Document:

Exhibit

Exhibit 10.2.22
	
			
	 
	 

	 
	Regeneron Pharmaceuticals, Inc. 

	 
	ID: [           ] 

	Notice of Grant of Performance Restricted
	777 Old Saw Mill River Road 

	Stock Units and Performance Restricted Stock

	Tarrytown, New York 10591 

	Unit Agreement (“Notice”)

	 

	 

	 

	[NAME] 
	Performance RSU Number:
	  [           ] 

	[ADDRESS] 
	Plan: 
	  [           ] 

	 
	ID: 
	  [           ] 

	 

Effective <date> (the “Grant Date”) you have been granted Performance Restricted Stock Units with respect to a target  number of  [    ] shares of REGENERON PHARMACUTICALS, INC. (the “Company”) common stock (the “Target PSU”).  Please refer to Section 2, Definitions below for definitions of certain terms used in this Notice.  Any capitalized term used but not defined in this Notice shall have the meaning given to such term in the Plan.

1.  Vesting Criteria and Rules.  

A.  Primary Performance Schedule.

The Performance Restricted Stock Units shall be eligible to vest based on determinations that are to be made first upon the fourth anniversary of the Grant Date and second upon the fifth anniversary of the Grant Date, subject to earlier determinations upon a Change in Control.  Rules regarding the timing of issuance of shares of Company Stock in connection with the vesting of Performance Restricted Stock Units are set forth below under Section 3, Special Rules (“Special Rules”). 

The number of shares of Company Stock deliverable in respect of determinations that are to be made upon the fourth anniversary of the Grant Date shall be based on the following matrix (the “4-Year Goal”):

4-Year Goal

	
			
	Level
	Cumulative TSR 
	Payout (as percentage of Target PSU)

	Maximum
	+75%
	225%

	 
	+69%
	200%

	 
	+63%
	175%

	 
	+57%
	150%

	 
	+52%
	125%

	Target
	+46%
	100%

	 
	+34%
	75%

	Threshold
	+22%
	50%

5-Year Goal

The number of shares of Company Stock deliverable in respect of determinations that are to be made upon the fifth anniversary of the Grant Date shall be based on the following matrix (the “5-Year Goal”), except that the number of shares of Company Stock deliverable shall be net of the number (if any) of shares of Company Stock previously delivered in respect of the 4-Year Goal:

	
			
	Level
	Cumulative TSR 
	Payout (as percentage of Target PSU)

	Maximum
	+101%
	225%

	 
	+93%
	200%

	 
	+84%
	175%

	 
	+76%
	150%

	 
	+69%
	125%

	Target
	+61%
	100%

	 
	+44%
	75%

	Threshold
	+28%
	50%

No Performance Restricted Stock Units shall vest for performance below the Threshold level (except as set forth below under Section 1.B, Secondary Relative TSR Performance Schedule (the “Secondary Relative TSR Performance Schedule”)) and no additional payments shall be made for payments above the Maximum level.  There shall be straight line interpolation to determine the payout percentage earned for performance above the Threshold level and falling between the percentages specified in the matrices shown above and below.  In the event of a Change in Control prior to the fourth anniversary of the Grant Date, the performance period shall be deemed to have ended on the date of the Change in Control and the payment of Company Stock shall be based on the compound annual growth rate (“CAGR”) of the TSR attained as of such date for the shortened performance period (as determined by the Committee) measured against the CAGR levels set forth in the matrix below.  In the event of a Change in Control between the fourth and fifth anniversaries of the Grant Date, the performance period shall be deemed to have ended on the date of the Change in Control and the payment of Company Stock shall be based on the CAGR of the TSR attained as of such date for the shortened performance period (as determined by the Committee) measured against the CAGR levels set forth in the matrix below, net of any shares paid pursuant to the determination of the 4-Year Goal.  Further, in the event that no Performance Restricted Stock Units have vested hereunder pursuant to the CAGR of the TSR attained for a shortened performance period (whether or not occurring after the first four years of the performance period), the Secondary Relative TSR Performance Schedule shall be applied, except that the relative TSR described therein shall be determined over the shortened performance period.

The following CAGR matrix shall be used to determine the number of shares of Company Stock deliverable in respect of TSR performance over a shortened performance period:

	
			
	Level
	CAGR 
	Payout (as percentage of Target PSU)

	Maximum
	+15%
	225%

	 
	+14%
	200%

	 
	+13%
	175%

	 
	+12%
	150%

	 
	+11%
	125%

	Target
	+10%
	100%

	 
	+7.5%
	75%

	Threshold
	+5%
	50%

B.  Secondary Relative TSR Performance Schedule

If, immediately following the determination of performance against the 5-Year Goal (or upon a shortened performance period due to a Change in Control, as described above), (1) no Performance Restricted Stock Units have vested hereunder and (2) the Company’s TSR for such 5-year period (or shortened performance period, as applicable) is at least 200 basis points above the TSR of the Nasdaq Biotech Index (composite return) as determined by the Committee for the corresponding period, then a number of Performance Restricted Stock Units equal to 50% of the Target PSU shall vest hereunder.

To the extent not earned pursuant to the criteria set forth above, the Performance Restricted Stock Units shall be forfeited upon the fifth anniversary of the Grant Date.

2.  Definitions.

“Beginning Stock Price” shall mean the Fair Market Value of a share of the Company Stock on the Grant Date.

“Closing Price” of a share of Company Stock, as of a date of determination, shall mean (1) the closing sales price per share of Company Stock on the national securities exchange or national market system on which such stock is principally traded on such date or, if such date is not a trading day, on the last preceding date on which there was a sale of such stock on such exchange, or (2) if the shares of Company Stock are not then listed on a national securities exchange or national market system, or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith.

“Dividend Value” shall mean the value of any dividends paid on a share of Company Stock during the applicable measurement period, with the payment date deemed to have occurred on the ex-dividend date for such dividend and the amount of such dividend deemed reinvested in shares of Company Stock as of the ex-dividend date (based on the Closing Price of such shares on such date).

“Ending Stock Price” shall mean the average Closing Price of a share of Company Stock for the twenty trading days immediately preceding the applicable determination date, after adjusting for the Dividend Value, as applicable. 

“Plan” shall mean the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan, as amended from time to time.

“TSR” shall mean the percent return on a share of Company Stock, determined using the following calculation:

TSR =  (Ending Stock Price - Beginning Stock Price)/(Beginning Stock Price)

3.  Special Rules.

Upon a termination of employment due to death or retirement (as defined in the Company’s employee handbook as in effect on the date hereof) (such retirement, “Retirement”), the Performance Restricted Stock Unit award shall remain outstanding, and vesting and forfeiture shall be determined in the manner set forth in this Notice, without regard to such termination of employment.

For the avoidance of doubt, and notwithstanding any provision in this Notice, the Performance Restricted Stock Unit Agreement, or the Plan to the contrary, no termination of employment shall be deemed to take place unless the Recipient has ceased both to be employed by and to provide service [(other than continued service on the board of directors of the successor, surviving, or resulting entity of the Company following a Change in Control, as described below)]1 to the Company and/or its Subsidiaries.

 ____________________ 
1 Not applicable to Notices for P. Roy Vagelos, M.D.

Upon any termination of employment other than (1) due to death, (2) due to Retirement, or (3) following a Change in Control, any unvested portion of the Performance Restricted Stock Units shall be immediately forfeited.  

In the event that the Company pays dividends during a performance period, the number of shares of Company Stock subject to the Target PSU shall be increased by a number of shares of Company Stock equal to the aggregate amount of the dividend payable with respect to the number of shares of Company Stock subject to the Target PSU, divided by the Fair Market Value of a share of the Company Stock on the ex-dividend date with respect to such dividend. 

[Except in the case of vesting determinations made early due to the occurrence of a Change in Control, shares]2 [Shares]3 of Company Stock earned pursuant to the Performance Restricted Stock Unit Agreement and this Notice shall be delivered (subject to satisfaction of the applicable tax withholding requirements) as soon as practicable (but in no event more than 30 days) following the applicable vesting determination described above, which shall be made by the Committee within 30 days following completion of the applicable performance period.  

[In the case of vesting determinations made early due to the occurrence of a Change in Control, shares of Company Stock earned pursuant to the Performance Restricted Stock Unit Agreement and this Notice  based on a determination made as a result of such Change in Control shall be delivered (subject to satisfaction of the applicable tax withholding requirements) as soon as practicable (but in no event more than 30 days) following the fifth anniversary of the Grant Date (subject to your continued employment upon such anniversary); provided, however, that in the event that your employment is terminated prior to such fifth anniversary and upon or within the two-year period immediately following the Change in Control either by the Company without Cause (as defined below) or by you for Good Reason (as defined below) or due to your death, such shares shall be delivered upon or within 30 days following such termination (and shall be forfeited upon any other termination of employment). In addition, in the event that the Performance Restricted Stock Units are not assumed or converted into an economically-equivalent right upon a Change in Control, Performance Restricted Stock Units earned as a result of vesting determinations made early due to the occurrence of a Change in Control shall be delivered upon or as soon as practicable following the Change in Control.

For purposes of this Notice, “Cause” shall mean (i) in the case where there is no employment agreement, consulting agreement, change in control agreement or plan, or similar agreement or plan in effect between you and the Company (or otherwise applicable to you) on the Grant Date (or where there is such an agreement or plan but it does not define “cause” (or words of like import)) (A) the willful and continued failure by you substantially to perform your duties and obligations to the Company (other than any such failure resulting from your incapacity due to physical or mental illness), including without limitation, repeated refusal to follow the reasonable directions of the Company, violation of the Company’s Code of Business Conduct and Ethics, knowing violation of law in the course of performance of your duties of employment, repeated absences from work without a reasonable excuse, or intoxication with alcohol or illegal drugs while on the Company’s premises during regular business hours; (B) fraud or material dishonesty against the Company; or (C)  a conviction or plea of guilty or nolo contendere to a felony or a crime involving material dishonesty; or (ii) in the case where there is an employment agreement, consulting agreement, change in control agreement or plan, or similar agreement or plan in effect between you and the Company (or otherwise applicable to you) on the Grant Date that defines “cause” (or words of like import), as defined under such agreement or plan.  For purposes of this paragraph, no act, or failure to act, on your part shall be considered “willful” unless done, or omitted to be done, by you in bad faith and without reasonable belief that the action or omission was in the best interest of the Company.  

For purposes of this Notice, “Good Reason” shall mean (i) in the case where there is no employment agreement, consulting agreement, change in control agreement or plan, or similar agreement or plan in effect between you and the Company (or otherwise applicable to you) on the Grant Date (or where there is such an agreement or plan but it does not define “good reason” (or words of like import)) a termination of employment by you within one hundred twenty (120) days after the occurrence of one of the following events after the occurrence of a Change in Control 
 ____________________ 
2 Not applicable to Notices for P. Roy Vagelos, M.D.
3 Only applicable to Notices for P. Roy Vagelos, M.D.

unless such events are fully corrected in all material respects by you within thirty (30) days following written notification by you to the Company that you intend to terminate your employment hereunder for one of the reasons set forth below:  (A) (1) any material diminution in your duties and responsibilities from those which existed immediately prior to a Change in Control (except in each case in connection with the termination of your employment for Cause or as a result of your death, or temporarily as a result of your illness or other absence), or (2) the assignment to you of duties and 
responsibilities materially inconsistent with the position held by you; (B) any material breach by the Company of any material provision of any written agreement with you or failure to timely pay any compensation obligation to you; (C) a reduction in your annual base salary or target bonus opportunity (if any) from that which existed immediately prior to a Change in Control; or (D) if you are based at the Company’s principal executive office, any relocation therefrom or, in any event, a relocation of your primary office of more than fifty (50) miles from the location immediately prior to a Change in Control; or (ii) in the case where there is an employment agreement, consulting agreement, change in control agreement or plan, or similar agreement or plan in effect between you and the Company (or otherwise applicable to you) on the Grant Date that defines “good reason” (or words of like import), as defined under such agreement or plan[; provided, however, that any such definition shall be deemed, solely for purposes of this Notice, to include as one of the reasons that the employment of Leonard S. Schleifer, M.D., Ph.D. with the Company under the Amended and Restated Employment Agreement, dated as of November 14, 2008, by and between Dr. Schleifer and the Company, as in effect from time to time (the “Employment Agreement”), has ended due to Dr. Schleifer’s Involuntary Termination (as defined in the Employment Agreement)].4]5  [For purposes of this Notice, in the event of a termination without Cause or for Good Reason on or within the two-year period following a Change in Control, continued service on the board of directors of the successor, surviving, or resulting entity of the Company in a Change in Control transaction shall not affect the payment timing (which shall be upon or within 30 days following such termination).6]

You and the Company agree that these Performance Restricted Stock Units are granted under and governed by the terms and conditions of the Plan and the enclosed Performance Restricted Stock Unit Agreement, both of which are attached and made a part of this document.  You and the Company further agree that these Performance Restricted Stock Units are intended to be short-term deferrals exempt from the provisions of Section 409A of the Code and shall be construed and interpreted in accordance with such intention.

 ____________________ 
4 Only applicable to Notices for George D. Yancopoulos, M.D., Ph.D.
5 Not applicable to Notices for P. Roy Vagelos, M.D.
6 Not applicable to Notices for P. Roy Vagelos, M.D.

REGENERON PHARMACEUTICALS, INC.
PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO 
THE AMENDED AND RESTATED REGENERON PHARMACEUTICALS, INC.
2014 LONG‐TERM INCENTIVE PLAN
THIS AGREEMENT (this “Agreement”), made as of the date on the Notice of Grant of Performance Restricted Stock Units, by and between Regeneron Pharmaceuticals, Inc., a New York corporation (the “Company” and, together with its Subsidiaries, the “Employer”), and the employee named on the Notice of Grant of Performance Restricted Stock Units (the “Recipient”). Any capitalized term used but not defined in this Agreement shall have the meaning given to such term in the Plan (as defined below).
WHEREAS, the Recipient is an employee of the Company (or a Subsidiary of the Company) and the Company desires to afford the Recipient the opportunity to acquire or enlarge the Recipient’s stock ownership in the Company so that the Recipient may have a direct proprietary interest in the Company’s success; and
WHEREAS, the Committee administering the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long‐Term Incentive Plan (as amended from time to time, the “Plan”) has granted (as of the effective date of grant specified in the Notice of Grant of Performance Restricted Stock Units) to the Recipient a Performance Restricted Stock Unit (as defined below) with respect to the number of shares of Company Stock as set forth in the Notice of Grant of Performance Restricted Stock Units.
NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties agree as follows:
1.Grant of Award.  Pursuant to Section 9 of the Plan, the Company grants to the Recipient, subject to the terms and conditions of the Plan and subject further to the terms and conditions set forth herein, a restricted stock unit (referred to in the Plan as “Phantom Stock”) (each such unit, a “Performance Restricted Stock Unit”) with respect to the shares of Company Stock as determined in accordance with the Notice of Grant of Performance Restricted Stock Units.  The Participant’s record of Company Stock ownership shall be recorded in the books of the Company only when and to the extent the Performance Restricted Stock Units vest and the shares of Company Stock are issued.  At the Recipient’s request, vested shares may be evidenced by stock certificates or book-entry registration. 
2.Vesting; Forfeiture.  (a)  The Performance Restricted Stock Units granted to the Recipient shall vest and be forfeited as provided in the Notice of Grant of Performance Restricted Stock Units. The provisions of this Section 2(a) are subject to the provisions set forth in the Notice of Grant of Performance Restricted Stock Units and any employment agreement, consulting agreement, change in control agreement or plan, or similar agreement or plan in effect between the Employer and the Recipient (or otherwise applicable to the Recipient) on the date of grant specified in the Notice of Grant of Performance Restricted Stock Units.
(b)    Except as otherwise provided in any employment agreement, consulting agreement, change in control agreement or plan, or similar agreement or plan in effect between the Employer and the Recipient (or otherwise applicable to the Recipient) on the date of grant specified in the Notice of Grant of Performance Restricted Stock Units, if the application of the Change in Control provisions set forth in the Notice of Grant of Performance Restricted Stock Units, similar provisions in other stock option or equity compensation grants, and other payments and benefits payable to the Recipient upon termination of employment with the Employer (collectively, the “Company Payments”) would result in the Recipient being subject to excise tax (the “Excise Tax”) payable under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the amount of any Company Payments shall be automatically reduced to an amount one dollar less than an amount that would subject the Recipient to the Excise Tax; provided, however, that the reduction shall occur only if the reduced Company Payments received by the Recipient (after taking into account further reductions for applicable federal, state and local income, social security and other taxes) would be greater than the unreduced Company Payments to be received by the Recipient minus (i) the Excise Tax payable with respect to such Company Payments and (ii) all applicable federal, state and local income, social security and other taxes on such Company Payments.  If the Company Payments are to be reduced in accordance with the foregoing, the Company Payments shall be reduced as mutually agreed between the Employer and the Recipient or, in the event the parties cannot agree, in the following order: (1) acceleration of vesting of any option where the exercise price exceeds the fair market value of the underlying shares at the time the acceleration would otherwise occur; (2) any lump-sum severance based on a multiple of base salary or bonus; (3) any other cash amounts payable to the Recipient; (4) any benefits valued as parachute payments; and (5) acceleration of vesting of any equity not covered by (1) above.
3.Reserved.

4.Securities Laws Requirements.  The Company shall not be obligated to transfer any shares of Company Stock to the Recipient, if such transfer, in the opinion of counsel for the Company, would violate the Securities Act (or any other federal or state statutes having similar requirements as may be in effect at that time).
5.Invalid Transfers.  No purported sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any of the Performance Restricted Stock Units by any holder thereof in violation of the provisions of this Agreement or the Certificate of Incorporation or the By-Laws of the Company shall be valid.  The foregoing restrictions are in addition to and not in lieu of any other remedies, legal or equitable, available to enforce said provisions. 
6.Taxes.  At the time the Recipient recognizes taxable income in respect of the Performance Restricted Stock Units, an amount equal to the federal, state and/or local taxes the Company determines it is required to withhold under applicable tax laws with respect to the Performance Restricted Stock Units shall be due from the Recipient to the Company and shall (except as may otherwise be determined by the Board of Directors or the Committee from time to time (including following the date hereof)) be satisfied by surrendering to the Company a portion of the shares of Company Stock otherwise deliverable with respect to the Performance Restricted Stock Units the vesting of which gives rise to the withholding obligation (but only to the extent of the minimum withholding required by law).  Shares so surrendered by the Recipient shall be credited against any such withholding obligation at the Fair Market Value of such shares on the date of such vesting (and the amount equal to the Fair Market Value of such shares shall be remitted by the Company to the appropriate tax authorities).  The Recipient understands that he or she (and not the Company) shall be responsible for any tax liability that may arise as a result of the transactions contemplated by this Agreement.
7.Rights as a Shareholder.  The Recipient will not have the rights of a shareholder with respect to shares of Company Stock subject to the Performance Restricted Stock Units until the vesting of the Performance Restricted Stock Units and the delivery of shares of Company Stock with respect to such vesting.
8.Compliance with Law and Regulations.  This Agreement, the award hereunder and any obligation of the Company hereunder shall be subject to all applicable federal, state and local laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  Except to the extent preempted by any federal law, this Agreement shall be construed and administered in accordance with the laws of the State of New York without reference to its principles of conflicts of law.
9.Recipient Bound by Plan.  The Recipient acknowledges receipt of a copy of this Agreement and the Plan and agrees to be bound by all the terms and provisions thereof, which are incorporated herein by reference.  To the extent that this Agreement is silent with respect to, or in any way inconsistent with, the terms of the Plan, the provisions of the Plan shall govern and this Agreement shall be deemed to be modified accordingly. 
10.Notices.  Any notice or communication given hereunder shall be in writing and shall be deemed given when delivered in person, or by United States mail, at the following addresses:  (i) if to the Company, to:  Regeneron Pharmaceuticals, Inc., 777 Old Saw Mill River Road, Tarrytown, NY  10591, Attention:  Secretary, and (ii) if to the Recipient, to:  the Recipient at Regeneron Pharmaceuticals, Inc., 777 Old Saw Mill River Road, Tarrytown, NY 10591, or, if the Recipient has terminated service with the Company, to the last address for the Recipient indicated in the records of the Company, or such other address as the relevant party shall specify at any time hereafter in accordance with this Section 10.
11.No Obligation to Continue Employment.  This Agreement does not guarantee that the Employer will employ the Recipient for any specified time period, nor does it modify in any respect the Recipient’s employment or compensation.
12.Recoupment.  By entering into this Agreement and accepting the award hereunder, the Recipient agrees to be bound by the terms of the Company’s Policy Regarding Recoupment or Reduction of Incentive Compensation for Compliance Violations, as in effect from time to time (or any successor policy thereto) (the “Recoupment Policy”), and further acknowledges and agrees that the Recoupment Policy shall apply to the Performance Restricted Stock Units and the shares of Company Stock deliverable pursuant to the Performance Restricted Stock Units granted hereunder (including after all restrictions on such shares have lapsed).Exhibit

Exhibit 10.10.2

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT, MARKED BY BRACKETS, WERE OMITTED BECAUSE THOSE PORTIONS ARE NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL TO THE COMPANY IF PUBLICLY DISCLOSED.

SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement (“Second Amendment Agreement”) is made and effective as of December 19th, 2019 (the “Effective Date”) with the Parties’ obligations hereunder to commence on January 1st, 2022 (the “Commencement Date”) by and between (i) Regeneron Ireland Designated Activity Company (“RIRE”) and (ii) Bayer Healthcare LLC (“Bayer”).  
WHEREAS, Regeneron Pharmaceuticals, Inc., the ultimate parent company of RIRE, (“Regeneron”) and Bayer were Parties to a License and Collaboration Agreement having an effective date of October 18, 2006, which was amended by a Restated Amendment Agreement effective May 7, 2012 and dated December 30, 2014 (“Restated Amendment Agreement”) to reflect changes in the financial and other arrangements with respect to the Commercialization of Licensed Products in Japan (the said License and Collaboration Agreement, as amended, the “LCA”) and partially assigned to RIRE; 
WHEREAS, Regeneron and Bayer agreed that Licensed Products would be Commercialized in Japan by Santen Pharmaceutical Co., Ltd. (“Santen”) pursuant to a Co-Promotion and Distribution Agreement by and between Bayer Yakuhin, Ltd (“BYL”) and Santen dated May 7, 2012 which was subsequently amended on July 14th, 2016 (the said Co-Promotion and Distribution Agreement, as amended, the “Santen Co-Promotion Agreement”); 
WHEREAS, the Santen Co-Promotion Agreement will expire on December 31st, 2021 and BYL and Santen would like to extend it, subject to the terms and conditions of an Amended and Restated Co-Promotion and Distribution Agreement (the “Extended Santen Co-Promotion Agreement”);
WHEREAS, the Parties would like to revise several terms and conditions in the Santen Co-Promotion Agreement considering the anticipated changes to the Anti-VEGF market in the future and a potential launch of a Licensed Product bio-identical; and
WHEREAS, the extension and changes to the Santen Co-Promotion Agreement require the consent of RIRE and certain further amendments to the LCA.
NOW THEREFORE, in consideration of the promises set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:
1.Definitions.    Capitalized terms used in this Second Amendment Agreement which are not defined herein and are defined in the LCA shall have the meanings ascribed to them in the LCA. Capitalized terms used in this Second Amendment Agreement which are not defined herein and are not defined in the LCA shall have the meanings ascribed to them in the Santen Co-Promotion Agreement or the Extended Santen Co-Promotion Agreement and such definitions are hereby deemed incorporated by reference into Article I of the LCA.
2.Date of Commencement. The Santen Co-Promotion Agreement shall continue in force until December 31, 2021 and the Extended Santen Co-Promotion Agreement shall become effective on the Commencement 

Date. The Restated Amendment Agreement shall also continue to apply until December 31, 2021 with this Second Amendment Agreement becoming effective on the Commencement Date.
3.Continuing Effect.    Except as specifically modified by this Second Amendment, all of the provisions of the LCA (including the Restated Amendment Agreement) are hereby ratified and confirmed to be in full force and effect. Where references are made in the Restated Amendment Agreement to the Santen Co-Promotion Agreement, following the Commencement Date such references shall be to the Extended Santen Co-Promotion Agreement.
4.Regeneron Consent to Sublicense Grant.    RIRE hereby expressly agrees and consents for the Initial Extension Term and for the Renewal Term (as defined in the Extended Santen Co-Promotion Agreement) to a sublicense by Bayer to BYL of Bayer’s rights under the Regeneron Intellectual Property granted by RIRE to Bayer pursuant to the LCA provided such sublicense is in compliance with Section 4.3 of the LCA unless agreed in writing by RIRE with Bayer, and to BYL’s further sublicense of such rights to Santen, pursuant to the terms of the Extended Santen Co-Promotion Agreement, provided that such agreement and consent shall not alter or affect in any manner Bayer’s obligations of RIRE’s rights under the LCA which shall remain in full force and effect, including without limitation under such Section 4.3.
5.[***].
6.Japan Profit Share.    With effect from the Commencement Date, the Purchase Price Adjustment arrangement shall cease to apply, and the Parties shall revert to a profit share arrangement for Japan. In determining the Territory Profit Split in accordance with Schedule 2 of the LCA, the following clarifications and modifications shall apply to Japan:
		
	(a)
	Net Sales will be calculated on the basis of sales by BYL to Santen with the gross amount invoiced corresponding to [***] pursuant to the Santen Co-Promotion Agreement; and

		
	(b)
	[***], calculated in accordance with the Extended Co-Promotion Agreement, shall be added as a deduction in Section 1.65 of the LCA in the calculation of Net Sales. [***].

[***].
7.Treatment of Santen Eylea Inventory on Commencement Date.  As part of the first Global True-Up following the Commencement Date, Bayer will compensate RIRE for the Eylea inventory that Santen has on-hand as of [***]. Such compensation will be calculated according to the following formula: Santen inventory units of Licensed Product in its possession on [***], converted to US Dollars using the Quarter exchange rates.
8.Schedule 2.    Schedule 2 of the LCA is deleted and replaced with the Amended and Restated Schedule 2 attached to this Second Amendment Agreement, and all references to Schedule 2 in this Second Amendment Agreement or in the LCA from and after the Commencement Date shall refer to such Amended and Restated Schedule 2.
9.Entire Agreement.  The LCA (including the Restated Amendment Agreement), this Second Amendment Agreement and any written agreements executed by both Parties pertaining to the subject matter therein or herein, contain the complete understanding and entire agreement of the Parties hereto with respect to subject matter hereof and thereof and said documents supersedes all prior understandings and agreements, whether written or oral, relating to the subject matter hereof and thereof. This Second Amendment Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. 
10.Headings.  Headings in this Second Amendment Agreement are for convenience of reference only and shall not be considered in construing this Second Amendment Agreement.
11.Counterparts.  This Second Amendment Agreement may be executed in counterparts, with each part being deemed an original, and that an electronic copy signature shall have the same force and effect as an original signature.

12.Miscellaneous.    The provisions of Section 20.1 of the LCA shall apply, mutatis mutandis, to this Second Amendment Agreement. If there is a direct conflict between the provisions of the LCA (including the Restated Amendment Agreement) and this Second Amendment Agreement, this Second Amendment Agreement shall govern. This Second Amendment Agreement may be amended only by a writing executed by an authorized representative of each of the Parties.    

[Signatures appear on following page]

IN WITNESS WHEREOF, each of the Parties has cause this Second Amendment Agreement to be executed as of the date hereof by a duly authorized corporate officer.

	
		
	REGENERON IRELAND DESIGNATED ACTIVITY COMPANY 
	BAYER HEALTHCARE  LLC

	By: /s/Muriel O’Byrne
	By: /s/Ganesh Kamath

	DATE: December 19, 2019
	DATE: December 19, 2019

Amended and Restated Schedule 2
Quarterly True-Up

At the end of each Quarter, the Parties will calculate the net payment one Party shall be required to make to the other Party (the “Quarterly True-Up”) equal to (a) the Territory Profit Split for such Quarter (as set forth in Part I), plus (b) the Regeneron Reimbursement Amount for such Quarter (as set forth in Part II), plus or minus (c) the Global True-Up (as set forth in Part III), minus (d) the Global Development Balance Payment (commencing in the Quarter of the First Commercial Sale in a Major Market Country) (as set forth in Part IV).  In the event that the Quarterly True-Up is an amount greater than zero, such amount shall be payable by Company to Regeneron in accordance with the terms set forth in Article 9.  In the event that the Quarterly True-Up is an amount less than zero, the absolute value of such amount shall be payable by Regeneron to Company in accordance with the terms set forth in Article 9.  An example of the Quarterly True-Up is shown in Part V.

I.  TERRITORY PROFIT SPLIT
The “Territory Profit Split” shall mean fifty percent (50%) of Territory Profits in a Quarter.  “Territory Profits” shall mean aggregate Net Sales in the Territory in the Quarter less the sum of aggregate COGS and aggregate Shared Promotion Expenses incurred by both Parties in the Territory in the Quarter.  

An example of a calculation of the Territory Profit Split in a Quarter would be:

	
					
	 
	Aggregate
	Company
	Regeneron
	Territory Profit Split

	 
	 
	 
	 
	 

	Net Sales in the Territory
	1000
	1000
	 
	 

	COGS
	(50)
	(50)
	0
	 

	Shared Promotion Expenses
	(350)
	(300)
	(50)
	 

	 
	 
	 
	 
	 

	Territory Profits
	 600
	 
	 
	300

II.  REGENERON REIMBURSEMENT AMOUNT
The “Regeneron Reimbursement Amount” for a Quarter shall mean (a) Shared Promotion Expenses incurred by Regeneron in the Quarter (if any), plus (b) Commercial Supply Costs incurred by Regeneron in the Quarter (if any), plus (c) Development Costs incurred by Regeneron under the Territory Development Plan in the Quarter (if any).

An example of a calculation of the Regeneron Reimbursement Amount in a Quarter would be:  
	
		
	Regeneron Shared Promotion Expenses
	50

	Regeneron Commercial Supply Costs
	10

	Regeneron Development Costs under Territory Development Plan
	5

	Regeneron Reimbursement Amount
	65

III.  GLOBAL TRUE-UP

The “Global True-Up” for a Quarter shall mean (a) fifty percent (50%) of the sum of (i) aggregate Development Costs incurred by both Parties under the Global Development Plan in the Quarter and (ii) aggregate Other Shared Expenses incurred by both Parties in the Quarter, minus (b) one hundred percent (100%) of the sum of (i) Development Costs incurred by Company under the Global Development Plan in the Quarter and (ii) Other Shared Expenses incurred by Company during the Quarter.  If the Global True-Up is a positive number, it shall be added in the calculation of the Quarterly True-Up and, if it is a negative number, the absolute value of such amount shall be subtracted in the calculation of the Quarterly True-Up. 

An example of a calculation of the Global True-Up in a Quarter would be:  
	
					
	 
	Aggregate
	Company
	Regeneron
	Global
True-Up

	 
	 
	 
	 
	 

	Development Costs under Global Development Plan
	80
	30
	50
	 

	Other Shared Expenses
	40
	35
	5
	 

	Total
	120
	65
	55
	(5)

IV.  GLOBAL DEVELOPMENT BALANCE PAYMENT

The “Global Development Balance” for a Quarter shall mean (a) twenty-five percent (25%) of the aggregate amount of Development Costs incurred by both Parties under the Global Development Plan from January 1, 2007 through the close of such Quarter ([***]), plus (b) fifty percent (50%) of the aggregate amount of Development Costs incurred by both Parties under the Territory Development Plan from the Effective Date through the close of such Quarter (excluding Development Overruns in connection with the Territory Development Plan that were not approved by both Parties’ representatives on the JSC), less (c) the aggregate amount of Global Development Balance Payments included in the calculation of the Quarterly True-Up in all prior Quarters.  

The “Global Development Balance Payment” shall mean [***].   

An example of a calculation of the Global Development Balance Payment in a Quarter would be:
	
		
	Territory Profit Split
	300

	Global Development Balance
	200

	[***]

	[***]

	Global Development Balance Payment
	10

V.  EXAMPLE OF QUARTERLY TRUE-UP

An example of a calculation of the Quarterly True-up in a Quarter would be: 
	
		
	Territory Profit Split
	300

	Regeneron Reimbursement Amount
	200

	Global True-Up
	(5)

	[***]

	[***]

	Quarterly True-up
	[***]

In this example, Company would pay Regeneron [***] in accordance with the terms set forth in Article 9.

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