Document:

exv10w106

 

*** Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

And 240.24b-2

Exhibit 10.106

THIRD AMENDMENT TO SUPPLY AGREEMENT

This Third Amendment to Supply Agreement (the “Amendment”) is entered into and effective as of
January 1, 2007 (the “Effective Date”) by and between Roche Diagnostics Corporation (“Roche”), an
Indiana corporation having its principal place of business at 9115 Hague Road, Indianapolis,
Indiana 46250, and Gen-Probe Incorporated, a corporation with its principal place of business at
10210 Genetic Center Drive, San Diego, CA 92121-4362 (“Gen-Probe”). Roche and Gen-Probe are
collectively referred to as “Parties” and each individually as a “Party.”

Whereas, Gen-Probe and Boehringer Mannheim GmbH entered into a Supply Agreement effective
as of March 5, 1998, as amended February 21, 2001, and August 31, 2004 and as further amended by
the Pricing Proposal Agreement dated 22 February/3 March 2006 (the “Agreement”);

Whereas, Subsequent to the execution of the Agreement, Roche Diagnostics GmbH succeeded to
the rights and obligations of Boehringer Mannheim GmbH; and

Whereas, Roche Diagnostics GmbH assigned the Agreement to Roche Diagnostics Corporation
effective July 2006; and

Whereas, Roche and Gen-Probe desire to amend the Agreement as set forth in this Amendment.

Now Therefore, in consideration of these premises, the mutual covenants contained herein,
and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Parties hereto agree as follows:

	 	1.	 	Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
	 
	 	2.	 	“Roche Diagnostics Corporation” shall be substituted for “Boehringer Mannheim
GmbH”, “BM” and “Roche Diagnostics GmbH” in all instances where those terms have
prospective application in the Agreement.
	 
	 	3.	 	Amendment to Section 1, Definitions:

	 	a.	 	Paragraph 1.1, Products, shall be amended as follows:

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	 	i.	 	The first sentence shall be stricken and shall be
replaced with the following: “ ‘Products’ shall mean those raw materials
included in Categories A and B below and complying with the Specifications
set forth in Attachment A attached hereto:”
	 
	 	ii.	 	The following additional products shall be added to
Category B: Acridinium esters (standard, 2-methyl, ortho-fluoro).

	 	b.	 	Paragraph 1.3, Affiliates, shall be stricken and replaced with the
following: “’Affiliates’ of either Party shall mean any individual, association or
other entity that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with
such specified Party. For purposes of this definition, “control”
(including “controlling,” “controlled by,” and “under common
control with”) means owning fifty percent (50%) or more of the outstanding
voting securities of an entity, or otherwise possessing, directly or indirectly,
the power to direct or cause the direction of the management and policies of an
individual, association, or other entity, whether through the ownership of voting
securities, by contract or otherwise. Notwithstanding the foregoing, for purposes
of this Agreement, Genentech, Inc., a Delaware corporation, and Chugai
Pharmaceutical Co., Ltd, 1-1 Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo,
103-8324, Japan, shall not be considered Affiliates of Roche unless Roche opts for
such inclusion of either of the foregoing entities by giving written notice to
Customer.”
	 
	 	c.	 	The following definition shall be added as Paragraph 1.5: “ ‘
Specifications’ shall mean the Product specifications set forth in Attachment A
attached hereto.”

	 	4.	 	Amendment to Section 2, Subject Matter of Agreement:

	 	a.	 	Paragraph 2.4 shall be stricken in its entirety and replaced with the
following: “Customer agrees that upon request it will make available to Roche, or
third party auditing firm designated by Roche, all records necessary to verify
Customer’s compliance with the terms of this Agreement.”

	 	5.	 	Section 4, Purchase Price

	 	a.	 	Paragraph 4.1(a) shall be stricken and replaced with the following:
“Prices for the Products shall be as set forth in Attachment B and are firm
until December 31, 2015. Gen-Probe shall purchase from Roche at least 85 % of its
requirements for Category A enzymes M-MuLV RT and T7 RNA Pol., and 90 % of its
requirements for Category B dNTPs and NTPs. Gen-Probe will purchase 100% of the
products Proteinase K, and Acridinium esters. In the event that Gen-Probe
exercises its option to engage Roche to manufacture 90% of Gen-Probe’s requirements
for the more completed lyophilized kits for Gen-Probe’s Aptima assays (the
“Lyophilized Kits”) Gen-Probe’s purchasing requirements for Category A enzymes
shall be reduced from a purchasing requirement of at least 85% to a purchasing
requirement of at least 75%. All other purchasing requirements will remain
unchanged. For clarification, the Parties have not yet fully defined the
specifications for the Lyophilized Kits; however, the Parties agree to work
together in good faith to fully develop the specifications for the 

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	 	 	 	Lyophilized Kits
at the earliest opportunity. Gen-Probe shall be released from its obligation to
purchase any Category B Product if, pursuant to section 2.2, Roche makes any
material changes to the specifications, acceptance criteria, processes or
procedures which have an impact on the performance of such Category B products in
Gen-Probe’s application.

	 	b.	 	Paragraph 4.1(b): shall be stricken and replaced with the following:
“In the event that the Parties mutually agree in writing to changes to acceptance
criteria or specifications for the Products, the prices are subject to change. The
prices are also subject to change pursuant to section 9.2 of this Agreement,
concerning regulatory requirements.”
	 
	 	c.	 	Paragraph 4.1(c): All references to the “Deutsch Mark” shall be
stricken and shall be replaced with “Euro”. This clause will not be enacted as
long as sales increase at a rate not less than 10% annually.

	 	6.	 	Section 6, Forecasting Process: In the second paragraph, the reference to
“succeeding three (3) calendar years” shall be stricken and replaced with “succeeding two
(2) calendar years.”
	 
	 	7.	 	Section 7, Purchase Orders, Delivery Process and Security of Supply: Paragraph 7.1:
The second paragraph shall be stricken and replaced with the following: “Furthermore, both
Parties will agree annually in December of each calendar year on adequate levels of safety
stock and storage locations to ensure the agreed upon terms of delivery are achieved. The
Parties agree that half of the safety stock shall be maintained at Gen-Probe’s facility at
San Diego, California, and the balance at Roche’s facilities in the United States. As to
any products kept as safety stocks at Gen-Probe’s facilities, Roche shall provide the
information described in section 3.2 for such Products at the time of delivery of those
Products into the safety stock.” As to any products kept as safety stock at Roche’s
Indianapolis facility, Gen-Probe will not be charged for said safety stock until its
release to customer.
	 
	 	8.	 	Section 13, Term and Termination:

	 	a.	 	Paragraph 13.1 shall be stricken and replaced with the following:
	 
	 	 	 	“The initial term of this Agreement shall expire on December 31, 2015, and thereafter
shall automatically renew for additional two (2) year terms unless either Party provides
written notice of its intent not to renew at least twelve (12) months prior to the
expiration of the then-current contract term.”

	 	9.	 	Attachments A and B shall be stricken in their entirety and replaced with the
Attachment A and the Attachment B which are attached to this Third Amendment.
	 
	 	10.	 	In the event that Gen-Probe provides written notice to Roche of its intention and
commitment to purchase 100% of its requirements for M-MuLV RT and T7 RNA Polymerase over a
24 month period (after 2010 this period will be shortened to a 12 month commitment), Roche
shall lower the price of those enzymes by one tier for the same two calendar years. The
Parties hereby agree that any 

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	 	 	 	such written notice shall be incorporated herein by reference
and shall constitute a legally binding agreement.

	 	11.	 	If during the Term of the Agreement Gen-Probe plans to purchase any biochemicals
that are not already listed as Products, Gen-Probe shall offer Roche an opportunity to bid
on the business before approaching other suppliers for a quotation.
	 
	 	12.	 	Except as expressly modified hereby, the Parties hereby ratify and confirm the
Agreement in all respects.

     All other terms and conditions of the Agreement shall remain in full force and effect.

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     Agreed to this 31st day of October, 2006, by and between:

	 	 	 	 	 	 	 	 	 
	ROCHE DIAGNOSTICS CORPORATION	 	 	 	GEN-PROBE INCORPORATED
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Lonnie Shoff
	 	 	 	By:
	 	/s/ R. William Bowen
VP & General
Counsel for
	 

	 	 
	 	 	 	 	 	 
	 

	 	Lonnie Shoff
	 	 	 	 	 	Henry L Nordhoff
	 
	 	 	 	 	 	 	 	 
	Its:

	 	Senior Vice President
	 	 	 	Its:
	 	President & CEO

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Attachment A

Product Specifications

[***]

***Confidential Treatment Requested

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Attachment B

Product Prices

[***]

***Confidential Treatment Requested

7Exhibit 10.1

 

CONFIDENTIAL

2008 Incentive Plan

 

 

CONFIDENTIAL

Somaxon Pharmaceuticals, Inc.

2008 Incentive Plan

The
Somaxon Pharmaceuticals, Inc. (“Somaxon”) 2008 Incentive Plan (the “Plan”) is designed to offer
incentive compensation to eligible Employees by rewarding the achievement of corporate goals and
specifically measured individual goals that are consistent with and support overall corporate
goals. The Plan will create an environment which will focus Employees on the achievement of
objectives. Since cooperation between departments and Employees will be required to achieve
corporate objectives that represent a significant portion of the Plan, the Plan should help foster
improved teamwork and a more cohesive management team.

Purpose of the Plan

The Plan is designed to:

	•	 	Provide an incentive program to achieve overall corporate objectives and to enhance
shareholder value
	 
	•	 	Reward those individuals who significantly impact corporate results
	 
	•	 	Encourage increased teamwork among all disciplines within the Company
	 
	•	 	Incorporate an incentive program in the Somaxon overall compensation program to help
attract and retain Employees
	 
	•	 	Incentivize eligible Employees to remain employed by Somaxon throughout the Plan year and
until the time incentive awards are paid

Plan Governance

The Plan will be governed by the Compensation Committee of the Board of Directors. The President
and CEO of Somaxon will be responsible for administration of the Plan. The Compensation Committee
of the Board will be responsible for approving any compensation or incentive awards to officers of
the Company and any other employees with an annual base salary greater than or equal to $200,000.

Eligibility

All full time (40 hours/week) exempt Employees salary grade 6 (Manager) or higher are eligible to
participate in the Plan. To receive an incentive award, a participant: (a) must have been in an
eligible position for at least three (3) consecutive months prior to the end of the Plan year and
remain employed through the end of the Plan year and

 

 

CONFIDENTIAL

until incentive awards are paid; and (b) must not be on probation at the time bonus determinations
are made.

Notwithstanding the foregoing or anything else to the contrary contained in this Plan, if (a) a
Change of Control Transaction occurs prior to the date that bonus determinations have been made
under the Plan and (b) the employment of an Employee that is eligible to participate in the Plan is
thereafter involuntarily terminated, then, at the discretion of the Board of Directors or
Compensation Committee, such Employee may be awarded an annual bonus for the year in which such
Employee’s employment is terminated, based on the good-faith estimate of the Board of Directors or
Compensation Committee of the actual amount, if any, that would have been payable for such year
under the Plan (assuming such Employee had remained employed by the Company through the end of such
year). A “Change of Control Transaction” shall be defined as (i) a sale, lease, or other
disposition of all or substantially all of the assets of the Company, (ii) any consolidation or
merger of the Company with or into any other corporation or other entity or person, or any other
corporate reorganization involving the Company, in each case in which the capital stock of the
Company immediately prior to such consolidation, merger or reorganization represents less than
fifty percent (50%) of the voting power of the surviving entity (or, if the surviving entity is a
majority-owned subsidiary, its parent) immediately after such consolidation, merger or
reorganization; or (iii) any transaction or series of related transactions to which the Company is
a party in which at least fifty percent (50%) of the Company’s voting power is transferred;
provided, that a “Change of Control” shall not include (A) any consolidation or merger effected
exclusively to change the domicile of the Company, or (B) any transaction or series of transactions
principally for bona fide equity financing purposes in which cash is received by the Company or
indebtedness of the Company is cancelled or converted, or a combination thereof.

Section 1: Bonus Incentive Awards (“Bonus”)

Form of Incentive Award Payments

Incentive award payments may be made in cash, through the issuance of stock or stock options, or by
a combination of cash, stock and/or stock options, at the discretion of the Company’s Compensation
Committee, subject to the approval of the Company’s Board of Directors. In the event that the
Compensation Committee and the Board of Directors elect to pay incentive awards in stock or stock
options, the Compensation Committee, in its sole discretion, will make a determination of the
number of shares of stock or stock options to be issued to each Plan participant based, in part,
upon each participant’s Corporate and Individual Performance, as described below. The issuance of
stock and stock options may also be subject to the approval of the Company’s stockholders, and any
stock options issued will be subject to the terms and conditions of the Company’s 2005 Equity
Incentive Award Plan, as amended from time to time by the Company.

 

 

CONFIDENTIAL

Corporate and Individual Performance

With respect to each Plan year, the President and CEO will present to the Board of Directors or
Compensation Committee a list of the overall corporate objectives for such year for approval. All
participants in the Plan will then develop a list of key individual objectives, which must be
approved by the responsible Vice President and by the President and CEO.

The Plan calls for incentive awards based on the achievement of annual corporate and individual
objectives that have been approved as indicated above.

The relative weight between corporate and individual performance factors may vary based on the
individual’s level within the organization. The weighting will be reviewed annually and may be
adjusted, as necessary or appropriate. The weighting for 2008 will be as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	Individual
	President and CEO
	 	 	100	%	 	 	 	 
	Vice Presidents/Executive Directors
	 	 	75	%	 	 	25	%
	All Others
	 	 	50	%	 	 	50	%

Bonus Percentage

Incentive Awards will be determined by applying a “bonus percentage” to the base salary of
participants in the Plan. The following bonus percentages will be used for this purpose:

	 	 	 	 	 
	Position Title	 	Bonus Percentage
	President & CEO
	 	 	45	%
	Officers, Sr. VP, CMO, VP
	 	 	35	%
	Executive Director
	 	 	25	%
	Sr. Director, Director, Associate Director
	 	 	20	%
	Sr. Manager, Manager
	 	 	15	%

Performance Measurement

The following scale will be used to determine the actual award multiplier for incentive award
calculations based upon measurement of corporate and individual performance versus objectives.
Separate payment multipliers will be established for both the individual and the corporate
components of each award. The same payment multiplier for the corporate component of each
participant’s annual award shall be used for all Plan participants in any given year.

 

 

CONFIDENTIAL

	 	 	 	 	 
	    Performance Category	 	Award Multiplier
	1.
Performance for the year met or exceeded objectives or was excellent
in view of prevailing conditions
	 	75%
— 150%

	 
	2.
Performance generally met the year’s objectives or was very acceptable in view of prevailing conditions

	 	50% — 75%

	 
	3. Performance for the year met some, but not all, objectives

	 	25% — 50%

	 
	4. Performance for the year was not acceptable in view of
prevailing conditions

	 	 	0	%

The award multiplier for the corporate component and, with respect to officers of the Company and
any other employees with an annual base salary greater than or equal to $200,000, the individual
component, shall be determined by the Compensation Committee, after considering recommendations
from Somaxon’s management.

Management’s recommendations with respect to bonuses hereunder will utilize the foregoing
weightings between corporate goals and individual performance and the multipliers to the target
bonus amounts. The Compensation Committee will consider these recommendations and take other
factors into account, such as market comparison data, contribution to corporate goals, historical
compensation awards and anticipated contribution to future corporate goals, to make final bonus
decisions for each officer of the Company and other employees with an annual base salary greater
than or equal to $200,000.

Calculation of Cash Incentive Award

The example below shows sample cash incentive award calculations under the Somaxon
Incentive Plan. First, a total bonus potential is calculated by multiplying the Employee’s base
salary by the bonus percentage. This dollar figure is then divided between its corporate component
and its individual component based on the performance factor mix for that specific position. This
calculation establishes specific dollar potential awards for the performance period for both the
individual and corporate components of the award.

At the end of the performance period, corporate and individual award multipliers will be
established using the criteria described above. The corporate award multiplier, which is based on
overall corporate performance, is used to calculate corporate performance awards for all Plan
participants. This is accomplished by multiplying the bonus percentage established for each
individual at the beginning of the performance period by the actual corporate award multiplier.
The individual award multiplier, which is based on an individual’s performance, is used in the same
way to calculate the actual individual performance award.

	 	 	 	 	 
	Example:	 	Cash Award Calculation	 	 
	 
	 	Position:	 	Manager
	 
	 	Base Salary:	 	$75,000
	 
	 	Bonus percentage:	 	         15%
	 
	 	Target bonus dollars:	 	$11,250

	 	 	 	 	 
	 	 	Target bonus components (based on performance factor mix):
	 
	 	Target corporate performance bonus (50%):       	$ 5,625
	 
	 	Target individual performance bonus (50%):  	$ 5,625

 

 

CONFIDENTIAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Actual
Cash Award Calculation
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Assumed payment multipliers based on assessment of corporate and individual
performance:	 	 	 	 
	 	 	Corporate multiplier	 	75%-performance generally met year’s objectives
	 	 	Individual multiplier	 	125%-performance generally exceeded objectives
	 
	 	Cash Award:	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	    Corporate component	 	$4,218.75	 	 	($5,625 x 75%)	 	 	 	 	 	 	 	 	 
	 
	 	   Individual component	 	$7,031.25	 	 	($5,625 x 125%)	 	 	 	 	 	 	 	 	 

Payment of the Incentive Award

Payment of incentive awards will be made as soon as practicable after the end of the Plan year but
not before the completion and issuance of the Company’s year-end audited Financial Statements.
Incentive award calculations will be based on the participant’s base salary earned during the year
ending December 31, 2008. Participants’ entitlement to an incentive award under this Plan does not
vest until the awards are actually paid.

Participants who have been in an eligible position for less than a year, but who hold an eligible
position for at least three months prior to the end of the Plan year and remain continuously
employed through the end of the Plan year, will receive a pro-rata bonus based on the portion of
the Plan year they hold an eligible position. Participants promoted during the year from one
“Bonus percentage” level to another will have their Incentive Award calculated using their base
salary earned during the year ending December 31, 2008. Providing the promotion occurred prior to
October 1, 2008, the calculation will be pro-rated, based on the number on months at each Bonus
Percentage level. If the promotion occurred after October 1, 2008, the entire calculation will be
based on the Bonus Percentage applicable prior to the promotion. Other than as stated above,
incentive awards will not be prorated for partial year service.

Termination

A Plan participant whose employment terminates voluntarily prior to the payment of the incentive
awards, will not be eligible to receive an incentive award. Continued employment until payment of
the incentive award is a condition of vesting. If a participant’s employment is terminated
involuntarily during the calendar year, or prior to payment of awards, it will be at the absolute
discretion of the Company whether or not an award payment is made.

Board of Director’s Absolute Right to Alter or Abolish the Plan

The Somaxon Board of Directors or Compensation Committee reserves the right in its absolute
discretion to abolish the Plan at any time or to alter the terms and conditions under which
incentive compensation will be paid. Such discretion may

 

 

CONFIDENTIAL

be exercised any time before, during, and after the Plan year is completed. No participant shall
have any vested right to receive any compensation hereunder until actual delivery of such
compensation.

Employment Duration/Employment Relationship

This Plan does not, and Somaxon’s policies and practices in administering this Plan do not,
constitute an express or implied contract or other agreement concerning the duration of any
participant’s employment with the Company. The employment relationship of each participant is “at
will” and may be terminated at any time by Somaxon or by the participant, with or without cause.

 

 

CONFIDENTIAL

Somaxon Pharmaceuticals, Inc.

2008 Incentive Plan

This is to acknowledge that I have received a copy of the 2008 Incentive Plan.

	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	(print)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	(signature)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Please return signed copy to Stacy Leppert.

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