAD
Pharmaceuticals, Inc. Executive Compensation Plan, which was first approved on
September 16, 1997.

     

    2.22           “Salary” means a
Participant’s base salary rate or rates in effect at the time of a Participant’s
Deferral Election.

     

    2.23           “Separation from Service”
means cessation of service with the Company and its Affiliates within the
meaning of Section 409A of the Code (after giving effect to the presumptions
contained therein).

     

    2.24           “Unforeseeable Emergency”
means the occurrence of a severe financial hardship resulting from (i) an
illness or accident of a Participant or his or her spouse or dependents, (ii)
the loss of a Participant’s property due to casualty or (iii) other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of a Participant.

     

    2.25           “Valuation Date” means (a) the
last day of each calendar quarter for purposes of periodically adjusting Account
balances under Article VI, (b) the last day of the calendar month for purposes
of paying Account balances under Articles VII, VIII and XI, and (c) any other
date or dates as may be designated in good faith by the Committee.

     

    ARTICLE III

     

    PARTICIPATION

     

    3.1           Eligibility.  Executive
officers, key employees and key advisors of the Company or an Affiliate shall
participate in the Plan when and as designated by the Committee in its sole
discretion, which designation may be made individually or by groups or
categories, in the discretion of the Committee.  The Committee shall
notify each individual who becomes eligible to participate in the
Plan.  Without the necessity of further action, Participants hereunder
shall include those individuals listed on Schedule A hereto, which shall be
deemed a part of the Plan by this reference.

     

    3.2           Loss of Eligible
Status.  If the Committee determines that a Participant shall
no longer be eligible to participate in the Plan, such Participant shall no
longer be entitled to receive an Award or make Deferrals
thereafter.  However, amounts credited to the Account of such
Participant shall continue to be held pursuant to the terms of the Plan and
shall be distributed as provided in Article VII or Article VIII.

    


    
      
         

      

      
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    ARTICLE IV

     

    DEFERRALS

     

    4.1           Right to Defer
Compensation.  The Committee may from time to time in its sole
discretion allow Participants to defer payment of part of their Compensation
under the Plan on a pre-tax basis under this Article IV.  If a
Participant is allowed to defer Compensation for a Plan Year, the Committee
shall credit to the Account of a Participant an amount equal to the amount
designated in the Participant’s Deferral Election for that Plan
Year.  Amounts shall not be made available to such Participant, except
as provided in Article VII, and shall reduce such Participant’s Compensation in
accordance with the provisions of the applicable Deferral Election.

    


    4.2           Timing for Deferral
Elections.  A Deferral Election shall be void with respect to
Salary unless submitted before the beginning of the calendar year during which
the amount to be deferred will be earned.  A Deferral Election shall
be void with respect to any Bonus unless submitted at least six months prior to
the end of the performance period over which the services for such Bonus are
performed.  Notwithstanding the foregoing, in the year in which the
Plan is first adopted or an individual is first eligible to participate, such
Deferral Election may be filed within thirty (30) days of the date on which the
Plan is adopted or the date on which such individual is first eligible to
participate (after taking into account the plan aggregation rules under Section
409A of the Code), respectively, with respect to Compensation earned during the
remainder of the calendar year after the filing and acceptance of such Deferral
Election.  A Deferral Election must be delivered to the Committee
before any Deferrals can become effective.

    


    4.3           Matters for Deferral
Election.  A Participant’s Deferral Election shall, subject to
the limitation set forth in Section 4.4 hereof, designate the amount of
Compensation to be deferred on the Participant’s behalf as a fixed dollar
amount, the Beneficiary to receive any Death Benefits and such other items as
may be prescribed by the Committee.  A Participant shall file a
Payment Election Form (as defined in Section 7.1 below) with the Committee at
the same time as a Deferral Election.  A Deferral Election filed by a
Participant for a Plan Year shall be irrevocable after the beginning of such
Plan Year except as may be permitted by the Committee consistent with the
requirements of Section 409A of the Code.

    


    4.4           Minimum and Maximum
Deferral.  The minimum amount that may be deferred hereunder
each Plan Year is ten thousand dollars ($10,000).  The maximum amount
that may be deferred hereunder each Plan Year is fifty percent (50%) of the
Participant’s Salary and one hundred percent (100%) of the Participant’s
Bonus.

    


    4.5           Vesting.  A
Participant shall have a fully vested right to the portion of his or her Account
attributable to Deferrals and any earnings or losses on the deemed investment of
the Deferrals at all times.

    


    ARTICLE V

     

    AWARDS

     

    5.1           Annual
Awards.  The Committee reserves the right annually to award
credits (each, an “Annual Award”) to Accounts in its sole
discretion.  The Committee may grant Annual Awards in such amounts and
in such manner as it considers appropriate or desirable.

     

    (a)           Performance-based
Awards.  Performance-based Awards shall be based on a
Participant attaining pre-established organizational or individual performance
criteria over a performance period of at least twelve months or with respect to
other circumstances as described below.  Performance criteria may be
objective or subjective in nature, provided that the criteria relate to the
performance of the Participant, a group of service providers that includes the
Participant, the Company, or any business unit (including an Affiliate) to which
the Participant provides services.  The Committee shall establish
performance criteria not later than ninety days after the beginning of the
performance period, provided that the outcome is not substantially certain at
the time the criteria are established.  The Committee shall
independently determine to what extent performance criteria have been satisfied
for an Award.  The Committee shall grant and administer
performance-based Awards so as to qualify them as “performance-based
compensation” as defined under Section 409A(a)(4)(B)(iii) of the
Code.

     

    (b)           Ad Hoc
Awards.  The Committee may grant an Annual Award in a form
other than a performance-based Award under Section 5.1(a) above, provided that
the grant must be subject to a bona fide vesting condition requiring continued
services by the Participant over a period of at least twelve
months.

     

    
      
         

      

      
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    A
Participant who receives an Annual Award with respect to all or part of a Plan
Year shall not have the right to receive an Annual Award in a subsequent Plan
Year.  Any power that may be exercised by the Committee under this
Section 5.1 may be delegated to an officer of the Company as provided under
Section 9.3 below.

     

    5.2           Initial
Award.  An individual providing services to the Company or an
Affiliate who became a Participant on the Effective Date and who participated in
the Prior Plan shall receive an Initial Award under this Section 5.2 equal to
the “Rollover Amount” (as defined under Section 3.10 of the Prior Plan) and any
additional amount that may be determined by the Committee in its sole
discretion.  Except as provided to the contrary in Section 5.4 below,
the Initial Award shall be subject to the same terms and conditions as any other
Award granted under the Plan.

     

    5.3           Vesting of Annual
Awards.  A Participant shall have a vested right to the portion
of his or her Account attributable to a specific Annual Award and any earnings
or losses on the deemed investment of such Annual Awards according to such
vesting schedule as the Committee shall determine at the time an Annual Award is
made.

     

    5.4           Vesting of Initial
Award.  A Participant shall have a vested right to the portion
of his or her Account attributable to his or her Rollover Amount and any
earnings or losses on the investment of his or her Rollover Amount according to
the vesting schedule as in effect under Section 3.4 of the Prior
Plan.  Any additional amount that may be determined by the Committee
as part of the Initial Award shall vest (a) fifty percent upon the first
anniversary of the grant date and (b) one hundred percent upon the second
anniversary of the grant date; provided that the Participant is then employed or
otherwise providing services to the Company and/or its Affiliates on such
date.

     

    5.5           Discretionary Vesting on
Change of Control.  Notwithstanding anything to the contrary in
Sections 5.3 and 5.4, upon a Change of Control, the Committee may elect to
accelerate the vesting of some or all amounts credited to a Participant’s
Account upon such Change of Control.  For avoidance of doubt, nothing
in this Section 5.5 shall be construed to prohibited accelerated vesting upon a
Change of Control or similar event to the extent required under an employment
agreement or other contract with a Participant.

     

    5.6           Amounts Not
Vested.  Any amounts credited to a Participant’s Account with
respect to an Award granted under Article V and any earnings or losses on the
investment of such Awards that are not vested at the time of the Participant’s
Separation from Service shall be forfeited.

     

    
      
         

      

      
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    ARTICLE VI

     

    ACCOUNTS
AND ACCOUNTING

     

    6.1           Establishment of
Accounts.  The Committee shall establish and maintain an
Account with respect to each Participant.  The Committee shall
establish and maintain sub-accounts as it determines are necessary, appropriate
or desirable to track vested amounts and to administer Payment Elections under
the Plan.

    


    6.2           Status of
Accounts.  Accounts are bookkeeping entries
only.  Assets that may be set aside by the Company or an Affiliate to
pay for Plan benefits shall not create a trust or other form of fiduciary
relationship between the Company, its Affiliates and any persons entitled to a
benefit under the Plan.  No Participant or Beneficiary shall have
rights or interests in any specific asset of the Company or of any Affiliate
under the Plan.

     

    6.3           Investment
Funds.  The Committee shall credit a “hypothetical rate of
return” to the Accounts on each Valuation Date.  The rate shall equal
the actual investment performance of one or more Investment Funds selected by
the Committee.  The Committee shall have the right to add and delete
investment funds, on a prospective basis.  Each Participant’s Account
will be credited monthly with a “hypothetical rate of return” under Section 6.4
until the amount in each Participant’s Account is completely distributed to the
Participant.  Nothing contained in this Article VI shall in any way
require the Company to make actual investments of deferred amounts in any
particular investment vehicle, including the Investment Funds.

     

    6.4           Accounting.  As
of each Valuation Date, each Account:

     

    (a)           will
be increased or decreased to reflect the investment experience of the Investment
Funds selected by the Committee for the period since the immediately preceding
Valuation Date;

     

    (b)           will
be credited with the amount of any Deferral or Award made on a Participant’s
behalf since the immediately preceding Valuation Date;

     

    (c)           will
be reduced by the amount of any payment from the Account made since the
immediately preceding Valuation Date, including any tax withholding payments
made under Section 10.4; and

     

    (d)           will
be reduced by the amount of any forfeitures since the immediately preceding
Valuation Date.

     

    ARTICLE VII

     

    PAYMENT OF
ACCOUNTS

     

    7.1           Payment
Elections.  A Participant shall file a “Payment Election Form”
designating the time and form of payment of his or her Account with the
Committee.  Designations may be made separately with respect to each
Award and Deferral except as otherwise provided by the Committee.  To
be valid, a Payment Election Form must be filed as follows:

     

    (a)           Initial
Award: no later than 90 days after the Effective Date.

     

    (b)           Performance-based
Award (other than a Bonus): not later than the end of the sixth month after the
beginning of the performance period for that Annual Award.

     

    (c)           Ad
hoc Award: not later than thirty days after the grant date.

     

    (d)           Deferral:
at the same time as the applicable Deferral Election under Article IV of the
Plan.

     

    
      
         

      

      
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    A Payment
Election Form shall be irrevocable except that it can be changed prior to the
applicable deadlines noted above or as allowed under Section 7.5
below.  A Participant’s failure to properly and timely file a Payment
Election Form shall result in payment being made in a lump sum not later than
two and one-half months after the calendar year in which such Deferral or Award
first becomes vested.

     

    7.2           Time of
Payment.  A Participant is eligible to receive payment in
connection with:

     

    (a)           a
specified date, which may include vesting of an Award,

     

    (b)           the
first anniversary of the Participant’s Separation from Service, or

     

    (c)           the
earlier of (a) or (b) (each, a “Benefit Eligibility Date”).

     

    Payment of
a Participant’s Account shall commence on the Payment Date that immediately
follows the Benefit Eligibility Date elected by the Participant; provided,
however, that a Participant may modify his or her Payment Election Form to
change the time of payment under Section 7.5.  The Committee shall
establish rules from time to time setting forth which dates may be specified by
a Participant in a Payment Election Form consistent with the requirements of
Section 409A of the Code. Notwithstanding the
elected time of payment, the Committee may elect to accelerate payment of a
Participant’s Account under Section 7.6 (regarding small payments).

     

    7.3           Forms of
Payment.  To the extent provided by the Committee, Participant
may elect in his or her Payment Election Form one of the following forms of
payment with respect to any Award or Deferral (including any applicable
earnings): (a) substantially equal annual installment payments for a period not
to exceed 20 years, or (b) a single-sum payment.  Each installment
payment shall be treated as a separate payment for purposes of Section 409A of
the Code.  A Participant may modify his or her Payment Election Form
to change the form of payment under Section 7.5.  Notwithstanding the
elected form of payment, the Committee may elect to pay a Participant’s Account
in a single lump sum under Section 7.6 (regarding small payments).

     

    7.4           Amount of Participant’s
Account Available for Payment.  The amount of a Participant’s
Account available for payment shall be determined as follows:

     

    (a)           Lump Sum
Payment.  The amount of any lump sum payment shall equal the
Participant’s vested Account balance as of the Valuation Date that immediately
precedes the applicable Payment Date.

     

    (b)           Installment
Payment.  The amount of any installment payment shall equal the
Participant’s vested Account balance as of the Valuation Date that immediately
precedes the applicable Payment Date, multiplied by a fraction (i) the numerator
of which is one, and (ii) the denominator of which is the number of annual
installments then remaining to be paid under the Participant’s Payment Election
Form.  The Participant’s Account shall be adjusted under Article VI
during the Installment Period.

     

    7.5           Changes to Payment Election
Form.  A Participant shall be entitled to modify his or her
Payment Election Form to change the time of payment, form of payment or both
under the Plan by providing an amended Payment Election Form provided that the
modification:

     

    (a)           will
be effective no earlier than twelve months following the date on which it is
received and accepted by the Committee;

     

    (b)           shall
be received and accepted not less than twelve months prior to the date on which
distributions are otherwise scheduled to commence;

     

    (c)           shall
designate a new Benefit Eligibility Date that is not less than five years after
the Benefit Eligibility Date then in effect;

     

    (d)           will
not result in an acceleration of payments except to the extent allowed under
Section 409A; and

     

    
      
         

      

      
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    (e)           complies
with all rules and regulations established by the Committee for changes to
payment elections.

     

    7.6           Small
Payment.  If the value of a Participant’s Account balance is
less than the applicable dollar amount under Section 402(g)(1)(B) of the Code as
of the Valuation Date immediately following a Participant’s Benefit Eligibility
Date, then notwithstanding any provision of this Article to the contrary, the
Committee may distribute the value of that Account as a single-sum payment as of
the Payment Date that coincides with or immediately follows his or her Benefit
Eligibility Date, and no additional benefit shall be payable
hereunder.

     

    7.7           Hardship
Withdrawals.  If a Participant experiences an Unforeseeable
Emergency, such Participant shall be permitted to withdraw all or a portion of
his or her vested Accounts in the form of an immediate single-sum payment,
subject to the following limitations:

     

    (a)           A
request for withdrawal shall be made, in writing, and shall set forth the
circumstances surrounding the Unforeseeable Emergency.  As a condition
of and part of such request, the Participant shall provide to the Committee his
or her written representation that:

     

    (i)           the
hardship cannot be relieved by insurance or other reimbursement available to the
Participant,

     

    (ii)           the
hardship cannot be relieved by the cessation of Deferrals under the Plan,
and

     

    (iii)           the
hardship can only be relieved by liquidation of the Participant’s assets and any
such liquidation would itself result in severe financial hardship to the
Participant.

     

    The
Committee shall be entitled to request such additional information as may be
reasonably required to determine whether an Unforeseeable Emergency exists and
the amount of the hardship and to establish additional conditions precedent to
the review or granting of a request for a withdrawal on account of an
Unforeseeable Emergency.

     

    (b)           If
the Committee determines that an Unforeseeable Emergency exists, the Committee
shall authorize the immediate distribution of an amount required to meet the
financial need created by such hardship, including any taxes payable on account
of such withdrawal.

     

    7.8           Plan Termination in
Connection with a Change of Control.  The Committee shall have
the discretion to irrevocably elect to terminate and liquidate the Plan within
30 days preceding or 12 months following a Change of Control.  It
shall be a condition of the Plan’s  termination and liquidation under
this Section 7.8 that all agreements, methods, programs, and other arrangements
sponsored by the Company or its Affiliates immediately after the time of the
Change of Control with respect to which deferrals of compensation are treated as
having been deferred under a single plan under Treas. Reg. Sect. 1.409A-1(c)(2)
are also terminated and liquidated with respect to each Participant that
experienced the Change of Control.  All liquidation payments under the
Plan shall be in the form of a lump sum cash payment and shall be provided
consistent with the requirements under Treas. Reg. Section
1.409A-3(j)(4)(ix)(B).  The Committee shall establish the Valuation
Date for any lump sum payment to be made under this Section 7.8.

     

    7.9           Forfeiture.  Notwithstanding
any other provision of the Plan, all Accounts, whether vested or not, shall be
forfeited upon the occurrence of any of the following events:

     

    (a)           Termination
of Participant’s service relationship for “cause” as defined in the
Participant’s employment, consulting or other service related agreement with the
Company or its Affiliates;

     

    (b)           Violation
of the non-compete or non-solicitation provision of the Participant’s
employment, consulting or other service related agreement with the Company or
its Affiliates; or

     

    
      
         

      

      
        - 8
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    (c)           Failure
to comply with the conflicts of interest provisions of the Participant’s
employment, consulting or other service related agreement with the Company or
its Affiliates.

     

    In
addition, the Company shall have a right of action against the Participant with
respect to any amounts distributed from the Plan before discovering the
Participant’s conduct described in (a), (b) or (c) above.  The
Committee, in its sole discretion and with the consent of the Board, may
reinstate any amounts which would otherwise be forfeited under this Section
7.9.

     

    ARTICLE VIII

     

    DEATH
BENEFITS

     

    8.1           Beneficiary
Designation.  A Participant shall be entitled to designate one
or more Beneficiaries and the manner of payment to each Beneficiary on forms
provided by the Committee.  A Participant may modify a beneficiary
designation by delivering a new designation to the Committee.  Any
designation or modification shall be effective upon its receipt and acceptance
by the Committee.

     

    8.2           Participant’s Death Before
Scheduled Time for Payment.  A Participant’s Beneficiary shall
be paid a lump sum death benefit if a Participant dies before his or her Benefit
Eligibility Date, as modified under Section 7.5.  The amount of the
lump sum payment shall be equal the vested portion of the Participant’s Account
as of the Valuation Date immediately following the Participant’s
death.  Payment shall be made as of the Payment Date that coincides
with or immediately follows the Participant’s death.

    


    8.3           Participant’s Death During
Installment Period.  The Company shall continue to pay any
installments that commenced during the Participant’s lifetime and that remain to
be paid after a Participant’s death to the Participant’s
Beneficiary.  Payments shall be made at such times and in such amounts
as provided in the deceased Participant’s Payment Election Form.

    


    8.4           Death of
Beneficiary.  Any death benefit that remains to be paid from
the Plan following a Beneficiary’s death shall be paid to one or more persons
designated in writing by the Beneficiary in such form and in such manner as
required by the Committee.  If a Beneficiary fails to make a
designation or the Committee rejects a designation, any remaining death benefit
shall be paid to the estate of such Beneficiary.

    


    8.5           Small
Payments.  If the value of an Account balance is less than the
applicable dollar amount under Section 402(g)(1)(B) of the Code as of the
Valuation Date immediately preceding the scheduled payment of a death benefit,
then notwithstanding any provision of this Article to the contrary, the
Committee may distribute the value of that Account to the affected Beneficiary
or Beneficiaries as a single-sum payment as of the Payment Date that coincides
with or immediately follows the date of the Participant’s death, and no
additional benefit shall be payable under the Plan.

    


    ARTICLE IX

    


    PLAN
ADMINISTRATION

     

    9.1           Powers.  The
Committee shall administer the Plan.  The Committee shall have
discretionary authority to take any and all actions it deems necessary,
appropriate to administer the Plan, including the following:

    


    (a)           interpret
Plan provisions, including, without limitation, correcting any defect, supplying
any omission or reconciling any inconsistency in the Plan,

    


    (b)           determine
all questions arising under the Plan including, without limitation, all
questions concerning administration, eligibility, benefit amounts, timing of
payments and the interpretation of any form or other document related to the
Plan,

    


    (c)           reject
or modify any Deferral Election, Payment Election Form, Beneficiary Designation
or other form filed by a Participant or Beneficiary with the
Committee,

     

    
      
         

      

      
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    (d)           modify
Awards, including, without limitation, changing the vesting terms applicable to
an Award,

    


    (e)           prescribe,
amend and rescind rules and administrative procedures relating to the operation
of the Plan,

    


    (f)           select
special Valuation Dates, and

    


    (g)           engage
the services of independent professionals and administrative personnel as it
deems necessary to administer the Plan.

    


    Any
Committee determination or interpretation shall be binding on all parties and
need not be uniform as to all interested parties.

    


    9.2           Payments.  The
Committee shall have the discretionary authority to finally determine the time
and amount of any payment under the Plan, subject to the provisions of the Plan
and any properly filed Payment Election Form.

    


    9.3           Delegation of Administrative
Authority.  The Committee may delegate to appropriate officers
of the Company or its Affiliates all or any portion of the power and authority
granted to it under the Plan, subject to any limitations imposed under
applicable law.  Notwithstanding the foregoing, the Committee shall in
no event delegate its authority in a manner that allows a Participant to grant
an Award to himself or herself or to determine whether he or she has met
performance criteria for a performance based Award under Section
5.1(a).  The Committee’s delegation authority is discretionary and may
be exercised orally or in writing.  An officer acting under delegated
authority shall be deemed to possess the power and authority granted to the
Committee.  Without requirement of further action, the Committee shall
be deemed to have delegated to its appropriate officers:

    


    (a)           the
authority to review and administer all payments under the Plan; and

    


    (b)           the
authority to make such ministerial amendments to the Plan or any ancillary form
or document related to the Plan to the extent reasonably necessary to facilitate
its administration or to avoid Federal income taxation on Accounts prior to
payment or to maintain the Plan’s status as an unfunded “top hat” plan under
ERISA.

    9.4           Claims.  If
a person claiming status as a Participant or Beneficiary (each, a “Claimant”)
believes a benefit is payable to him or her under the Plan, the Claimant may
request payment in writing, on forms acceptable to the Committee.  If
a payment request is disputed or denied by the Committee, the following action
shall be taken:

     

    (a)           First,
the Claimant shall be notified, in writing, of the dispute or denial as soon as
reasonably possible (but no later than ninety days) after receipt of the payment
request.  The notice shall set forth the specific reasons for the
denial, including any relevant provisions of the Plan, and shall explain the
review procedures of the Plan.

    


    (b)           Second,
the Claimant shall be entitled to a full review of his or her payment
request.  A Claimant desiring a review of the dispute or denial must
request review, in writing, not later than sixty days after the notification of
the dispute or denial is received.

    


    The
Committee shall render a final decision within sixty days after receiving a
Claimant’s review request.  If special circumstances require an
extension of time, the Committee shall notify the Claimant, in writing, and the
decision shall be rendered no later than one hundred and twenty days after the
receipt of the request.  The Committee’s final decision shall be in
writing and shall include specific reasons for the action taken and specific
references to the Plan provisions on which the decision is based.

    


    Nothing in
this Section 9.4 shall modify, amend or otherwise detract from the validity and
enforcement of the forfeiture provisions in Section 7.8.

     

    
      
         

      

      
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    9.5           Fees and
Expenses.  The Company shall bear all costs, fees and expenses
associated with the establishment, administration, and maintenance of the
Plan.

    


    9.6           Facility of
Payment.  If the Committee determines that any person to whom a
benefit is payable hereunder is or may be unable to care for his or her affairs
on account of an illness or accident, or is a minor, then any benefit due such
person may be paid to such person’s spouse, a child, a relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person. Any such payment
shall be deemed to discharge, in full, the liability of the Plan and the Company
therefore

    


    ARTICLE X

    


    PARTICIPANTS’
RIGHTS

    


    10.1           Spendthrift
Provision.  No Participant or Beneficiary shall have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber any amount payable under the Plan.  No amount payable under
the Plan shall, prior to actual payment, be subject to seizure or sequestration
for the payment of any debt, judgment, alimony or separate maintenance owed by a
Participant or Beneficiary.  No amount payable under the Plan shall be
transferable by operation of law if a Participant or Beneficiary becomes
bankrupt or insolvent.

    


    10.2           No Continued
Employment.  No Participant shall have any right to continue in
the employ or other service of the Company or an Affiliate for any period of
time or any right to continue his or her present or any other rate of
compensation on account of participation in the Plan.

    


    10.3           Obligation for Benefit
Payments.  Notwithstanding any provision of the Plan to the
contrary, the payment of Plan benefits shall remain the obligation of the
Company or the Affiliate that employed the Participant.  If the
Participant’s employer designates an affiliated third-party to pay that
Participant’s benefits and the third-party’s assets are insufficient to pay all
Plan benefits, the Participant’s employer shall be responsible to pay any
deficiency.

    


    10.4           Taxes.  The
Company or an Affiliate shall withhold as a condition of payment, or as a
condition of the crediting of a Deferral or an Award, the amount of any income,
employment or other taxes required to be withheld under applicable Federal or
state law.  Any taxes may be withheld from Accounts at any time or
from any amount otherwise payable from the Company or an Affiliate to a
Participant or Beneficiary.

    


    ARTICLE XI

    


    MISCELLANEOUS

    


    11.1           Termination of
Plan.

     

    (a)           The
Board of Directors shall have the right to terminate the Plan at any
time.  Plan termination shall not reduce the amount payable to
Participants and Beneficiaries.  Upon plan termination:

     

    (1)           no
additional Deferrals or Awards shall be credited to Accounts,

     

    (2)           amounts
then credited to Accounts shall continue to be credited with investment
experience under Article VI, and

     

    (3)           Plan
Accounts shall be paid in accordance with outstanding Payment Election Forms and
Article VII.

     

    (b)           Notwithstanding
Section 11(a) above, the Company may elect to make a lump sum payment to all
persons entitled to Plan benefits following plan termination.  The
amount to be paid shall equal the payee’s Account balance as of the Valuation
Date immediately following the plan termination.  Payment of Plan
benefits can be accelerated under this Section 11(b) only if all of the
conditions are satisfied:

     

    
      
         

      

      
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    (i)           the
Plan termination and liquidation does not occur proximate to a downturn in the
financial health of the Company,

     

    (ii)           all
arrangements of the same type (as determined under Section 409A) as the Plan are
also terminated with respect to all employees who participate in the
Plan,

     

    (iii)           no
payments other than those otherwise payable under the terms of the Plan absent a
termination of the Plan are made within twelve months of the Board vote to
terminate the Plan,

     

    (iv)           all
payments on account of plan termination under this Section 11(b) are made within
twenty-four months of the Board vote to terminate the Plan, and

     

    (v)           the
Company does not adopt a new arrangement that would be aggregated with the Plan
under Section 409A at any time during the three years following the Board vote
to terminate the Plan.

     

    (c)           This
Section 11.1 shall only apply to Plan terminations that are not covered by
Section 7.8 of the Plan.

     

    11.2           Section
409A.

     

    (a)           The
Plan is intended to comply and shall be interpreted and construed in a manner
consistent with the provisions of Section 409A of the Code.  Any Plan
provision that would cause amounts allocated to an Account to be subject to
Federal income tax prior to payment shall be void as of the Effective Date
without the necessity of further action by the Board or the
Committee.

     

    (b)           There
shall be no acceleration of the time or schedule of any payment under the Plan
except as permitted under Section 409A.  Distributions shall not be
made to an employee while employed by the Company except as provided under a
timely and properly filed Payment Election Form (under Section 7.1 above), an
Unforeseeable Emergency (but only to the extent permitted under Section 7.7),
the Plan’s termination (but only to the extent permitted under Section 7.8 or
11.1(b)) or a requirement to pay employment taxes with respect to
Deferrals.

     

    (c)           There
shall be no subsequent deferral of the time or schedule of any payment under the
Plan except as allowed under Section 7.5.

     

    (d)           All
references to Section 409A in the Plan shall also refer to Notice 2007-86 (as
applicable to periods prior to January 1, 2009) and Treasury regulations (as
applicable to periods after December 31, 2008).

     

    (e)           The
provisions of the Plan shall not apply to the Prior Plan or constitute a
material modification of the Prior Plan.

     

    11.3           Delay in Payment of Plan
Benefits.

     

    (a)           There
shall be a delay of any payment otherwise required under the Plan if it would
(i) violate Federal securities laws, or (ii) jeopardize the ability of the
Company to continue as a going concern.  The delay shall last until
the first calendar year in which the Company reasonably anticipates that the
payment would not violate these restrictions.

     

    
      
         

      

      
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    (b)           There
shall be a delay of any payment otherwise required under the Plan if the
Company’s deduction of such payment would not be permitted under Section 162(m)
of the Code.  The delay shall last until the first calendar year in
which the Company reasonably anticipates that the deduction of the payment will
be permitted under Section 162(m) or, if earlier, the calendar year in which the
Participant separates from service.

     

    (c)           The
Company shall be entitled to add to the list of events that will result in a
delay of payments under this Section 11.3 to the extent allowed under guidance
issued after the date hereof by the Treasury or Internal Revenue Service under
Section 409A.

     

    11.4           Inurement.  The
Plan shall be binding upon and shall inure to the benefit of the Company, each
Participant and Beneficiary and their respective heirs, executors,
administrators, successors and assigns.

     

    11.5           No Effect on Other
Benefits.  Any compensation paid or benefits provided to a
Participant shall be in addition to, and not in lieu of, the benefits provided
under the Plan.  Nothing in the Plan shall be construed as limiting,
varying or reducing the provision of any benefit available to a Participant, a
Participant’s estate or Beneficiary under any employment agreement, retirement
plan, including any qualified pension or profit-sharing plan, health, disability
or life insurance plan or any other form of agreement or arrangement between the
Company, an Affiliate or both, and a Participant.

     

    11.6           Amendment and
Modification.

     

    (a)           The
Board may amend the Plan in its sole discretion.

     

    (b)           The
Committee may amend the Plan, any Payment Election Form or any ancillary form or
document related to the Plan to facilitate its administration or to comply or
make the Plan consistent with applicable law, including ERISA and the
Code.

     

    (c)           Any
amendment that reduces the amount credited to an Account shall be effective only
with the affected Participant’s or Beneficiary’s written
consent.  Notwithstanding the foregoing, consent shall not be required
if the Board or the Committee, as the case may be, reasonably determines that an
amendment is necessary to avoid Federal income taxation on Accounts prior to
payment or to maintain the Plan’s status as an unfunded “top hat” plan under
ERISA.

     

    (d)           No
amendment shall provide for the payment or notional investment of an Award in
the form of units or shares of common stock issued by the Company or in a manner
otherwise constituting a security or derivative security within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended.

     

    11.7           Governing
Law.  The Plan is governed by the internal laws of the
Commonwealth of Massachusetts, in all respects, including matters of
construction, validity and performance.

     

    11.8           Merger or
Consolidation.  The obligations and responsibilities of the
Company under the Plan shall be assumed by any successor or acquirer, and all of
the rights, privileges and benefits of the Participants and Beneficiaries shall
continue.  This Section 11.8 shall apply to any merger or a
consolidation by the Company with another corporation or entity, or the
acquisition of substantially all of the assets or outstanding stock of the
Company by another corporation or entity, whether or not it qualifies as a
Change of Control.

     

    11.9           Entire
Plan.  The Plan, any written amendments hereto, Payment
Election Forms, and each designation of a Beneficiary hereunder shall be deemed
to contain all the terms and provisions of the Plan and shall constitute the
entire Plan.

     

    The Plan,
as amended and restated, was approved by the Compensation Committee of the Board
of Directors on December 31, 2008, to be effective as of the date first set
forth above.

     

    
      
         

      

      
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                                    ARIAD
      PHARMACEUTICALS, INC.

                                  	 
	 	 	 
	 	
                                    /s/
      Harvey J. Berger

                                  	 
	 	 	 
	 	
                                    By:

                                  	
                                    Harvey
      J. Berger, M.D.

                                  	 
	 	
                                    Its:

                                  	
                                    Chairman
      and Chief Executive Officer

                                  	 


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

     

    
      
         

      

      
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    EXHIBIT A

     

    INITIAL
PARTICIPANTS

     

    Set forth
below are the individuals who shall be deemed Participants in the Plan as of the
Effective Date:

     

    


     

    Laurie
Allen

     

    Camille
Bedrosian

     

    David
Berstein

     

    Joseph
Bratica

     

    Timothy
Clackson

     

    David
Dalgarno

     

    Edward
Fitzgerald

     

    John
Iuliucci

     

    Maryann
Krane

     

    Jay
LaMarche

     

    Thomas
Pearson

     

    Tomi
Sawyer

     

     

     

     

     

     

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