Document:

Exhibit 10.32

 

IMCLONE
SYSTEMS INCORPORATED

CHANGE-IN-CONTROL
PLAN

(As
Amended February 16, 2006)

 

1.0                                 PURPOSE
OF PLAN

 

1.1                                 Purpose.
The purpose of the ImClone Systems Incorporated Change-in-Control Plan (the “Plan”)
is to:

 

(a)                                  retain
certain highly qualified individuals as employees of ImClone Systems
Incorporated and/or its subsidiaries (the “Company”);

 

(b)                                 maintain
the focus of such employees on the business of the Company and to mitigate the
distractions caused by the possibility that the Company may be the target
of an acquisition strategy; and

 

(c)                                  provide
certain benefits to such employees if a change in control of the Company occurs
and/or any employee’s employment is terminated in connection with such change
in control.

 

The Plan is intended to qualify as an “employee benefit plan” (as such
term is defined under Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) and accordingly will be subject to
ERISA. In addition, the Plan is intended to qualify as a “top-hat” plan (as
such term is commonly used under the ERISA regulations promulgated by the U.S.
Department of Labor) since it is intended to provide benefits only to a select
group of management or highly compensated employees of the Company.

 

2.0                                 DEFINITIONS

 

The following terms shall have the following meanings unless the
context indicates otherwise:

 

2.1                                 “Beneficiary” shall mean a beneficiary
designated in writing by a Participant to receive any Change-in-Control
Benefits in accordance with Sections 5 or 6 below. If no beneficiary is
designated by the Participant, then the Participant’s estate shall be deemed to
be the Participant’s Beneficiary.

 

2.2                                 “Board” shall mean the Board of Directors
of the Company.

 

2.3                                 “Bonus” shall mean the 3-year average of
the actual annual bonuses paid to the Participant during the 36-month period
immediately preceding the Change-in-Control Date, with such amount increased
(if applicable) to take into account any elective or mandatory deferrals. For a
Participant who has not been employed by the Company for the full 36-month
period prior to the Change-in-Control Date, the average annual bonus amount
shall be calculated based on the number of full years of employment. For a
Participant who has not been employed long enough to receive an annual bonus,
the annual bonus amount shall be equal to the target annual bonus.

 

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2.4                                 “Cause” shall mean – unless otherwise
defined in an employment agreement between the Participant and the Company or
Subsidiary – the occurrence of any of the following:

 

(1)                                  an
indictment of the Participant involving a felony or a misdemeanor involving
moral turpitude; or

 

(2)                                  willful
misconduct or gross negligence by the Participant resulting, in either case, in
harm to the Company or any Subsidiary; or

 

(3)                                  failure
by the Participant to carry out the directions of the Board or the Participant’s
immediate supervisor, as the case may be; or

 

(4)                                  fraud,
embezzlement, theft or dishonesty by the Participant against the Company or any
Subsidiary or a material violation by the Participant of a policy or procedure
of the Company, resulting, in any case, in harm to the Company or any
Subsidiary.

 

2.5                                 “Change in Control” shall mean the
occurrence of one of the following events:

 

(1)                                  individuals
who, on the Effective Date, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the Effective Date whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination) shall
be an Incumbent Director; provided, however, that no individual initially
elected or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be an Incumbent Director;

 

(2)                                  any
“person” (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the
Effective Date, a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
40% or more of the combined voting power of the Company’s then outstanding
securities eligible to vote for the election of the Board (the “Company Voting
Securities”); provided, however, that an event described in this Section 2.5(2) shall
not be deemed to be a Change in Control if any of following becomes such a
beneficial owner:

 

(A)                              the
Company or any majority-owned subsidiary (provided, that this exclusion applies
solely to the ownership levels of the Company or the majority-owned
subsidiary),

 

(B)                                any
tax-qualified, broad-based employee benefit plan sponsored or maintained by the
Company or any majority-owned subsidiary,

 

(C)                                any
underwriter temporarily holding securities pursuant to an offering of such
securities, or

 

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(D)                               any
person pursuant to a Non-Qualifying Transaction (as defined in Section 2.5(3) below);

 

(3)                                  the
consummation of a merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or any of its Subsidiaries that
requires the approval of the Company’s stockholders, whether for such
transaction or the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business Combination:

 

(A)                              50%
or more of the total voting power of:

 

(x)                                   the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or

 

(y)                                 if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”),

 

is represented by Company Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power of such
Company Voting Securities among the holders thereof immediately prior to the
Business Combination;

 

(B)                                no
person (other than any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Corporation or the Parent Corporation), is or
becomes the beneficial owner, directly or indirectly, of 40% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation); and

 

(C)                                at
least a majority of the members of the board of directors of the Parent
Corporation (or if there is no Parent Corporation, the Surviving Corporation)
following the consummation of the Business Combination were Incumbent Directors
at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination

 

(any Business Combination which satisfies all of the criteria specified
in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or

 

(4)                                  stockholder
approval of a liquidation or dissolution of the Company, unless the voting
common equity interests of an ongoing entity (other than a liquidating trust)
are beneficially owned, directly or indirectly, by the Company’s shareholders
in substantially the same proportions as such shareholders owned the Company’s
outstanding voting common equity interests immediately prior to such
liquidation and such ongoing entity assumes all existing obligations of the
Company under this Plan.

 

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Notwithstanding the foregoing, a Change in Control of the Company shall
not be deemed to occur solely because any person acquires beneficial ownership
of more than 40% of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided, that, if after such
acquisition by the Company such person becomes the beneficial owner of Company
Voting Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the
Company shall then occur.

 

2.6                                 “Change-in-Control Benefits” shall mean
the benefits described in Sections 5 and 6 below.

 

2.7                                 “Change-in-Control Date” shall mean the
date that a Change in Control first occurs.

 

2.8                                 “Change-in-Control Termination” shall mean
a termination of the Participant’s employment:

 

(1)                                  by
the Company without Cause during the period beginning 3 months prior to the
Change-in-Control Date and ending 18 months after the Change-in-Control Date,
or

 

(2)                                  if
the Participant has been designated by the Committee as a Tier 1 Participant or
a Tier 2 Participant in accordance with Section 3.2 below, by the
Participant for Good Reason during the period beginning 3 months prior to the
date of the Change in Control and ending 18 months after the Change-in-Control
Date.

 

2.9                                 “Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time.

 

2.10                           “Committee” shall mean (i) the Board
or (ii) a committee or subcommittee of the Board appointed by the Board
from among its members. The Committee may be the Board’s compensation
committee.

 

2.11                           “Company” shall mean ImClone Systems
Incorporated, a Delaware corporation, including any successor entity or any
successor to the assets of the Company that has assumed the Plan.

 

2.12                           “Competitive Activity” shall mean the
Participant’s engaging in an activity – whether as an employee, consultant,
principal, member, agent, officer, director, partner or shareholder (except as
a less than 1% shareholder of a publicly traded company) – that is competitive
with any business of the Company or any Subsidiary conducted by the Company or
such Subsidiary at any time during the Noncompetition/Nonsolicitation Period; provided, however, that the Participant may be
employed by or otherwise associated with:

 

(i)                                     a
business of which a subsidiary, division, segment, unit, etc. is in competition
with the Company or any Subsidiary but as to which such subsidiary, division,
segment, unit, etc. the Participant has absolutely no direct or indirect
responsibilities or involvement, or

 

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(ii)                                  a
company where the Competitive Activity is:

 

(A)                              from
the perspective of such company, de minimis
with respect to the business of such company and its affiliates, and

 

(B)                                from
the perspective of the Company or any Subsidiary, not in material competition
with the Company or any Subsidiary.

 

2.13                           “Effective Date” shall mean the date the
Board adopts the Plan.

 

2.14                           “Employee” shall mean a regular full-time
employee of the Company or any Subsidiary.

 

2.15                           “Good Reason” shall mean – unless
otherwise defined in an employment agreement between the Participant and the
Company or Subsidiary – the occurrence of any of the following within the
60-day period preceding a Termination Date:

 

(1)                                  a
material adverse diminution of the Participant’s titles, authority, duties or
responsibilities, or the assignment to the Participant of titles, authority,
duties or responsibilities that are materially inconsistent with his or her
titles, authority, duties and/or responsibilities in a manner materially
adverse to the Participant; or

 

(2)                                  a
reduction in the Participant’s base salary, annual target bonus, or maximum
bonus without the Participant’s prior written consent (other than any reduction
applicable to Employees generally); or

 

(3)                                  an
actual change in the Participant’s principal work location by more than 75
miles and more than 75 miles from the Participant’s principal place of abode as
of the date of such change in job location without the Participant’s prior
written consent; or

 

(4)                                  a
failure of the Company to obtain the assumption in writing of its obligation
under the Plan by any successor to all or substantially all of the assets of
the Company within 45 days after a merger, consolidation, sale or similar
transaction that qualifies as a Change in Control.

 

2.16                           “Health Continuation Period” shall mean
the period commencing on the Termination Date and continuing until the end of
the applicable period as shown on Schedule A..

 

2.17                           “Noncompetition/Nonsolicitation Period”
shall mean the period commencing on the Termination Date and continuing until
the end of the applicable period as shown on Schedule A.

 

2.18                           “Participant” shall mean any Employee who
has been designated to participate in the Plan under Section 3 below.

 

2.19                           “Plan” shall mean the ImClone Systems
Incorporated Change-in-Control Plan.

 

2.20                           “Salary” shall mean the highest annual
base salary paid to the Participant during the 12-month period immediately
preceding the earlier of (i) the Termination Date or the Change-in-

 

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Control Date, with such amount increased (if applicable) to take into
account any elective or mandatory deferrals.

 

2.21                           “Severance Multiplier” shall mean the
multiplier that shall be used to determine cash severance paid to a Participant
in accordance with Schedule A and Section 6.2 below.

 

2.22                           “Subsidiary” shall mean a corporation of
which the Company directly or indirectly owns more than 50 percent of the “voting
stock” (meaning the capital stock of any class or classes having general
voting power under ordinary circumstances, in the absence of contingencies, to
elect the directors of a corporation) or any other business entity in which the
Company directly or indirectly has an ownership interest of more than 50
percent.

 

2.23                           “Terminated Participant” shall mean a
Participant whose employment with the Company and/or a Subsidiary has been
terminated and which qualifies as a Change-in-Control Termination.

 

2.24                           “Termination Date” shall mean the date a
Terminated Participant’s employment with the Company and/or a Subsidiary is
terminated.

 

2.25                           “Tier 1 Participant” shall mean a
Participant who has been designated by the Committee as a Tier 1 Participant in
accordance with Section 3.2 below.

 

2.26                           “Tier 2 Participant” shall mean a
Participant who has been designated by the Committee as a Tier 2 Participant in
accordance with Section 3.2 below.

 

2.27                           “Tier 3 Participant” shall mean a
Participant who has been designated by the Committee as a Tier 3 Participant in
accordance with Section 3.2 below.

 

2.28                           “Tier 4 Participant” shall mean a
Participant who has been designated by the Committee as a Tier 4 Participant in
accordance with Section 3.2 below.

 

3.0                                 ELIGIBILITY
AND PARTICIPATION

 

3.1                                 Eligibility.
All Employees of the Company shall be eligible to participate in the Plan.

 

3.2                                 Participation.
Participants shall consist of such Employees as the Committee in its sole
discretion designates to participate in the Plan; provided, however, that the Committee shall not designate
an Employee as a new Participant following a Change-in-Control Date. At the
time the Committee designates an Employee as a Participant, the Committee shall
also designate whether such Employee is a Tier 1 Participant, a Tier 2
Participant, a Tier 3 Participant or a Tier 4 Participant. The Committee may,
in its sole discretion, terminate a Participant’s participation in the Plan at
any time prior to the beginning of the 180-day period ending on the
Change-in-Control Date.

 

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4.0                                 ADMINISTRATION

 

4.1                                 Responsibility.
The Committee shall have the responsibility, in its sole discretion, to control,
operate, manage and administer the Plan in accordance with its terms.

 

4.2                                 Authority
of the Committee. The Committee shall have the maximum discretionary
authority permitted by law that may be necessary to enable it to discharge
its responsibilities with respect to the Plan, including but not limited to the
following:

 

(a)                                  to
determine eligibility for participation in the Plan;

 

(b)                                 to
designate Participants;

 

(c)                                  to
determine and establish the formula to be used in calculating a Participant’s
Change-in-Control Benefits;

 

(d)                                 to
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan in such manner and to such extent as it shall deem appropriate in its sole
discretion to carry the same into effect;

 

(e)                                  to
issue administrative guidelines as an aid to administer the Plan and make
changes in such guidelines as it from time to time deems proper;

 

(f)                                    to
make rules for carrying out and administering the Plan and make changes in
such rules as it from time to time deems proper;

 

(g)                                 to
the extent permitted under the Plan, grant waivers of Plan terms, conditions,
restrictions, and limitations;

 

(h)                                 to
make reasonable determinations as to a Participant’s eligibility for benefits
under the Plan, including determinations as to Cause and Good Reason; and

 

(i)                                     to
take any and all other actions it deems necessary or advisable for the proper
operation or administration of the Plan.

 

4.3                                 Action
by the Committee. The Committee may act only by a majority of its
members. Any determination of the Committee may be made, without a
meeting, by a writing or writings signed by all of the members of the Committee.
In addition, the Committee may authorize any one or more of its members to
execute and deliver documents on behalf of the Committee.

 

4.4                                 Delegation
of Authority. The Committee may delegate to one or more of its
members, or to one or more agents, such administrative duties as it may deem
advisable; provided, however,
that any such delegation shall be in writing. In addition, the Committee, or
any person to whom it has delegated duties as aforesaid, may employ one or
more persons to render advice with respect to any responsibility the Committee
or such person may have under the Plan. The Committee may employ such
legal or other counsel, consultants and agents as it may deem

 

7

 

desirable for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel, consultant or agent. Expenses
incurred by the Committee in the engagement of such counsel, consultant or
agent shall be paid by the Company, or the Subsidiary whose employees have
benefited from the Plan, as determined by the Committee.

 

4.5                                 Determinations
and Interpretations by the Committee. All determinations and
interpretations made by the Committee shall be binding and conclusive to the
maximum extent permitted by law on all Participants and their heirs,
successors, and legal representatives.

 

4.6                                 Information.
The Company shall furnish to the Committee in writing all information the
Committee may deem appropriate for the exercise of its powers and duties
in the administration of the Plan. Such information may include, but shall
not be limited to, the full names of all Participants, their earnings and their
dates of birth, employment, retirement or death. Such information shall be
conclusive for all purposes of the Plan, and the Committee shall be entitled to
rely thereon without any investigation thereof.

 

4.7                                 Self-Interest.
No member of the Committee may act, vote or otherwise influence a decision
of the Committee specifically relating to his or her benefits, if any, under
the Plan.

 

4.8                                 Liability. No member of the Board, no
member of the Committee and no employee of the Company shall be liable for any
act or failure to act hereunder, except in circumstances involving his or her
bad faith, gross negligence or willful misconduct, or for any act or failure to
act hereunder by any other member or employee or by any agent to whom duties in
connection with the administration of the Plan have been delegated.

 

4.9                                 Indemnification. The Company shall
indemnify members of the Committee and any agent of the Committee who is an
employee of the Company, against any and all liabilities or expenses to which
they may be subjected by reason of any act or failure to act with respect
to their duties on behalf of the Plan, except in circumstances involving such
person’s bad faith, gross negligence or willful misconduct.

 

5.0                                 SINGLE-TRIGGER
BENEFITS

 

5.1                                 Equity-Based
Compensation. Unless otherwise provided in any written agreement between
the Company and a Participant, all equity-based compensation awards held by the
Participants as of the Change-in-Control Date shall become fully vested and/or
exercisable as of such date, unless the Committee, in its sole discretion,
determines (i) that such awards will be substituted, replaced, rolled
over, or converted into equity-based compensation awards of the acquiring
and/or surviving entity and (ii) the economic value and benefit of the
equity-based compensation awards immediately prior to the Change-in-Control
Date are equal to the economic value and benefit of the equity-based
compensation awards immediately after the Change-in-Control Date, on an
award-by-award basis.

 

5.2                                 Deferred Compensation. Unless otherwise
provided in any written agreement between the Company and a Participant, a
Participant’s unvested nonqualified deferred compensation as of the
Change-in-Control Date shall become fully vested and nonforfeitable as of such
date.

 

8

 

5.3                                 Payment
of Change-in-Control Benefits to Beneficiaries. In the event of the
Participant’s death, all Change-in-Control Benefits that would have been paid
to the Participant under this Section 5 but for his or her death, shall be
paid to the Participant’s Beneficiary.

 

5.4                                 Other
Benefits. Notwithstanding anything contained in the Plan to the contrary,
the Company or the Committee may, in its sole discretion, provide benefits in
addition to the benefits described under this Section 5.

 

6.0                                 DOUBLE-TRIGGER
BENEFITS

 

6.1                                 Accrued
Obligations. Unless otherwise provided in any written agreement between the
Company and the Participant, on the later to occur of (i) a
Change-in-Control Date or (ii) a Termination Date, the Company shall pay
to the Terminated Participant during the 30-day period following the later of
(x) the Change-in-Control Date or (y) the Termination Date, a lump sum cash
payment equal to the Participant’s earned but unpaid Salary and/or Bonus, plus
unreimbursed expenses, plus any and all other Company obligations that are
accrued and due and owing to the Terminated Participant.

 

6.2                                 Cash
Severance. Unless otherwise provided in any written agreement between the
Company and the Participant, on the later to occur of (i) a
Change-in-Control Date or (ii) a Termination Date, the Company shall pay
to the Terminated Participant during the 30-day period following the later of
(x) the Change-in-Control Date or (y) the Termination Date, a lump sum cash
payment equal to the sum of:

 

(A)                              a
pro rata annual target bonus with respect to the year that the Termination Date
occurs, plus

 

(B)                                the
product of (x) the Severance Multiplier times (y) the sum of the Terminated
Participant’s (a) Salary plus (b) Bonus.

 

6.3                                 Long-Term
Incentive Compensation. Unless otherwise provided in any written agreement
between the Company and a Participant, any and all long-term incentive
arrangements that did not vest and/or become payable in accordance with Section 5
above shall be paid to the Participant in accordance with the terms and
conditions of such long-term incentive arrangement, or if such arrangement does
not provide express terms and conditions relating to the consequences of a
Change in Control, then:

 

(a)                                  all
equity-based compensation awards held by the Terminated Participant as of the
Termination Date shall become fully vested and/or exercisable as of such date,
and

 

(b)                                 awards
under any long-term incentive arrangement shall be paid to the Terminated
Participant based on a pro rata portion of the completed performance cycle or
vesting period, as applicable, as of the Termination Date and using actual
performance as of the Termination Date (as applicable).

 

9

 

6.4                                 Pension-Benefit
Arrangements. Unless otherwise provided in any written agreement between
the Company and a Participant, benefits under all nonqualified pension-benefit
arrangements, including nonqualified deferred compensation arrangements, may not
be paid to the Terminated Participant prior to the first anniversary of the
Change-in-Control Date. Notwithstanding the preceding sentence, the Committee may accelerate
such payment, in its sole discretion, after having received advice from the
Company’s tax counsel.

 

6.5                                 Welfare-Benefit
Arrangements. Unless otherwise provided in any written agreement between
the Company and a Participant, the Company shall provide a Terminated
Participant with continued health coverage during the Health Continuation
Period as shown on Schedule A. Unless otherwise provided for in any
written agreement between the Company and a Terminated Participant, or as
otherwise agreed to by the Committee in its sole discretion, all other welfare
benefits shall cease as of the Termination Date. Following the end of the
applicable Health Continuation Period, the Terminated Participant shall be
eligible to receive COBRA health continuation coverage in accordance with rules and
provisions under the Consolidated Omnibus Budget Reconciliation Act of 1985.

 

6.6                                 Outplacement
Services. The Company shall provide a Terminated Participant with
outplacement services during the 6-month period following the Termination Date.

 

6.7                                 Payment
of Change-in-Control Benefits to Beneficiaries. In the event of the
Terminated Participant’s death, all Change-in-Control Benefits that would have
been paid to the Terminated Participant under this Section 6 but for his
or her death, shall be paid to the Terminated Participant’s Beneficiary.

 

6.8                                 Other
Benefits. Notwithstanding anything contained in the Plan to the contrary,
the Company or the Committee may, in its sole discretion, provide benefits in
addition to the benefits described under this Section 6.

 

6.9                                 Code
Section 409A. The Company intends that all payments under the
Plan be made on a basis that complies with Section 409A of the Code. Accordingly,
in the event that any Participant is considered a “Specified Employee” as
defined in Section 409A of the Code or the guidance issued thereunder (“Section 409A”),
and any payments to the Participant under the Plan are considered “deferred
compensation” under Section 409A of a type requiring payment six months
after the date of the Participant’s separation from service (within the meaning
of Section 409A), then to the extent required by Section 409A, such
payment shall be delayed until six (6) months after the date of the
Participant’s separation from service. The Company makes no guarantee with
respect to the tax treatment of payments hereunder, and the Company shall not
be responsible in any event with regard to non-compliance with Code Section 409A.

 

7.0                                 PARTICIPANT
OBLIGATIONS

 

7.1                                 Waiver and Release. As a condition
precedent for receiving the double-trigger benefits provided under Section 6
above, a Terminated Participant shall execute a waiver and release
substantially in the form attached to the Plan as Exhibit B.

 

10

 

7.2                                 Noncompetition. During the
Noncompetition/Nonsolicitation Period, a Terminated Participant shall not at
any time, directly or indirectly, engage in Competitive Activity.

 

7.3                                 Nonsolicitation. During the
Noncompetition/Nonsolicitation Period, a Terminated Participant shall not at
any time, directly or indirectly, solicit (x) any customer or client of the
Company or any Subsidiary with respect to a Competitive Activity or (y) any
employee of the Company or any Subsidiary for the purpose of causing such
employee to terminate his or her employment with the Company or such
Subsidiary.

 

7.4                                 Enforcement. If a Terminated Participant
violates or threatens to violate Section 7.2 or Section 7.3 above,
the Company shall not have an adequate remedy at law. Accordingly, the Company
shall be entitled to such equitable and injunctive relief as may be
available to restrain the Terminated Participant and any business, firm,
partnership, individual, corporation or entity participating in the breach or
threatened breach from the violation of the provisions of Section 7.2 or
7.3 above. Nothing in the Plan shall be construed as prohibiting the Company from
pursuing any other remedies available at law or in equity for breach or
threatened breach of Section 7.2 or 7.3 above, including the recovery of
damages.

 

7.5                                 Confidentiality. At all times prior to and
after the Change-in-Control Date, a Participant shall not disclose to anyone or
make use of any trade secret or proprietary or confidential information of the
Company, including such trade secret or proprietary or confidential information
of any customer or other entity to which the Company owes an obligation not to
disclose such information, which he or she acquires during his or her
employment with the Company, including but not limited to records kept in the
ordinary course of business, except:

 

(i)                                     as
such disclosure or use may be required or appropriate in connection with
his or her work as an employee of the Company;

 

(ii)                                  when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order him or her to divulge, disclose or make accessible such information;

 

(iii)                               as
to such confidential information that becomes generally known to the public or
trade without his or her violation of this Section 7.5; or

 

(iv)                              to
the Participant’s spouse and/or his or her personal tax and financial advisors
as reasonably necessary or appropriate to advance the Participant’s tax,
financial and other personal planning (each an “Exempt Person”), provided, however, that any disclosure or
use of any trade secret or proprietary or confidential information of the
Company by an Exempt Person shall be deemed to be a breach of this Section 7.5
by the Participant.

 

7.6                                 Return of Company Property. Immediately following
the Termination Date, a Participant shall immediately return all Company
property in his or her possession, including but not limited to all computer
equipment (hardware and software), telephones, facsimile machines, palm pilots
and other communication devices, credit cards, office keys, security access
cards,

 

11

 

badges, identification cards and all copies (including drafts) of any
documentation or information (however stored) relating to the business of the
Company, its customers and clients or its prospective customers and clients.

 

7.7                                 Cooperation. Following the Termination
Date, a Participant shall give his or her assistance and cooperation willingly,
upon reasonable advance notice with due consideration for his or her other
business or personal commitments, in any matter relating to his or her position
with the Company, or his or her expertise or experience as the Company may reasonably
request, including his or her attendance and truthful testimony where deemed
appropriate by the Company, with respect to any investigation or the Company’s
defense or prosecution of any existing or future claims or litigations or other
proceeding relating to matters in which he or she was involved or potentially
had knowledge by virtue of his or her employment with the Company. In no event
shall his or her cooperation materially interfere with his or her services for
a subsequent employer or other similar service recipient. The Company agrees
that (i) it will promptly reimburse the Terminated Participant for his or
her reasonable and documented expenses in connection with his or her rendering
assistance and/or cooperation under this Section 7.7, upon his or her
presentation of documentation for such expenses and (ii) the Terminated
Participant will be reasonably compensated for any continued material services
as required under this Section 7.7.

 

8.0                                 CLAIMS

 

8.1                                 Claims
Procedure. If any Participant or Beneficiary, or his or her legal
representative, has a claim for benefits which is not being paid, such claimant
may file a written claim with the Committee setting forth the amount and
nature of the claim, supporting facts, and the claimant’s address. Written
notice of the disposition of a claim by the Committee shall be furnished to the
claimant within 90 days after the claim is filed. In the event of special
circumstances, the Committee may extend the period for determination for
up to an additional 90 days, in which case it shall so advise the claimant. If
the claim is denied, the reasons for the denial shall be specifically set forth
in writing, pertinent provisions of the Plan shall be cited, including an
explanation of the Plan’s claim review procedure, and, if the claim is
perfectible, an explanation as to how the claimant can perfect the claim shall
be provided.

 

8.2                                 Claims
Review Procedure. If a claimant whose claim has been denied wishes further
consideration of his or her claim, he or she may request the Committee to
review his or her claim in a written statement of the claimant’s position filed
with the Committee no later than 60 days after receipt of the written
notification provided for in Section 8.1 above. The Committee shall fully
and fairly review the matter and shall promptly advise the claimant, in
writing, of its decision within the next 60 days. Due to special circumstances,
the Committee may extend the period for determination for up to an
additional 60 days.

 

8.3                                 Dispute
Resolution. Any disputes arising under or in connection with the Plan shall
be resolved by binding arbitration, to be held in New York City in accordance
with the rules and procedures of the American Arbitration Association. Judgment
upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

 

12

 

8.4                                 Reimbursement
of Expenses. If there is any dispute between the Company and a Participant
with respect to a claim under the Plan, the Company shall reimburse such
Participant all reasonable fees, costs and expenses incurred by such
Participant with respect to such disputed claim; provided, however, that (i) such Participant is the
prevailing party with respect to such disputed claim or (ii) the disputed
claim is settled.

 

9.0                                 TAXES

 

9.1                                 Withholding
Taxes. The Company shall be entitled to withhold from any and all payments
made to a Participant under the Plan all federal, state, local and/or other
taxes or imposts which the Company determines are required to be so withheld
from such payments or by reason of any other payments made to or on behalf of
the Participant or for his or her benefit hereunder.

 

9.2                                 Golden
Parachute Excise Tax Gross-Up. The Committee shall designate which, if
any, of paragraphs (a), (b), (c) or (d) of this Section 9.2, or
such other alternative as the Committee shall determine, in each case without
duplication, applies to the Participant. Such designation shall be made at the
time the Participant is designated by the Committee as a Participant under this
Plan (except that all Participants in the Plan prior to February 16, 2006
are designated for this purpose as having paragraph (b) apply to them), or
at such other time as the Committee determines in accordance with the
provisions of the Plan; provided that any subsequent designation under this Section 9.2
after the initial designation hereunder shall not be any less favorable to the
Participant than the then existing designation without the written consent of
the Participant. If no such designation is made by the Committee (or if the
Committee so affirmatively states) then the provisions of this Section 9.2
shall not apply to the Participant, and the Company shall have no obligation to
the Participant under this Section 9.2.

 

(a)                                  Gross
Up. In the event that a Participant becomes subject to the excise tax
imposed by Code Section 4999 (the “Parachute Excise Tax”), then the
Company shall pay to the Participant a tax gross-up payment so that after
payment by the Participant of all federal, state, and local excise, income,
employment, Medicare and any other taxes (including any related penalties and
interest) resulting from the payment of the “parachute payments” (defined in
Code Section 280G) and the tax gross-up payments to the Participant by the
Company, the Participant retains on an after-tax basis an amount equal to the
amount that the Participant would have retained had he or she not been subject
to the Parachute Excise Tax.

 

(b)                                 Gross
Up Subject to Limitations. In the event that a Participant becomes subject
to the Parachute Excise Tax, then the Company and the Participant shall carry
out the following:

 

(i)                                     if
the aggregate “parachute payment” (as such term is used under Code Section 280G)
exceeds 299.99% of the “base amount” (as such term is used under Code Section 280G)
(the “Safe Harbor Amount”) by less than 10% of the Safe Harbor Amount, then the
parachute payment shall be reduced to the Safe Harbor Amount, with the
Participant determining in his or her sole discretion which portion of the
aggregate parachute payment shall be so reduced; or

 

13

 

(ii)                                  if
the aggregate parachute payment exceeds the Safe Harbor Amount by 10% or more
of the Safe Harbor Amount, then the Company shall pay to the Participant a tax
gross-up payment so that after payment by the Participant of all federal,
state, and local excise, income, employment, Medicare and any other taxes
(including any related penalties and interest) resulting from the payment of
the parachute payments and the tax gross-up payments to the Participant by the
Company, the Participant retains on an after-tax basis an amount equal to the
amount that the Participant would have retained had he or she not been subject
to the Parachute Excise Tax.

 

(c)                                  Cutback.
In the event that a Participant becomes subject to the Parachute Excise Tax,
then the parachute payment shall be reduced to the Safe Harbor Amount, with the
Participant determining in his or her sole discretion which portion of the
aggregate parachute payment shall be so reduced.

 

(d)                                 Better
Of Cutback or No Protection. In the event that a Participant becomes
subject to the Parachute Excise Tax, then the provisions of either of clause (i) or
(ii) of this paragraph (d) shall apply, whichever provision results
in the Participant retaining the greater amount after payment of all taxes,
including any Parachute Excise Tax:

 

(i)                                     the
parachute payment shall be reduced to the Safe Harbor Amount, with the
Participant determining in his or her sole discretion which portion of the
aggregate parachute payment shall be so reduced; or

 

(ii)                                  the
parachute payment shall not be reduced, and the Participant shall be
responsible for the payment of all federal, state, and local excise, income,
employment, Medicare and any other taxes (including any related penalties and
interest) resulting from the payment of the parachute payments.

 

9.3                                 No
Guarantee of Tax Consequences. No person connected with the Plan in any
capacity, including, but not limited to, the Company and any Subsidiary and
their directors, officers, agents and employees makes any representation,
commitment, or guarantee that any tax treatment, including, but not limited to,
federal, state and local income, estate and gift tax treatment, will be
applicable with respect to amounts deferred under the Plan, or paid to or for
the benefit of a Participant under the Plan, or that such tax treatment will
apply to or be available to a Participant on account of participation in the
Plan.

 

10.0                           TERM OF PLAN; AMENDMENT AND TERMINATION OF PLAN

 

10.1                           Term
of Plan. The Plan shall be effective as of the Effective Date and shall
remain in effect until the Board terminates the Plan.

 

10.2                           Amendment
of Plan. The Plan may be amended by the Board at any time with or
without prior notice; provided, however,
that the Plan shall not be amended on a Change-in-Control Date or during the
3-year period following such Change-in-Control Date.

 

14

 

10.3                           Termination of Plan. The Plan may be
terminated or suspended by the Board at any time with or without prior notice; provided, however, that the Plan shall
not be terminated or suspended on a Change-in-Control Date or during the 3-year
period following such Change-in-Control Date.

 

10.4                           No Adverse Effect. If the Plan is amended,
terminated, or suspended in accordance with Sections 10.2 or 10.3 above, such
action shall not adversely affect the benefits of any Participant.

 

11.0                           MISCELLANEOUS

 

11.1                           Offset.
Change-in-Control Benefits shall be reduced by any payment or benefit made or
provided by the Company or any Subsidiary to the Participant pursuant to (i) any
severance plan, program, policy or arrangement of the Company or any Subsidiary
not otherwise referred to in the Plan, (ii) any employment agreement
between the Company or any Subsidiary and the Participant, and (iii) any
federal, state or local statute, rule, regulation or ordinance.

 

11.2                           No
Right, Title, or Interest in Company Assets. Participants shall have no
right, title, or interest whatsoever in or to any assets of the Company or any
investments which the Company may make to aid it in meeting its
obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a

 

fiduciary relationship between the Company and any Participant,
Beneficiary, legal representative or any other person. To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. Subject to this Section 11.2, all payments to be made
hereunder shall be paid from the general funds of the Company and no special or
separate fund shall be established and no segregation of assets shall be made
to assure payment of such amounts; provided,
however, that the Company may establish a grantor trust to
provide for the payment of the benefits under the Plan of which the Company is
the grantor within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Code and under which the assets held by such trust
will be subject to the claims of the Company’s general creditors under federal
and state law in the event of the Company’s insolvency.

 

11.3                           No
Right to Continued Employment. The Participant’s rights, if any, to
continue to serve the Company as an employee shall not be enlarged or otherwise
affected by his or her designation as a Participant under the Plan, and the
Company or the applicable Subsidiary reserves the right to terminate the employment
of any employee at any time. The adoption of the Plan shall not be deemed to
give any employee, or any other individual any right to be selected as a
Participant or to continued employment with the Company or any Subsidiary.

 

11.4                           Other
Rights. The Plan shall not affect or impair the rights or obligations of
the Company or a Participant under any other written plan, contract,
arrangement, or pension, profit sharing or other compensation plan.

 

15

 

11.5                           Governing
Law. The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to principles of conflict of
laws, except as superseded by ERISA and other applicable federal law.

 

11.6                           Severability.
If any term or condition of the Plan shall be invalid or unenforceable to
any extent or in any application, then the remainder of the Plan, with the
exception of such invalid or unenforceable provision, shall not be affected
thereby and shall continue in effect and application to its fullest extent.

 

11.7                           Incapacity.
If the Committee determines that a Participant or a Beneficiary is unable
to care for his or her affairs because of illness or accident or because he or
she is a minor, any benefit due the Participant or Beneficiary may be paid
to the Participant’s spouse or to any other person deemed by the Committee to
have incurred expense for such Participant (including a duly appointed
guardian, committee or other legal representative), and any such payment shall
be a complete discharge of the Company’s obligation hereunder.

 

11.8                           Transferability
of Rights. The Company shall have the unrestricted right to transfer its
obligations under the Plan with respect to one or more Participants to any
person, including, but not limited to, any purchaser of all or any part of
the Company’s business. No Participant or Beneficiary shall have any right to
commute, encumber, transfer or otherwise dispose of or alienate any present or
future right or expectancy which the Participant or Beneficiary may have
at any time to receive payments of benefits hereunder, which benefits and the
right thereto are expressly declared to be non-assignable and nontransferable,
except to the extent required by law. Any attempt to transfer or assign a benefit,
or any rights granted hereunder, by a Participant or the spouse of a
Participant shall, in the sole discretion of the Committee (after consideration
of such facts as it deems pertinent), be grounds for terminating any rights of
the Participant or Beneficiary to any portion of the Plan benefits not
previously paid.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

16

 

SCHEDULE A

 

	
  TIER

  	
   

  	
  SEVERANCE

  MULTIPLIER

  	
   

  	
  HEALTH CONTINUATION

  PERIOD

  	
   

  	
  NONCOMPETITION /

  NONSOLICITATION PERIOD

  	
   

  
	
  1

  	
   

  	
  3x

  	
   

  	
  18 months

  	
   

  	
  12 months

  	
   

  
	
  2

  	
   

  	
  2x

  	
   

  	
  18 months

  	
   

  	
  12 months

  	
   

  
	
  3

  	
   

  	
  1x

  	
   

  	
  12 months

  	
   

  	
  12 months

  	
   

  
	
  4

  	
   

  	
  0.5x

  	
   

  	
  6 months

  	
   

  	
  6 months

  	
   

  

 

17

 

EXHIBIT B

 

RELEASE

 

This RELEASE (“Release”) dated as of this          day
of                    ,
20   between ImClone Systems Incorporated, a Delaware
corporation (the “Company”), and               (the
“Employee”).

 

WHEREAS, the Employee is a participant in the Company’s
Change-in-Control Plan (the “Plan”); and

 

WHEREAS, the Employee’s employment with the Company (has been) (will
be) terminated effective                           ;
and

 

WHEREAS, pursuant to Section 7.1 of the Plan, the Employee is
entitled to certain compensation and benefits upon such termination, contingent
upon the execution of this Release;

 

NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and in the Plan, the Company and the Employee agree as
follows:

 

1.                                       The
Employee, on [his/her] own behalf and on behalf of [his/her] heirs, estate and
beneficiaries, does hereby release the Company, and any of its Subsidiaries or
affiliates, and each past or present officer, director, agent, employee,
shareholder, and insurer of any such entities, from any and all claims made, to
be made, or which might have been made of whatever nature, whether known or
unknown, from the beginning of time, including those that arose as a
consequence of [his/her] employment with the Company, or arising out of the
severance of such employment relationship, or arising out of any act committed
or omitted during or after the existence of such employment relationship, all
up through and including the date on which this Release is executed, including,
but not limited to, those which were, could have been or could be the subject
of an administrative or judicial proceeding filed by the Employee or on
[his/her] behalf under federal, state or local law, whether by statute,
regulation, in contract or tort, and including, but not limited to, every claim
for front pay, back pay, wages, bonus, fringe benefit, any form of
discrimination (including but not limited to, every claim of race, color, sex,
religion, national origin, disability or age discrimination), wrongful
termination, emotional distress, pain and suffering, breach of contract,
compensatory or punitive damages, interest, attorney’s fees, reinstatement or
reemployment. If any court rules that such waiver of rights to file, or
have filed on [his/her] behalf, any administrative or judicial charges or
complaints is ineffective, the Employee agrees not to seek or accept any money
damages or any other relief upon the filing of any such administrative or
judicial charges or complaints. The Employee relinquishes any right to future
employment with the Company and the Company shall have the right to refuse to
re-employ the Employee without liability. The Employee acknowledges and agrees
that even though claims and facts in addition to those now known or believed by
[him/her] to exist may subsequently be discovered, it is [his/her]
intention to fully settle and release all claims [he/she] may have against
the Company and the persons and entities described above, whether known,
unknown or suspected.

 

18

 

2.                                       The
Employee acknowledges that [he/she] has been provided at least 21 days to
review the Release and has been advised to review it with an attorney of
[his/her] choice. In the event the Employee elects to sign this Release prior
to the end of this 21-day period, [he/she] agrees that it is a knowing and
voluntary waiver of [his/her] right to wait the full 21 days. The Employee
further understands that [he/she] has 7 days after the signing hereof to revoke
it by so notifying the Company in writing, such notice to be received by               within
the 7-day period. The Employee further acknowledges that [he/she] has carefully
read this Release, and knows and understands its contents and its binding legal
effect. The Employee acknowledges that by signing this Release, [he/she] does
so of [his/her] own free will and act and that it is [his/her] intention that
[he/she] be legally bound by its terms.

 

IN WITNESS WHEREOF, the parties have executed this Release on the date
first above written.

 

 

	
   

  	
  IMCLONE SYSTEMS INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Employee’s Name]

  

 

19Exhibit 10.40

 

IMCLONE
SYSTEMS INCORPORATED

TRANSITION
SEVERANCE PLAN

 

Effective
As Of March 1, 2006

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I - 

  	
  INTRODUCTION

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II - 

  	
  DEFINITIONS AND INTERPRETATIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Agreement and Release

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Board

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Cause

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Change in Control

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Committee

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Company

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Effective Date

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Eligible Employee

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Good Reason

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Participant

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.

  	
  Plan Administrator

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Term

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.

  	
  Termination Date

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.

  	
  Termination of Employment.

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.

  	
  Base Pay

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE III - 

  	
  ELIGIBILITY TO PARTICIPATE

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV - 

  	
  BENEFITS PAYABLE FROM THE PLAN

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Severance Pay

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Other Benefits

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Withholding

  	
  7

  

 

 

	
  ARTICLE V - 

  	
  HOW AND WHEN SEVERANCE WILL BE
  PAID

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI - 

  	
  MISCELLANEOUS PROVISIONS

  	
  8

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Amendment and Termination

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  No Additional Rights Created

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Records

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Construction

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Severability

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Incompetency

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Payments to a Minor

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Plan Not a Contract of Employment

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Financing

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Nontransferability

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII - 

  	
  WHAT ELSE A PARTICIPANT NEEDS TO
  KNOW ABOUT THE PLAN

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Claim Procedure

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Plan Interpretation and Benefit
  Determination.

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Your Rights Under ERISA

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Plan Document

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Other Important Facts.

  	
  13

  

 

ii

 

IMCLONE SYSTEMS INCORPORATED

TRANSITION SEVERANCE PLAN

 

ARTICLE I - INTRODUCTION

 

ImClone
Systems Incorporated (the “Company”) hereby establishes the ImClone Systems
Incorporated Transition Severance Plan (the “Plan”), effective as of March 1,
2006, to provide severance benefits to select employees of the Company who
suffer a loss of employment under the terms and conditions set forth in the
Plan. The Plan will remain in effect for a period of 18 months following its
effective date (i.e., through August 31, 2007) (the “Term”), and is
intended to make severance payments in lieu of, and not in addition to, payments
under any and all severance plans, policies and/or practices of the Company
(including the ImClone Systems Incorporated Senior Executive Severance Plan) in
effect for covered employees. The Plan is not intended to supersede or replace
such other severance plans, policies and/or practices following the expiration
of the Term, and such other severance plans, policies and/or practices will
continue to apply, if then in effect, following the expiration of the Term in
accordance with their terms. The Plan is intended to fall within the definition
of an “employee welfare benefit plan” under Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). No
employee or representative of the Company or its affiliates is authorized to
modify, add to or subtract from the terms and conditions in the Plan, except in
accordance with the amendment and termination procedures described herein.

 

ARTICLE II - DEFINITIONS AND INTERPRETATIONS

 

The following
definitions and interpretations of important terms apply to the Plan.

 

1.                                       Agreement
and Release. An Agreement and General Release in a form acceptable to
the Plan Administrator, in its sole and absolute discretion, under which, among
other things, the Eligible Employee releases and discharges the Company and
related entities (as well as any third party for whom the Eligible Employee
provides services on the Company’s behalf) from any and all claims and
liabilities relating to the Eligible Employee’s employment with the Company
and/or the termination of the Eligible Employee’s employment, including without
limitation, claims under the Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Family and Medical Leave Act, the Age
Discrimination in Employment Act, the Sarbanes Oxley Act and, where applicable,
the Older Workers Benefit Protection Act, the New Jersey Law Against
Discrimination, the New Jersey Conscientious Employee Protection Act
(Whistleblowing Law) and the New York State and City Human Rights Laws (and
similar laws of any other state or locality).

 

2.                                       Board.
The Board of Directors of the Company.

 

3.                                       Cause.
Any one of the following circumstances:

 

(i)                                     the
performance by the Eligible Employee of his or her employment duties in a
manner deemed by the Company to be unsatisfactory in any way; provided that the
Eligible Employee had previously received a written warning identifying the
problem and

 

 

outlining a course of
corrective action, has been given a reasonable opportunity to correct his or
her performance, and has failed or refused to do so;

 

(ii)                                  the
performance by the Eligible Employee of his or her employment duties in a
manner deemed by the Company to be grossly incompetent or grossly negligent;

 

(iii)                               any
other willful misconduct or gross negligence resulting, in either case, in harm
to the Company or a subsidiary;

 

(iv)                              indictment
involving a felony or misdemeanor involving moral turpitude or the commission
of a criminal act by the Eligible Employee, whether or not performed in the
workplace, which subjects, or if generally known, would subject, the Company to
public ridicule or embarrassment;

 

(v)                                 failure
to carry out directions of the Board or the Eligible Employee’s immediate
supervisor;

 

(vi)                              fraud,
embezzlement, theft or dishonesty against the Company or a subsidiary resulting
in harm to the Company or a subsidiary;

 

(vii)                           material
violation of Company policies, rules or procedures resulting in harm to
the Company or a subsidiary;

 

(viii)                        violent
acts, threats of violence or unauthorized possession of alcohol or controlled
substances on Company property; or

 

(ix)                                acts
intended to result in personal gain at the expense of the Company or through
the improper disclosure of proprietary information or trade secrets.

 

The
determination of whether a discharge or other separation from employment is for
Cause shall be made by the Plan Administrator, in its sole and absolute
discretion, and such determination shall be conclusive and binding on the affected
Eligible Employee.

 

4.                                       Change
in Control. The occurrence of one of the following events during the Term:

 

(i)                                     individuals
who, on the Effective Date, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board; provided
that any person becoming a director subsequent to the Effective Date whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination) shall
be an Incumbent Director; provided, further, that no individual initially
elected or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be an Incumbent Director;

 

2

 

(ii)                                  any
“person” (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the
Effective Date, a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the “Company
Voting Securities”); provided, however, that an event described in this Clause (ii) shall
not be deemed to be a Change in Control if any of following becomes such a
beneficial owner:

 

(A)                              the
Company or any majority-owned subsidiary (provided, that this exclusion applies
solely to the ownership levels of the Company or the majority-owned
subsidiary),

 

(B)                                any
tax-qualified, broad-based employee benefit plan sponsored or maintained by the
Company or any majority-owned subsidiary,

 

(C)                                any
underwriter temporarily holding securities pursuant to an offering of such
securities, or

 

(D)                               any
person pursuant to a Non-Qualifying Transaction (as defined in Clause (iii) below);

 

(iii)                               the
consummation of a merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or any of its subsidiaries that
requires the approval of the Company’s stockholders, whether for such
transaction or the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business Combination:

 

(A)                              50%
or more of the total voting power of:

 

(x)                                   the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or

 

(y)                                 if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”),

 

is represented
by Company Voting Securities that were outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination;

 

(B)                                no
person (other than any employee benefit plan (or related trust) sponsored or maintained
by the Surviving Corporation or the Parent Corporation), is or becomes the
beneficial owner, directly or indirectly, of 40% or more of the total voting

 

3

 

power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation); and

 

(C)                                at
least a majority of the members of the board of directors of the Parent
Corporation (or if there is no Parent Corporation, the Surviving Corporation)
following the consummation of the Business Combination were Incumbent Directors
at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination

 

(any Business
Combination which satisfies all of the criteria specified in (A), (B) and (C) above
shall be deemed to be a “Non-Qualifying Transaction”); or

 

(iv)                              stockholder
approval of a liquidation or dissolution of the Company, unless the voting
common equity interests of an ongoing entity (other than a liquidating trust)
are beneficially owned, directly or indirectly, by the Company’s shareholders
in substantially the same proportions as such shareholders owned the Company’s
outstanding voting common equity interests immediately prior to such
liquidation and such ongoing entity assumes all existing obligations of the
Company under this Plan.

 

Notwithstanding
the foregoing, a Change in Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 40% of the
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided, that, if after such acquisition by the Company such
person becomes the beneficial owner of Company Voting Securities that increases
the percentage of outstanding Company Voting Securities beneficially owned by
such person, a Change in Control of the Company shall then occur.

 

5.                                       Committee.
The Compensation Committee of the Board.

 

6.                                       Company.
ImClone Systems Incorporated, and its successors.

 

7.                                       Effective
Date. March 1, 2006.

 

8.                                       Eligible
Employee. Any active, regular, full-time, U.S.-based, salaried employee of
the Company in a position at a level of Vice President or below who is
designated by the Plan Administrator, in a written designation delivered to the
Eligible Employee, as eligible to become a Participant under this Plan. Notwithstanding
the preceding sentence, “Eligible Employee” does not include any employee who
is a party to a formal, written employment agreement with the Company that
provides for severance or other payments in the event of the individual’s
termination of employment or other separation from service with the Company
(regardless of the circumstances). “Eligible Employee” also does not include
any individual (i) designated by the Company as an independent contractor
and not as an employee at the time of any determination under the Plan, (ii) being
paid by or through a third party agency, (iii) designated by the Company
as a freelance worker and not as an employee at the time of any determination
under the Plan, (iv) designated by the Company as a seasonal, occasional,
limited duration, leased or temporary employee, during the period the
individual is so paid or

 

4

 

designated. Any such individual
shall not be an Eligible Employee even if he or she is later retroactively
reclassified as a common-law or other type of employee of the Company during
all or any part of such period pursuant to applicable law or otherwise. Employees
of the Company in a position at a level of Senior Vice President or above are
not eligible to participate in the Plan.

 

9.                                       Good
Reason. Any one of the following circumstances that occurs on or following
a Change in Control, and within the 60-day period preceding a Termination Date:

 

(i)                                     a
reduction in the Eligible Employee’s base salary without the Eligible Employee’s
prior written consent (other than any reduction applicable to similarly
situated employees of the Company generally); or

 

(ii)                                  an
actual change in the Eligible Employee’s principal work location by more than
35 miles from its current location and more than 35 miles from the Eligible
Employee’s principal place of abode as of the date of such change in job
location without the Eligible Employee’s prior written consent.

 

10.                                 Participant.
An Eligible Employee who meets the requirements for eligibility under the Plan,
as set forth in Article III of the Plan. An individual shall cease being a
Participant once all Plan benefits due to such individual under the Plan have
been paid (or, if earlier, upon the death of the Participant) and no person
shall have any further rights under this Plan with respect to such former
Participant.

 

11.                                 Plan
Administrator. The Chief Executive Officer of the Company. The Chief
Executive Officer may designate a person or committee to perform day
to day administrative duties for the Plan.

 

12.                                 Term.
The period of 18 months following the Effective Date (i.e., through August 31,
2007). The Plan applies to Participants who experience a Termination of
Employment during the Term.

 

13.                                 Termination
Date. The date on which a Participant experiences a Termination of
Employment with the Company.

 

14.                                 Termination
of Employment.

 

(i)                                     The
termination by the Company of an Eligible Employee’s employment relationship
with the Company as the result of job elimination, job discontinuation, office
closing, staff reduction, organizational restructuring, or unsatisfactory job
performance that does not constitute Cause; or

 

(ii)                                  The
termination by the Eligible Employee of the Eligible Employee’s employment
relationship with the Company for Good Reason.

 

Termination of
Employment does not include termination of an Eligible Employee’s employment
relationship with the Company due to death or disability, or a

 

5

 

discharge or separation from service with the Company under any of the
following circumstances: retirement, voluntary resignation without Good Reason or
job abandonment (including the termination of employment of an Eligible
Employee for excessive absenteeism).

 

The
determination as to whether a termination is made by the Company with or
without Cause, or by the Eligible Employee with or without Good Reason, will be
made by the Plan Administrator, in its sole and absolute discretion, and such
determination shall be final and binding on all affected Eligible Employees. If
an Eligible Employee terminates employment or is terminated from employment and
it is subsequently determined that either before or after the termination,
Cause existed or exists, the Eligible Employee’s separation of employment will
be deemed to have been for Cause.

 

15.                                 Base
Pay. The Eligible Employee’s annual base salary at the time of his or her
Termination of Employment, excluding bonuses, overtime pay, premium or
differential pay, commissions, non-cash compensation, incentive or deferred
compensation or any other additional compensation. However, Base Pay will
include salary reduction contributions made on an Eligible Employee’s behalf to
any plan of the Company under Section 125, 132(f) or 401(k) of the
Internal Revenue Code of 1986, as amended.

 

ARTICLE III - ELIGIBILITY TO PARTICIPATE

 

An Eligible
Employee becomes a Participant in the Plan and shall be entitled to severance
benefits only if he or she:

 

(i)                                     Is
notified in writing by the Plan Administrator of his/her Termination Date;

 

(ii)                                  Remains
in the continuous employ of the Company until his or her Termination Date, does
not terminate his or her employment without Good Reason, and is not terminated
by the Company for Cause (as defined above);

 

(iii)                               Experiences
a Termination of Employment; and

 

(iv)                              Timely
returns and does not revoke (if applicable) a signed, dated and notarized original
Agreement and Release.

 

An Eligible
Employee shall become a Participant and payment of benefits under the Plan will
be made only after the Agreement and Release has been signed and the time for
the Eligible Employee to revoke the agreement and general release (as set forth
in the Agreement and Release), if any, has expired (the “Release Effective Date”).
Participation in this Plan does not affect an Eligible Employee’s right to any
bonus, incentive pay, stock options or pension benefit to which he or she would
otherwise be entitled under the terms of the respective plans governing those
programs on account of service with the Company prior to the Termination of
Employment.

 

6

 

ARTICLE IV - BENEFITS PAYABLE FROM THE PLAN

 

1.                                       Severance
Pay

 

Participants
shall be entitled to receive severance pay based on their position as follows:

 

Vice Presidents and Assistant Vice Presidents:  Participants in a position at the level of Vice
President or Assistant Vice President shall receive twelve (12) months of Base
Pay.

 

All other Participants:  Participants in a
position at a level below Assistant Vice President shall receive six (6) months
of Base Pay.

 

2.                                       Other
Benefits. If an Eligible Employee is eligible to receive any benefits paid
under the Plan, such Eligible Employee shall not be entitled to receive any
other severance, separation, notice or termination payments on account of his
or her employment with the Company under any other plan, policy, program or
agreement (other than the exercise of stock options or other long-term
incentive awards pursuant to the terms of the applicable plan). If, for any
reason, an Eligible Employee becomes entitled to or receives any other
severance, separation, notice or termination payments on account of his or her
employment or termination of employment with the Company, including, for
example, any payments required to be paid to the Eligible Employee under any
Federal, State or local law (including, without limitation, the Worker
Adjustment and Retraining Notification Act) or pursuant to any agreement
(except unemployment benefits payable in accordance with state law and payment
for accrued but unused vacation), his
or her severance under the Plan will be reduced by the amount of such other
payments paid or payable. An Eligible Employee must notify the Plan
Administrator if he or she receives or is claiming to be entitled to receive
any such payment(s). With respect to an Eligible Employee in a position at the
level of Vice President who becomes a Participant entitled to receive severance
pay under Section 1 of this Article IV, (i) the severance pay
amounts set forth in Section 1 of this Article IV are intended to be
in lieu of, and not in addition to, any amounts otherwise payable to such
Participant under Section 1 of Article IV of the ImClone Systems
Incorporated Senior Executive Severance Plan, if applicable to such Participant
pursuant to the terms of that plan, and (ii) such Participant may be
eligible for the continued health benefits set forth in Section 2 of Article IV
of the ImClone Systems Incorporated Senior Executive Severance Plan, if
applicable to such Participant pursuant to the terms of that plan.

 

3.                                       Withholding.
Severance pay is subject to Federal and State income and Social Security tax
withholdings and any other withholdings mandated by law.

 

ARTICLE V - HOW AND WHEN SEVERANCE WILL BE PAID

 

Severance pay
will be paid in a single lump sum payment as soon as practicable following the
Participant’s Release Effective Date, but in no event more than ten (10) days
following the participant’s Release Effective Date.

 

7

 

The Company
intends that all payments under the Plan be made on a basis that complies with Section 409A
of the Code. Accordingly, in the event that any Participant is considered a “Specified
Employee” as defined in Section 409A of the Code or the guidance issued
thereunder (“Section 409A”), and any payments to the Participant under the
Plan are considered “deferred compensation” under Section 409A of a type
requiring payment six months after the date of the Participant’s separation
from service (within the meaning of Section 409A), then to the extent
required by Section 409A, such payment shall be delayed until six (6) months
after the date of the Participant’s separation from service. The Company
makes no guarantee with respect to the tax treatment of payments hereunder, and
the Company shall not be responsible in any event with regard to non-compliance
with Code Section 409A.

 

ARTICLE VI - MISCELLANEOUS PROVISIONS

 

1.                                       Amendment
and Termination. The Company reserves the right, in its sole and absolute
discretion, to terminate, amend or modify the Plan, in whole or in part, at any
time and for any reason by action of the Committee; provided that no amendment may reduce
the level of benefits provided for hereunder during the Term, and no
termination shall be effective prior to the first anniversary of such Committee
action; provided further that the Committee may not act to designate an
Eligible Employee as ineligible to participate in the Plan and receive benefits
thereunder at any time during the six month period prior to a Change in Control
or thereafter during the Term; and provided, further that the Company shall not
amend or terminate the Plan at any time after (i) the occurrence of a
Change in Control or (ii) the date the Company enters into a definitive
agreement which, if consummated, would result in a Change in Control, unless
the potential Change in Control is abandoned (as publicly announced by the
Company), in each case except as may be required by applicable law.

 

2.                                       No
Additional Rights Created. Neither the establishment of this Plan, nor any
modification thereof, nor the payment of any benefits hereunder, shall be
construed as giving to any Participant, Eligible Employee or other person any
legal or equitable right against the Company or any officer, director or
employee thereof; and in no event shall the terms and conditions of employment
by the Company of any Eligible Employee be modified or in any way affected by
this Plan.

 

3.                                       Records.
The records of the Company with respect to periods of service, employment
history, base salary, absences, and all other relevant matters shall be
conclusive for all purposes of this Plan.

 

4.                                       Construction.
The respective terms and provisions of the Plan shall be construed, whenever
possible, to be in conformity with the requirements of ERISA, or any subsequent
laws or amendments thereto. To the extent not in conflict with the preceding
sentence or another provision in the Plan, the construction and administration
of the Plan shall be in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York
(without reference to its conflicts of law provisions).

 

8

 

5.                                       Severability.
Should any provisions of the Plan be deemed or held to be unlawful or invalid
for any reason, such fact shall not adversely affect the other provisions of
the Plan unless such determination shall render impossible or impracticable the
functioning of the Plan, and in such case, an appropriate provision or
provisions shall be adopted so that the Plan may continue to function
properly.

 

6.                                       Incompetency.
In the event that the Plan Administrator finds that a Participant is unable to
care for his or her affairs because of illness or accident, then benefits
payable hereunder, unless claim has been made therefor by a duly appointed
guardian, committee, or other legal representative, may be paid in such
manner as the Plan Administrator shall determine, and the application thereof
shall be a complete discharge of all liability for any payments or benefits to
which such Participant was or would have been otherwise entitled under this
Plan.

 

7.                                       Payments
to a Minor. Any payments to a minor from this Plan may be paid by the
Plan Administrator in its sole and absolute discretion (a) directly to
such minor; (b) to the legal or natural guardian of such minor; or (c) to
any other person, whether or not appointed guardian of the minor, who shall
have the care and custody of such minor. The receipt by such individual shall
be a complete discharge of all liability under the Plan therefor.

 

8.                                       Plan
Not a Contract of Employment. Nothing contained in this Plan shall be held
or construed to create any liability upon the Company to retain any Eligible
Employee in its service. All Eligible Employees shall remain subject to discharge
or discipline to the same extent as if the Plan had not been put into effect.

 

9.                                       Financing.
The benefits payable under this Plan shall be paid out of the general assets of
the Company. No Participant or any other person shall have any interest whatsoever
in any specific asset of the Company. To the extent that any person acquires a
right to receive payments under this Plan, such right shall not be secured by
any assets of the Company.

 

10.                                 Nontransferability.
In no event shall the Company make any payment under this Plan to any assignee
or creditor of a Participant, except as otherwise required by law. Prior to the
time of a payment hereunder, a Participant shall have no rights by way of
anticipation or otherwise to assign or otherwise dispose of any interest under
this Plan, nor shall rights be assigned or transferred by operation of law.

 

ARTICLE VII - WHAT ELSE A PARTICIPANT NEEDS

TO KNOW ABOUT THE PLAN

 

1.                                       Claim
Procedure. An Eligible Employee may file a written claim with the Plan
Administrator with respect to his or her rights to receive a benefit from the
Plan. The Eligible Employee will be informed of the decision of the Plan
Administrator with respect to the claim within ninety (90) days after it is
filed. Under special circumstances, the Plan Administrator may require an
additional period of not more than ninety (90) days to review a claim. If that
happens, the Eligible Employee will receive a written

 

9

 

notice of that fact, which will
also indicate the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to make a determination with
respect to the claim. If the extension is required due to the Eligible Employee’s
failure to submit information necessary to decide the claim, the period for
making the determination will be tolled from the date on which the extension
notice is sent until the date on which the Eligible Employee responds to the
Plan’s request for information. The Plan Administrator has delegated to the
Vice President of Human Resources of the Company the authority to make the
initial decision on any claim not brought by such individual.

 

If a claim is
denied in whole or in part, or any adverse benefit determination is made with
respect to the claim, the Eligible Employee will be provided with a written
notice setting forth the reason for the determination, along with specific
references to Plan provisions on which the determination is based. This notice
will also provide an explanation of what additional information is needed to
evaluate the claim (and why such information is necessary), together with an
explanation of the Plan’s claims review procedure and the time limits
applicable to such procedure, as well as a statement of the Eligible Employee’s
right to bring a civil action under Section 502(a) of ERISA following
an adverse benefit determination on review. If an Eligible Employee is not
notified (of the denial or an extension) within ninety (90) days from the date
the Eligible Employee notifies the Plan Administrator, the Eligible Employee may request
a review of the application as if the claim had been denied.

 

If the
Eligible Employee’s claim has been denied, or an adverse benefit determination
has been made, the Eligible Employee may request that the Committee (or
its delegate) review the denial. The request must be in writing and must be
made within sixty (60) days after written notification of denial. In connection
with this request, the Eligible Employee (or his or her duly authorized
representative) may (i) be provided, upon written request and free of
charge, with reasonable access to (and copies of) all documents, records, and
other information relevant to the claim; and (ii) submit to the Committee
(or its delegate) written comments, documents, records, and other information
related to the claim.

 

The review by
the Committee (or its delegate) will take into account all comments, documents,
records, and other information the Eligible Employee submits relating to the
claim. The Committee (or its delegate) will make a final written decision on a
claim review, in most cases within sixty (60) days after receipt of a request
for a review. In some cases, the claim may take more time to review, and
an additional processing period of up to sixty (60) days may be required. If
that happens, the Eligible Employee will receive a written notice of that fact,
which will also indicate the special circumstances requiring the extension of
time and the date by which the Committee (or its delegate) expects to make a
determination with respect to the claim. If the extension is required due to
the Eligible Employee’s failure to submit information necessary to decide the
claim, the period for making the determination will be tolled from the date on which
the extension notice is sent to the Eligible Employee until the date on which
the Eligible Employee responds to the Plan’s request for information.

 

10

 

The Committee’s
(or its delegate’s) decision on the claim for review will be communicated to
the Eligible Employee in writing. If an adverse benefit determination is made
with respect to the claim, the notice will include (i) the specific
reason(s) for any adverse benefit determination, with references to the
specific Plan provisions on which the determination is based; (ii) a
statement that the Eligible Employee is entitled to receive, upon request and
free of charge, reasonable access to (and copies of) all documents, records and
other information relevant to the claim; and (iii) a statement of the
Eligible Employee’s right to bring a civil action under Section 502(a) of
ERISA. The decision of Committee (or its delegate) is final and binding on all
parties. The Committee has delegated to the Chief Executive Officer of the
Company the authority to make a determination on the claim for review.

 

No civil
action for benefits may be commenced until the exhaustion of these
procedures.

 

2.                                       Plan
Interpretation and Benefit Determination.

 

(i)                                     The
Plan Administrator (or, where applicable, any duly authorized delegee of the
Plan Administrator), and the Committee (or its delegate) for purposes of the
Plan’s claims procedures, shall have the exclusive right, power, and authority,
in its sole and absolute discretion, to administer, apply and interpret the
Plan and any other documents and to decide all factual and legal matters
arising in connection with the operation or administration of the Plan.

 

(ii)                                  Without
limiting the generality of the foregoing paragraph, the Plan Administrator (or,
where applicable, any duly authorized delegee of the Plan Administrator), and
the Committee (or its delegate) for purposes of the Plan’s claims procedures,
shall have the sole and absolute discretionary authority to:

 

(A)                              take
all actions and make all decisions (including factual decisions) with respect
to the eligibility for, and the amount of, benefits payable under the Plan;

 

(B)                                formulate,
interpret and apply rules, regulations and policies necessary to administer the
Plan;

 

(C)                                decide
questions, including legal or factual questions, relating to the calculation
and payment of benefits, and all other determinations made, under the Plan;

 

(D)                               resolve
and/or clarify any factual or other ambiguities, inconsistencies and omissions
arising under the Plan or other Plan documents; and

 

(E)                                 process,
and approve or deny, benefit claims and rule on any benefit exclusions.

 

All
determinations made by the Plan Administrator (or, where applicable, any duly
authorized delegee of the Plan Administrator), and the Committee (or its
delegate) for purposes of the Plan’s claims procedures, with respect to any
matter arising under the

 

11

 

Plan shall be final and binding on the Company, Eligible Employee,
Participant, beneficiary, and all other parties affected thereby.

 

3.                                       Your
Rights Under ERISA. As a participant in the Plan you are entitled to
certain rights and protections under the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”). ERISA provides that all Plan participants
shall be entitled to:

 

Receive Information About Your
Plan and Benefits

 

Examine,
without charge, at the Plan Administrator’s office and at other specified
locations, such as worksites, all documents governing the Plan, including
insurance contracts, and a copy of the latest annual report (Form 5500
Series), if any, filed by the Plan with the U.S. Department of Labor and
available at the Public Disclosure Room of the Pension and Welfare Benefit
Administration.

 

Obtain, upon
written request to the Plan Administrator, copies of documents governing the
operation of the Plan, including insurance contracts, and copies of the latest
annual report (Form 5500 Series), if any, and updated summary plan
description. The Plan Administrator may make a reasonable charge for the
copies.

 

Receive a
summary of the Plan’s annual financial report (if any). The Plan Administrator
is required by law to furnish each Participant with a copy of this summary
annual report.

 

Prudent Actions by Plan
Fiduciaries

 

In addition to
creating rights for Plan participants, ERISA imposes duties upon the people who
are responsible for the operation of the employee benefit plan. The people who
operate your Plan, called “fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your employer or any other person, may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a welfare benefit or exercising your rights under ERISA.

 

Enforce Your Rights

 

If your claim
for a welfare benefit is denied or ignored, in whole or in part, you have a
right to know why this was done, to obtain copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time
schedules.

 

Under ERISA,
there are steps you can take to enforce the above rights. For instance, if you
request a copy of Plan documents or the latest annual report from the Plan and
do not receive them within 30 days, you may file suit in a Federal court. In
such a case, the court may require the Plan Administrator to provide
materials and pay you up to $110 a day until you receive the materials, unless
the materials were not sent because of reasons beyond the control of the Plan
Administrator. If you have a claim for benefits which is denied or ignored, in
whole or in part, you may file suit in a state or Federal

 

12

 

court. If you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a
Federal court. The court will decide who should pay court costs and legal fees.
If you are successful the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these
costs and fees, for example, if it finds your claim is frivolous.

 

Assistance with Your Questions

 

If you have
any questions about your Plan, you should contact the Plan Administrator. If
you have any questions about this statement or about your rights under ERISA,
or if you need assistance in obtaining documents from the Plan Administrator,
you should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Pension and Welfare
Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue
N.W., Washington, D.C. 20210. You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Pension and Welfare Benefits Administration.

 

4.                                       Plan
Document. This document shall constitute both the plan document and summary
plan description and shall be distributed to all Eligible Employees in this
form.

 

5.                                       Other
Important Facts.

 

	
  OFFICIAL NAME OF THE PLAN:

  	
   

  	
  ImClone Systems Incorporated Transition
  Severance Plan

  
	
   

  	
   

  	
   

  
	
  SPONSOR:

  	
   

  	
  ImClone Systems Incorporated

  
	
   

  	
   

  	
  180 Varick Street, 6th Floor

  
	
   

  	
   

  	
  New York, NY 10014

  
	
   

  	
   

  	
  (212) 645-1405

  
	
   

  	
   

  	
   

  
	
  EMPLOYER IDENTIFICATION

  NUMBER (EIN):

  	
   

  	
  04-2834797

  
	
   

  	
   

  	
   

  
	
  TYPE OF PLAN:

  	
   

  	
  Employee Welfare Severance Benefit Plan

  
	
   

  	
   

  	
   

  
	
  END OF PLAN YEAR:

  	
   

  	
  December 31

  
	
   

  	
   

  	
   

  
	
  TYPE OF ADMINISTRATION:

  	
   

  	
  Employer Administered

  

 

13

 

	
  PLAN ADMINISTRATOR:

  	
   

  	
  ImClone Systems Incorporated

  
	
   

  	
   

  	
  c/o Vice President, Human Resources

  
	
   

  	
   

  	
  33 ImClone Drive

  
	
   

  	
   

  	
  Branchburg, NJ 08876

  
	
   

  	
   

  	
  (908) 541-2300

  
	
   

  	
   

  	
   

  
	
  EFFECTIVE DATE:

  	
   

  	
  March 1, 2006

  

 

The Plan Administrator keeps records of the Plan and is responsible for
the administration of the Plan. The Plan Administrator will also answer any
questions you may have about the Plan.

 

Service of legal process may be made upon the Plan Administrator.

 

No individual may, in any case, become entitled to additional benefits
or other rights under this Plan after the Plan is terminated. Under no
circumstances, will any benefit under this Plan ever vest or become
nonforfeitable.

 

14

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