0001021408-01-508839.txt : 20011030
0001021408-01-508839.hdr.sgml : 20011030
ACCESSION NUMBER: 0001021408-01-508839
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 11
CONFORMED PERIOD OF REPORT: 20010930
FILED AS OF DATE: 20011026
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMGEN INC
CENTRAL INDEX KEY: 0000318154
STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
IRS NUMBER: 953540776
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-12477
FILM NUMBER: 1767551
BUSINESS ADDRESS:
STREET 1: ONE AMGEN CENTER DRIVE
CITY: THOUSAND OAKS
STATE: CA
ZIP: 91320-1799
BUSINESS PHONE: 805-447-1000
MAIL ADDRESS:
STREET 1: ONE AMGEN CENTER DRIVE
STREET 2: MAIL STOP 27-3-C
CITY: THOUSAND OAKS
STATE: CA
ZIP: 91320-1799
FORMER COMPANY:
FORMER CONFORMED NAME: AMGEN
DATE OF NAME CHANGE: 19870305
10-Q
1
d10q.txt
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 000-12477
AMGEN INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3540776
--------------------------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Amgen Center Drive, Thousand Oaks, California 91320-1799
--------------------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (805) 447-1000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of September 30, 2001, the registrant had 1,045,511,203 shares of Common
Stock, $0.0001 par value, outstanding.
AMGEN INC.
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements................................ 3
Condensed Consolidated Statements of
Operations - three and nine months
ended September 30, 2001 and 2000........................ 4
Condensed Consolidated Balance Sheets -
September 30, 2001 and December 31, 2000................. 5
Condensed Consolidated Statements of
Cash Flows - nine months
ended September 30, 2001 and 2000........................ 6
Notes to Condensed Consolidated Financial
Statements............................................... 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations.......................................... 13
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................... 19
Item 6. Exhibits and Reports on Form 8-K.................... 19
Signatures................................................... 20
Index to Exhibits............................................ 21
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The information in this report for the three and nine months ended
September 30, 2001 and 2000 is unaudited but includes all adjustments
(consisting only of normal recurring accruals, unless otherwise indicated) which
Amgen Inc. ("Amgen" or the "Company") considers necessary for a fair
presentation of the results of operations for those periods.
The condensed consolidated financial statements should be read in
conjunction with the Company's financial statements and the notes thereto
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.
Interim results are not necessarily indicative of results for the full
fiscal year.
3
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---------- ---------- ----------- -----------
Revenues:
Product sales $ 879.6 $ 851.0 $ 2,536.9 $ 2,355.4
Corporate partner revenues 60.6 51.9 182.0 187.2
Royalty income 62.9 46.6 172.5 135.4
---------- ---------- ----------- -----------
Total revenues 1,003.1 949.5 2,891.4 2,678.0
---------- ---------- ----------- -----------
Operating expenses:
Cost of sales 102.7 109.5 290.5 296.9
Research and development 216.9 202.9 632.4 595.5
Selling, general and administrative 221.8 202.9 644.5 577.7
Loss of affiliates, net 5.5 4.8 1.9 26.1
Legal award - (73.9) - (73.9)
---------- ---------- ----------- -----------
Total operating expenses 546.9 446.2 1,569.3 1,422.3
---------- ---------- ----------- -----------
Operating income 456.2 503.3 1,322.1 1,255.7
Other income (expense):
Interest and other income 44.4 30.7 133.2 110.3
Interest expense, net (2.3) (4.1) (10.2) (11.7)
---------- ---------- ----------- -----------
Total other income 42.1 26.6 123.0 98.6
---------- ---------- ----------- -----------
Income before income taxes 498.3 529.9 1,445.1 1,354.3
Provision for income taxes 168.4 171.0 488.4 426.6
---------- ---------- ----------- -----------
Net income $ 329.9 $ 358.9 $ 956.7 $ 927.7
========== ========== =========== ===========
Earnings per share:
Basic $ 0.31 $ 0.35 $ 0.92 $ 0.90
Diluted $ 0.30 $ 0.33 $ 0.88 $ 0.86
Shares used in calculation of earnings per share:
Basic 1,048.3 1,032.1 1,044.9 1,027.7
Diluted 1,084.6 1,085.6 1,085.4 1,085.0
See accompanying notes.
4
AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
September 30, December 31,
2001 2000
------------- -------------
ASSETS
------
Current assets:
Cash and cash equivalents $ 284.0 $ 226.5
Marketable securities 2,145.2 1,801.6
Trade receivables, net 481.5 389.2
Inventories 384.4 305.2
Other current assets 187.2 214.6
----------- ------------
Total current assets 3,482.3 2,937.1
Property, plant and equipment at cost, net 1,909.2 1,781.5
Other assets 662.2 681.0
----------- ------------
$ 6,053.7 $ 5,399.6
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 70.3 $ 143.2
Commercial paper 100.0 99.7
Accrued liabilities 552.2 619.2
----------- ------------
Total current liabilities 722.5 862.1
Long-term debt 223.0 223.0
Stockholders' equity:
Preferred stock; $0.0001 par value; 5.0 shares
authorized; none issued or outstanding - -
Common stock and additional paid-in capital;
$0.0001 par value; 2,750.0 shares authorized;
outstanding - 1,045.5 shares in 2001 and
1,037.4 shares in 2000 3,298.2 2,947.3
Retained earnings 1,773.7 1,304.6
Accumulated other comprehensive income 36.3 62.6
----------- ------------
Total stockholders' equity 5,108.2 4,314.5
----------- ------------
$ 6,053.7 $ 5,399.6
=========== ============
See accompanying notes.
5
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended
September 30,
2001 2000
----------- -----------
Cash flows from operating activities:
Net income $ 956.7 $ 927.7
Depreciation and amortization 194.9 156.3
Tax benefits related to employee stock options 166.5 304.5
Gain on equity investments (12.4) (30.7)
Loss of affiliates, net 1.9 26.1
Cash provided by (used in):
Trade receivables, net (92.3) 108.9
Inventories (114.3) (109.3)
Other current assets (6.4) (12.9)
Accounts payable (72.9) 38.2
Accrued liabilities (67.0) (145.9)
----------- -----------
Net cash provided by operating activities 954.7 1,262.9
----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment (310.5) (318.0)
Proceeds from maturities of marketable securities 193.1 -
Proceeds from sales of marketable securities 208.6 868.2
Purchases of marketable securities (701.2) ( 1,359.7)
Other 27.4 (15.0)
----------- -----------
Net cash used in investing activities (582.6) (824.5)
----------- -----------
Cash flows from financing activities:
Net proceeds from issuance of common stock upon the
exercise of employee stock options and in
connection with an employee stock purchase plan 181.1 266.1
Repurchases of common stock (487.6) (645.1)
Other (8.1) (30.5)
----------- -----------
Net cash used in financing activities (314.6) (409.5)
----------- -----------
Increase in cash and cash equivalents 57.5 28.9
Cash and cash equivalents at beginning of period 226.5 130.9
----------- -----------
Cash and cash equivalents at end of period $ 284.0 $ 159.8
=========== ===========
See accompanying notes.
6
AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001
1. Summary of significant accounting policies
Business
Amgen Inc. ("Amgen" or the "Company") is a global biotechnology company
that discovers, develops, manufactures and markets human therapeutics based on
advances in cellular and molecular biology.
Principles of consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries as well as affiliated companies in
which the Company has a controlling financial interest and exercises control
over their operations ("majority controlled affiliates"). All material
intercompany transactions and balances have been eliminated in consolidation.
Investments in affiliated companies which are 50% or less owned and where the
Company exercises significant influence over operations are accounted for using
the equity method. All other equity investments are accounted for under the cost
method. The caption "Loss of affiliates, net" includes Amgen's equity in the
operating results of affiliated companies and the minority interest others hold
in the operating results of Amgen's majority controlled affiliates.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined in a manner which approximates the first-in, first-out (FIFO) method.
Inventories consist of currently marketed products and product candidates which
the Company expects to commercialize. The inventory balance of such product
candidates totaled $67.0 million and $112.7 million as of September 30, 2001 and
December 31, 2000, respectively. Inventories are shown net of applicable
reserves and allowances. Inventories consisted of the following (in millions):
September 30, December 31,
2001 2000
------------- ------------
Raw materials $ 34.7 $ 29.4
Work in process 287.7 238.7
Finished goods 62.0 37.1
------------- ------------
$ 384.4 $ 305.2
============= ============
7
The Company has a collaboration agreement with PRAECIS PHARMACEUTICALS
INCORPORATED ("Praecis") relating to the commercialization of abarelix depot
(now referred to as "Plenaxis(TM)"). Costs of approximately $35 million
associated with the manufacture of Plenaxis(TM) are no longer classified in
inventories (see footnote 4 - "Collaboration agreement with Praecis").
Product sales
Product sales primarily consist of sales of EPOGEN(R) (Epoetin alfa)
and NEUPOGEN(R) (Filgrastim).
The Company has the exclusive right to sell Epoetin alfa for dialysis,
certain diagnostics and all non-human, non-research uses in the United States.
The Company sells Epoetin alfa under the brand name EPOGEN(R). Amgen has granted
to Ortho Pharmaceutical Corporation (which has assigned its rights under the
product license agreement to Ortho Biotech Products, L.P.), a subsidiary of
Johnson & Johnson ("Johnson & Johnson"), a license relating to Epoetin alfa for
sales in the United States for all human uses except dialysis and diagnostics.
Pursuant to this license, the Company and Johnson & Johnson are required to
compensate each other for Epoetin alfa sales that either party makes into the
other party's exclusive market, sometimes referred to as "spillover" sales.
Accordingly, Amgen does not recognize product sales it makes into the exclusive
market of Johnson & Johnson and does recognize the product sales made by Johnson
& Johnson into Amgen's exclusive market. Sales in Amgen's exclusive market are
derived from the Company's sales to its customers, as adjusted for any spillover
sales. The Company is employing an audit methodology to measure each party's
spillover sales based in part on estimates of and subsequent adjustments thereto
of third-party data on shipments to end users and their usage. Sales of the
Company's other products are recognized when shipped and title has passed.
Derivative instruments
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities", as amended, on January 1, 2001 and its adoption has not had a
material effect on the Company's financial statements. SFAS No. 133 requires
companies to recognize all of its derivative instruments as either assets or
liabilities in the balance sheet at fair value. The accounting for changes in
the fair value (i.e., unrealized gains or losses) of a derivative instrument
depends on whether it has been designated and qualifies as part of a hedging
relationship and further, on the type of hedging relationship. Derivatives that
are not hedges must be adjusted to fair value through current earnings.
To protect against possible changes in values of certain anticipated
foreign currency cash flows, primarily resulting from sales outside the U.S.,
the Company enters into foreign currency forward contracts which qualify and are
designated as cash flow hedges. No portions of these foreign currency forward
contracts are excluded from the assessment of
8
hedge effectiveness, and there are no ineffective portions of these hedging
instruments. The gains and losses on these forward contracts are reported as a
component of other comprehensive income and reclassified into earnings in the
same periods during which the hedged transactions affect earnings. At September
30, 2001, amounts in accumulated other comprehensive income related to cash flow
hedges were not material.
To protect against possible reductions in value of certain of its
available-for-sale marketable equity securities, the Company has entered into
equity forward contracts which qualify and are designated as fair value hedges.
The gains and losses on these forward contracts as well as the offsetting losses
and gains on the hedged equity securities are recognized in current earnings.
During the three and nine months ended September 30, 2001, gains and losses on
the portions of these forwards excluded from the assessment of hedge
effectiveness and the ineffective portions of these hedging instruments were not
material.
The Company has additional foreign currency forward contracts to reduce
exposures to foreign currency fluctuations of certain assets and liabilities
denominated in foreign currencies. However, these contracts have not been
designated as hedges under SFAS No. 133.
Prior to the adoption of SFAS No. 133, all of the Company's foreign
exchange forward contracts were adjusted to fair value through current earnings.
Foreign exchange option contracts that hedged anticipated foreign currency
transactions were deferred and recognized in the same period as the hedged
transaction. In addition, derivatives that hedged against possible reductions in
the fair values of available-for-sale equity securities were included in the
basis of the hedged securities and adjusted to fair value through other
comprehensive income.
Employee stock option and stock purchase plans
The Company's employee stock option and stock purchase plans are
accounted for under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees".
Earnings per share
Basic earnings per share is based upon the weighted-average number of
common shares outstanding. Diluted earnings per share is based upon the
weighted-average number of common shares and dilutive potential common shares
outstanding. Potential common shares are outstanding options under the Company's
employee stock option plans, restricted stock and potential issuances of stock
under the employee stock purchase plan (collectively "Dilutive Securities")
which are included under the treasury stock method.
9
The following table sets forth the computation for basic and diluted
earnings per share (in millions, except per share information):
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
------------ ----------- ------------ -----------
Numerator for basic and diluted
earnings per share - net income $ 329.9 $ 358.9 $ 956.7 $ 927.7
============ =========== ============ ===========
Denominator:
Denominator for basic earnings
per share - weighted-average shares 1,048.3 1,032.1 1,044.9 1,027.7
Effect of Dilutive Securities 36.3 53.5 40.5 57.3
------------ ----------- ------------ -----------
Denominator for diluted earnings
per share - adjusted weighted-
average shares 1,084.6 1,085.6 1,085.4 1,085.0
============ =========== ============ ===========
Basic earnings per share $ 0.31 $ 0.35 $ 0.92 $ 0.90
Diluted earnings per share $ 0.30 $ 0.33 $ 0.88 $ 0.86
Recent accounting pronouncements
In June 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets" effective for fiscal years beginning after December 15, 2001. Under the
new rules, goodwill will no longer be amortized but will be subject to annual
impairment tests in accordance with the statements. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
rules on accounting for goodwill and other intangible assets beginning in the
first quarter of 2002. Application of the non-amortization provisions of the
statement is not expected to have a material effect on the Company's financial
statements. The Company will perform the first of the required impairment tests
of goodwill as of January 1, 2002 and has not yet determined what the effect of
these tests will be on the earnings and financial position of the Company.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
Basis of presentation
The financial information for the three and nine months ended September
30, 2001 and 2000 is unaudited but includes all adjustments (consisting only of
normal recurring accruals, unless otherwise indicated) which the Company
considers necessary for a fair presentation of
10
the results of operations for these periods. Interim results are not necessarily
indicative of results for the full fiscal year.
Reclassification
Certain prior year amounts have been reclassified to conform to the
current year presentation.
2. Stockholders' equity
The Company has a stock repurchase program primarily to reduce the
dilutive effect of its employee stock option and stock purchase plans. Stock
repurchased under the program is intended to be retired. During the nine months
ended September 30, 2001, the Company repurchased 8.4 million shares of its
common stock at a total cost of $487.6 million under its common stock repurchase
program. In December 2000, the Board of Directors authorized the Company to
repurchase up to $2.0 billion of common stock between January 1, 2001 and
December 31, 2002. As of September 30, 2001, $1,512.4 million was available
for stock repurchases through December 31, 2002.
3. Other comprehensive income/(loss)
SFAS No. 130, "Reporting Comprehensive Income", requires unrealized
gains and losses on the Company's available-for-sale securities, foreign
currency translation adjustments, and unrealized gains and losses on cash flow
hedge instruments to be included in other comprehensive income/(loss). During
the three and nine months ended September 30, 2001, total comprehensive income
was $307.5 million and $930.4 million, respectively. During the three and nine
months ended September 30, 2000, total comprehensive income was $393.5 million
and $1,002.7 million, respectively.
4. Collaboration agreement with Praecis
The Company has a collaboration agreement with Praecis relating to the
commercialization of Plenaxis(TM). In September 2001, the Company and Praecis
announced that they are ending their agreement to jointly develop and
commercialize Plenaxis(TM) for all indications. Praecis also stated that it
remains committed to the further development and commercialization of
Plenaxis(TM). The Company is currently transitioning its development and
commercialization responsibilities to Praecis and is negotiating various
financial and other matters related to the termination of this agreement. At
September 30, 2001, the Company had approximately $60 million of capitalized
costs related to this agreement
11
(including approximately $35 million previously classified as inventories - see
footnote 1 "Summary of significant accounting policies - Inventories") and will
incur certain additional costs during the transition period. The Company
believes it is reasonably possible that it may incur a loss as a result of
terminating this agreement. However, due to the current status of negotiations
with Praecis, the Company cannot estimate the amount of such loss, if any.
Accordingly, no loss has been accrued in the Company's financial statements for
the three and nine months ended September 30, 2001.
12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Company had cash, cash equivalents and marketable securities of
$2,429.2 million at September 30, 2001, compared with $2,028.1 million at
December 31, 2000. Cash provided by operating activities has been and is
expected to continue to be the Company's primary source of funds. During the
nine months ended September 30, 2001, operations provided $954.7 million of cash
compared with $1,262.9 million during the same period last year.
Capital expenditures totaled $310.5 million for the nine months ended
September 30, 2001, compared with $318.0 million for the same period a year ago.
The Company anticipates spending approximately $400 million to $500 million in
2001 on capital projects and equipment to expand its global operations.
The Company receives cash from the exercise of employee stock options
and proceeds from the sale of stock by Amgen pursuant to the employee stock
purchase plan. During the nine months ended September 30, 2001, employee stock
option exercises and proceeds from the sale of stock by Amgen pursuant to the
employee stock purchase plan provided $181.1 million of cash compared with
$266.1 million for the same period last year. Proceeds from the exercise of
employee stock options will vary from period to period based upon, among other
factors, fluctuations in the market value of the Company's stock relative to the
exercise price of such options.
The Company has a stock repurchase program primarily to reduce the
dilutive effect of its employee stock option and stock purchase plans. During
the nine months ended September 30, 2001, the Company purchased 8.4 million
shares of its common stock at a total cost of $487.6 million compared with 9.9
million shares purchased at a cost of $645.1 million during the same period last
year. In December 2000, the Board of Directors authorized the Company to
repurchase up to $2.0 billion of common stock between January 1, 2001 and
December 31, 2002. The amount the Company spends on and the number of shares
repurchased each quarter varies based on a variety of factors, including the
stock price and blackout periods in which the Company is restricted from
repurchasing shares. As of September 30, 2001, $1,512.4 million was available
for stock repurchases through December 31, 2002.
To provide for financial flexibility and increased liquidity, the
Company has established several sources of debt financing. As of September 30,
2001, the Company had $223.0 million of unsecured long-term debt securities
outstanding. These unsecured long-term debt securities consisted of: 1) $100
million of debt securities that bear interest at a fixed rate of 6.5% and mature
in 2007 under a $500 million debt shelf registration (the "Shelf"), 2) $100
million of debt securities that bear interest at a fixed rate of 8.1% and mature
in 2097 and 3) $23 million of debt securities that bear interest at a fixed rate
of 6.2% and mature in 2003. Under the Shelf, all of the remaining $400 million
of debt securities available for issuance
13
may be offered under the Company's medium-term note program with terms to be
determined by market conditions.
The Company's sources of debt financing also include a commercial paper
program which provides for unsecured short-term borrowings up to an aggregate
face amount of $200 million. As of September 30, 2001, commercial paper with a
face amount of $100.0 million was outstanding. These borrowings had maturities
of less than one month and had effective interest rates averaging 3.1%. In
addition, the Company has an unsecured $150 million credit facility that expires
on May 28, 2003. This credit facility supports the Company's commercial paper
program. As of September 30, 2001, no amounts were outstanding under this line
of credit.
The primary objectives for the Company's investment portfolio are
liquidity and safety of principal. Investments are made to achieve the highest
rate of return to the Company, consistent with these two objectives. The
Company's investment policy limits investments to certain types of instruments
issued by institutions with investment grade credit ratings and places
restrictions on maturities and concentration by type and issuer.
The Company believes that existing funds, cash generated from
operations and existing sources of debt financing are adequate to satisfy its
working capital and capital expenditure requirements for the foreseeable future,
as well as to support its stock repurchase program. However, the Company may
raise additional capital from time to time.
Results of Operations
Product sales
Product sales were $879.6 million and $2,536.9 million during the three
and nine months ended September 30, 2001, respectively. These amounts represent
increases of $28.6 million and $181.5 million, or 3% and 8%, respectively, over
the same periods last year. Quarterly product sales are influenced by a number
of factors, including demand, wholesaler inventory management practices and
foreign exchange effects.
EPOGEN(R) (Epoetin alfa)/Aranesp(TM) (darbepoetin alfa)
In September 2001, the Company received approval to market Aranesp(TM)
in the U.S. for the treatment of anemia associated with chronic renal failure,
including patients on dialysis and patients not on dialysis. Aranesp(TM) was
launched in October 2001; thus, there were no U.S. sales in the current year
quarter. In June 2001, the Company received approval and has launched
Aranesp(TM) in several countries in the European Union ("EU"). Sales in these EU
markets through September 30, 2001 were not material.
Combined EPOGEN(R) and Aranesp(TM) sales were $519.8 million and
$1,541.3 million for the three and nine months ended September 30, 2001,
respectively. These
14
amounts represent increases of $23.7 million and $111.8 million, or 5% and 8%,
respectively, over EPOGEN(R) sales in the same periods last year. These
increases were primarily due to increased EPOGEN(R) demand, which includes the
effect of higher prices and growth in the U.S. dialysis patient population.
Sales growth during the three and nine months ended September 30, 2001, was
negatively impacted to a slight degree by wholesaler inventory changes.
NEUPOGEN(R) (Filgrastim)
Worldwide NEUPOGEN(R) sales were $359.8 million and $993.4 million for
the three and nine months ended September 30, 2001, respectively. These amounts
represent increases of $7.0 million and $80.9 million, or 2% and 9%,
respectively, over the same periods last year.
The increase in the three months ended September 30, 2001 was primarily
due to increased worldwide demand, which includes the effect of higher prices in
the U.S. However, this increase was substantially offset by wholesaler inventory
changes, and to a lesser extent, the negative impact of a stronger U.S. dollar.
The Company believes that demand grew at a high-single digit rate during the
third quarter. The increase in the nine months ended September 30, 2001 was
primarily due to worldwide demand growth, which includes the effect of higher
prices in the U.S., and to a lesser extent, the beneficial effects of wholesaler
inventory changes compared with the prior year period. This increase was
slightly offset by the negative impact of a stronger U.S. dollar.
Cost of sales
Cost of sales as a percentage of product sales was 11.7% and 11.5% for
the three and nine months ended September 30, 2001, respectively, compared with
12.9% and 12.6% for the same periods last year. These decreases were primarily
due to reduced royalty obligations.
Research and development
During the three and nine months ended September 30, 2001, research and
development expenses increased $14.0 million and $36.9 million, or 7% and 6%,
respectively, compared with the same periods last year. The increase for the
three months ended September 30, 2001 was primarily due to higher staff-related
costs necessary to support ongoing product development activities. The increase
for the nine months ended September 30, 2001, was due to higher staff-related
costs, partially offset by lower clinical manufacturing and product
licensing-related costs.
Selling, general and administrative
During the three and nine months ended September 30, 2001, selling,
general and administrative ("SG&A") expenses increased $18.9 million and $66.8
million, or 9% and 12%, respectively, compared with the same periods last year.
These increases were primarily due to higher staff-related costs, consulting
expenses, and outside marketing expenses as the
15
Company continues to support its existing products and prepares for anticipated
new product launches.
Legal award
Included in the three months ended September 30, 2000 was a benefit of
$73.9 million primarily from an award for certain costs and expenses, including
attorneys' fees, associated with the spillover arbitration with Johnson &
Johnson.
Interest and other income
During the three and nine months ended September 30, 2001, interest and
other income increased $13.7 and $22.9, or 45% and 21%, respectively, over the
same periods last year. The increase for the three months ended September 30,
2001 was primarily due to higher interest income generated from the Company's
investment portfolio as a result of higher average cash balances. The increase
for the nine months ended September 30, 2001 was primarily due to higher
interest income generated from the Company's investment portfolio as a result of
higher average cash balances, partially offset by higher gains on the sale of
equity investments that occurred in the second quarter of 2000.
Income taxes
The Company's effective tax rate for both the three and nine months
ended September 30, 2001 was 33.8%, compared with 32.3% and 31.5%, respectively,
for the same periods last year. The Company's tax rate has increased primarily
as a result of increased taxable income combined with a provision in the federal
tax law that caps tax benefits associated with the Company's Puerto Rico
operations at the 1995 income level.
Financial Outlook
In the third quarter, the Company received regulatory approval to
market Aranesp(TM) in the U.S. for the treatment of anemia associated with
chronic renal failure, including patients on dialysis and patients not on
dialysis. Aranesp(TM) was launched in the U.S. in October 2001. The Company
received approval in the second quarter to market Aranesp(TM) in the EU,
Australia and New Zealand. Aranesp(TM) has been launched in several EU
countries, and launches in additional countries will occur as reimbursement is
obtained.
Because the Company is unable to predict the timing and the extent to
which health care providers in the U.S. may transition from administering
EPOGEN(R) to Aranesp(TM), sales guidance for EPOGEN(R) and Aranesp(TM) is
provided on a combined basis. The Company continues to expect 2001 combined
EPOGEN(R) and Aranesp(TM) sales to grow at a low-double digit rate over 2000
EPOGEN(R) sales. In the future, the Company expects the growth of its anemia
business to be driven primarily by Aranesp(TM) sales in new market
16
opportunities. The Company expects growth in its U.S. dialysis business to come
primarily from patient population growth and inflation-related price increases.
Patients receiving treatment for end stage renal disease are covered primarily
under medical programs provided by the federal government. Therefore, EPOGEN(R)
sales may also be affected by future changes in reimbursement rates or a change
in the basis for reimbursement by the federal government. Worldwide Aranesp(TM)
sales will be dependent in part upon such factors as the effects of competitive
pressures, penetration of existing and new market opportunities, and the
availability and extent of reimbursement by third party payors including
governments and private insurance plans.
In 2001, the Company continues to expect NEUPOGEN(R) sales growth to be
in the high-single digits. Future NEUPOGEN(R) demand is dependent primarily upon
penetration of existing markets and the effects of competitive products. In
addition, chemotherapy treatments that are less myelosuppressive may require
less NEUPOGEN(R). NEUPOGEN(R) usage is expected to continue to be affected by
cost containment pressures from governments and private insurers on health care
providers worldwide. In addition, reported NEUPOGEN(R) sales will continue to be
affected by changes in foreign currency exchange rates. In both domestic and
foreign markets, sales of NEUPOGEN(R) are dependent, in part, on the
availability of reimbursement from third party payors such as governments (for
example, Medicare and Medicaid programs in the U.S.) and private insurance
plans. Therefore, NEUPOGEN(R) sales may also be affected by future changes in
reimbursement rates or changes in the bases for reimbursement.
The Company continues to expect 2001 total product sales and earnings
per share, excluding non-recurring items, to grow at low-double digit rates. In
2001, corporate partner revenues are expected to be less than 2000 revenues,
cost of sales is estimated to be in the range of 11% to 12% of total product
sales, research and development expenses and SG&A expenses are each estimated to
be in the range of 25% to 27% of total product sales, and the effective tax rate
is expected to be approximately 34%.
For information regarding the commercialization of Plenaxis(TM), see
footnote 4 - "Collaboration agreement with Praecis" to the condensed
consolidated financial statements.
Estimates of future product sales, operating expenses and earnings per
share are necessarily speculative in nature and are difficult to predict with
accuracy. The Company is providing this information as of the filing date of
this Form 10-Q, and does not plan to update this information and expressly
disclaims any duty to update the information contained in this filing.
Except for the historical information contained herein, the matters
discussed herein are by their nature forward-looking. Investors are cautioned
that forward-looking statements or projections made by the Company, including
those made in this document, are subject to risks and uncertainties that may
cause actual results to differ materially from those projected. Reference is
made in particular to forward-looking statements regarding product sales,
earnings per share and expenses. Amgen operates in a rapidly changing
environment
17
that involves a number of risks, some of which are beyond the Company's control.
Future operating results and the Company's stock price may be affected by a
number of factors, including, without limitation: (i) the results of preclinical
and clinical trials; (ii) regulatory approvals of product candidates, new
indications and manufacturing facilities; (iii) health care guidelines and
policies relating to Amgen's products; (iv) reimbursement for Amgen's products
by governments and private payors; (v) intellectual property matters (patents)
and the results of litigation; (vi) competition; (vii) fluctuations in operating
results and (viii) rapid growth of the Company. These factors and others are
discussed herein and in Exhibit 99 filed with this report titled "Factors That
May Affect Amgen" and incorporated herein by reference.
18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Certain of the Company's legal proceedings are reported in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000, with
material developments since that report described in the Company's Form 10-Q for
the quarters ended March 31, 2001 and June 30, 2001, and below. While it is not
possible to predict accurately or to determine the eventual outcome of these
matters, the Company believes that the outcome of these proceedings will not
have a material adverse effect on the annual financial statements of the
Company.
Johnson & Johnson arbitrations
The trial date is scheduled for January 2002.
Genentech litigation
Briefing was completed and the Federal Circuit Court of Appeals heard
oral arguments in October 2001.
Biogen litigation
The Massachusetts District Court had set September 12, 2001 as the
hearing date for Amgen's contention that prosecution history estoppel and issue
preclusion compel findings of non-infringement of the '642 and '658 patents in
the NEUPOGEN(R) action and the dismissal of the INFERGEN(R) action. Due to the
events of September 11, 2001, the hearing was rescheduled to December 19, 2001.
Item 6. Exhibits and Reports on Form 8-K
(a) Reference is made to the Index to Exhibits included herein.
(b) Reports on Form 8-K - none
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Amgen Inc.
(Registrant)
Date: 10/26/01 By: /s/ Richard D. Nanula
--------------------------- ------------------------------------------
Richard D. Nanula
Executive Vice President, Finance,
Strategy and Communications,
and Chief Financial Officer
Date: 10/26/01 By: /s/ Barry D. Schehr
--------------------------- ------------------------------------------
Barry D. Schehr
Vice President, Financial Operations,
and Chief Accounting Officer
20
AMGEN INC.
INDEX TO EXHIBITS
Exhibit No. Description
3.1 Restated Certificate of Incorporation as amended. (10)
3.2 Amended and Restated Bylaws of Amgen Inc. (as amended October 24,
2000). (20)
3.3 Certificate of Amendment of Restated Certificate of Incorporation.
(19)
3.4 Certificate of Designations of Series A Junior Participating
Preferred Stock. (22)
4.1 Indenture dated January 1, 1992 between the Company and Citibank
N.A., as trustee. (4)
4.2 First Supplement to Indenture, dated February 26, 1997 between the
Company and Citibank N.A., as trustee. (7)
4.3 Officer's Certificate pursuant to Sections 2.1 and 2.3 of the
Indenture, as supplemented, establishing a series of securities
"8-1/8% Debentures due April 1, 2097." (9)
4.4 8-1/8% Debentures due April 1, 2097. (9)
4.5 Form of stock certificate for the common stock, par value $.0001
of the Company. (10)
4.6 Officer's Certificate pursuant to Sections 2.1 and 2.3 of the
Indenture, dated as of January 1, 1992, as supplemented by the
First supplemental Indenture, dated as of February 26, 1997, each
between the Company and Citibank, N.A., as Trustee, establishing a
series of securities entitled "6.50% Notes Due December 1, 2007".
(12)
4.7 6.50% Notes Due December 1, 2007 described in Exhibit 4.6. (12)
4.8 Corporate Commercial Paper - Master Note between and among Amgen
Inc., as Issuer, Cede & Co., as nominee of The Depository Trust
Company and Citibank, N.A. as Paying Agent. (14)
10.1* Company's Amended and Restated 1991 Equity Incentive Plan.
10.2 Company's Amended and Restated 1997 Special Non-Officer Equity
Incentive Plan. (22)
10.3 Shareholder's Agreement of Kirin-Amgen, Inc., dated May 11, 1984,
between the Company and Kirin Brewery Company, Limited. (22)
10.4 Amendment Nos. 1, 2, and 3, dated March 19, 1985, July 29, 1985
and December 19, 1985, respectively, to the Shareholder's
Agreement of Kirin-Amgen, Inc., dated May 11, 1984. (19)
10.5 Product License Agreement, dated September 30, 1985, and
Technology License Agreement, dated, September 30, 1985 between
the Company and Ortho Pharmaceutical Corporation. (19)
21
10.6 Product License Agreement, dated September 30, 1985, and
Technology License Agreement, dated September 30, 1985 between
Kirin-Amgen, Inc. and Ortho Pharmaceutical Corporation. (19)
10.7 Company's Amended and Restated Employee Stock Purchase Plan. (19)
10.8 Research, Development Technology Disclosure and License Agreement
PPO, dated January 20, 1986, by and between the Company and Kirin
Brewery Co., Ltd. (1)
10.9 Amendment Nos. 4 and 5, dated October 16, 1986 (effective July 1,
1986) and December 6, 1986 (effective July 1, 1986), respectively,
to the Shareholders Agreement of Kirin-Amgen, Inc. dated May 11,
1984. (22)
10.10 Assignment and License Agreement, dated October 16, 1986, between
the Company and Kirin-Amgen, Inc. (22)
10.11 G-CSF European License Agreement, dated December 30, 1986, between
Kirin-Amgen, Inc. and the Company. (22)
10.12 Company's Retirement and Savings Plan (as amended and restated
effective October 23, 2000). (22)
10.13 Company's Amended and Restated 1988 Stock Option Plan. (6)
10.14 First Amendment to the Company's Retirement and Savings Plan (as
amended and restated effective October 23, 2000). (22)
10.15 Amendment, dated June 30, 1988, to Research, Development,
Technology Disclosure and License Agreement: GM-CSF dated March
31, 1987, between Kirin Brewery Company, Limited and the Company.
(2)
10.16 Agreement on G-CSF in Certain European Countries, dated January 1,
1989, between Amgen Inc. and F. Hoffmann-La Roche & Co. Limited
Company (with certain confidential information deleted therefrom).
(3)
10.17 Partnership Purchase Agreement, dated March 12, 1993, between the
Company, Amgen Clinical Partners, L.P., Amgen Development
Corporation, the Class A limited partners and the Class B limited
partner. (5)
10.18 Amgen Inc. Supplemental Retirement Plan (As Amended and Restated
Effective November 1, 1999). (18)
10.19 First Amendment to Amgen Inc. Change of Control Severance Plan.
(19)
10.20 Amended and Restated Amgen Performance Based Management Incentive
Plan. (17)
10.21 Credit Agreement, dated as of May 28, 1998, among Amgen Inc., the
Borrowing Subsidiaries named therein, the Banks named therein,
Citibank, N.A., as Issuing Bank, and Citicorp USA, Inc., as
Administrative Agent. (15)
10.22 G-CSF United States License Agreement dated June 1, 1987
(effective July 1, 1986) between Kirin-Amgen, Inc. and the
Company. (22)
10.23 Amendment No. 1 dated October 20, 1988 to Kirin-Amgen, Inc./Amgen
G-CSF United States License Agreement dated June 1, 1987
(effective July 1, 1986). (22)
10.24 Amendment No. 2 dated October 17, 1991 (effective November 13,
1990) to Kirin-Amgen, Inc./Amgen G-CSF United States License
Agreement dated June 1, 1987 (effective July 1, 1986). (22)
22
10.25 Amendment No. 10 dated March 1, 1996 to the Shareholders'
Agreement of Kirin-Amgen, Inc. dated May 11, 1984. (22)
10.26 Amgen Inc. Change of Control Severance Plan effective as of
October 20, 1998. (16)
10.27 Preferred Share Rights Agreement, dated as of December 12, 2000,
between Amgen Inc. and American Stock Transfer and Trust Company,
as Rights Agent. (21)
10.28 First Amendment, effective January 1, 1998, to the Company's
Amended and Restated Employee Stock Purchase Plan. (11)
10.29 Amendment No. 11 dated March 20, 2000 to the Shareholders'
Agreement of Kirin-Amgen, Inc. dated May 11, 1984. (22)
10.30 Agreement between Amgen Inc. and Dr. Fabrizio Bonanni, dated March
3, 1999. (18)
10.31 Amendment No. 1 dated June 1, 1987 to Kirin-Amgen, Inc./Amgen
G-CSF European License Agreement dated December 30, 1986. (22)
10.32 Amendment No. 2 dated March 15, 1988 to Kirin-Amgen, Inc./Amgen
G-CSF European License Agreement dated December 30, 1986. (22)
10.33 Amendment No. 3 dated October 20, 1988 to Kirin-Amgen, Inc./Amgen
G-CSF European License Agreement dated December 30, 1986. (22)
10.34 Amendment No. 4 dated December 29, 1989 to Kirin-Amgen, Inc./Amgen
G-CSF European License Agreement dated December 30, 1986. (22)
10.35 Company's Amended and Restated 1987 Directors' Stock Option Plan.
(8)
10.36 Amended and Restated Agreement on G-CSF in the EU between Amgen
Inc. and F. Hoffmann-La Roche Ltd (with certain confidential
information deleted therefrom). (14)
10.37 Collaboration and License Agreement, dated December 15, 1997,
between the Company, GPI NIL Holdings, Inc. and Guilford
Pharmaceuticals Inc. (with certain confidential information
deleted therefrom). (13)
10.38 Promissory Note of Dr. Fabrizio Bonanni, dated August 7, 1999.
(18)
10.39 Promissory Note of Dr. Fabrizio Bonanni, dated October 29, 1999.
(18)
10.40* Company's Amended and Restated 1997 Equity Incentive Plan.
10.41 Agreement between Amgen Inc. and Mr. Gordon M. Binder, dated May
10, 2000. (19)
10.42 Amendment No. 6 dated May 11, 1984 to the Shareholders' Agreement
of Kirin-Amgen, Inc. dated May 11, 1984. (22)
10.43 Amendment No. 7 dated July 17, 1987 (effective April 1, 1987) to
the Shareholders' Agreement of Kirin-Amgen, Inc. dated May 11,
1984. (22)
10.44 Amendment No. 8 dated May 28, 1993 (effective November 13, 1990)
to the Shareholders' Agreement of Kirin-Amgen, Inc. dated May 11,
1984. (22)
10.45 Amendment No. 9 dated December 9, 1994 (effective June 14, 1994)
to the Shareholders' Agreement of Kirin-Amgen, Inc. dated May 11,
1984. (22)
10.46 Agreement between Amgen Inc. and Mr. George J. Morrow, dated March
3, 2001. (23)
10.47 Promissory Note of Mr. George J. Morrow, dated March 11, 2001.
(23)
23
10.48 Agreement between Amgen Inc. and Dr. Roger M. Perlmutter, M.D.,
Ph.D., dated March 5, 2001. (23)
10.49 Agreement between Amgen Inc. and Mr. Brian McNamee, dated May 5,
2001. (24)
10.50 Agreement between Amgen Inc. and Mr. Richard Nanula, dated May 15,
2001. (24)
10.51 Promissory Note of Mr. Richard Nanula, dated June 27, 2001. (24)
10.52 Promissory Note of Dr. Roger M. Perlmutter, dated June 29, 2001.
(24)
10.53* Second Amendment to the Amgen Retirement and Savings Plan as
amended and restated effective October 15, 2001.
10.54* Second Amendment to the Amgen Inc. Change of Control Severance
Plan.
10.55* First Amendment to the Amgen Supplemental Retirement Plan as
amended and restated effective November 1, 1999.
10.56* Agreement between Amgen Inc. and Dr. George Morstyn, dated July
19, 2001.
10.57* Promissory Note of Mr. Brian McNamee, dated May 30, 2001.
10.58* Restricted Stock Purchase Agreement between Amgen Inc. and Mr.
Richard Nanula, dated May 16, 2001.
10.59* Restricted Stock Purchase Agreement between Amgen Inc. and Dr.
Roger M. Perlmutter, dated January 8, 2001.
99* "Factors That May Affect Amgen"
___________________
* Filed herewith.
(1) Filed as an exhibit to Amendment No. 1 to Form S-1 Registration Statement
(Registration No. 33-3069) on March 11, 1986 and incorporated herein by
reference.
(2) Filed as an exhibit to Form 8 amending the Quarterly Report on Form 10-Q
for the quarter ended June 30, 1988 on August 25, 1988 and incorporated
herein by reference.
(3) Filed as an exhibit to the Form 8 dated November 8, 1989, amending the
Annual Report on Form 10-K for the year ended March 31, 1989 on June 28,
1989 and incorporated herein by reference.
(4) Filed as an exhibit to Form S-3 Registration Statement dated December 19,
1991 and incorporated herein by reference.
(5) Filed as an exhibit to the Form 8-A dated March 31, 1993 and incorporated
herein by reference.
(6) Filed as an exhibit to the Form 10-Q for the quarter ended September 30,
1996 on November 5, 1996 and incorporated herein by reference.
(7) Filed as an exhibit to the Form 8-K Current Report dated March 14, 1997 on
March 14, 1997 and incorporated herein by reference.
(8) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1996 on March 24, 1997 and incorporated herein by reference.
(9) Filed as an exhibit to the Form 8-K Current Report dated April 8, 1997 on
April 8, 1997 and incorporated herein by reference.
(10) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 1997
on May 13, 1997 and incorporated herein by reference.
24
(11) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 1997
on August 12, 1997 and incorporated herein by reference.
(12) Filed as an exhibit to the Form 8-K Current Report dated and filed on
December 5, 1997 and incorporated herein by reference.
(13) Filed as Exhibit 10.40 to the Guilford Pharmaceuticals Inc. Form 10-K for
the year ended December 31, 1997 on March 27, 1998 and incorporated herein
by reference.
(14) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 1998
on May 13, 1998 and incorporated herein by reference.
(15) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 1998
on August 14, 1998 and incorporated herein by reference.
(16) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1998 on March 16, 1999 and incorporated herein by reference.
(17) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 1999
on August 3, 1999 and incorporated herein by reference.
(18) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1999 on March 7, 2000 and incorporated herein by reference.
(19) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 2000
on August 1, 2000 and incorporated herein by reference.
(20) Filed as an exhibit to the Form 10-Q for the quarter ended September 30,
2000 on November 14, 2000 and incorporated herein by reference.
(21) Filed as an exhibit to the Form 8-K Current Report dated December 13, 2000
on December 18, 2000 and incorporated herein by reference.
(22) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 2000 on March 7, 2001 and incorporated herein by reference.
(23) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 2001
on May 14, 2001 and incorporated herein by reference.
(24) Filed as an exhibit to the Form 10-Q for the quarter ended June 30, 2001
on July 27, 2001 and incorporated herein by reference.
25
EX-10.1
3
dex101.txt
AMENDED AND RESTATED 1991 EQUITY INCENTIVE PLAN
Exhibit 10.1
AMGEN INC.
AMENDED AND RESTATED 1991 EQUITY INCENTIVE PLAN
-----------------------------------------------
1. PURPOSE.
-------
(a) The purpose of the Amended and Restated 1991 Equity Incentive Plan
as amended and restated in October 2001 (the "Plan") is to provide a means by
which employees or directors of and consultants to Amgen Inc., a Delaware
corporation (the "Company"), and its Affiliates, as defined in paragraph 1(b),
directly, or indirectly through Trusts, may be given an opportunity to benefit
from increases in value of the stock of the Company through the granting of (i)
incentive stock options, (ii) nonqualified stock options, (iii) stock bonuses,
and (iv) rights to purchase restricted stock, all as defined below. For purposes
of the incentive stock option rules of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), the Plan is a new plan.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Code.
(c) The Company, by means of the Plan, seeks to retain the services of
persons now employed by or serving as directors or consultants to the Company,
to secure and retain the services of persons capable of filling such positions,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company.
(d) The Company intends that the rights issued under the Plan ("Stock
Awards") shall, in the discretion of the Board of Directors of the Company (the
"Board") or any committee to which responsibility for administration of the Plan
has been delegated pursuant to paragraph 2(c), be either (i) stock options
granted pursuant to Sections 5 or 6 hereof, including incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which do not qualify as Incentive Stock Options ("Nonqualified Stock
Options") (together hereinafter referred to as "Options"), or (ii) stock bonuses
or rights to purchase restricted stock granted pursuant to Section 7 hereof.
(e) The word "Trust" as used in the Plan shall mean a trust created
for the benefit of the employee, director or consultant, his or her spouse, or
members of their immediate family. The word optionee shall mean the person to
whom the option is granted or the employee, director or consultant for whose
benefit the option is granted to a Trust, as the context shall require.
2. ADMINISTRATION.
--------------
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a committee, as provided in paragraph 2(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how Stock Awards shall be
granted; whether a Stock Award will be an Incentive Stock Option, a Nonqualified
Stock Option, a stock bonus, a right to purchase restricted stock, or a
combination of the foregoing; the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be
permitted to purchase or receive stock pursuant to a Stock Award; and the number
of shares with respect to which Stock Awards shall be granted to each such
person.
(2) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award, in a manner
and to the extent it shall deem necessary or expedient to make the Plan fully
effective.
(3) To amend the Plan as provided in Section 14.
(4) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"). One
or more of these members may be non-employee directors and outside directors, if
required and as defined by the provisions of paragraphs 2(d) and 2(e). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (except amendment of Section 6 or the options granted thereunder
shall only be by action taken by the Board or a committee of one or more members
of the Board to which such authority has been specifically delegated by the
Board), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.
Notwithstanding anything else in this paragraph 2(c) to the contrary, at any
time the Board or the Committee may delegate to a committee of one or more
members of the Board the authority to grant or amend options to all employees,
directors or consultants or any portion or class thereof.
(d) The term "non-employee director" shall mean a member of the Board
who (i) is not currently an officer of the Company or a parent or subsidiary of
the Company (as defined in Rule 16a-1(f) promulgated by the Securities and
Exchange Commission under
2
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) or an employee of the Company or a parent or subsidiary of the Company;
(ii) does not receive compensation from the Company or a parent or subsidiary of
the Company for services rendered in any capacity other than as a member of the
Board (including a consultant) in an amount required to be disclosed to the
Company's stockholders under Rule 404 of Regulation S-K promulgated by the
Securities and Exchange Commission ("Rule 404"); (iii) does not possess an
interest in any other transaction required to be disclosed under Rule 404; or
(iv) is not engaged in a business relationship required to be disclosed under
Rule 404, as all of these provisions are interpreted by the Securities and
Exchange Commission under Rule 16b-3 promulgated under the Exchange Act.
(e) The term "outside director," as used in this Plan, shall mean an
administrator of the Plan, whether a member of the Board or of any Committee to
which responsibility for administration of the Plan has been delegated pursuant
to paragraph 2(c), who is considered to be an "outside director" in accordance
with the rules, regulations or interpretations of Section 162(m) of the Code.
(f) Any requirement that an administrator of the Plan be a
"non-employee director" or "outside director" shall not apply if the Board or
the Committee expressly declares that such requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN.
--------------------------
(a) Subject to the provisions of Section 11 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
granted under the Plan shall not exceed in the aggregate One Hundred Ninety-Two
Million (192,000,000) shares of the Company's $.0001 par value common stock (the
"Common Stock"). If any Stock Award granted under the Plan shall for any reason
expire or otherwise terminate without having been exercised in full, the Common
Stock not purchased under such Stock Award shall again become available for the
Plan. Shares repurchased by the Company pursuant to any repurchase rights
reserved by the Company pursuant to the Plan shall not be available for
subsequent issuance under the Plan.
(b) The Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an eligible person
under the Plan only if the aggregate fair market value (determined at the time
the Incentive Stock Option is granted) of the Common Stock with respect to which
incentive stock options (as defined by the Code) are exercisable for the first
time by such optionee during any calendar year under all such plans of the
Company and its Affiliates does not exceed one hundred thousand dollars
3
($100,000). If it is determined that an entire Option or any portion thereof
does not qualify for treatment as an Incentive Stock Option by reason of
exceeding such maximum, such Option or the applicable portion shall be
considered a Nonqualified Stock Option.
4. ELIGIBILITY.
-----------
(a) Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the Company
shall not be eligible to receive Incentive Stock Options unless such director is
also an employee of the Company or any Affiliate. Stock Awards other than
Incentive Stock Options may be granted to employees (including officers) or
directors of or consultants to the Company or any Affiliate or to Trusts of any
such employee, director or consultant.
(b) A director shall in no event be eligible for the benefits of the
Plan (other than from a Director NQSO under Section 6 of the Plan) unless and
until such director is expressly declared eligible to participate in the Plan by
action of the Board or the Committee, and only if, at any time discretion is
exercised by the Board or the Committee in the selection of a director as a
person to whom Stock Awards may be granted, or in the determination of the
number of shares which may be covered by Stock Awards granted to a director, the
Plan complies with the requirements of Rule 16b-3 promulgated under the Exchange
Act, as from time to time in effect. The Board shall otherwise comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act, as from time to
time in effect. Notwithstanding the foregoing, the restrictions set forth in
this paragraph 4(b) shall not apply if the Board or Committee expressly declares
that such restrictions shall not apply.
(c) No person shall be eligible for the grant of an Incentive Stock
Option under the Plan if, at the time of grant, such person owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such Incentive
Stock Option is at least one hundred and ten percent (110%) of the fair market
value of the Common Stock at the date of grant and the Incentive Stock Option is
not exercisable after the expiration of five (5) years from the date of grant.
(d) Stock Awards shall be limited to a maximum of 2,000,000 shares of
Common Stock per person per calendar year.
5. TERMS OF DISCRETIONARY STOCK OPTIONS.
------------------------------------
An option granted pursuant to this Section 5 (a "Discretionary Stock
Option") shall be in such form and shall contain such terms and conditions as
the Board or the Committee shall deem appropriate. The provisions of separate
Options need not be identical,
4
but each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) the substance of each of the following
provisions:
(a) No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) The exercise price of each Incentive Stock Option and each
Nonqualified Stock Option shall be not less than one hundred percent (100%) of
the fair market value of the Common Stock subject to the Option on the date the
Option is granted.
(c) The purchase price of Common Stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations,
either: (i) in cash at the time the Option is exercised; or (ii) at the
discretion of the Board or the Committee, either at the time of grant or
exercise of the Option (A) by delivery to the Company of shares of Common Stock
that have been held for the period required to avoid a charge to the Company's
reported earnings and valued at the fair market value on the date of exercise,
(B) according to a deferred payment or other arrangement with the person to whom
the Option is granted or to whom the Option is transferred pursuant to paragraph
5(d), or (C) in any other form of legal consideration that may be acceptable to
the Board or the Committee in their discretion; including but not limited to
payment of the purchase price pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which results in the receipt of cash
(or a check) by the Company before Common Stock is issued or the receipt of
irrevocable instruction to pay the aggregate exercise price to the Company from
the sales proceeds before Common Stock is issued.
In the case of any deferred payment arrangement, interest shall be payable
at least annually and shall be charged at not less than the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(d) An Option granted to a natural person shall be exercisable during
the lifetime of such person only by such person, provided that such person
during such person's lifetime may designate a Trust to be such person's
beneficiary with respect to any Incentive Stock Options granted after February
25, 1992 and with respect to any Nonqualified Stock Options, and such
beneficiary shall, after the death of the person to whom the Option was granted,
have all the rights that such person has while living, including the right to
exercise the Option. In the absence of such designation, after the death of the
person to whom the Option is granted, the Option shall be exercisable by the
person or persons to whom the optionee's rights under such Option pass by will
or by the laws of descent and distribution.
(e) The total number of shares of Common Stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). From
5
time to time during each of such installment periods, the Option may become
exercisable ("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period and/or any prior period as to which the Option was not fully
exercised. During the remainder of the term of the Option (if its term extends
beyond the end of the installment periods), the Option may be exercised from
time to time with respect to any shares then remaining subject to the Option.
The provisions of this paragraph 5(e) are subject to any Option provisions
governing the minimum number of shares as to which an Option may be exercised.
(f) The Company may require any optionee, or any person to whom an
Option is transferred under paragraph 5(d), as a condition of exercising any
such Option: (i) to give written assurances satisfactory to the Company as to
such person's knowledge and experience in financial and business matters and/or
to employ a purchaser representative who has such knowledge and experience in
financial and business matters, and that such person is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the Common Stock subject to the
Option for such person's own account and not with any present intention of
selling or otherwise distributing the Common Stock. These requirements, and any
assurances given pursuant to such requirements, shall be inoperative if: (x) the
issuance of the shares upon the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"); or (y) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities law.
(g) An Option shall terminate three (3) months after termination of
the optionee's employment or relationship as a consultant or director with the
Company or an Affiliate, unless: (i) such termination is due to the optionee's
permanent and total disability, within the meaning of Section 422(c)(6) of the
Code and with such permanent and total disability being certified by the Social
Security Administration prior to such termination, in which case the Option may,
but need not, provide that it may be exercised at any time within one (1) year
following such termination of employment or relationship as a consultant or
director; (ii) the optionee dies while in the employ of or while serving as a
consultant or director to the Company or an Affiliate, or within not more than
three (3) months after termination of such employment or relationship as a
consultant or director, in which case the Option may, but need not, provide that
it may be exercised at any time within eighteen (18) months following the death
of the optionee by the person or persons to whom the optionee's rights under
such Option pass by will or by the laws of descent and distribution; or (iii)
the Option by its term specifies
6
either (A) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a consultant or
director with the Company or an Affiliate; or (B) that it may be exercised more
than three (3) months after termination of the optionee's employment or
relationship as a consultant or director with the Company or an Affiliate. This
paragraph 5(g) shall not be construed to extend the term of any Option or to
permit anyone to exercise the Option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any Option is
exercisable from the amount exercisable on the date of termination of the
optionee's employment or relationship as a consultant or director.
(h) The Option may, but need not, include a provision whereby the
optionee may elect at any time during the term of the optionee's employment or
relationship as a consultant or director with the Company or any Affiliate to
exercise the Option as to any part or all of the shares subject to the Option
prior to the stated vesting dates of the Option. Any shares so purchased from
any unvested installment or Option may be subject to a repurchase right in favor
of the Company or to any other restriction the Board or the Committee determines
to be appropriate.
(i) To the extent provided by the terms of an Option, each optionee
may satisfy any federal, state or local tax withholding obligation relating to
the exercise of such Option by any of the following means or by a combination of
such means: (i) tendering a cash payment; (ii) authorizing the Company to
withhold from the shares of the Common Stock otherwise issuable to the optionee
as a result of the exercise of the Option a number of shares having a fair
market value less than or equal to the amount of the Company's required minimum
statutory withholding; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock having a fair market value less than or equal to the
amount of the Company's required minimum statutory withholding.
(j) Without in any way limiting the authority of the Board or
Committee to make or not to make grants of Discretionary Stock Options under
this Section 5, the Board or Committee shall have the authority (but not an
obligation) to include as part of any Option agreement a provision entitling the
optionee to a further Option (a "Re-Load Option") in the event the optionee
exercises the Option evidenced by the Option agreement, in whole or in part, by
surrendering other shares of Common Stock in accordance with this Plan and the
terms and conditions of the Option agreement. Any such Re-Load Option (i) shall
be for a number of shares equal to the number of shares surrendered as part or
all of the exercise price of such Option; (ii) shall have an expiration date
which is the same as the expiration date of the Option the exercise of which
gave rise to such Re-Load Option; and (iii) shall have an exercise price which
is equal to one hundred percent (100%) of the fair market value of the Common
Stock subject to the Re-Load Option on the date of exercise of the original
Option or, in the case of a
7
Re-Load Option which is an Incentive Stock Option and which is granted to a 10%
stockholder (as defined in paragraph 4(c)), shall have an exercise price which
is equal to one hundred and ten percent (110%) of the fair market value of the
Common Stock subject to the Re-Load Option on the date of exercise of the
original Option.
Any such Re-Load Option may be an Incentive Stock Option or a
Nonqualified Stock Option, as the Board or Committee may designate at the time
of the grant of the original Option, provided, however, that the designation of
any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollars ($100,000) annual limitation on exercisability of
Incentive Stock Options described in paragraph 3(c) of the Plan and in Section
422(d) of the Code. There shall be no Re-Load Option on a Re-Load Option. Any
such Re-Load Option shall be subject to the availability of sufficient shares
under paragraph 3(a) and shall be subject to such other terms and conditions as
the Board or Committee may determine.
6. TERMS OF NON-DISCRETIONARY OPTIONS
----------------------------------
(a) On January 27 of each year, each person who is at that time an
Eligible Director of the Company, (as defined in paragraph 6(k)), shall
automatically be granted under the Plan, without further action by the Company,
the Board, or the Company's stockholders, a Nonqualified Stock Option (a
"Director NQSO") to purchase sixteen thousand (16,000) shares of Common Stock on
the terms and conditions set forth herein. An Eligible Director may designate
that such Director NQSO be granted in the name of a Trust instead of in the name
of such Eligible Director. The Director NQSO shall be on the terms and
conditions set forth herein and should the date of grant set forth above be a
Saturday, Sunday or legal holiday, such grant shall be made on the next business
day.
(b) Each person who becomes an Eligible Director, shall, upon the
date such person first becomes an Eligible Director, automatically be granted
under the Plan, without further action by the Company, the Board, or the
Company's stockholders, a Director NQSO to purchase sixty thousand (60,000)
shares of Common Stock on the terms and conditions set forth herein. An Eligible
Director may designate that such Director NQSO be granted in the name of a Trust
instead of in the name of such Eligible Director. The Director NQSO shall be on
the terms and conditions set forth herein and should the date of grant set forth
above be a Saturday, Sunday or legal holiday, such grant shall be made on the
next business day.
(c) Each Director NQSO granted pursuant to this Section 6 (or any
Director Re-Load Option granted pursuant to paragraph 6(j)) shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The provisions of separate Director NQSO's need not be
identical, but each
8
Director NQSO shall include (through incorporation of provisions hereof
by reference in the Director NQSO or otherwise) the substance of each of the
following provisions as set forth in paragraphs 6(d) through 6(j), inclusive.
(d) The term of each Director NQSO shall be ten (10) years from the
date it was granted.
(e) The exercise price of each Director NQSO shall be one
hundred percent (100%) of the fair market value of the Common Stock subject to
such Director NQSO on the date such Director NQSO is granted.
(f) The purchase price of Common Stock acquired pursuant to a
Director NQSO shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Director NQSO is exercised; (ii)
by delivery to the Company of shares of Common Stock that have been held for the
period required to avoid a charge to the Company's reported earnings and valued
at their fair market value on the date of exercise; or (iii) pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
which results in the receipt of cash (or a check) by the Company before Common
Stock is issued or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds before Common Stock is
issued.
(g) A Director NQSO shall be exercisable during the lifetime of the
Eligible Director with respect to whom it was granted only by the person to whom
it was granted (whether the Eligible Director or a Trust), provided that such
person during the Eligible Director's lifetime may designate a Trust to be a
beneficiary with respect to the Director NQSO, and such beneficiary shall, after
the death of the Eligible Director to whom the Director NQSO was granted, have
all of the rights designated for such beneficiary. In the absence of such
designation, after the death of the Eligible Director with respect to whom the
Director NQSO was granted, if such Director NQSO was granted to the Eligible
Director, the Director NQSO shall be exercisable by the person or persons to
whom the optionee's rights under such option pass by will or by the laws of
descent and distribution.
(h) A Director NQSO shall not vest with respect to an Eligible
Director, or the affiliate of such Eligible Director, as the case may be, (i)
unless the Eligible Director, has, at the date of grant, provided three (3)
years of prior continuous service as an Eligible Director, or (ii) until the
date upon which such Eligible Director has provided one year of continuous
service as an Eligible Director following the date of grant of such Director
NQSO, whereupon such Director NQSO shall become fully vested and exercisable in
accordance with its terms.
(i) The Company may require any optionee under this Section 6, or
any person to whom a Director NQSO is transferred under paragraph 6(g), as a
condition of exercising any such option: (i) to give written assurances
satisfactory to the Company as to
9
such person's knowledge and experience in financial and business matters and/or
to employ a purchaser representative who has such knowledge and experience in
financial and business matters, and that such person is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Director NQSO; and (ii) to give written assurances satisfactory
to the Company stating that such person is acquiring the Common Stock subject to
the Director NQSO for such person's own account and not with any present
intention of selling or otherwise distributing the stock. These requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
(i) the issuance of the shares upon the exercise of the Director NQSO has been
registered under a then currently effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), or (ii), as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws.
(j) Subject to the last sentence of this paragraph 6(j), each
Director NQSO shall include a provision entitling the optionee to a further
Nonqualified Stock Option (a "Director Re-Load Option") in the event the
optionee exercises the Director NQSO evidenced by the Director NQSO grant, in
whole or in part, by surrendering other shares of Common Stock in accordance
with the Plan and the terms of the Director NQSO grant. Any such Director
Re-Load Option (i) shall be for a number of shares equal to the number of shares
surrendered as part or all of the exercise price of the original Director NQSO;
(ii) shall have an expiration date which is the same as the expiration date of
the original Director NQSO; and (iii) shall have an exercise price which is
equal to one hundred percent (100%) of the fair market value of the Common Stock
subject to the Director Re-Load Option on the date of exercise of the original
Director NQSO. Any such Director Re-Load Option shall be subject to the
availability of sufficient shares under paragraph 3(a). There shall be no
Director Re-Load Option on a Director Re-Load Option. Notwithstanding anything
else in the Plan to the contrary, this paragraph 6(j) shall be of no force and
effect from and after June 23, 1998.
(k) For purposes of this Section 6, the term "Eligible Director"
shall mean a member of the Board who is not an employee of the Company or any
Affiliate, and the term "affiliate" shall mean a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Eligible Director.
7. TERMS OF STOCK BONUSES AND PURCHASES OF
---------------------------------------
RESTRICTED STOCK.
----------------
Each stock bonus or restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements
10
may change from time to time, and the terms and conditions of separate
agreements need not be identical, but each stock bonus or restricted stock
purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions as appropriate:
(a) The purchase price under each stock purchase agreement shall be
such amount as the Board or Committee shall determine and designate in such
agreement. Notwithstanding the foregoing, the Board or the Committee may
determine that eligible participants in the Plan may be awarded stock pursuant
to a stock bonus agreement in consideration for past services actually rendered
to the Company or for its benefit.
(b) No rights under a stock bonus or restricted stock purchase
agreement shall be assignable by any participant under the Plan, either
voluntarily or by operation of law, except where such assignment is required by
law or expressly authorized by the terms of the applicable stock bonus or
restricted stock purchase agreement.
(c) The purchase price of stock acquired pursuant to a stock purchase
agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board or the Committee, according to a deferred payment or
other arrangement with the person to whom the Common Stock is sold; or (iii) in
any other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion; including but not limited to payment of the
purchase price pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board which results in the receipt of cash (or a check)
by the Company before Common Stock is issued or the receipt of irrevocable
instruction to pay the aggregate exercise price of the Company from the sales
proceeds before Common Stock is issued. Notwithstanding the foregoing, the Board
or the Committee to which administration of the Plan has been delegated may
award Common Stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.
(d) Shares of Common Stock sold or awarded under the Plan may, but need
not, be subject to a repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board or the Committee.
(e) In the event a person ceases to be an employee of or ceases to
serve as a director or consultant to the Company or an Affiliate, the Company
may repurchase or otherwise reacquire any or all of the shares of Common Stock
held by that person which have not vested as of the date of termination under
the terms of the stock bonus or restricted stock purchase agreement between the
Company and such person.
8. COVENANTS OF THE COMPANY.
------------------------
(a) During the terms of the Stock Awards granted under the Plan,
the
11
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards up to the number of shares of Common Stock
authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of Common Stock under the Stock Awards granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award granted under
the Plan or any Common Stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Stock Awards unless and until such authority
is obtained.
9. USE OF PROCEEDS FROM COMMON STOCK.
---------------------------------
Proceeds from the sale of Common Stock pursuant to Stock Awards
granted under the Plan shall constitute general funds of the Company.
10. MISCELLANEOUS.
-------------
(a) The Board or Committee shall have the power to accelerate the time
during which a Stock Award may be exercised or the time during which a Stock
Award or any part thereof will vest, notwithstanding the provisions in the Stock
Award stating the time during which it may be exercised or the time during which
it will vest. Each Discretionary Stock Option providing for vesting pursuant to
paragraph 5(e) shall also provide that if the employee's employment or a
director's or consultant's affiliation with the Company or an Affiliate of the
Company formed under the laws of the U.S., Puerto Rico or Bermuda is terminated
by reason of death or disability (within the meaning of Title II or XVI of the
Social Security Act and with such permanent and total disability certified by
the Social Security Administration or the comparable governmental authority of
an Affiliate, as applicable, prior to such termination), then the vesting
schedule of Discretionary Stock Options granted to such employee, director or
consultant or to the Trusts of such employee, director or consultant shall be
accelerated by twelve months for each full year the employee has been employed
by or the director or consultant has been affiliated with the Company and an
Affiliate of the Company formed under the laws of the U.S., Puerto Rico or
Bermuda. Discretionary Stock Options granted under the Plan that are outstanding
on February 25, 1992, shall be amended to include the accelerated vesting upon
death provided for in the preceding sentence of this paragraph 10(a) and
12
Discretionary Stock Options granted under the Plan that are outstanding on June
18, 1996, shall be amended to include the accelerated vesting upon disability
provided for in the preceding sentence of this paragraph 10(a).
(b) Neither an optionee nor any person to whom an Option is transferred
under the provisions of the Plan shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to such Option
unless and until such person has satisfied all requirements for exercise of the
Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any eligible employee, consultant,
director, optionee or holder of Stock Awards under the Plan any right to
continue in the employ of the Company or any Affiliate or to continue acting as
a consultant or director or shall affect the right of the Company or any
Affiliate to terminate the employment or consulting relationship or directorship
of any eligible employee, consultant, director, optionee or holder of Stock
Awards under the Plan with or without cause. In the event that a holder of Stock
Awards under the Plan is permitted or otherwise entitled to take a leave of
absence, the Company shall have the unilateral right to (i) determine whether
such leave of absence will be treated as a termination of employment or
relationship as consultant or director for purposes hereof, and (ii) suspend or
otherwise delay the time or times at which exercisability or vesting would
otherwise occur with respect to any outstanding Stock Awards under the Plan.
11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
----------------------------------------
If any change is made in the Common Stock subject to the Plan, or
subject to any Stock Award granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), the Plan and
outstanding Stock Awards will be appropriately adjusted in the class(es) and
maximum number of shares subject to the Plan, the maximum number of shares which
may be granted to a participant in a calendar year, the class(es) and number of
shares and price per share of stock subject to outstanding Stock Awards, and the
number of shares of Common Stock to be granted as provided for in paragraphs
6(a) and 6(b). Such adjustment shall be made by the Board or the Committee, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
"transaction not involving the receipt of consideration".)
13
12. CHANGE OF CONTROL.
-----------------
(a) Notwithstanding anything to the contrary in this Plan, in the event
of a Change in Control (as hereinafter defined), then, to the extent permitted
by applicable law: (i) the time during which Stock Awards become vested shall
automatically be accelerated so that the unvested portions of all Stock Awards
shall be vested prior to the Change in Control and (ii) the time during which
the Options may be exercised shall automatically be accelerated to prior to the
Change in Control. Upon and following the acceleration of the vesting and
exercise periods, at the election of the holder of the Stock Award, the Stock
Award may be: (x) exercised (with respect to Options) or, if the surviving or
acquiring corporation agrees to assume the Stock Awards or substitute similar
stock awards, (y) assumed; or (z) replaced with substitute stock awards. Options
not exercised, substituted or assumed prior to or upon the Change in Control
shall be terminated.
(b) For purposes of the Plan, a "Change of Control" shall be deemed to
have occurred at any of the following times:
(i) upon the acquisition (other than from the Company) by
any person, entity or "group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act (excluding, for this purpose, the Company or its
affiliates, or any employee benefit plan of the Company or its affiliates which
acquires beneficial ownership of voting securities of the Company), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of either the then outstanding
shares of Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors; or
(ii) at the time individuals who, as of April 2, 1991,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to April 2, 1991, whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of the Plan,
considered as though such person were a member of the Incumbent Board; or
(iii) immediately prior to the consummation by the Company of
a reorganization, merger, consolidation, (in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the
14
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's then outstanding voting
securities) or a liquidation or dissolution of the Company or of the sale of all
or substantially all of the assets of the Company; or
(iv) the occurrence of any other event which the Incumbent Board
in its sole discretion determines constitutes a Change of Control.
13. QUALIFIED DOMESTIC RELATIONS ORDERS
-----------------------------------
(a) Anything in the Plan to the contrary notwithstanding, rights under
Stock Awards may be assigned to an Alternate Payee to the extent that a QDRO so
provides. (The terms "Alternate Payee" and "QDRO" are defined in paragraph 13(c)
below.) The assignment of a Stock Award to an Alternate Payee pursuant to a QDRO
shall not be treated as having caused a new grant. The transfer of an Incentive
Stock Option to an Alternate Payee may, however, cause it to fail to qualify as
an Incentive Stock Option. If a Stock Award is assigned to an Alternate Payee,
the Alternate Payee generally has the same rights as the grantee under the terms
of the Plan; provided however, that (i) the Stock Award shall be subject to the
same vesting terms and exercise period as if the Stock Award were still held by
the grantee, (ii) an Alternate Payee may not transfer a Stock Award and (iii) an
Alternate Payee is ineligible for Re-Load Options described at paragraph 5(j) or
Director Re-Load Options described at paragraph 6(j).
(b) In the event of the Plan administrator's receipt of a domestic
relations order or other notice of adverse claim by an Alternate Payee of a
grantee of a Stock Award, transfer of the proceeds of the exercise of such Stock
Award, whether in the form of cash, stock or other property, may be suspended.
Such proceeds shall thereafter be transferred pursuant to the terms of a QDRO or
other agreement between the grantee and Alternate Payee. A grantee's ability to
exercise a Stock Award may be barred if the Plan administrator receives a court
order directing the Plan administrator not to permit exercise.
(c) The word "QDRO" as used in the Plan shall mean a court order (i)
that creates or recognizes the right of the spouse, former spouse or child (an
"Alternate Payee") of an individual who is granted a Stock Award to an interest
in such Stock Award relating to marital property rights or support obligations
and (ii) that the administrator of the Plan determines would be a "qualified
domestic relations order," as that term is defined in section 414(p) of the Code
and section 206(d) of the Employee Retirement Income Security Act ("ERISA"), but
for the fact that the Plan is not a plan described in section 3(3) of ERISA.
15
14. AMENDMENT OF THE PLAN.
---------------------
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 10 relating to adjustments upon
changes in the Common Stock, no amendment shall be effective unless approved by
the stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
(i) increase the number of shares reserved for Stock Awards
under the Plan;
(ii) modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422(b) of
the Code); or
(iii) modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422(b) of the Code.
(b) The Board may in its sole discretion submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments
to the Plan intended to satisfy the requirements of Section 162(m) of the Code
and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation to certain executive officers.
(c) It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide optionees with
the maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to employee Incentive Stock
Options and/or to bring the Plan and/or Options granted under it into compliance
therewith.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan,
unless: (i) the Company requests the consent of the person to whom the Stock
Award was granted; and (ii) such person consents in writing.
15. TERMINATION OR SUSPENSION OF THE PLAN.
-------------------------------------
(a) The Board may suspend or terminate the Plan at any time. No
Stock Awards may be granted under the Plan while the Plan is suspended or after
it is terminated. No Incentive Stock Options may be granted under the Plan after
February 22, 2009.
(b) Rights and obligations under any Stock Awards granted while the
Plan is in effect shall not be impaired by suspension or termination of the
Plan, except with the consent of the person to whom the Stock Award was granted.
16
16. EFFECTIVE DATE OF PLAN.
----------------------
The Plan shall become effective as determined by the Board.
17
EX-10.40
4
dex1040.txt
AMENDED AND RESTATED 1997 SPECIAL NON-OFFICER PLAN
Exhibit 10.40
AMGEN INC.
AMENDED AND RESTATED 1997 SPECIAL NON-OFFICER EQUITY INCENTIVE
PLAN
1. PURPOSE.
-------
(a) The purpose of the 1997 Special Non-Officer Equity
Incentive Plan (the "Plan") is to provide a means by which non-Officer employees
of and consultants to Amgen Inc., a Delaware corporation (the "Company"), and
employees of and consultants to the Company's Affiliates, as defined in
paragraph 1(b), directly, or indirectly through Trusts, may be given an
opportunity to benefit from increases in value of the stock of the Company
through the granting of (i) stock options, (ii) stock bonuses, and (iii) rights
to purchase restricted stock, all as defined below.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of non-Officer employees of the Company and persons serving as
consultants to the Company, to secure and retain the services of persons capable
of filling such positions, and to provide incentives for such persons to exert
maximum efforts for the success of the Company.
(d) The Company intends that the rights issued under the Plan
("Stock Awards") shall, in the discretion of the Board of Directors of the
Company (the "Board") or any committee to which responsibility for
administration of the Plan has been delegated pursuant to paragraph 2(c), be
either (i) stock options granted pursuant to Section 5 hereof, which option
shall not qualify as incentive stock options as that term is used in Section 422
of the Code ("Options") or (ii) stock bonuses or rights to purchase restricted
stock granted pursuant to Section 6 hereof.
(e) The word "Trust" as used in the Plan shall mean a trust
created for the benefit of the employee or consultant, his or her spouse, or
members of their immediate family. The word optionee shall mean the person to
whom the option is granted or the employee or consultant for whose benefit the
option is granted to a Trust, as the context shall require.
2. ADMINISTRATION.
--------------
(a) The Plan shall be administered by the Board unless and
until the Board delegates administration to a committee, as provided in
paragraph 2(c).
(b) The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how Stock Awards
shall be granted; whether a Stock Award will be an Option, a stock bonus, a
right to purchase restricted stock, or a combination of the foregoing; the
provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to purchase or receive stock
pursuant to a Stock Award; and the number of shares with respect to which Stock
Awards shall be granted to each such person.
(2) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award, in a manner
and to the extent it shall deem necessary or expedient to make the Plan fully
effective.
(3) To amend the Plan as provided in Section 13.
(4) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members of the Board (the
"Committee") which members may be non-employee directors and outside directors.
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.
Notwithstanding anything else in this paragraph 2(c) to the contrary, at any
time the Board or the Committee may delegate to a committee of one or more
members of the Board the authority to grant or amend options to all employees or
consultants or any portion or class thereof.
(d) The term "non-employee director" shall mean a member of
the Board who (i) is not currently an officer of the Company or a parent or
subsidiary of the Company (as defined in Rule 16a-1(f) promulgated by the
Securities and Exchange Commission under Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or an employee of the Company or a
parent or subsidiary of the Company; (ii) does not receive compensation from the
Company or a parent or subsidiary of the Company for services rendered in any
capacity other than as a member of the Board (including a consultant) in an
amount required to be disclosed to the Company's stockholders under Rule 404 of
Regulation S-K promulgated by the Securities and Exchange Commission ("Rule
404"); (iii) does not possess an interest in any other transaction required to
be disclosed under Rule 404; or (iv) is not engaged in a business relationship
required to be disclosed under Rule 404, as all of these provisions are
interpreted by the Securities and Exchange Commission under Rule 16b-3
promulgated under the Exchange Act.
2
(e) The term "outside director," as used in this Plan, shall
mean an administrator of the Plan, whether a member of the Board or of any
Committee to which responsibility for administration of the Plan has been
delegated pursuant to paragraph 2(c), who is considered to be an "outside
director" in accordance with the rules, regulations or interpretations of
Section 162(m) of the Code.
3. SHARES SUBJECT TO THE PLAN.
--------------------------
(a) Subject to the provisions of Section 10 relating to
adjustments upon changes in stock, the stock that may be issued pursuant to
Stock Awards granted under the Plan shall not exceed in the aggregate
Eighty-Nine Million (89,000,000) shares of the Company's $.0001 par value common
stock (the "Common Stock"). If any Stock Award granted under the Plan shall for
any reason expire or otherwise terminate without having been exercised in full,
the Common Stock not purchased under such Stock Award shall again become
available for the Plan. Shares repurchased by the Company pursuant to any
repurchase rights reserved by the Company pursuant to the Plan shall not be
available for subsequent issuance under the Plan.
(b) The Common Stock subject to the Plan may be unissued
shares or reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
-----------
(a) Stock Awards may be granted to non-Officer employees of
the Company, or employees of any Affiliate, or consultants to the Company or any
Affiliate, or to Trusts of any such employee or consultant. Notwithstanding any
other provisions in this Plan to the contrary, Officers of the Company shall not
be eligible to receive Stock Awards. The term "Officer" shall include any
natural person who is elected as a corporate officer of the Company by the
Board.
(b) Stock Awards shall be limited to a maximum of 2,000,000
shares of Common Stock per person per calendar year.
5. TERMS OF OPTIONS.
----------------
An Option granted pursuant to this Section 5 shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:
(a) No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) The exercise price of each Option shall be not less than
one hundred percent (100%) of the fair market value of the Common Stock subject
to the Option on the date the Option is granted.
3
(c) The purchase price of Common Stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either: (i) in cash at the time the Option is exercised; or (ii) at
the discretion of the Board or the Committee, either at the time of grant or
exercise of the Option (A) by delivery to the Company of shares of Common Stock
that have been held for the period required to avoid a charge to the Company's
reported earnings and valued at the fair market value of the shares of Common
Stock on the date of exercise, (B) according to a deferred payment or other
arrangement with the person to whom the Option is granted or to whom the Option
is transferred pursuant to paragraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee in their
discretion, including but not limited to payment of the purchase price pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve
Board which results in the receipt of cash (or a check) by the Company before
Common Stock is issued or, prior to the issuance of Common Stock, receipt by the
Company of evidence from the person authorized to sell the underlying stock that
they have received irrevocable instructions from the option holder to pay to the
Company the aggregate exercise price of the Option from the sale proceeds.
In the case of any deferred payment arrangement, interest
shall be payable at least annually and shall be charged at not less than the
minimum rate of interest necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.
(d) An Option granted to a natural person shall be exercisable
during the lifetime of such person only by such person, provided that such
person during such person's lifetime may designate a Trust to be such person's
beneficiary, and such beneficiary shall, after the death of the person to whom
the Option was granted, have all the rights that such person had while living,
including the right to exercise the Option. In the absence of such designation,
after the death of the person to whom the Option is granted, the Option shall be
exercisable by the person or persons to whom the optionee's rights under such
Option pass by will or by the laws of descent and distribution.
(e) The total number of shares of Common Stock subject to an
Option may, but need not, be allotted in periodic installments (which may, but
need not, be equal). From time to time during each of such installment periods,
the Option may become exercisable ("vest") with respect to some or all of the
shares allotted to that period, and may be exercised with respect to some or all
of the shares allotted to such period and/or any prior period as to which the
Option was not fully exercised. During the remainder of the term of the Option
(if its term extends beyond the end of the installment periods), the Option may
be exercised from time to time with respect to any shares then remaining subject
to the Option. The provisions of this paragraph 5(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
(f) The Company may require any optionee, or any person to
whom an Option is transferred under paragraph 5(d), as a condition of exercising
any such Option: (i) to give written assurances satisfactory to the Company as
to such person's knowledge and experience in financial and business matters
and/or the employment of such person's purchaser
4
representative who has such knowledge and experience in financial and business
matters, and that such person is capable of evaluating, alone or together with
the purchaser representative, the merits and risks of exercising the Option; and
(ii) to give written assurances satisfactory to the Company stating that such
person is acquiring the Common Stock subject to the Option for such person's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if: (x) the issuance of the shares upon the
exercise of the Option has been registered under a then currently effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"); or (y) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities law.
(g) An Option shall terminate three (3) months after
termination of the optionee's employment or relationship as a consultant with
the Company or an Affiliate, unless: (i) such termination is due to the
optionee's permanent and total disability, within the meaning of Section
422(c)(6) of the Code and with such permanent and total disability being
certified by the Social Security Administration prior to such termination, in
which case the Option may, but need not, provide that it may be exercised at any
time within one (1) year following such termination of employment or
relationship as a consultant; (ii) the optionee dies while in the employ of or
while serving as a consultant to the Company or an Affiliate, or within not more
than three (3) months after termination of such employment or relationship as a
consultant, in which case the Option may, but need not, provide that it may be
exercised at any time within eighteen (18) months following the death of the
optionee by the person or persons to whom the optionee's rights under such
Option pass by will or by the laws of descent and distribution; or (iii) the
Option by its term specifies either (A) that it shall terminate sooner than
three (3) months after termination of the optionee's employment or relationship
as a consultant with the Company or an Affiliate; or (B) that it may be
exercised more than three (3) months after termination of the optionee's
employment or relationship as a consultant with the Company or an Affiliate.
Notwithstanding any other provision in this Plan to the contrary, (x) no portion
of an Option shall be exercisable by any person to the extent that the Company's
federal income tax deduction with respect to the exercise of such portion of the
Option would be subject to disallowance pursuant to Section 162(m) of the Code,
or any successor thereto, and (y) subject to paragraph 5(a), if any portion of
an Option is not exercisable solely because of the preceding clause (x) on the
date on which such Option would otherwise terminate pursuant to the foregoing
provisions of this paragraph 5(g), such Option shall not terminate until three
(3) months after such Option thereafter ceases to be subject to the preceding
clause (x). Subject to the preceding sentence, any portion of an Option which is
not exercisable on the date on which an optionee's employment or relationship as
a consultant with the Company or an Affiliate ceases shall terminate immediately
on such date. This paragraph 5(g) shall not be construed to extend the term of
any Option or to permit anyone to exercise the Option after expiration of its
term, nor shall it be construed to increase the number of shares as to which any
Option is exercisable from the amount exercisable on the date of termination of
the optionee's employment or relationship as a consultant.
(h) The Option may, but need not, include a provision whereby
the optionee may elect at any time during the term of the optionee's employment
or relationship as a
5
consultant with the Company or any Affiliate to exercise the Option as to any
part or all of the shares subject to the Option prior to the stated vesting
dates of the Option. Any shares so purchased from any unvested installment or
Option may be subject to a repurchase right in favor of the Company or to any
other restriction the Board or the Committee determines to be appropriate.
(i) To the extent provided by the terms of an Option, each
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such Option by any of the following means or by a
combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold from the shares of the Common Stock otherwise issuable to
the optionee as a result of the exercise of the Option a number of shares having
a fair market value less than or equal to the amount of the Company's required
minimum statutory withholding; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock having a fair market value less than or
equal to the amount of the Company's required minimum statutory withholding.
6. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
--------------------------------------------------------
Each stock bonus or restricted stock purchase agreement shall
be in such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate agreements need not be identical, but each stock
bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions as appropriate:
(a) The purchase price under each stock purchase agreement
shall be such amount as the Board or Committee shall determine and designate in
such agreement. Notwithstanding the foregoing, the Board or the Committee may
determine that eligible participants in the Plan may be awarded stock pursuant
to a stock bonus agreement in consideration for past services actually rendered
to the Company or for its benefit.
(b) No rights under a stock bonus or restricted stock purchase
agreement shall be assignable by any participant under the Plan, either
voluntarily or by operation of law, except where such assignment is required by
law or expressly authorized by the terms of the applicable stock bonus or
restricted stock purchase agreement.
(c) The purchase price of stock acquired pursuant to a stock
purchase agreement shall be paid either: (i) in cash at the time of purchase;
(ii) at the discretion of the Board or the Committee, according to a deferred
payment or other arrangement with the person to whom the Common Stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in their discretion; including but not limited to payment
of the purchase price pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the receipt of cash
(or a check) by the Company before Common Stock is issued or the receipt of
irrevocable instruction to pay the aggregate exercise price of the Company from
the sales proceeds before Common Stock is
6
issued. Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan has been delegated may award Common Stock pursuant to
a stock bonus agreement in consideration for past services actually rendered to
the Company or for its benefit.
(d) Shares of Common Stock sold or awarded under the Plan may,
but need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee.
(e) In the event a person ceases to be an employee of or
ceases to serve as a consultant to the Company or an Affiliate, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held
by that person which have not vested as of the date of termination under the
terms of the stock bonus or restricted stock purchase agreement between the
Company and such person.
7. COVENANTS OF THE COMPANY.
------------------------
(a) During the terms of the Stock Awards granted under the
Plan, the Company shall keep available at all times the number of shares of
Common Stock required to satisfy such Stock Awards up to the number of shares of
Common Stock authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of Common Stock under the Stock Awards granted
under the Plan; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any Stock Award
granted under the Plan or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority that counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under
the Plan, the Company shall be relieved from any liability for failure to issue
and sell Common Stock upon exercise of such Stock Awards unless and until such
authority is obtained.
8. USE OF PROCEEDS FROM COMMON STOCK.
---------------------------------
Proceeds from the sale of Common Stock pursuant to Stock
Awards granted under the Plan shall constitute general funds of the Company.
9. MISCELLANEOUS.
-------------
(a) The Board or Committee shall have the power to accelerate
the time during which a Stock Award may be exercised or the time during which a
Stock Award or any part thereof will vest, notwithstanding the provisions in the
Stock Award stating the time during which it may be exercised or the time during
which it will vest. Each Option providing for vesting pursuant to paragraph 5(e)
shall also provide that if the employee's employment or a consultant's
affiliation with the Company or an Affiliate of the Company formed under the
laws of the U.S., Puerto Rico or Bermuda is terminated by reason of death or
disability (within the meaning of Title II or XVI of the Social Security Act and
with such permanent and total
7
disability certified by the Social Security Administration or the comparable
governmental authority of an Affiliate, as applicable, prior to such
termination), then the vesting schedule of Options granted to such employee or
consultant or to the Trusts of such employee or consultant shall be accelerated
as of the date of such termination by twelve months for each full year the
employee has been employed by or the consultant has been affiliated with the
Company and an Affiliate of the Company formed under the laws of the U.S.,
Puerto Rico or Bermuda.
(b) Neither an optionee nor any person to whom an Option is
transferred under the provisions of the Plan shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Option unless and until such person has satisfied all requirements for
exercise of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock
Award granted pursuant thereto shall confer upon any eligible employee,
consultant, optionee or holder of Stock Awards under the Plan any right to
continue in the employ of the Company or any Affiliate or to continue acting as
a consultant or shall affect the right of the Company or any Affiliate to
terminate the employment or consulting relationship of any eligible employee,
consultant, optionee or holder of Stock Awards under the Plan with or without
cause, at any time and with or without notice. In the event that a holder of
Stock Awards under the Plan is permitted or otherwise entitled to take a leave
of absence, the Company shall have the unilateral right to (i) determine whether
such leave of absence will be treated as a termination of employment or
relationship as consultant for purposes hereof, and (ii) suspend or otherwise
delay the time or times at which exercisability or vesting would otherwise occur
with respect to any outstanding Stock Awards under the Plan.
10. ADJUSTMENTS UPON CERTAIN TRANSACTIONS.
-------------------------------------
(a) In the event that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company (other than pursuant
to the conversion of convertible securities), issuance of warrants or other
rights to purchase Common Stock or other securities of the Company, or other
similar corporate transaction or event, in the Board's or the Committee's sole
discretion, affects the Common Stock such that an adjustment is determined by
the Board or the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to Stock Awards, then the Committee or the Board
shall, in such manner as it may deem equitable, may make the following
adjustments to the Plan and with respect to any or all of the outstanding Stock
Awards:
a. the number and kind of shares of Common Stock (or
other securities or property) with respect to which Stock Awards may be
granted under the Plan (including, but not limited to, adjustments of
the limitations in paragraph 3(a) on the maximum number and kind of
shares which may be issued under the Plan and in
8
paragraph 4(b) on the maximum number of shares subject to Stock Awards
which can be granted any person in a calendar year),
b. the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Stock Awards, including
by providing, either by the terms of such Stock Awards or by action
taken prior to the occurrence of such transaction or event, that upon
such event, such Stock Award shall be assumed by a successor or
survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar Stock Awards covering the stock of a
successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices, and
c. the grant or exercise price with respect to any Stock
Award.
(b) In the event that the Board or Committee adjusts any or
all of the outstanding Stock Awards by providing that such Stock Awards shall be
assumed by a successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, rights or awards
covering the stock of a successor or survivor corporation, or a parent or
subsidiary thereof, the Board or the Committee may, in its sole discretion,
determine that the transfer of the optionee's or other holder's employment or
consulting relationship to such successor or survivor corporation or a parent or
subsidiary thereof shall not constitute a cessation of the optionee's or
holder's employment or consulting relationship with the Company or an Affiliate
for the purposes of paragraph 5(g).
(c) Any adjustments made by the Board or the Committee under
paragraphs 10(a) and 10(b) shall be final, binding and conclusive on all
persons.
11. CHANGE OF CONTROL.
-----------------
(a) Notwithstanding anything to the contrary in this Plan, in
the event of a Change in Control (as hereinafter defined), then, to the extent
permitted by applicable law: (i) the time during which Stock Awards become
vested shall automatically be accelerated so that the unvested portions of all
Stock Awards shall be vested prior to the Change in Control and (ii) the time
during which the Options may be exercised shall automatically be accelerated to
immediately prior to the Change in Control. Upon and following the acceleration
of the vesting and exercise periods, at the election of the holder of the Stock
Award, the Stock Award may be: (x) exercised (with respect to Options) or, if
the surviving or acquiring corporation agrees to assume the Stock Awards or
substitute similar stock awards, (y) assumed; or (z) replaced with substitute
stock awards. Options not exercised, substituted or assumed prior to or upon the
Change in Control shall be terminated.
(b) For purposes of the Plan, a "Change of Control" shall be
deemed to have occurred at any of the following times:
(i) upon the acquisition (other than from the Company) by
any person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)
(2) of the Exchange Act
9
(excluding, for this purpose, the Company or its affiliates, or any employee
benefit plan of the Company or its affiliates which acquires beneficial
ownership of voting securities of the Company), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of either the then outstanding shares of Common Stock or the
combined voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors; or
(ii) at the time individuals who, as of December 9, 1997,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to December 9, 1997, whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of the Company, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of the Plan,
considered as though such person were a member of the Incumbent Board; or
(iii) immediately prior to the consummation by the Company
of a reorganization, merger, consolidation, (in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
company's then outstanding voting securities) or a liquidation or dissolution of
the Company or of the sale of all or substantially all of the assets of the
Company; or
(iv) the occurrence of any other event which the Incumbent
Board in its sole discretion determines constitutes a Change of Control.
12. QUALIFIED DOMESTIC RELATIONS ORDERS.
-----------------------------------
(a) Anything in the Plan to the contrary notwithstanding,
rights under Stock Awards may be assigned to an Alternate Payee to the extent
that a QDRO so provides. (The terms "Alternate Payee" and "QDRO" are defined in
paragraph 12(c) below.) The assignment of a Stock Award to an Alternate Payee
pursuant to a QDRO shall not be treated as having caused a new grant. If a Stock
Award is assigned to an Alternate Payee, the Alternate Payee generally has the
same rights as the grantee under the terms of the Plan; provided however, that
(i) the Stock Award shall be subject to the same vesting terms and exercise
period as if the Stock Award were still held by the grantee, and (ii) an
Alternate Payee may not transfer a Stock Award.
(b) In the event of the Plan administrator's receipt of a
domestic relations order or other notice of adverse claim by an Alternate Payee
of a grantee of a Stock Award, transfer of the proceeds of the exercise of such
Stock Award, whether in the form of cash, stock or other property, may be
suspended. Such proceeds shall thereafter be transferred pursuant to
10
the terms of a QDRO or other agreement between the grantee and Alternate Payee.
A grantee's ability to exercise a Stock Award may be barred if the Plan
administrator receives a court order directing the Plan administrator not to
permit exercise.
(c) The word "QDRO" as used in the Plan shall mean a court
order (i) that creates or recognizes the right of the spouse, former spouse or
child (an "Alternate Payee") of an individual who is granted a Stock Award to an
interest in such Stock Award relating to marital property rights or support
obligations and (ii) that the administrator of the Plan determines would be a
"qualified domestic relations order," as that term is defined in section 414(p)
of the Code and section 206(d) of the Employee Retirement Income Security Act
("ERISA"), but for the fact that the Plan is not a plan described in section
3(3) of ERISA.
13. AMENDMENT OF THE PLAN.
---------------------
The Board at any time, and from time to time, may amend the
Plan. Rights and obligations under any Stock Award granted before amendment of
the Plan shall not be impaired by any amendment of the Plan, unless: (i) the
Company requests the consent of the person to whom the Stock Award was granted;
and (ii) such person consents in writing.
14. TERMINATION OR SUSPENSION OF THE PLAN.
-------------------------------------
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on December 9, 2007. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any Stock Awards granted
while the Plan is in effect shall not be impaired by suspension or termination
of the Plan, except with the consent of the person to whom the Stock Award was
granted.
15. EFFECTIVE DATE OF PLAN.
----------------------
The Plan shall become effective as determined by the Board.
11
EX-10.53
5
dex1053.txt
SECOND AMENDMENT TO AMGEN RETIREMENT PLAN
Exhibit 10.53
SECOND AMENDMENT TO THE
AMGEN RETIREMENT AND SAVINGS PLAN
AS AMENDED AND RESTATED EFFECTIVE OCTOBER 15, 2001
The Amgen Retirement and Savings Plan as Amended and Restated Effective
October 15, 2001, and as amended on February 27, 2001 (the "Plan") is hereby
amended to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. This amendment shall also modify the
vesting schedule for Company Contributions, and designate Amgen USA Inc. as a
Participating Company. Except as otherwise provided, this amendment shall be
effective as of January 1, 2002. This amendment shall supersede the provisions
of the plan to the extent those provisions are inconsistent with the provisions
of this amendment.
1. Amgen USA Inc. shall be a Participating Company for so long as Amgen
USA Inc. remains in existence, and Appendix A to the Plan is thereby
amended to include Amgen USA Inc.
2. Article 7 of the Plan shall be amended as follows:
a. The following language is added to the beginning of Article 7
as Section 7.1 and all Sections under Article 7 are hereby
renumbered accordingly, and any references to any Sections
under Article 7 in the Plan are hereby amended to refer to the
Sections as renumbered hereunder:
7.1 100 Percent Vesting. Except for those
-------------------
Participants whose employment with a member
of the Affiliated Group was terminated on or
prior to December 31, 2001, a Participant's
interest in all of his or her Participant
Elected Contributions Account, Qualified
Matching Contributions Account, Qualified
Nonelective Contributions Account, Rollover
Contributions Account, Matching
Contributions Account and Nonelective
Contributions Account shall be 100% vested
and nonforfeitable at all times. If a
Participant's employment with a member of
the Affiliated Group was terminated on or
before December 31, 2001, then Sections
7.2-7.5 shall apply in determining the
vesting of those Accounts.
b. Section 7.2, as hereby amended, shall be re-titled "Vesting of
----------
Participant Elected Contributions Accounts."
------------------------------------------
3. Section 4.1 shall be amended to read:
4.1 Participant Elected Contributions. Each Participant
---------------------------------
whose participation in the Plan is not suspended may
make Participant Elected Contributions to the Trust
Fund pursuant to a Salary Deferral Agreement that
specifies the amount of the contribution. Subject to
the limitations set forth in Section
4.4 and Articles 13-16, the amount of the Participant Elected
Contributions shall be equal to any whole percentage of his or
her Compensation, as the Participant shall elect, except that
this whole percentage shall not exceed 30 percent of his or
her Compensation. Participant Elected Contributions shall be
made through payroll deductions from the Participant's
Compensation. If a Participant elects to make Participant
Elected Contributions, the contributions shall be deemed to be
employer contributions to the Plan for federal income tax
purposes and, to the extent permitted, for purposes of other
federal, state and local taxes. A Participant's election to
make Participant Elected Contributions shall constitute an
election to have the Participant's taxable salary or wages
from the Participating Company reduced by the amount of the
Participant Elected Contributions.
4. Section 4.6 is added to read in its entirety:
4.6 Catch-up Contributions. All Participants who are eligible to
----------------------
make Participant Elected Contributions under this Plan and
who have attained age 50 before the close of the Plan Year
shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Section
414(v) of the Code. Such catch-up contributions shall be
equal to any whole percentage of the Participant's
Compensation, except that this whole percentage shall not
exceed 30% of his or her Compensation, and such catch-up
contributions shall not be taken into account for purposes
of Matching Contributions under Section 5.1 of the Plan.
Such catch-up contributions shall not be taken into account
for purposes of the provisions of the Plan implementing the
required limitations of Sections 402(g) and 415 of the Code.
The Plan shall not be treated as failing to satisfy the
provisions of the Plan implementing the requirements of
Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of
the Code, as applicable, by reason of the making of such
catch-up contributions.
5. Section 5.1 shall be amended to also be subject to the limitations of
Section 4.6 of the Plan.
6. Section 4.4(d) shall be restated in its entirety to read:
(d) Section 415 "Annual Additions" Limit. As it described in
------------------------------------
detail in Article 16, if amounts credited to a Participant's
Accounts during the Plan Year, other than earnings and
Rollover Contributions, exceed the Section 415 "Annual
Additions" Limit, then Participant elected Contributions may
be returned to the Participant.
7. Section 16.1 shall be restated in its entirety to read:
16.1 Limitation on Contributions. Except to the extent permitted
---------------------------
under Section 4.6 of the Plan and Section 414(v) of the Code,
if applicable, the Annual
2
Additions that may be contributed or allocated to a Participant
for any Plan Year shall not exceed the lesser of:
(a) $40,000 as adjusted for increases in the cost-of-living
under Section 415(d) of the Code, or
(b) 100% of the Participant's Section 415 Compensation for
such year.
If a Participant's Annual Additions would exceed the foregoing
limitation, then such Annual Additions shall be reduced by
reducing the components thereof as necessary in the order in
which they are listed in Section 16.5(a). Any amounts so reduced
shall not be included in a Participant's Aggregate 401(k)
Contributions or Aggregate 401(m) Contributions. The limitation
in Section 16.1(b) shall not apply to any amount that otherwise
is an Annual Addition under Section 415(l)(1) or 419A(d)(2) of
the Code.
8. Section 8.8 shall be restated in its entirety to read:
8.8 Small Benefits: Lump Sum. Any other provision of this Article
------------------------
notwithstanding, if the value of a Participant's entire Plan
Benefit equals $5,000 or less (including a Plan Benefit of $0)
before the first payment of the Plan Benefit is made, then the
Plan Benefit shall be paid (or deemed paid if the Plan Benefit is
$0) as soon as reasonably practicable after the Participant's
termination of employment to the Participant (or to his or her
Beneficiary in the case of the Participant's death) in a single
lump sum in cash. For purposes of this section, the value of a
Participant's Plan Benefit shall be determined without regard to
that portion of the Participant's Account that is attributable to
rollover contributions (and earnings allocable thereto) within
the meaning of Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii), and 457(e)(16) of the Code.
9. Section 8.9. shall be amended as follows:
a. Section 8.9(a) shall be restated in its entirety to read:
(a) Definition of Eligible Retirement Plan. An Eligible Retirement
--------------------------------------
Plan is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity contract described in
Section 403(b) of the Code, an eligible plan under Section 457(b)
of the Code which is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or
political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan, or
a qualified trust described in Section 401(a) of the Code, that
accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to a
Beneficiary who is the Participant's surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
3
individual retirement annuity. The definition of Eligible
Retirement Plan shall also apply in the case of a distribution
to a surviving spouse, or to a spouse or former spouse who is
the Alternate Payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code.
b. Section 8.9(b) shall be restated in its entirety to read:
(b) Definition of Eligible Rollover Distribution. An Eligible
--------------------------------------------
Rollover Distribution is any distribution of all or any portion
of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: (1) any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period
of 10 years or more; (2) any distribution to the extent the
distribution is required under Section 401(a)(9) of the Code;
(3) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities); or (4) any amount that is distributed on account
of hardship shall not be an eligible rollover distribution and
the distributee may not elect to have any portion of such a
distribution paid directly to an eligible retirement plan.
10. Section 4.5(b) shall be restated in its entirety to read:
(b) The Eligible Employee demonstrates to the Company's
satisfaction that the contribution is a qualifying rollover
contribution under Section 402(c)(4), 403(a)(4), 457(e)(16) or
408(d)(3) of the Code.
11. Article 22 shall be amended to reflect that the top-heavy requirements of
Section 416 of the Code and Article 22 of the Plan shall not apply in any
year beginning after December 31, 2001, in which the Plan consists solely
of a cash or deferred arrangement which meets the requirements of Section
401(k)(12) of the Code and matching contributions with respect to which the
requirements of Section 401(m)(11) of the Code are met.
12. Section 3.5(b) shall be restated in its entirety to read:
(b) Does not qualify as an Eligible Employee but remains a
Participant.
In accordance with Section 10.8 and 11.4, participation is also
suspended for 12 months if a Participant defaults on a Plan
loan or 6 months if a Participant takes a Hardship Withdrawal.
A Participant shall not make Participant Elected Contributions
or receive any allocation of Company Contributions with respect
to a period of suspended participation, but a suspended
Participant's Accounts shall remain invested as a part of the
Trust Fund and shall continue to share in the gains, income,
losses and expenses of the Trust Fund.
4
13. Section 11.4(a) shall be restated in its entirety to read:
(a) Plan participation and all employee before- and after-tax
contributions to the Plan and other qualified and
nonqualified deferred compensation plans sponsored by
members of the Affiliated Group shall be suspended for a
period of 6 months. The consequences of suspension from
the Plan are described in Section 3.5.
To record this Second Amendment to the Plan as set forth herein, the Company has
caused its authorized officer to execute this document this 24th day of
----
October, 2001.
-------
AMGEN INC.
By: /s/ Brian McNamee
------------------------------------------
Title: Senior Vice President Human Resources
--------------------------------------
5
EX-10.54
6
dex1054.txt
SECOND AMENDMENT TO AMGEN CHANGE OF CONTROL PLAN
Exhibit 10.54
SECOND AMENDMENT TO THE
AMGEN INC.
CHANGE OF CONTROL SEVERANCE PLAN
This Second Amendment to the Amgen Inc. Change of Control Severance Plan is
adopted as of October 16, 2001 by the Board of Directors (the "Board") of Amgen
Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Company maintains the Amgen Inc. Change of Control Severance
Plan, effective as of October 20, 1998, (hereinafter the "Plan"); and
WHEREAS, pursuant to section 11.3 of the Plan, the Company may amend the
Plan from time to time by resolution of the Board;
NOW THEREFORE, BE IT RESOLVED, that the Plan be amended as follows,
effective January 1, 2002:
1. Section 1(M) shall be amended and restated in its entirety as follows:
"(M) "Group I Participants" shall mean those senior executive-level
staff members of the Company and of Amgen USA Inc. whom the Company has
designated as members of the Amgen Executive Committee, as such
committee shall be constituted immediately prior to a Change of Control.
At or before the occurrence of a Change of Control, the Company shall
notify the Group I Participants in writing of their status as
Participants in the Plan."
2. Section 1(N) shall be amended and restated in its entirety as follows:
"(N) "Group II Participants" shall mean those management-level staff
members of the Company and of Amgen USA Inc. at the level of Director or
equivalent and above (i.e., those employees of the Company or of Amgen
USA Inc. whose positions have been designated as Salary Grade 32 or
Salary Grade EL4 and above) and who are not Group I Participants, as
such group shall be constituted immediately prior to a Change of
Control. At or before the occurrence of a Change of Control, the Company
shall notify the Group II Participants in writing of their status as
Participants in the Plan."
3. Section 1(O) shall be amended and restated in its entirety as follows:
"(O) "Group III Participants" shall mean those management-level staff
members of the Company and of Amgen USA Inc. at the level of Associate
Director or equivalent (i.e., those employees of the Company or of Amgen
USA Inc. whose positions have been designated as Salary Grade 30 or
Salary Grade
EL2 or Salary Grade EL3), as such group shall be constituted
immediately prior to a Change of Control. At or before the occurrence
of a Change of Control, the Company shall notify the Group III
Participants in writing of their status as Participants in the Plan."
I hereby certify that the foregoing Second Amendment to the Plan was duly
adopted by the Board of Directors of Amgen Inc. on October 24, 2001
--
AMGEN INC.
By: /s/ Brian McNamee
-----------------------------------------
Title: Senior Vice President Human Resources
-------------------------------------
2
EX-10.55
7
dex1055.txt
FIRST AMEND TO AMGEN SUPP RETIREMENT PLAN
Exhibit 10.55
FIRST AMENDMENT TO THE
AMGEN SUPPLEMENTAL RETIREMENT PLAN
AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 1, 1999
The Amgen Supplemental Retirement Plan as amended and restated
effective November 1, 1999 (the "Plan") is hereby amended as follows:
1. Effective as of January 1, 2002, Amgen USA Inc. shall participate in
the Plan for so long as Amgen USA Inc. remains in existence. As such,
the attached Appendix A shall be added to the Plan to show Amgen USA
Inc. as a participating subsidiary in the Plan.
To record this First Amendment to the Plan as set forth herein, the Company has
caused its authorized officer to execute this document this 24th day of
----
October, 2001.
-------
AMGEN INC.
By: /s/ Brian McNamee
-----------------------------------------
Title: Senior Vice President, Human Resources
--------------------------------------
APPENDIX A
----------
Participating Subsidiaries and Affiliates of Amgen Inc.
1. Amgen USA Inc. - January 1, 2002
2
EX-10.56
8
dex1056.txt
AGREEMENT WITH DR. GEORGE MORSTYN
Exhibit 10.56
July 19, 2001
Dr. George Morstyn
964 Bright Star
Thousand Oaks, CA 91360
Re: Agreement Regarding Part-Time Special Assignment Position
---------------------------------------------------------
Dear George:
On behalf of Amgen Inc. ("Amgen" or the "Company"), I am pleased to confirm in
this letter agreement ("Agreement") the terms and conditions under which you
will continue to be employed by Amgen from and after the date upon which you
cease to serve and resign your positions as Amgen's Senior Vice President of
Development, Chief Medical Officer, and any other officer and/or director
positions that you presently hold with Amgen or any of its subsidiaries or
affiliates, which will occur on January 1, 2002 (the "Effective Date"), it being
acknowledged that you will be on paid vacation from December 1, 2001 until the
Effective Date. You will remain a full-time Amgen staff member and receive all
compensation and benefits of your current position between now and the Effective
Date, although your duties may be modified and your responsibilities may be
reduced by the Company. In addition, it is acknowledged that you will be on a
paid personal leave of absence during all of August 2001 and such leave shall
not reduce any other paid leave or vacation time you are entitled to receive or
use. This Agreement also provides for the termination of your employment with
Amgen on or before July 31, 2004, as set forth below.
1. POSITION AND DUTIES
-------------------
On the Effective Date, you will cease to be a regular full-time employee of
Amgen, but you will continue to be employed by Amgen as an employee in a
part-time special assignment position, at grade level 28, with the title of
Special Advisor, Development reporting to me, or my designee or successor
(collectively the "Executive VP"). You also will provide assistance to
Steve Odre, Amgen General Counsel, or his designee or successor
(collectively the "General Counsel") (the Executive VP and the General
Counsel, acting individually or together, hereafter are referred to as
"Your Supervisor"). You will also resign as an officer and/or director of
Amgen and any Amgen subsidiaries or affiliates on the Effective Date or
such other time as Amgen may designate in its sole discretion. In
connection with resigning your offices, you agree to execute and return to
Amgen with this Agreement two signed, undated original resignation letters
(the "Resignation Letters") on your Amgen letterhead in the forms provided
in Appendices A through F to this Agreement. Appendices A through H are
hereby incorporated into and made part of this Agreement by reference. In
addition, you agree to take all such further
Dr. George Morstyn
July 19, 2001
Page 2
steps as Amgen may deem necessary or appropriate in order to accomplish the
resignation of any officer and/or director positions that you hold with
Amgen or any of its subsidiaries or affiliates.
As Special Advisor, Development you will:
1. assist the Executive VP by providing technical and professional
assessments of Amgen's current products and products that Amgen is in the
process of developing as of the Effective Date; and
2. assist the General Counsel on intellectual property or other related
legal matters or litigation including, but not limited to, your meeting
with Amgen attorneys and testifying or otherwise appearing at depositions
or court hearings scheduled as a result of any such litigation, including
preparation for all the above.
The times and places where this work will be performed will be at your
choosing unless otherwise requested by Your Supervisor. It is currently
anticipated that your duties can be performed primarily in Australia except
that you will be required to make approximately four trips per year to
Amgen's Thousand Oaks, California facility to perform your duties. You will
be a member of the Development Department and, as such, Your Supervisor
will assign these matters to you from time to time and you will provide
Your Supervisor with quarterly written or oral reports detailing your
progress toward accomplishing the tasks and directives given to you by Your
Supervisor. You will also provide additional reports and materials, upon
reasonable request by Your Supervisor. Your Supervisor will evaluate your
performance.
You agree that you will not hire or pay anyone to assist you in performing
your services under this Agreement. If your work load is such that you
require assistance, you agree to consult with Your Supervisor, and, if, in
Amgen's sole discretion, it is deemed appropriate, Amgen either will assign
one of its then-current employees to assist you, or Amgen will hire an
assistant for you.
Your Supervisor will control and direct the manner (including the order),
in which you perform the services under this Agreement, including the
details and means by which you provide your services.
You will be an employee of Amgen for all purposes during the term of this
Agreement and will not be an independent contractor.
As we have discussed, the position of Special Advisor, Development, is a
part-time special assignment position in which you will be required to work
a minimum of ten (10) hours per month; however, you also agree that, to the
extent that Your Supervisor requests, you will work up to twenty (20) hours
per month. In the event that you work more than twenty (20) hours per
month, then you will receive no additional compensation
Dr. George Morstyn
July 19, 2001
Page 3
or benefits for such additional work. If, in any month, Your Supervisor
does not specifically assign you a sufficient amount of work to meet your
minimum hour requirement, you will satisfy your minimum requirement by
independently researching and evaluating product development by competitors
of Amgen and U.S. Food and Drug Administration developments and reporting
your findings to Your Supervisor.
If requested by Your Supervisor, you agree to attend certain meetings or
programs related to your area of expertise so long as such meeting or
program does not unreasonably interfere with your other activities.
Furthermore, from time to time, your duties may require you to travel and
attend meetings at various locations, including Amgen's Thousand Oaks
facility, and you agree that no reasonable request by Your Supervisor for
travel or attendance at meetings will be refused. Your Supervisor will work
with you in scheduling any such business trips or meetings so that they do
not unreasonably interfere with your other activities. Amgen will reimburse
you for your reasonable travel expenses pursuant to the reimbursement
policy(ies) in place at Amgen at the time you incur such expenses except
that your air travel for work under this Agreement may be first-class as
provided by Amgen's travel policy for Amgen officers at the time of such
travel, even though you will no longer be an Amgen officer.
You will maintain an accurate and contemporaneous log showing the time you
have spent performing the foregoing services and this log shall be deemed
conclusive evidence of the time spent. Your Supervisor, at any time, may
request a copy of your log and you agree to provide such a copy within a
reasonable period of time after the request is made.
We have agreed that your part-time special assignment will continue until
July 31, 2004, subject to earlier termination by you or Amgen as set forth
in Paragraph 8 of this Agreement. As long as you are employed by Amgen, you
will continue to be subject to Amgen's policies and procedures, including
but not limited to those relating to the non-disclosure of proprietary and
confidential information and you will continue to be subject to the Amgen
Inc. Proprietary Information and Inventions Agreement, executed by you on
or about July 1, 1991 (the "Proprietary Agreement") (which also contains
obligations that survive the termination of your employment with Amgen).
During the term of your part-time special assignment, except as set forth
herein, you may not be employed by any person or company other than Amgen,
without Amgen's prior approval. You may, however, perform part-time
services for companies listed on Appendix H to this Agreement, teach, be on
faculties and sit on boards of directors of other companies outside the
fields of biotechnology and/or pharmaceutics, or companies within these
fields having fewer than 500 employees and no current contractual
relationship with Amgen provided that any such entity (whether profit or
non-profit) for which you perform services during the term of your
part-time special assignment with Amgen does not compete with Amgen or
conduct research and development in any subject area in which Amgen
competes or conducts research and development at any time during such term
and provided, further, that your activities do not violate the Proprietary
Dr. George Morstyn
July 19, 2001
Page 4
Agreement or interfere or conflict with your duties under this Agreement.
Your engaging in the activities described in the preceding sentence shall
not constitute a violation of paragraph 7 of the Proprietary Rights
Agreement. You agree promptly to notify Amgen in writing if you provide
services to any third party in the biotechnology or pharmaceutical
industries during the term of your part-time special assignment. You also
agree that during the term of this Agreement and for one year after the
termination of your employment you will not induce any employee of Amgen to
leave the employ of Amgen or otherwise solicit for employment or
affiliation, including as an independent contractor, any officer, director,
or employee of Amgen or its subsidiaries.
2. COMPENSATION AND BENEFITS
-------------------------
Following is a brief description of the compensation and benefits you will
receive under this Agreement during your part-time special assignment. The
terms and conditions of all of your benefits are subject to the terms and
conditions of each of the applicable plans, policies or arrangements, as
they may be amended or terminated by Amgen from time to time.
2.1 Compensation: Your compensation will be $32,260.00 per month for the
------------
period from the Effective Date through the Termination Date, as
defined in Paragraph 8 of this Agreement, subject to applicable income
tax and employment tax withholding requirements. Amgen will also
reimburse you for any reasonable business expenses you incur in
performing your duties, subject to Amgen's standard employee expense
reimbursement policies.
2.2 Administrative Support: Amgen will provide you with an office and
----------------------
secretarial assistance for any work that you perform while at Amgen's
Thousand Oaks headquarters or its Melborne, Australia facility. You
will also be provided any office equipment and supplies you may need
to perform your duties under this Agreement and you will have access
to the services of Amgen's travel department. You may not rent any
office space or purchase any office equipment in connection with
performing your services under this Agreement.
2.3 Management Incentive Plan: You will not be eligible to participate in
--------------------------
Amgen's Management Incentive Plan ("MIP") for any year after the 2001
calendar year.
2.4 Supplemental Retirement Plan: As an employee in a part-time special
----------------------------
assignment position, you will no longer be eligible to receive
additional credits in your supplemental retirement plan account,
although you will continue to maintain an account and receive earnings
on the balance in your account until the termination of your
employment with Amgen.
Dr. George Morstyn
July 19, 2001
Page 5
2.5 Retirement and Savings Plan: Pursuant to Section 3.3 of the Amgen
---------------------------
Retirement and Savings Plan (the "401(k) Plan"), employees that are
eligible to participate in the 401(k) Plan are those that are
classified as "regular full-time" or "regular part-time" employees. By
signing below, you expressly acknowledge and agree that Amgen is not
classifying you as a regular full-time or regular part-time employee
during your part-time special assignment and, therefore, after the
Effective Date, you will not be eligible to make contributions or to
have contributions made on your behalf to the 401(k) Plan. This letter
qualifies as an agreement pursuant to Section 3.3(c)(2) of the 401(k)
Plan. You will, however, be able to maintain your account in the
401(k) Plan to the extent allowed by law.
2.6 Change of Control Severance Plan: Due to your new grade level, you
---------------------------------
will not be eligible to participate in the Amgen Inc. Change of
Control Severance Plan on or after the Effective Date.
2.7 Stock Options:
-------------
2.7.1 No New Grants: As an employee in a part-time special assignment
--------------
position, you will not be eligible to receive additional stock
option grants after the Effective Date.
2.7.2 Vesting During Special Assignment: To the extent that you
---------------------------------
continue in your part-time special assignment, you will be
eligible to continue to vest in all unvested options that have
previously been granted to you by Amgen on the dates and in the
manner provided in your stock option grant agreements and
applicable stock option plans. No stock options will vest
following the Termination Date as defined in Paragraph 8 of this
Agreement.
2.7.3 Cooperation To Restructure: As we have discussed, it is our
--------------------------
intention that your ability to continue to vest in and exercise
options during your part-time special assignment will not result
in any additional compensation charges to Amgen in accordance
with U.S. generally accepted accounting principles. Accordingly,
at any time that Amgen requests, you agree that you will use
your reasonable best efforts to cooperate with Amgen to
restructure this Agreement and the terms of your position, such
as with respect to hours of employment, reporting relationships,
working conditions, etc., as Amgen reasonably determines is
necessary for you to continue to be able to vest and exercise
your options without creating a compensation charge to Amgen in
accordance with U.S. generally accepted accounting principles.
Dr. George Morstyn
July 19, 2001
Page 6
2.7.4 No Amendment to Stock Option Grant Agreements or Stock Option
-------------------------------------------------------------
Plans: Nothing in this Agreement shall be deemed to alter,
-----
amend, or otherwise modify the terms of your stock option grant
agreements or the terms of the applicable stock option plans.
2.8 Medical, Dental, and Vision Insurance and COBRA: Your medical,
-----------------------------------------------
dental and vision insurance coverage will terminate on the Effective
Date due to your reduction of hours pursuant to this Agreement. If
after the Effective Date you or your eligible dependents should elect
to continue coverage under Amgen's group health plan(s) under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") continuation
rights, and you or your eligible dependents timely take the required
steps to initiate such coverage, then Amgen will pay the cost of COBRA
coverage for you and your eligible dependents until the earlier of
June 30, 2003, or until you and/or your eligible dependents no longer
qualify for COBRA continuation rights or, in the case of your
dependents, the date on which such dependents cease to be eligible
dependents under Amgen's group health plan(s), whichever occurs first.
Such coverage is limited to the insurance benefits provided under
Amgen's United States medical, dental and vision insurance plans.
Generally, the period during which you and/or your eligible dependents
will be eligible for COBRA benefits will be no more than eighteen (18)
months from the Effective Date. However, if you and/or your eligible
dependents qualify for COBRA benefits on or after June 30, 2003, then
you and/or your eligible dependents will have the option of continuing
coverage under Amgen's group health plan(s), under COBRA and at your
own expense, for the remainder of the period for which you are
entitled to receive COBRA benefits, if any, provided that you and your
eligible dependents continue to meet the qualification requirements
under COBRA and under Amgen's group health plan(s). For a complete
description of the rights and responsibilities you and your eligible
dependents have under COBRA, you must refer to the COBRA documents
that will be sent to you by Amgen or its designee under separate
cover. In the event that you work more than twenty (20) hours per week
during some period(s) of this part-time special assignment, you will
still be ineligible to participate in Amgen's group health plans as an
active employee because, despite those periods, you would not be
considered to "normally" work more than twenty (20) hours per week.
Therefore, your COBRA continuation period will not terminate merely
because you work more than twenty (20) hours per week for a temporary
period during the part-time special assignment. In any event, by
signing this Agreement, you hereby waive any claim you have to
benefits under Amgen's group health plans beyond what is provided
through your COBRA coverage.
In the event that you and your eligible dependents do not elect COBRA
coverage, then Amgen will reimburse you for the cost of a private
medical insurance plan in Australia for you and/or your eligible
dependents for the duration of this Agreement provided that the
maximum monthly reimbursement shall be the lesser
Dr. George Morstyn
July 19, 2001
Page 7
of (a) the actual cost of to you of such insurance or (b) the amount
that Amgen would have paid for COBRA coverage per month under the
preceding paragraph if you had elected COBRA coverage.
2.9 Basic Life Insurance: Your Basic Life Insurance coverage will
--------------------
terminate on the Effective Date. If you are interested in converting
your insurance to an individual policy, please contact Jean Ellis at
Aetna (860) 273-7252 within thirty (30) days after the Effective Date.
In the event that you work more than twenty (20) hours per week during
some period(s) of this part-time special assignment, you will still be
ineligible to obtain Basic Life Insurance because, despite those
periods, you would not be considered to "normally" work more than
twenty (20) hours per week. In any event, by signing this Agreement,
you hereby waive your eligibility to obtain Basic Life Insurance
coverage.
2.10 Long-Term Disability Plan: Your Long-Term Disability Plan coverage
-------------------------
will terminate on the Effective Date and there is no conversion policy
or plan available for this coverage. In the event that you work more
than twenty (20) hours per week during some period(s) of this
part-time special assignment, you will still be ineligible to
participate in the Long-Term Disability Plan because, despite those
periods, you would not be considered to "regularly" work more than
twenty (20) hours per week. In any event, by signing this Agreement,
you hereby waive your participation in the Long-Term Disability Plan.
2.11 Amgen Foundation Matching Funds: During the term of your part-time
-------------------------------
special assignment, contributions you make to qualified organizations
will continue to be eligible for matching funds from the Amgen
Foundation, subject to the same terms, conditions, and limitations
that apply to contributions made by regular, full time employees of
Amgen.
2.12 Employee Stock Purchase Plan: Provided that you take the necessary
----------------------------
steps to enroll in the Employee Stock Purchase Plan (the "ESPP") for
the purchase period of January 2, 2001, to December 31, 2001, you will
be eligible to participate in the ESPP for that purchase period.
Thereafter, however, you will not be eligible to participate in the
ESPP due to the fact that you will be customarily working less than
twenty (20) hours per week. In the event that you work more than
twenty (20) hours per week during some period(s) of this part-time
special assignment, you will still be ineligible to participate in the
ESPP after that purchase period because, despite those periods, you
would not be considered to "customarily" work more than twenty (20)
hours per week. In any event, by signing this Agreement, you hereby
waive your eligibility to participate in the ESPP after the purchase
period of January 2, 2001 to December 31, 2001.
Dr. George Morstyn
July 19, 2001
Page 8
2.13 Other Benefits: As an employee in a part-time special assignment
--------------
position, you will not be eligible to participate in the following
Amgen benefit plans and programs, as well as any other benefits not
specifically listed in this letter, after the Effective Date: Medical
Flexible Spending Account; Dependent Care Assistance Program;
Accidental Death and Dismemberment Insurance; Voluntary and Dependent
Life Insurance; use of Amgen Fitness Center facilities; use of Amgen
Child Care Center facilities; personal illness, vacation/optional
holiday pay; family illness/personal time; bereavement leave; or
holidays. Your accrued and unused vacation hours and optional holiday
pay will be paid to you on the next regularly scheduled payroll date
following the Effective Date. By signing this Agreement, you agree
that, notwithstanding any rights you may otherwise have under these
programs, you hereby waive your claim to any benefits under these
programs.
3. TRANSFER OF COMPANY PROPERTY
----------------------------
You promise that on or before the Termination Date, as defined in Paragraph
8 of this Agreement, you will return to Amgen all files, memoranda,
documents, records, copies of the foregoing, credit cards, keys, and any
other Amgen property in your possession or under your control.
4. OFFICERS AND DIRECTORS INSURANCE
--------------------------------
During your part-time special assignment and for four (4) years following
the Termination Date, as defined in Paragraph 8 of this Agreement, you will
be covered by such officers and directors insurance coverage that Amgen
provides to its senior executive officers at your salary grade level 37
during that time period. In addition, Amgen shall indemnify and hold you
harmless both during and after the entire term of your employment
(including your service hereunder) to the fullest extent permitted by law
with regards to actions or inactions in relation to your duties performed
at Amgen, both before and after the date of this Agreement. Furthermore,
you will be entitled to reimbursement of expenses incurred in accordance
with your rights under California Labor Code Section 2802.
5. FINANCIAL/TAX CONSULTING REIMBURSEMENT
--------------------------------------
Amgen will reimburse you for the legal expenses reasonably incurred by you
in connection with the review of this Agreement up to a maximum amount of
$10,000. Amgen will reimburse you for financial and/or tax counseling
expenses that you reasonably incur, up to a maximum amount of $3,000 per
year, for each year of this Agreement.
Dr. George Morstyn
July 19, 2001
Page 9
6. REFERENCE
---------
Amgen will provide you with a positive written factual reference. Kevin W.
Sharer should be listed as your work reference. You agree to confer with
Kevin on the form and nature of the reference to be provided to third
parties concerning the work that you have performed at Amgen. If, by sixty
(60) days after the Effective Date, you are unable to reach agreement with
Kevin on the written reference to be provided, then Amgen's only obligation
will be to respond to inquiries by confirming to third parties the dates of
your employment at Amgen and the last position you held as an Amgen
employee.
7. RELOCATION
----------
If you decide to relocate outside of the (50) mile radius of your residence
located in Thousand Oaks, California during the period of your part-time
special assignment or immediately at the termination thereof for any reason
other than for a Stated Reason, as defined below, then Amgen will pay or
reimburse you up to the aggregate maximum amount of $50,000 for the
following relocation assistance: (i) packing, shipping, delivery, storage
(for up to ninety (90) days) and unpacking of your common household goods
and furnishings to be arranged by Amgen and handled by Mover's
International or such other vendor as Amgen may select and paid directly by
Amgen to Mover's International or such other vendor; (ii) reimbursement
(not to exceed $9,000) for moving expenses that you have paid to Mover's
International for moving your goods to Australia; and (iii) payment or
reimbursement of travel expenses for you and your family to travel to
Australia. As a condition of receiving this relocation assistance you agree
to (i) provide all documentation requested by Amgen in connection with this
Paragraph 7 upon the request of Amgen; (ii) to indemnify and hold Amgen
harmless for any and all claims in connection with this relocation up to a
maximum obligation to you of $50,000; and (iii) you agree that Amgen shall
have no liability to you or your family for lost or damaged items, or
otherwise, in connection with this relocation. In order to initiate this
relocation assistance, please contact Christine Swinburne or her designee
at Amgen.
8. EARLY TERMINATION OF SPECIAL ASSIGNMENT
---------------------------------------
8.1 At-Will Employment: If you accept this new position, it will become
------------------
your new assignment and you will have no right to return to your
current position. Although it is currently anticipated that this
part-time special assignment position will continue until July 31,
2004, you acknowledge, understand and agree that your employment with
Amgen remains at-will. Therefore, your employment can terminate, with
or without cause, and with or without notice, at any time, at your
option or Amgen's option prior to July 31, 2004. This at-will
relationship will remain in effect throughout your employment with
Amgen or any of its subsidiaries or affiliates. The at-will nature of
your employment, as set forth in this Paragraph, can be modified only
by a written agreement signed by both me
Dr. George Morstyn
July 19, 2001
Page 10
and you which expressly alters it. This at-will relationship may not
be modified by any oral or implied agreement, or by any Company
policies, practices or patterns of conduct.
8.2 Termination by Amgen for a Stated Reason or Termination by You for Any
----------------------------------------------------------------------
Reason Other Than A Covered Breach: If your employment is terminated
----------------------------------
by Amgen for a Stated Reason (as defined below), or if you terminate
your employment for any reason other than a Covered Breach (as defined
below), then your payments and benefits from Amgen under this
Agreement, including but not limited to the vesting of your stock
options, will cease as of the Termination Date (as defined below).
For purposes of this Paragraph, a "Stated Reason" means that you:
breached any material provision of this Agreement or the Proprietary
Agreement; engaged in fraud or other acts of dishonesty in connection
with your employment; were guilty of gross misconduct or gross
negligence; continued to perform your job deficiently after having
received specific written notice calling your attention to the
deficiency and requiring improvement; made disparaging remarks about
Amgen, its products, employees, or research and development abilities
and projects; or engaged in sexual or any other prohibited form of
harassment or discrimination.
For purposes of this Paragraph, a "Covered Breach" means a breach by
Amgen of its obligations under this Agreement in the following manner
only: (i) any reduction in your salary or benefits provided for in
this Agreement, including nonpayment thereof; or (ii) the assignment
of duties to you that are inconsistent with those set forth in
Paragraph 1 of this Agreement; or (iii) a reduction in your title or
position. In order for an event described in the preceding sentence to
qualify as a Covered Breach, you must give written notice of the event
to Amgen and Amgen must fail to cure the event within 30 days of
receipt of that written notice.
8.3 Termination by Amgen for Other Than a Stated Reason or Termination by
---------------------------------------------------------------------
You for a Covered Breach: In the event your employment is terminated
------------------------
by Amgen or its successor, if any, before July 31, 2004 for any reason
other than a Stated Reason, or your employment is terminated by you
for a Covered Breach, then (1) you shall be paid in a cash lump-sum
all of the remaining payments due to you under this Agreement from the
date of termination through July 31, 2004 and (2) Amgen shall take the
necessary corporate action to accelerate the vesting of all of your
outstanding and then unvested stock options so that they shall vest
and become immediately exercisable in full as of the Termination Date;
such stock options, as so accelerated shall be exercisable as provided
in your stock option grant agreements and applicable stock option
plans.
Dr. George Morstyn
July 19, 2001
Page 11
8.4 Termination Date: The date of the termination of your employment for
----------------
any of the foregoing reasons is referred to in this Agreement as the
"Termination Date."
9. DEATH
-----
In the event of the termination of your employment hereunder by reason
of your death prior to July 31, 2004, all of the remaining payments
that would have been paid to you through July 31, 2004 pursuant to
Paragraph 2.1 of this Agreement will be payable to the beneficiary or
beneficiaries that you designate in writing to Amgen. Your other
remaining benefits will be treated according to their specific terms
concerning such death. For purposes of Paragraph 10(a) of the Amgen
Inc. Amended and Restated 1991 Equity Incentive Plan, your employment
with Amgen shall be deemed to have commenced in 1991, when you first
became an employee at Amgen.
10. RELEASE
-------
In exchange for consideration provided to you under this Agreement, you
agree to execute and be bound by the General Release attached hereto as
Appendix G (the "General Release") and to return the executed
Agreement, together with the executed General Release and Appendices A
through H, to me. The General Release is hereby incorporated into and
made part of the Agreement by this reference.
11. INTERPRETATION
--------------
This Agreement and the Appendices hereto shall be construed as a whole
according to their fair meaning, and not strictly for or against any of
the parties. Unless the context indicates otherwise, the term "or"
shall be deemed to include the term "and" and the singular or plural
number shall be deemed to include the other. Paragraph headings used in
this Agreement and the General Release are intended solely for
convenience of reference and shall not be used in the interpretation of
any part of this Agreement or the General Release.
12. NOTICES
-------
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either
personally, by United States certified or registered mail, return
receipt requested, postage prepaid, or by Australian certified mail -
requires receipt, postage prepaid, addressed, if to you, to the last
address on file with Amgen and if to Amgen, to its executive offices or
to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
Dr. George Morstyn
July 19, 2001
Page 12
13. ARBITRATION OF DISPUTES
-----------------------
13.1 Agreement to Arbitrate: Any dispute (an "Arbitrable Dispute")
----------------------
arising between any of the Amgen Releasees (as defined in
Paragraph 1.1 of the General Release attached hereto as
Appendix G) who either consent to arbitration or demand
arbitration and you, including but not limited to those
disputes concerning the formation, validity, interpretation,
effect, or alleged violations of this Agreement or the General
Release, must be submitted to binding arbitration for
resolution in Los Angeles, California in accordance with the
rules and procedures of the Employment Dispute Resolution
Rules of the American Arbitration Association then in effect.
The decision of the arbitrator shall be final and binding on
the parties, and any court of competent jurisdiction may enter
judgment upon the award. Except for an action taken outside of
arbitration pursuant to Subparagraph 13.4 of this Agreement,
should any party pursue any other legal or administrative
action outside of arbitration against the other, the
responding party shall be entitled to the return of any
payments that party made under this Agreement and shall be
entitled to recover all costs, expenses and attorneys' fees
the responding party incurs as a result of such action. The
arbitrator may not modify or change this Agreement in any way.
13.2 Costs of Arbitration: Each party shall pay the fees of their
--------------------
respective attorneys, the expenses of their witnesses and any
other expenses connected with the arbitration, but all other
costs of the arbitration, including the fees of the
arbitrator, cost of any record or transcript of the
arbitration, administrative fees and other fees and costs
shall be paid by Amgen, except that you shall pay an amount
equal to 50% of the filing fee for a civil action in the court
of general jurisdiction where the claim arose. Subject to the
arbitrator's discretion, the party losing the arbitration
shall reimburse the party who prevailed for all fees and
expenses the prevailing party paid pursuant to the preceding
sentence, and (where a prevailing party attorney's fees
provision exists) shall also reimburse the prevailing party
for attorney's fees paid.
13.3 Exclusive Remedy: Arbitration in this manner shall be the
----------------
exclusive remedy for any Arbitrable Dispute. The arbitrator's
decision or award shall be fully enforceable and subject to an
entry of judgment by a court of competent jurisdiction. Except
for an action taken outside of arbitration pursuant to
Subparagraph 13.4 of this Agreement, should you or any of the
Releasees (as defined in Paragraph 1.1 of the General Release
attached hereto as Appendix G) who either consent to
arbitration or demand arbitration, without the consent of the
other party, attempt to resolve an Arbitrable Dispute by any
method other than arbitration pursuant to this Paragraph 13,
the responding party shall be entitled to recover from the
initiating party all damages, expenses and attorneys' fees
incurred as a result.
Dr. George Morstyn
July 19, 2001
Page 13
13.4 Sole Exception: Notwithstanding the foregoing, a dispute
--------------
relating to alleged violation(s) of Paragraph 2 and/or
Paragraph 3 of the General Release attached hereto as Exhibit
G, including those involving the disclosure of the existence,
terms or amount of this Agreement, and/or the use or
disclosure of information which is prohibited by the
Proprietary Agreement, and/or the criticism, denigration or
disparagement of Amgen, any other Releasee (as defined in
Paragraph 1.1 of the General Release attached hereto as
Appendix G), or any of Amgen's products, processes,
experiments, policies, practices, standards of business
conduct, or areas or techniques of research may be resolved
through a means other than arbitration.
14. CHOICE OF LAWS
--------------
This Agreement shall be governed by, and shall be construed and
enforced in accordance with, the substantive laws of the State of
California, without regard to principles of conflicts of laws, as
applied to contracts entered into and to be performed entirely within
such state by residents thereof.
15. TAXES
-----
You acknowledge and agree that all payments made pursuant to this
Agreement shall be made less applicable tax withholdings and/or other
withholdings as required by law. You acknowledge and agree that you,
and not Amgen, shall be solely responsible for any taxes (other than
Amgen's share of FICA) imposed upon you as a result of entering into
this Agreement.
16. MITIGATION
----------
You shall not be required to mitigate amounts payable under this
Agreement by seeking other employment or otherwise, and there shall be
no offset against amounts due you under this Agreement on account of
employment after the termination of your part-time special assignment.
Additionally, amounts owed to you under this Agreement shall not be
offset by any claims Amgen may have against you and Amgen's obligation
to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder, shall not be affected by any other
circumstances, including, without limitation, any counterclaim,
recoupment, defense or other right which Amgen may have against you or
others.
17. NO ASSIGNMENT OR DELEGATION
---------------------------
Amgen has selected you for this part-time special assignment because it
has judged that your unique experience and skills are those Amgen
required for the job. Accordingly, you may not assign or delegate any
of your duties or responsibilities under this Agreement.
Dr. George Morstyn
July 19, 2001
Page 14
18. NATURE, EFFECT AND INTERRELATION OF THIS AGREEMENT
--------------------------------------------------
18.1 Amgen's Successors: No rights or obligations of Amgen under this
------------------
Agreement may be assigned or transferred except that Amgen will
require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of Amgen to expressly assume and
agree to perform this Agreement in the same manner and to the same
extent that Amgen would be required to perform it if no such
succession had taken place. As used in this Agreement, "Amgen"
shall mean Amgen as herein before defined and any successor to its
business and/or assets (by merger, purchase or otherwise) which
executes and delivers the agreement provided for in this Paragraph
18 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
18.2 Your Successors: No rights or obligations of you under this
---------------
Agreement may be assigned or transferred by you, other than your
rights to payments or benefits hereunder, which may be
transferred only by will or the laws of descent and
distribution. Upon your death, this Agreement and all rights
of you hereunder shall inure to the benefit of and be
enforceable by your beneficiary or beneficiaries, personal or
legal representatives, or estate, to the extent any such
person succeeds to your interests under this Agreement. You
shall be entitled to select and change a beneficiary or
beneficiaries to receive any benefit or compensation payable
hereunder following your death by giving Amgen written notice
thereof. In the event of your death or a judicial
determination of your incompetence, reference in this
Agreement to you shall be deemed, where appropriate, to refer
to your beneficiary(ies), estate or other legal
representative(s). If your should die following your
Termination Date while any amounts would still be payable to
you hereunder if you had continued to live, all such amounts
unless otherwise provided herein shall be paid in accordance
with the terms of this Agreement to such person or persons so
appointed in writing by you, or otherwise to your legal
representatives or estate.
18.3 Implementation: Amgen and you both agree that, without the
--------------
receipt of further consideration, they will sign and deliver
any documents and do anything else that is necessary in the
future to make the provisions of this Agreement effective.
Dr. George Morstyn
July 19, 2001
Page 15
19. ENTIRE AGREEMENT
----------------
The Proprietary Agreement, your stock option agreements, this Agreement, and
Appendices A through H to this Agreement constitute the entire agreement,
arrangement and understanding between you and Amgen; they may not be
modified or canceled in any manner except by a writing signed by both you
and Amgen. This Agreement supersedes any prior or contemporaneous agreement,
arrangement or understanding on this subject matter. By executing this
Agreement as provided below, you expressly acknowledge the termination of
any such prior agreement, arrangement or understanding. Also, by executing
this Agreement, you affirm that no one has made any written or verbal
statement that contradicts the provisions of this Agreement.
Sincerely yours,
/s/ Roger M. Perlmutter
-----------------------
Roger M. Perlmutter
Executive Vice President Research and Development
Amgen Inc.
Acknowledged and Agreed:
/s/ George Morstyn Dated: 7/19/01
------------------------------------ ----------
Dr. George Morstyn
APPENDIX A
RESIGNATION
-----------
The undersigned hereby resigns his position as Senior Vice President,
Development and Chief Medical Officer of Amgen Inc., effective _____________
Date: _______________
/s/ George Morstyn
------------------
George Morstyn
APPENDIX B
TO: AMGEN-REGENERON PARTNERS (the "Partnership")
AND TO: The Joint Management Committee of the Partnership
RESIGNATION
-----------
The undersigned hereby resigns as an Amgen member of the Joint
Management Committee effective _______________.
Date:
-------
/s/ George Morstyn
------------------
George Morstyn
APPENDIX C
TO: AMGEN AUSTRALIA PTY LIMITED (the "Company")
AND TO: The Directors and Shareholders of the Company
RESIGNATION
-----------
The undersigned hereby resigns as Secretary of the Company effective
_______________
Date:
-------
/s/ George Morstyn
------------------
George Morstyn
APPENDIX D
TO: AMGEN CANADA INC. (the "Company")
AND TO: The Directors and Shareholders of the Company
RESIGNATION
-----------
The undersigned hereby resigns as Senior Vice President, Development
and Chief Medical Officer of the Company effective _______________.
Date:
-------
/s/ George Morstyn
------------------
George Morstyn
APPENDIX E
_______, 200_
To the Directors of
Amgen Limited (the "Company")
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y ODX
Dear Sirs:
I hereby resign as a director of the Company to be effective as of _________,
200_ and confirm that I have no claims against the Company whatsoever.
EXECUTED as a deed )
by GEORGE MORSTYN )
in the presence of: )
/s/ George Morstyn
------------------
George Morstyn
Signature of Witness:
/s/ Shae Williams
------------------------------
Name: Shae Williams
Address: One Amgen Center Drive
Thousand Oaks, CA 91320
Occupation: Administrative Coordinator V
APPENDIX F
TO: KIRIN-AMGEN, INC. (the "Company")
AND TO: The Directors and Shareholders of the Company
RESIGNATION
-----------
The undersigned hereby resigns as an Amgen Director of the Company
effective ______________.
Date:
-------
/s/ George Morstyn
---------------------------
George Morstyn
APPENDIX G
GENERAL RELEASE
By signing below, Amgen Inc. ("Amgen" or the "Company") and you, George
Morstyn, agree to all of the terms and conditions set forth in this General
Release, which resolves all issues between you and the Company including, but
not limited to, those related to your employment with the Company, and the
termination thereof.
1. COMPLETE RELEASE
----------------
1.1 Release: In exchange for consideration provided to you and the Company
-------
under the Agreement, the receipt of which and adequacy thereof you and
the Company hereby acknowledge, you irrevocably and unconditionally
release all the claims described in Subparagraph 1.2 of this General
Release that you may have against the following persons or entities
(the "Amgen Releasees"): Amgen, all related or affiliated companies
and all of Amgen's or such related or affiliated companies'
predecessors, successors, and assigns; and, with respect to each such
entity, all of its past and present employees, officers, directors,
stockholders, owners, representatives, assigns, attorneys, agents,
insurers, employee benefit programs (and the trustees, administrators,
fiduciaries and insurers of such programs) and any other persons
acting by, through, under or in concert with any of the persons or
entities listed in this Subparagraph and each of them; and the Company
irrevocably and unconditionally releases all the claims described in
Subparagraph 1.2 of this General Release that the Company may have
against the following persons or entities (the "Mortsyn Releasees")
you, your employees, agents, attorneys, representatives, successors,
and assigns, past and present and each of them.
1.2 Claims Released: Except as provided in Subparagraph 1.4 of this
---------------
General Release, the claims released include all claims, promises,
debts, causes of action or similar rights of any type or nature you
have or had against the Amgen Releasees and/or the Company has or had
against the Morstyn Releasees, including but not limited to those
which in any way relate to: (a) your employment with Amgen, the change
in your employment status or the termination of your employment as of
the Termination Date, such as claims for compensation, bonuses,
commissions, lost wages or unused accrued vacation, or sick pay; (b)
the design or administration of any employee benefit program or your
entitlement to benefits under any such program; (c) any rights you may
have to severance or similar benefits under any program, policy or
procedure of Amgen; (d) any rights you may have to the continued
receipt of health or life insurance-type benefits, except for any
rights you may have to continue benefits pursuant to COBRA at your own
expense; (e) any claims to attorneys fees or
other indemnities; and (f) any other claims or demands you or the
Company may have on any basis. The claims released, for example,
may have arisen under any of the following statutes or common law
doctrines:
1.2.1 Anti-Discrimination Statutes, such as Title VII of the Civil
----------------------------
Rights Act of 1964, (S)1981 of the Civil Rights Act of 1866 and
Executive Order 11246, which prohibit discrimination based on
race, color, national origin, religion or sex; the Equal Pay Act,
which prohibits paying men and women unequal pay for equal work;
the Americans With Disabilities Act and (S)503 and (S)504 of the
Rehabilitation Act of 1973, which prohibit discrimination against
the disabled; the California Fair Employment and Housing Act,
which prohibits discrimination in employment based on race,
color, national origin, ancestry, physical or mental disability,
medical condition, marital status, sexual orientation, sex or
age.
1.2.2 Federal Employment Statutes, such as the WARN Act, which
---------------------------
requires that advance notice be given of certain work force
reductions; Employee Retirement Income Security Act of 1974,
which, among other things, protects pension or health plan
benefits; and the Fair Labor Standards Act of 1938, which
regulates wage and hour matters.
1.2.3 Other Laws, such as any federal, state or local laws providing
----------
workers' compensation benefits; restricting an employer's right
to terminate employees or otherwise regulating employment; or
enforcing express or implied employment contracts or requiring an
employer to deal with employees fairly or in good faith;
California Labor Code(S)(S)200 et seq., relating to salary,
-- ---
commission, compensation, benefits and other matters; the
California Workers' Compensation Act; the California Unemployment
Insurance Code; any applicable California Industrial Welfare
Commission Order; and any other federal, state or local laws,
whether based on statute, regulation or common law, providing
recourse for alleged wrongful discharge, physical or personal
injury, emotional distress, fraud, negligent misrepresentation,
libel, slander, defamation and similar or related claims.
1.2.4 Age Discrimination In Employment Act
------------------------------------
1.2.4.1 You also acknowledge and agree that by signing the
Agreement and this General Release, in addition to the
any matters discussed above, you are waiving and
releasing and all claims, charges, or rights you may have
under the Age Discrimination In Employment Act of 1967,
as amended ("ADEA"), that this waiver and release is
knowing and voluntary, and that the consideration given
for this waiver and release is in addition to anything of
value to which you were already entitled as an employee
of Amgen. You further acknowledge that you have been
advised that: (a) you should consult with an attorney (at
your own expense) prior to executing the Agreement, and
this General Release (you understand that whether you
consult an attorney or not is your decision); (b) you
have at least twenty-one (21) days in which to consider
the Agreement and this General Release (although you
may choose to execute the Agreement and this General
Release earlier); (c) the Agreement and this General
Release does not waive or release any rights or claims
you may have under the ADEA which may arise after you
execute the Agreement and this General Release; (d) you
have seven (7) days following execution of the
Agreement and this General Release to revoke your
consent to the Agreement and this General Release (to
be effective, any revocation must be actually received
in writing by me by 5:30 p.m. on the seventh day); and
(e) the Agreement and this General Release shall not be
effective until the seven (7) day revocation period has
expired.
In the event that you exercise this right to revoke this
General Release, you and Amgen agree that the Agreement
(including without limitation the Resignation Letters
attached to the Agreement as Appendices A-F) will be
simultaneously revoked.
1.2.4.2 You acknowledge and agree that you were first given
a copy of the Agreement and this General Release on
January 16, 2001 that you have been given the
opportunity to consult with whomever you wish regarding
the Agreement and this General Release and that you
have entered into the Agreement and this General
Release voluntarily and with full knowledge of their
final and binding effect.
1.3 Release Extends to Both Known and Unknown Claims: This General Release
------------------------------------------------
covers both claims that you and/or Amgen know about and those you
and/or Amgen do not know about. You understand the significance of
this release of unknown claims and this waiver of statutory protection
against a release of unknown claims by you. You expressly waive all
rights afforded by any statute which limits the effect of a release
with respect to unknown claims. You and Amgen expressly waive the
protection of (S) 1542 of the Civil Code of the State of California,
which states as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have
materially affected his settlement with the debtor."
1.4 Claims Not Released: This General Release does not release your right
-------------------
or the Company's right to enforce the Agreement, nor does it release
your rights under Labor Code (S) 2802 or the Company's rights under
the Amgen Inc. Proprietary Information and Inventions Agreement
executed by you on or about July 1, 1991 (the "Proprietary
Agreement").
1.5 Ownership of Claims: You represent that you have not assigned or
-------------------
transferred, or purported to assign or transfer, all or any part of
any claim released by the Agreement and this General Release.
2. YOUR PROMISES In addition to the release of claims provided for in
-------------
Paragraph 1 of this General Release, you also agree to the following:
2.1 Employee's Representations:
--------------------------
2.1.1 You represent and warrant that you are changing the scope of
your responsibilities voluntarily and that your age has not been
a factor in any employment decision involving you.
2.1.2 You represent and warrant that you have not been the victim of
age or other discrimination or wrongful treatment in connection
with your employment with Amgen.
2.1.3 You represent and warrant that you have not breached any portion
of the Proprietary Agreement.
2.1.4 You represent and warrant that you have not suffered any
job-related injury to which you might be entitled to
compensation or relief, such as an injury for which you might
receive a workers' compensation award now or in the future.
2.1.5 You represent and warrant that you are not aware of any facts
that would (a) establish, (b) tend to establish, or (c) in any
way support an allegation of, a violation by the Company of the
federal False Claims Act (or any similar state or federal qui
---
tam statute).
---
2.2 No Future Employment: You understand that, as provided in Paragraph 7
--------------------
of the Agreement, your employment with Amgen and all related or
affiliated companies will terminate forever on the Termination Date
and you promise never to seek employment with Amgen or its related or
affiliated companies in the future. If your employment is not
terminated by Amgen for a Stated Reason, Amgen shall treat this
termination as a resignation on its records. You acknowledge and agree
that the Agreement, together with this General Release, contemplates
your termination from Amgen on the Termination Date, and that the
release in Paragraph 1 of this General Release shall cover your entire
employment with Amgen and the termination of that employment.
2.3 You are Not to Harm Amgen: You agree not to criticize, denigrate or
-------------------------
otherwise disparage Amgen, any other Releasee, or any of Amgen's
products, processes, experiments, policies, practices, standards of
business conduct, or areas or techniques of research; provided,
however, that nothing in this General Release shall prohibit you from
complying with any lawful subpoena or court order.
2.4 No Pursuit of Released Claims: You promise never to file or prosecute
-----------------------------
a lawsuit or other complaint or charge asserting any claims that are
released by the Agreement. You represent that you have not filed or
caused to be filed any lawsuit, complaint or charge with respect to
any claim the Agreement and this General Release.
2.5 Agreement to be Kept Confidential: You agree not to disclose the
---------------------------------
terms, amount or existence of the Agreement and this General Release
to anyone other than (i) Your Supervisor; (ii) members of your
immediate family; or (iii) your professional representatives and, even
as to such persons in groups (ii) and (iii), only if they are informed
of and agree to honor this confidentiality requirement. Such persons'
violation of this confidentiality requirement shall be treated as a
violation of the Agreement and this General Release by you. This
Subparagraph shall not prohibit disclosure of the terms, amount or
existence of the Agreement and this General Release to the extent (i)
such information has been made public by Amgen in a proxy statement or
other corporate disclosure; (ii) legally necessary to enforce the
Agreement and this General Release or (iii) to the extent otherwise
legally required. Since the damages Amgen would suffer if this
Subparagraph were violated would be difficult to calculate, you
promise to pay Amgen $7,500 for each violation and, in addition, Amgen
shall be entitled to the relief described in Paragraph 3.
3. CONSEQUENCES OF YOUR VIOLATION OF YOUR PROMISES
-----------------------------------------------
3.1 General Consequences: If you break any of the promises made in the
--------------------
Agreement or this General Release, for example, by filing or
prosecuting a lawsuit based on claims that you have released, or if
any representation made by you in this General Release was false when
made, or if you have, as of the Effective Date, breached any portion
of the Proprietary Agreement, or if you, at any time after the
Effective Date, breach any portion of the Proprietary Agreement that
contains obligations which survive the termination of your employment
with the Company, you (a) shall forfeit all right to future benefits
under the Agreement; (b) must repay all benefits previously received,
other than the monthly compensation paid to you under Paragraph 2.1 of
the Agreement, upon Amgen's demand; and (c) must pay reasonable
attorneys' fees and all other costs incurred as a result of your
breach or false representation, such as the cost of defending any suit
brought with respect to a released claim by you or other owner of a
released claim.
In addition, in order to ensure that you have complied fully with your
obligations under Paragraph 2.1.5 of this General Release, you hereby
covenant and agree that to the full extent permitted by law, you
hereby waive and release any and all rights or claims you may have to
any proceeds or awards that you may be entitled to under any qui tam
--- ---
proceeding brought against Amgen. You further agree that you shall
deliver any such money, proceeds, or awards to the U.S. government.
3.2 Injunctive Relief: You further agree that Amgen would be irreparably
-----------------
harmed by any actual or threatened violation of Paragraph 2.5 that
involves disclosure of the existence, terms or amount of the Agreement
and this General Release, and/or the use or disclosure of information
that is prohibited by the Proprietary Agreement (which contains
obligations that survive the termination of your employment with
Amgen), and that Amgen shall be entitled to an injunction prohibiting
you from committing any such violation.
3.3 Challenges to Validity: Should you attempt to challenge the formation
----------------------
or enforceability of the Agreement, this General Release, and/or the
Proprietary Agreement, you shall initially tender, by certified check
delivered to Amgen, all amounts received pursuant to the Agreement,
other than the monthly compensation paid to you under Paragraph 2.1 of
the Agreement, plus interest at the legal rate and invite Amgen to
cancel the Agreement. In the event Amgen accepts this offer, the
Agreement shall be canceled. In the event Amgen does not accept this
offer, Amgen shall so notify you and the amount tendered by you shall
be placed in an interest-bearing account pending a determination of
the enforceability of the Agreement, this General Release, and/or the
Proprietary Agreement. If the Agreement, General Release and/or
Proprietary Agreement is determined to be enforceable, the amount in
the account shall be repaid to you; if the Agreement, General Release
and/or Proprietary Agreement is determined not to be enforceable, the
amount in the account shall be retained by Amgen or its designee.
4. VOLUNTARILY ENTERING AGREEMENT
------------------------------
You acknowledge that you (a) have had a sufficient period to consider and
review the Agreement and this General Release before signing them; (b) have
carefully read the Agreement and this General Release; and (c) fully
understand the Agreement and this General Release and are entering into
them voluntarily.
5. SEVERABILITY
------------
The provisions of the Agreement and this General Release are severable. If
any one or more of the provisions contained therein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable in
any respect and for any reason, the validity, legality and enforceability
of any such provision in every other respect and of the remaining
provisions hereof shall not be affected or impaired in any way, it being
intended that all of the parties'
rights and privileges arising hereunder shall be enforceable to the fullest
extent permitted by law.
6. NON-ADMISSION OF LIABILITY
--------------------------
Amgen has entered into the Agreement and this General Release with you to
effect a mutually acceptable resolution of each claim that is released in
Paragraph 1. Amgen does not believe or admit that it or any other Releasee
has done anything wrong. You agree that neither the Agreement nor this
General Release is admissible in any court or other forum for any purpose
other than the enforcement of their terms.
7. ENCOURAGEMENT TO CONSULT WITH ATTORNEY
--------------------------------------
You acknowledge that Amgen strongly encouraged you to discuss the Agreement
and this General Release with an attorney (at your own expense, except as
provided in Paragraph 5 of the Agreement) before signing the Agreement and
this General Release and that, to the extent you deemed it appropriate, you
did so.
PLEASE READ THIS GENERAL RELEASE CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.
Executed at Thousand Oaks, California this 19 day of July, 2001.
------------- --
/s/ George Morstyn
------------------
George Morstyn
Executed at Thousand Oaks, California this 19th day of July, 2001.
/s/ Roger M. Perlmutter
-----------------------
Amgen Inc.
By: Roger M. Perlmutter
Executive Vice President Research and Development
APPENDIX H
Bionomics Limited (based in Adelaide, Australia)
CSL Limited (based in Melbourne, Australia)
The Scientific Advisory Board of Baxter International Inc.
(based in Deerfield, Illinois)
EX-10.57
9
dex1057.txt
PROMISSORY NOTE OF BRIAN MCNAMEE
Exhibit 10.57
PROMISSORY NOTE
---------------
$500,000.00
1. Promise to Pay.
--------------
For value received, I, Brian M. McNamee ("Staff Member"), a married man,
and I, Gillian D. McNamee, wife of Staff Member, promise to pay to the
order of Amgen Inc., a Delaware corporation ("Payee"), at its office at
One Amgen Center Drive, Thousand Oaks, CA 91320-1789, the sum of Five
Hundred Thousand Dollars and No Cents ($500,000.00) (the "Principal"),
payable in full on the earlier of five (5) years from date of execution
of this Note or thirty (30) days from the date on which Staff Member
ceases to be an employee of Payee, whichever first occurs, together with
interest on the Principal from the date of this Note until such date as
the Note is paid in full. Interest on this Note shall be computed as set
forth below. The interest rate for the period from the date of this Note
through December 31, 2001 (the "initial rate") is 5.00% per annum on the
unpaid Principal. After December 31, 2001 the interest rate on this Note
shall change as set forth below.
2. Adjustable Interest Rate.
------------------------
The interest rate shall be adjusted annually on January 1 of each year
(the "Change Date") so as to equal the average interest rate designated
as the "Introduction Rates" on adjustable rate loans as publicly offered
by the banks and savings and loans in California as published by the Los
Angeles Times in its Sunday edition. The rate shall be set using the
rates published in the Los Angeles Times on the Sunday immediately
preceding the Change Date. In the event that the "Introduction Rates"
list is not published in the Los Angeles Times for any reason, then, in
such event, the Payee shall establish the interest rate based on a
survey by it of the introductory interest rates on adjustable loans
offered by no fewer than five banking institutions located in Southern
California that the Payee, in its sole discretion, deems representative
of banking institutions in the Ventura and Los Angeles County areas.
Payee shall give Staff Member notice if the interest rate shall be
determined using this alternative method. Notwithstanding the foregoing,
the interest rate shall never be increased or decreased on any single
Change Date by more than one percentage point from the interest rate for
the preceding 12 months. At no time during the term of this Note shall
the annual interest rate exceed 8.00% per annum.
Payee shall deliver or mail to Staff Member a notice of any changes in
the adjustable interest rate on this Note and the amount of the Staff
Member's semi-monthly payroll deductions before the effective date of
any change. The notice shall include information required by law to be
given to Staff Member and also the title and telephone number of a
person who shall answer any questions Staff Member may have regarding
the notice.
3. Salary Deduction.
----------------
The interest on this Note shall be payable by semi-monthly deductions
from Staff Member's salary. The amount of such deductions shall
initially be One Thousand Forty-One Dollars and Sixty-Seven Cents
($1,041.67) per installment; provided, however, that the manner of
payment of this Note shall not be limited to deductions from Staff
Member's salary. The amount of such deductions shall be adjusted
annually concurrently with any adjustment in the interest rate on this
Note to ensure that interest to be incurred during the ensuing calendar
year shall be paid in twenty-four (24) equal payments. The first such
installment shall be on 06/15/01; the second installment shall be on
06/30/01; and each successive installment shall be on the fifteenth and
last days of each successive month until the Principal is repaid. Payee
shall give Staff Member at least seven (7) days advance notice of any
adjustment in the amount of said payroll deductions. Staff Member
acknowledges and agrees that by executing this Note, Staff Member agrees
to the payroll deductions described in this Note.
4. Option to Convert.
-----------------
At the end of the term of this Note, Staff Member shall have the option
to seek to convert this loan to a loan amortized over an additional
five-year period by executing a new Promissory Note at terms to be
mutually agreed upon by Staff Member and Payee. In the event that Staff
Member and Payee are unable to reach agreement on such terms, this Note
shall become immediately due and payable.
5. Prepayment.
----------
Staff Member may prepay without penalty this Note in whole or in part at
any time. Any and all payments or prepayments under this Note may be
made by Staff Member to Payee at the following address (or such other
address as it designates in writing to Staff Member):
AMGEN INC.
One Amgen Center Drive
Thousand Oaks, California 91320-1789
Attention: Accounting Manager
6. Attorneys' Fees.
---------------
Staff Member agrees to pay all costs and expenses, including, without
limitation, collection agency fees and expenses, reasonable attorneys'
fees, costs of suit and costs of appeal, which Payee may incur in the
exercise, preservation or enforcement of its right, powers and remedies
hereunder, or under any documents or instruments securing this Note, or
under law.
7. Modification of Terms.
---------------------
Payee may, with or without notice to Staff Member, cause additional
parties to be added to this Note, or release any party to this Note, or
revise, extend, or renew the Note, or extend the time for making any
installment provided for by this Note, or accept any installment in
advance, all without affecting the liability of Staff Member. Staff
Member may not assign or transfer in any manner whatsoever this Note or
any of Staff Member's obligations under this Note.
8. Security Interest.
-----------------
The purpose of this loan is to purchase a personal residence. Staff
Member shall secure this loan by executing and causing to be filed,
immediately upon close of escrow, a trust deed on this residence,
commonly known as 5921 Careybrook Drive, Agoura Hills, CA 91301 whose
property description is as follows: Lot 79, of Tract No. 33411, in the
City of
Agoura Hills, County of Los Angeles, State of California, as per map
recorded in Book 1022 Page(s) 7 - 15 inclusive of Maps, in the office of
the County Recorder of said County.
9. Acceleration.
------------
A) In the event Staff Member fails to pay when due any sums under this
Note, then:
(1) the entire unpaid balance of this Note shall, at the option of
the Payee hereof, immediately become due and payable in full and
unpaid Principal thereafter shall bear interest at the lesser of the
maximum rate permitted by law or at the rate of 8.00% per annum; and
(2) Staff Member authorizes Payee to deduct any sums due to Payee
under this Note from any monies, including any wages due, otherwise
owing to Staff Member.
B) If Staff Member sells the residence which is purchased with the funds
herein provided, this Note shall immediately become due and payable upon
the sale of such residence.
10. Waiver of Rights by Staff Member.
--------------------------------
Staff Member waives (1) presentment, demand, protest, notice of dishonor
and/or protest and notice of non-payment; (2) the right, if any, to the
benefit of, or to direct the application of, any security hypothecated
to Payee until all indebtedness of Staff Member to Payee, however
arising, has been paid; and (3) the right to require the Payee to
proceed against any party to this Note, or to pursue any other remedy in
Payee's power. Payee may proceed against Staff Member directly and
independently of any other party to this Note, and the cessation of the
liability of any other party for any reason other than full payment, or
any revision, renewal, extension, forbearance, change of rate of
interest, or acceptance, release or substitution of security, or any
impairment or suspension of Payee's remedies or rights against any other
party, shall not in any way affect the liability of Staff Member.
11. Obligations of Persons Under this Note.
--------------------------------------
If more than one person signs this Note, each person is fully and
personally obligated to keep all of the promises made in this Note,
including the promise to pay the full amount owed. Any person who is a
guarantor, surety, or endorser of this Note is also obligated to do
these things. Any person who takes over these obligations, including the
obligations of a guarantor, surety or endorser of this Note, is also
obligated to keep all of the promises made in this Note. Payee may
enforce its rights under this Note against each person individually or
against all of the signatories to this Note. This means that any one of
the signatories to this Note may be required to pay all of the amounts
owed under this Note.
12. Governing Law.
-------------
This Note and the obligations under this Note of Staff Member or any
other signatory to this Note shall be governed by and interpreted and
determined in accordance with the laws of the State of California as
applied to contracts between California residents entered into and to be
performed entirely within said State.
IN WITNESS WHEREOF, the undersigned has/have executed and delivered this Note as
of the 30th day of May, 2001.
/s/ Brian M. McNamee
______________________________________
Brian M. McNamee
/s/ Gillian D. McNamee
______________________________________
Gillian D. McNamee
EX-10.58
10
dex1058.txt
RESTRICTED STOCK PURCHASE AGREEMENT WITH RICHARD NANULA
Exhibit 10.58
RESTRICTED STOCK PURCHASE AGREEMENT
RICHARD NANULA, Amgen Inc. Grantee:
On this 16th day of May, 2001, Amgen Inc., a Delaware corporation (the
"Company"), pursuant to its Amended and Restated 1991 Equity Incentive Plan (the
"Plan") has granted to you, the grantee named above, a right to purchase Eighty
Five Thousand (85,000) shares (the "Shares") of the $.0001 par value common
stock of the Company ("Common Stock") pursuant to the terms of this Restricted
Stock Purchase Agreement (this "Agreement") and the Plan. Capitalized terms not
defined herein shall have the meanings assigned to such terms in the Plan.
I. Purchase Price. Subject to the terms and conditions of this
--------------
Agreement, the Shares may be purchased from the Company at a purchase price per
share of $.0001 for a total purchase price of $8.50 (the "Total Purchase
Price"). The Total Purchase Price shall be paid in cash at the time of purchase.
II. Repurchase Option.
-----------------
(1) Subject to Section III(4), upon termination of your
employment for any reason, other than death and permanent and total disability
(with such permanent and total disability being certified by the Social Security
Administration prior to such termination), the Company shall have the right and
option to purchase from you or any holder of the Shares as permitted under
Section III(5) (a "Holder") any or all of the Shares at the per Share purchase
price paid by you for such Shares (the "Repurchase Option").
(2) The Company may exercise the Repurchase Option by delivering
personally or by registered mail, to you or a Holder within ninety (90) days of
the date of termination of your employment, a notice in writing indicating the
Company's intention to exercise the Repurchase Option and setting forth a date
for closing not later than thirty (30) days from the mailing of such notice. The
closing shall take place at the Company's office. At the closing, the Secretary
of the Company or other escrow agent as provided in Section VI shall deliver the
stock certificate or certificates evidencing the Shares to the Company, and the
Company shall deliver the purchase price therefor to you or a Holder.
(3) At its option, the Company may elect to make payment for the
Shares to a bank selected by the Company. The Company shall avail itself of this
option by a notice in writing to you or a Holder stating the name and address of
the bank, date of closing, and waiving the closing at the Company's office.
(4) If the Company does not elect to exercise the Repurchase
Option conferred above by giving the requisite notice to you or a Holder within
ninety (90) days following the date of termination of your employment, the
Repurchase Option shall terminate, and any restrictions on Shares remaining as
of the date of the termination of your employment shall lapse immediately.
(5) One hundred percent (100%) of the Shares shall initially be
subject to the Repurchase Option. The Shares shall be released from the
Repurchase Option in accordance with the schedule set forth in Section III(1).
III. Lapse of Repurchase Option.
--------------------------
(1) Subject to Sections III (2), (3) and (4), the Repurchase
Option shall lapse in accordance with the following schedule with respect to the
Shares which have not previously been forfeited by you, provided you are
actively employed by the Company on the respective dates:
Number of Shares to Which Repurchase Option
-------------------------------------------
Date Shall Lapse
---- -----------
May 16, 2004 20,000
May 16, 2005 20,000
May 16, 2006 45,000
(2) Upon termination of your employment due to your permanent
and total disability (with such permanent and total disability being certified
by the Social Security Administration prior to such termination) or your death,
then the Repurchase Option shall lapse immediately with respect to all the
Shares awarded under this Agreement. For purposes of this Agreement,
"termination of your employment" shall mean the last date you are either an
employee of the Company or an Affiliate or engaged as a consultant or director
to the Company or an Affiliate.
(3) In addition, the lapsing of the Repurchase Option pursuant
to Section III(1) may be suspended during a leave of absence as provided from
time to time according to Company policies and practices.
(4) Upon termination of your employment by Amgen without Cause,
the Repurchase Option shall automatically lapse with respect to a pro rata
portion of each tranche of restricted stock for which the Repurchase Option was
otherwise scheduled to lapse as set forth in Section III(1), multiplied by the
ratio of (x) the sum of the number of full months of your active employment with
the Company and (y) the number of months otherwise required for lapsing of the
Repurchase Option with respect to such tranche, as follows:
Number of Shares Ratio
---------------- -----
20,000 x Z/36
20,000 x Z/48
45,000 x Z/60
where Z= the sum of the number of full months of your active employment with the
Company.
Solely for the purpose of this Agreement, "Cause" means (i) your
conviction of a felony, (ii) the engaging by you in conduct that constitutes
willful gross neglect
2
or willful gross misconduct in carrying out your duties to the Company,
resulting, in either case, in material economic harm to the Company, unless you
believed in good faith that such conduct was in, or not contrary to, the best
interests of the Company, (iii) your material breach of any of the terms of this
letter agreement or the Proprietary Information and Inventions Agreement or (iv)
your failure to follow any lawful directive of the Company's Chief Executive
Officer with respect to your employment. For purposes hereof, no act, or failure
to act, on your part shall be deemed "willful" unless done, or omitted to be
done, by you not in good faith.
Notwithstanding anything to the contrary contained herein, the
Committee may, as it deems appropriate, in its sole discretion, accelerate the
date on which the Repurchase Option shall lapse with respect to any of the
Shares which have not been previously forfeited by you.
(5) Your Shares are not assignable or transferable, except by
will or the laws of descent and distribution. Notwithstanding the foregoing, all
or a portion of the Shares subject to the Repurchase Option may be transferred
to an Alternate Payee (as defined in the Plan) if required by the terms of a
QDRO (as defined in the Plan), as further described in the Plan; provided, that
such Alternate Payee is subject to the same terms and conditions as set forth in
this Agreement
IV. Legends. Certificates representing the Shares issued pursuant to
-------
this Agreement shall, until all restrictions lapse or shall have been removed
and new certificates are issued pursuant to Section V, bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS AND REPURCHASE RIGHTS AND MAY BE SUBJECT TO
FORFEITURE UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK PURCHASE
AGREEMENT BY AND BETWEEN AMGEN INC. (THE "COMPANY") AND THE
REGISTERED OWNER OF SUCH SHARES, AND SUCH SHARES MAY NOT BE, DIRECTLY
OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT
PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT."
V. Issuance of Certificates; Tax Withholding.
-----------------------------------------
(1) Subject to subsection (2) below, upon the lapse of the
Repurchase Option with respect to any of the Shares as provided in Section III,
the Company shall cause new certificates to be issued with respect to such
Shares and delivered to you or a Holder, free from the legend provided for in
Section IV and of the Repurchase Option. Such Shares shall cease to be subject
to the terms and conditions of this Agreement.
(2) Notwithstanding subsection (1), no such new certificate
shall be delivered to you or a Holder unless and until you or a Holder shall
have paid to the Company, in cash or by check, the full amount of all federal
and state withholding or other employment taxes applicable to your taxable
income resulting from the grant of the Shares or the lapse or removal of the
restrictions in a form approved by the Committee.
3
VI. Escrow. The Secretary of the Company or such other escrow
------
holder as the Committee may appoint shall retain physical custody of the
certificates representing the Shares until all of the restrictions lapse or
shall have been removed, including, without limitation, the Repurchase Option.
VII. No Contract for Employment. This Agreement is not an
--------------------------
employment or service contract and nothing in this Agreement shall be deemed to
create in any way whatsoever any obligation on your part to continue in the
employ or service of the Company, or of the Company to continue your employment
or service with the Company.
VIII. Notices. Any notices provided for in this Agreement or the
-------
Plan shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by the Company to you, five (5)
days after deposit in the United States mail, postage prepaid, addressed to you
at such address as is currently maintained in the Company's records or at such
other address as you hereafter designate by written notice to the Company.
IX. Plan. This Agreement is subject to all the provisions of
----
the Plan and its provisions are hereby made a part of this Agreement, including
without limitation the provisions of paragraph 7 of the Plan relating to
purchases of restricted stock, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this Agreement and those of the Plan, the provisions of the Plan
shall control.
Very truly yours,
AMGEN INC.
By /s/ Steven M. Odre
____________________________________
Duly authorized on behalf of the Board of Directors
Agreed and Accepted
as of the date first written above
/s/ Richard Nanula
_________________________________
Richard Nanula
4
EX-10.59
11
dex1059.txt
RESTRICTED STOCK PURCHASE AGREEMENT WITH ROGER PERLMUTTER
Exhibit 10.59
RESTRICTED STOCK PURCHASE AGREEMENT
ROGER M. PERLMUTTER, Amgen Inc. Grantee:
On this 8th day of January, 2001, Amgen Inc., a Delaware corporation
(the "Company"), pursuant to its Amended and Restated 1991 Equity Incentive Plan
(the "Plan") has granted to you, the grantee named above, a right to purchase
One Hundred Eleven Thousand Five Hundred (111,500) shares (the "Shares") of the
$.0001 par value common stock of the Company ("Common Stock") pursuant to the
terms of this Restricted Stock Purchase Agreement (this "Agreement") and the
Plan. Capitalized terms not defined herein shall have the meanings assigned to
such terms in the Plan.
I. Purchase Price. Subject to the terms and conditions of this
--------------
Agreement, the Shares may be purchased from the Company at a purchase price per
share of $.0001 for a total purchase price of $11.15 (the "Total Purchase
Price"). The Total Purchase Price shall be paid in cash at the time of purchase.
II. Repurchase Option.
-----------------
(1) Upon termination of your employment for any reason, other
than death and permanent and total disability (with such permanent and total
disability being certified by the Social Security Administration prior to such
termination), the Company shall have the right and option to purchase from you
or any holder of the Shares as permitted under Section III(5) (a "Holder") any
or all of the Shares at the per Share purchase price paid by you for such Shares
(the "Repurchase Option").
(2) The Company may exercise the Repurchase Option by delivering
personally or by registered mail, to you or a Holder within ninety (90) days of
the date of termination of your employment, a notice in writing indicating the
Company's intention to exercise the Repurchase Option and setting forth a date
for closing not later than thirty (30) days from the mailing of such notice. The
closing shall take place at the Company's office. At the closing, the Secretary
of the Company or other escrow agent as provided in Section VI shall deliver the
stock certificate or certificates evidencing the Shares to the Company, and the
Company shall deliver the purchase price therefor.
(3) At its option, the Company may elect to make payment for the
Shares to a bank selected by the Company. The Company shall avail itself of this
option by a notice in writing to you or a Holder stating the name and address of
the bank, date of closing, and waiving the closing at the Company's office.
(4) If the Company does not elect to exercise the Repurchase
Option conferred above by giving the requisite notice to you or a Holder within
ninety (90) days
following the date of termination of your employment, the Repurchase Option
shall terminate, and any restrictions on Shares remaining as of the date of the
termination of your employment shall lapse immediately.
(5) One hundred percent (100%) of the Shares shall initially be
subject to the Repurchase Option. The Shares shall be released from the
Repurchase Option in accordance with the schedule set forth in Section III(1).
III. Lapse of Repurchase Option.
--------------------------
(1) Subject to Sections III (2), (3) and (4), the Repurchase
Option shall lapse in accordance with the following schedule with respect to the
Shares which have not previously been forfeited by you, provided you are
actively employed by the Company on the respective dates:
Number of Shares to Which Repurchase Option
-------------------------------------------
Date Shall Lapse
---- -----------
April 1, 2002 40,000
April 1, 2003 23,750
April 1, 2004 23,750
April 1, 2005 24,000
(2) Upon termination of your employment due to your permanent and
total disability (with such permanent and total disability being certified by
the Social Security Administration prior to such termination) or your death,
then the Repurchase Option shall lapse immediately with respect to all the
Shares awarded under this Agreement. For purposes of this Agreement,
"termination of your employment" shall mean the last date you are either an
employee of the Company or an Affiliate or engaged as a consultant or director
to the Company or an Affiliate.
(3) In addition, the lapsing of the Repurchase Option pursuant to
Section III(1) may be suspended during a leave of absence as provided from time
to time according to Company policies and practices.
(4) Notwithstanding anything to the contrary contained herein,
the Committee may, as it deems appropriate, in its sole discretion, accelerate
the date on which the Repurchase Option shall lapse with respect to any of the
Shares which have not been previously forfeited by you.
(5) Your Shares are not assignable or transferable, except by
will or the laws of descent and distribution. Notwithstanding the foregoing, all
or a portion of the Shares subject to the Repurchase Option may be transferred
to an Alternate Payee (as defined in the Plan) if required by the terms of a
QDRO (as defined in the Plan), as further described in the Plan; provided, that
such Alternate Payee is subject to the same terms and conditions as set forth in
this Agreement
2
IV. Legends. Certificates representing the Shares issued pursuant to
-------
this Agreement shall, until all restrictions lapse or shall have been removed
and new certificates are issued pursuant to Section V, bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS AND REPURCHASE RIGHTS AND MAY BE SUBJECT TO
FORFEITURE UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK
PURCHASE AGREEMENT BY AND BETWEEN AMGEN INC. (THE "COMPANY") AND
THE REGISTERED OWNER OF SUCH SHARES, AND SUCH SHARES MAY NOT BE,
DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY
CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH
AGREEMENT."
V. Issuance of Certificates; Tax Withholding.
-----------------------------------------
(1) Subject to subsection (2) below, upon the lapse of the
Repurchase Option with respect to any of the Shares as provided in Section III,
the Company shall cause new certificates to be issued with respect to such
Shares and delivered to you or a Holder, free from the legend provided for in
Section IV and of the Repurchase Option. Such Shares shall cease to be subject
to the terms and conditions of this Agreement.
(2) Notwithstanding subsection (1), no such new certificate shall
be delivered to you or a Holder unless and until you or a Holder shall have paid
to the Company, in cash or by check, the full amount of all federal and state
withholding or other employment taxes applicable to your taxable income
resulting from the grant of the Shares or the lapse or removal of the
restrictions in a form approved by the Committee.
VI. Escrow. The Secretary of the Company or such other escrow holder
------
as the Committee may appoint shall retain physical custody of the certificates
representing the Shares until all of the restrictions lapse or shall have been
removed; provided, however, that in no event shall you retain physical custody
of any certificates representing Shares issued to you which are subject to the
Repurchase Option.
VII. No Contract for Employment. This Agreement is not an employment
--------------------------
or service contract and nothing in this Agreement shall be deemed to create in
any way whatsoever any obligation on your part to continue in the employ or
service of the Company, or of the Company to continue your employment or service
with the Company.
VIII. Notices. Any notices provided for in this Agreement or the Plan
-------
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at such
address as is currently maintained in the Company's records or at such other
address as you hereafter designate by written notice to the Company.
3
IX. Plan. This Agreement is subject to all the provisions of the Plan
----
and its provisions are hereby made a part of this Agreement, including without
limitation the provisions of paragraph 7 of the Plan relating to purchases of
restricted stock, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and adopted
pursuant to the Plan. In the event of any conflict between the provisions of
this Agreement and those of the Plan, the provisions of the Plan shall control.
Very truly yours,
AMGEN INC.
By /s/ Steven M. Odre
------------------------------
Duly authorized on behalf of the
Board of Directors
Agreed and Accepted
as of the date first written above
/s/ Roger M. Perlmutter
-----------------------------
Roger M. Perlmutter
4
EX-99
12
dex99.txt
FACTORS THAT MAY AFFECT AMGEN
Exhibit 99
FACTORS THAT MAY AFFECT AMGEN
Amgen operates in a rapidly changing environment that involves a number
of risks, some of which are beyond our control. The following discussion
highlights some of these risks.
Our product development efforts may not result in commercial products.
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We intend to continue an aggressive product development program.
Successful product development in the biotechnology industry is highly
uncertain, and very few research and development projects produce a commercial
product. Product candidates that appear promising in the early phases of
development, such as in early human clinical trials, may fail to reach the
market for a number of reasons, such as:
. the product candidate did not demonstrate acceptable clinical
trial results even though it demonstrated positive preclinical
trial results
. the product candidate was not effective in treating a specified
condition or illness
. the product candidate had harmful side effects on humans
. the necessary regulatory bodies such as the U.S. Food and Drug
Administration, did not approve our product candidate for an
intended use
. the product candidate was not economical for us to manufacture
and commercialize
. other companies or people have or may have proprietary rights to
our product candidate, such as patent rights, and will not let
us sell it on reasonable terms, or at all
. the product candidate is not cost effective in light of existing
therapeutics
Several of our product candidates have failed at various stages in the
product development process, including Brain Derived Neurotrophic Factor (BDNF),
Megakaryocyte Growth and Development Factor (MGDF) and Glial Cell-line Derived
Neurotrophic Factor (GDNF). For example, in 1997, we announced the failure of
BDNF for the treatment of amyotrophic lateral sclerosis, or Lou Gehrig's
Disease, because the product candidate, when administered by injection, did not
produce acceptable clinical results for a specific use after a phase 3 trial,
even though BDNF had progressed successfully through preclinical and earlier
clinical trials. In addition, in 1998, we discontinued development of MGDF, a
novel platelet growth factor, at the phase 3 trial stage after several people in
platelet donation trials developed low platelet counts and neutralizing
antibodies. In 1999 we discontinued development of GDNF after a phase 1/2 trial
of GDNF in Parkinson's disease failed to demonstrate a statistically significant
benefit. Of course, there may be other factors that prevent us from marketing a
product. We cannot guarantee we will be able to produce commercially successful
products. Further, clinical trial results are frequently susceptible to varying
interpretations by scientists, medical personnel, regulatory personnel,
statisticians and others which may delay, limit or prevent further clinical
development or regulatory approvals of a product candidate. Also, the length of
time that it takes for us to complete clinical trials and obtain regulatory
approval for product marketing has in the past varied by product and by the
intended use of a product. We expect that this will likely be the case with
future product candidates and we cannot predict the
length of time to complete necessary clinical trials and obtain regulatory
approval. See "- Our current products and products in development cannot be sold
if we do not obtain and maintain regulatory approval."
Our current products and products in development cannot be sold if we do not
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obtain and maintain regulatory approval.
---------------------------------------
We conduct research, preclinical testing and clinical trials and we
manufacture our product candidates. We also manufacture, price, sell, distribute
and market our products for their approved indications. These activities are
subject to extensive regulation by numerous state and federal governmental
authorities in the U.S., such as the FDA and the Health Care Financing
Administration, as well as by foreign countries, including the European Union.
Currently, we are required in the U.S. and in foreign countries to obtain
approval from those countries' regulatory authorities before we can market and
sell our products in those countries. In our experience, obtaining regulatory
approval is costly and takes many years, and after it is obtained, it remains
costly to maintain. The FDA and other U.S. and foreign regulatory agencies have
substantial discretion to terminate clinical trials, require additional testing,
delay or withhold registration and marketing approval and mandate product
withdrawals. EPOGEN(R) is currently approved in the U.S. and NEUPOGEN(R) is
currently approved in the U.S., the EU and in some other foreign countries for
specific uses. We currently manufacture and market EPOGEN(R) and NEUPOGEN(R) and
we plan to manufacture and market many of our potential products. Even though we
have obtained regulatory approval for EPOGEN(R) and NEUPOGEN(R), these products
and our manufacturing processes are subject to continued review by the FDA and
other regulatory authorities. In addition, later discovery of unknown problems
with our products or manufacturing processes could result in restrictions on
such products or manufacturing processes, including potential withdrawal of the
products from the market. If regulatory authorities determine that we have
violated regulations or if they restrict, suspend or revoke our prior approvals,
they could prohibit us from manufacturing or selling EPOGEN(R) or NEUPOGEN(R)
until we comply or indefinitely. In addition, if regulatory authorities
determine that we have not complied with regulations in the research and
development of a product candidate, then they may not approve the product
candidate and we will not be able to market and sell it. If we are unable to
market and sell our products or product candidates, our business would be
adversely affected.
Guidelines and recommendations published by various organizations can reduce the
--------------------------------------------------------------------------------
use of our products.
-------------------
Government agencies promulgate regulations and guidelines directly
applicable to us and to our products. However, professional societies, practice
management groups, private health/science foundations and organizations involved
in various diseases from time to time may also publish guidelines or
recommendations to the health care and patient communities. Recommendations of
government agencies or these other groups/organizations may relate to such
matters as usage, dosage, route of administration and use of concomitant
therapies. Organizations like these have in the past made recommendations about
our products. Recommendations or guidelines that are followed by patients and
health care providers could result in decreased use of our products. In
addition, the perception by the investment community or stockholders that
recommendations or guidelines will result in decreased use of our products could
adversely affect prevailing market prices for our common stock.
2
Our sales depend on payment and reimbursement from third party payors, and a
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reduction in the payment rate or reimbursement could result in decreased use or
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sales of our products.
---------------------
In both domestic and foreign markets, sales of our products are
dependent, in part, on the availability of reimbursement from third party payors
such as state and federal governments, under programs such as Medicare and
Medicaid in the U.S., and private insurance plans. In certain foreign markets,
the pricing and profitability of our products generally are subject to
government controls. In the U.S., there have been, and we expect there will
continue to be, a number of state and federal proposals that could limit the
amount that state or federal governments will pay to reimburse the cost of
drugs. In addition, we believe the increasing emphasis on managed care in the
U.S. has and will continue to put pressure on the price and usage of our
products, which may adversely impact product sales. Further, when a new
therapeutic product is approved, the availability of governmental and/or private
reimbursement for that product is uncertain, as is the amount for which that
product will be reimbursed. We cannot predict the availability or amount of
reimbursement for our product candidates, including those at a late stage of
development, and current reimbursement policies for existing products may change
at any time. For example, we believe that sales of ARANESP(TM) will be affected
by government and private payor reimbursement policies.
If reimbursement for EPOGEN(R) and NEUPOGEN(R) changes adversely or if
we fail to obtain adequate reimbursement for our future products, health care
providers may limit how much or under what circumstances they will administer
them, which could reduce the use of our products or cause us to reduce the price
of our products. This could result in lower product sales or revenues which
could have a material adverse effect on us and our results of operations. For
example, in the U.S. the use of EPOGEN(R) in connection with treatment for end
stage renal disease is funded primarily by the U.S. federal government. In early
1997, HCFA instituted a reimbursement change for EPOGEN(R) which adversely
affected Amgen's EPOGEN(R) sales, until the policies were revised. Therefore, as
in the past, EPOGEN(R) sales could be adversely affected by future changes in
reimbursement rates or the basis for reimbursement by the federal government for
the end stage renal disease program.
If our intellectual property positions are challenged, invalidated or
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circumvented, or if we fail to prevail in present and future intellectual
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property litigation, our business could be adversely affected.
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The patent positions of pharmaceutical and biotechnology companies can
be highly uncertain and often involve complex legal, scientific and factual
questions. To date, there has emerged no consistent policy regarding breadth of
claims allowed in such companies' patents. Third parties may challenge,
invalidate or circumvent our patents and patent applications relating to our
products, product candidates and technologies. In addition, our patent positions
might not protect us against competitors with similar products or technologies
because competing products or technologies may not infringe our patents. For
certain of our product candidates, there are third parties who have patents or
pending patents that they may claim prevent us from commercializing these
product candidates in certain territories. Patent disputes are frequent, costly
and can preclude commercialization of products. We are currently, and in the
future may be, involved in patent litigation. For example, we are involved in
ongoing patent infringement lawsuits against Transkaryotic Therapies, Inc. and
Aventis S.A. with respect to our erythropoietin patents. The trial court decided
in our favor on January 19, 2001, however, Transkaryotic Therapies, Inc. and
Aventis S.A. have appealed the decision. If we ultimately lose
3
these or other litigations we could be subject to competition and/or significant
liabilities, we could be required to enter into third party licenses for the
infringed product or technology, or we could be required to cease using the
technology or product in dispute. In addition, we cannot guarantee that such
licenses will be available on terms acceptable to us.
Our success depends in part on our ability to obtain and defend patent
rights and other intellectual property rights that are important to the
commercialization of our products and product candidates. We have filed
applications for a number of patents and have been granted patents relating to
erythropoietin, recombinant G-CSF and our other products and potential products.
We market our erythropoietin and G-CSF products as EPOGEN(R) and NEUPOGEN(R),
respectively. In the United States, we have been issued several patents relating
to erythropoietin that generally cover DNA and host cells, processes for making
erythropoietin, various product claims to erythropoietin, cells that make levels
of erythropoietin and pharmaceutical compositions of erythropoietin. We have
also been issued U.S. patents relating to G-CSF that cover aspects of DNAs,
vectors, cells, processes, polypeptides, methods of treatment using G-CSF
polypeptides, methods of enhancing bone marrow transplantation and treating burn
wounds, methods for recombinant production of G-CSF and analogs of G-CSF. We
also have a patent in the EU relating to erythropoietin and a patent in the EU
relating to G-CSF, and two patents in the EU relating to darbepoetin alfa and
hyperglycosylated erythropoietic proteins.
We face substantial competition, and others may discover, develop, acquire or
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commercialize products before or more successfully than we do.
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We operate in a highly competitive environment. Our products compete
with other products or treatments for diseases for which our products may be
indicated. For example, although we maintain a substantial share of the
chemotherapy induced neutropenia market, NEUPOGEN(R) competes against a product
marketed by Immunex Corporation. EPOGEN(R) faces competition from other
treatments for anemia in end stage renal disease patients in the U.S. Further,
we believe that some of our late stage product candidates may face competition
when they are approved and marketed. For example, ARANESP(TM) will compete with
an epoetin alfa product marketed by Johnson & Johnson in certain anemia markets
and anakinra could compete with rheumatoid arthritis products marketed by
Immunex, Centocor Inc./Johnson & Johnson and others. Additionally, some of our
competitors, including biotechnology and pharmaceutical companies, market
products or are actively engaged in research and development in areas where we
are developing product candidates. Large pharmaceutical corporations may have
greater clinical, research, regulatory and marketing resources than we do. In
addition, some of our competitors may have technical or competitive advantages
over us for the development of technologies and processes. These resources may
make it difficult for us to compete with them to successfully discover, develop
and market new products.
Our operating results may fluctuate, and this fluctuation could cause financial
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results to be below expectations.
--------------------------------
Our operating results may fluctuate from period to period for a number
of reasons. In budgeting our operating expenses, we assume that revenues will
continue to grow; however, some of our operating expenses are fixed in the short
term. Because of this, even a relatively small revenue shortfall may cause a
period's results to be below our expectations or projections. A revenue
shortfall could arise from any number of factors, some of which we cannot
control. For example, we may face:
4
. lower than expected demand for our products
. changes in the government's or private payors' reimbursement
policies for our products
. changes in wholesaler buying patterns
. increased competition from new or existing products
. fluctuations in foreign currency exchange rates
. changes in our product pricing strategies
Of these, we would only have control over changes in our product pricing
strategies and, of course, there may be other factors that affect our revenues
in any given period.
We plan to grow rapidly, and if we fail to adequately manage that growth our
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business could be adversely impacted.
------------------------------------
We have an aggressive growth plan that includes substantial and
increasing investments in research and development, sales and marketing and
facilities. Our plan has a number of risks, some of which we cannot control. For
example:
. we may need to generate higher revenues to cover a higher level
of operating expenses, and our ability to do so may depend on
factors that we do not control
. we may need to attract and assimilate a large number of new
employees
. we may need to manage complexities associated with a larger and
faster growing organization
. we will need to accurately anticipate demand for the products we
manufacture and maintain adequate manufacturing capacity, and
our ability to do so may depend on factors that we do not
control
Of course, there may be other risks and we cannot guarantee that we will
be able to successfully manage these or other risks.
Our stock price is volatile, which could adversely affect your investment.
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Our stock price, like that of other biotechnology companies, is highly
volatile. For example, in the fifty-two weeks prior to May 2, 2001, the trading
price of our common stock has ranged from a high of $80.4375 per share to a low
of $45.4375 per share. Our stock price may be affected by such factors as:
. clinical trial results
. product development announcements by us or our competitors
. regulatory matters
. announcements in the scientific and research community
. intellectual property and legal matters
5
. changes in reimbursement policies or medical practices
. broader industry and market trends unrelated to our performance
In addition, if our revenues or earnings in any period fail to meet the
investment community's expectations, there could be an immediate adverse impact
on our stock price.
6