Exhibit 10.48
March 2, 2001
Xx. Xxxxx X. Xxxxxxxxxx, M.D., Ph.D.
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxx:
Amendment and Restatement of December 21, 2000 Letter
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The following is our letter agreement dated December 21, 2000, which has been
restated to reflect our handwritten notations and oral agreements on a few
points which were not reflected in the December 21, 2000 letter (the "Original
Letter"). As so amended and restated, this letter supersedes the Original Letter
and shall be effective as of January 8, 2001, the date upon which you became an
employee of Amgen (your "Start Date"). There is no need for you to re-sign your
Proprietary Information and Inventions Agreement and your Mutual Agreement to
Arbitrate Claims which were attached as Attachment 1 to the Original Letter,
which agreements you signed on December 27, 2000, because we have made no
changes to those agreements. Accordingly, those agreements continue to be in
full force and effect. However, the attached Attachment 2 has been revised and
the attached Attachment 3 is new.
Amended and Restated Letter
---------------------------
I am pleased to offer you the position of Executive Vice President of Research
and Development reporting to me. You will be based at our Thousand Oaks,
California facility.
Base Salary and Annual Incentive
--------------------------------
Your monthly salary will be $54,167. In addition, you will be entitled to a
$750,000 bonus which will be paid within 30 days of your start date. As an
Executive Vice President, you will be eligible to participate in Amgen's
Management Incentive Plan (the "MIP") pursuant to the terms of the MIP. Your
annual target incentive opportunity will be 70% of your base salary earnings
during the year. Your performance against pre-established goals and Amgen's
performance will determine your actual incentive each year. However, in order to
ease your transition to a new company and a new area, Amgen will guarantee a
minimum incentive payment of $750,000 (payable in March 2002) for 2001 and
$750,000 (payable in March 2003) for 2002. You must be actively
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March 2, 2001
Page 2
employed by Amgen on December 31, 2001 and on December 31, 2002 to receive the
guaranteed payments for 2001 and 2002, respectively.
Annual Retention Bonuses
------------------------
On each of the first five one-year anniversaries of your Start Date, beginning
on January 8, 2002, Amgen will pay you a retention bonus in the amount of
$200,000, provided that you are actively employed by Amgen on each such date. If
you are not so employed on each such date, no portion of the bonus is considered
earned or vested and no prorated payments will be made.
Stock Options
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You will be granted an option to purchase 200,000 shares of Amgen's common stock
at a price equal to 100% of the fair market value on your start date. This
option shall be an incentive stock option to the extent permitted by law, with
the balance being granted as a non-qualified stock option. This option shall be
vested at a rate of 25% per year for four years, beginning one year from the
date of grant, and the option will expire seven years from the date of grant.
In addition, you will also be eligible to receive additional stock options as
part of Amgen's Periodic Stock Option Program (the "PSOP"). Grants under the
PSOP are discretionary and are usually made in July of each year, as approved by
Amgen's Compensation Committee. However, for 2001 and 2002, subject to approval
by the Compensation Committee of Amgen's Board of Directors, Amgen will grant
you an option to purchase 150,000 shares in each of these years. These options
will be granted pursuant to, and in conformity with, the terms of the PSOP.
These PSOP options will vest 20% per year for five years, beginning one year
from the date of grant, and the options will expire seven years from the date of
grant. You must be actively employed by Amgen on the PSOP grant date in each
year to receive the PSOP grant for that year.
Non-Qualified Deferred Compensation
-----------------------------------
Amgen will provide you with non-qualified deferred compensation benefits as set
forth on Attachment 3, subject to all of the terms and conditions set forth
therein.
Forfeited Compensation Replacement.
-----------------------------------
In order to compensate you for certain compensation which you forfeited upon the
termination of your employment with your prior employer, Amgen will award you
111,500 shares of restricted stock under Amgen's 1991 Equity Incentive Plan, in
consideration of your payment of the $.0001 per share par value of the
restricted shares (the "Par Value Price"), in the aggregate amount of $11.15.
This grant will vest as follows, contingent upon your being actively employed
with Amgen on each vesting date:
April 1, 2002 40,000 shares
April 1, 2003 23,750 shares
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
Page 3
April 1, 2004 23,750 shares
April 1, 2005 24,000 shares
Upon the termination of your active employment with Amgen, any unvested shares
of restricted stock may be repurchased by Amgen at their Par Value Price, except
that upon termination of your employment due to your "Permanent and Total
Disability," as defined below, or your death, then the vesting of the unvested
shares of restricted stock will be accelerated so that all the restricted stock
will be fully vested as of the date of termination. For the purposes of this
provision and Attachment 3 only, you shall have incurred a "Permanent and Total
Disability" when such a disability has been certified by the Social Security
Administration prior to the date of termination. Amgen will hold the
certificates representing any unvested shares of restricted stock until the
shares vest, at which time Amgen will issue you a certificate representing the
vested shares.
Termination
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If, within the first five years of your employment with Amgen, either: (i) Amgen
terminates your employment without Cause, as defined below, or (ii) you resign
your employment due to a reduction of your duties or your base salary or annual
target incentive opportunity under the MIP, then you will be entitled to three
years of base salary and target incentive paid monthly and health care coverage
unless coverage is obtained from another employer, but only if you sign a
general release form furnished to you by Amgen. If you intend to resign your
employment for reduction of duties or compensation, you must notify the Company
in writing. If Amgen fails to cure or remedy your reason for resignation within
thirty (30) days of its receipt of your notification and you still choose to
resign, you must do so within fifteen (15) days of Amgen's failure to cure or
remedy your reason. If you are also entitled to receive severance benefits under
the Amgen Inc. Change of Control Severance Plan (the "COC Plan") on account of a
termination covered by this provision, you will be paid the greater of the
amount provided above or provided in the COC Plan, but not both amounts.
Solely for the purpose of this provision and Attachment 3, "Cause" means (i)
your conviction of a felony, (ii) the engaging by you in conduct that
constitutes willful gross neglect or willful gross misconduct in carrying out
your duties to Amgen, resulting, in either case, in material economic harm to
Amgen, unless you believed in good faith that such conduct was in, or not
contrary to, the best interests of Amgen, (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 Amgen'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.
Benefits
--------
You will also have the opportunity to participate in our comprehensive benefits
program. Amgen's excellent health care plan currently includes medical, dental,
and vision coverage for
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
Page 4
you and your eligible dependents. Amgen currently pays the major expense for
these programs while staff members share through payroll deductions. Please be
advised that in order for you and your dependents to be eligible for Amgen's
medical coverage you must:
1. Report to work at Amgen or another location to which you are
required to travel and perform the regular duties of your
employment.
2. Contact the Amgen Benefit Center at Fidelity, 0-000-000-0000, to
enroll within 31 days of your hire date.
3. Meet all other eligibility requirements under the plan.
Amgen's Retirement & Savings 401(K) Plan provides an opportunity for staff
members to save up to 15% of their pay on a tax deferred basis. (Maximum
statutory individual limit for 2001 will be $10,500). Amgen will also contribute
to your 401(K) account to help you save for your future financial goals. The
benefits, services and programs are summarized in the enclosed brochure called
"Welcome to Amgen - Total Compensation and Benefits at Amgen." You will also be
eligible for Amgen's Supplemental (401K) Retirement Plan (the "SRP").
Subject to your insurability at standard rates and continued employment with
Amgen, until September 16, 2007 Amgen shall maintain and pay the premiums on a
term life insurance policy in the amount of $10,000,000 for your benefit.
You will also be entitled to senior executive physicals, financial counseling
and tax preparation services at the same level as all other Amgen senior
executives.
When you travel on Amgen business, you may travel first class, provided that you
make arrangements for such travel with Amgen's designated travel agents and
pursuant to Amgen's travel and business expense policies.
You will be responsible for paying all applicable income and employment taxes on
your Amgen compensation and benefits and will be subject to all income and
employment tax withholding, except as expressly provided otherwise with respect
to certain relocation benefits described in Attachment 2.
Required Documents
------------------
Enclosed and included as part of this offer (Attachment 1) is information
regarding Amgen's Proprietary Information and Inventions Agreement, the
Immigration Reform & Control Act, and a packet of materials entitled
"Arbitration of Disputes - Amgen Inc." which includes a Mutual Agreement to
Arbitrate Claims. This offer is contingent upon your completing the items
described in Attachment 1.
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
Page 5
Relocation
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Also enclosed and included, as part of this offer (Attachment 2), is information
about the main points of the relocation assistance which Amgen will provide to
you to relocate to the "local area." The brochures included describe each
component in more detail.
Upon acceptance of this offer, please fill out the attached "Moving
Forward...With Amgen" acceptance form and fax it to the Relocation Department at
805/447-1985 to initiate your relocation benefits. Xxxx Xxxxxx will contact you
as soon as possible to walk you through the process.
Employment At Will
------------------
By signing this letter, you understand and agree that your employment with Amgen
is 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, and Amgen
can terminate or change all other terms and conditions of your employment, with
or without Cause, and with or without notice, at any time. This at-will
relationship will remain in effect throughout your employment with Amgen Inc. or
any of its subsidiaries, or affiliates. This letter constitutes the entire
agreement, arrangement and understanding between you and Amgen on the nature and
terms of your employment with Amgen. This letter supersedes any prior or
contemporaneous agreement, arrangement or understanding on this subject matter.
By executing this letter as provided below, you expressly acknowledge the
termination of any such prior agreement, arrangement or understanding. Also, by
your execution of this letter, you affirm that no one has made any written or
verbal statement that contradicts the provisions of this letter. The at-will
nature of your employment, as set forth in this paragraph, can be modified only
by a written agreement signed by both Amgen's Chief Executive Officer 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.
We are enthusiastic about the contribution you can make, and we believe that
Amgen can provide you with attractive opportunities for personal achievement and
growth. Please retain the original offer letter for your records. If you have
any questions regarding this offer, please contact Xxxx Xxxxxxx at (805) 447 -
7456.
Sincerely,
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
/s/ Xxxxx X. Xxxxxxxxxx 3/05/01
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Signature of Acceptance Date
Enclosures
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
Page 6
ATTACHMENT 2
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Page 1
Relocation Assistance Coverage
All relocation expense coverage to be provided as a part of your Amgen
employment offer is outlined in this attachment. This relocation expense
coverage is designed to offset most of the cost of your relocation. However, as
a new staff member, it is expected that you will make every effort to reduce or
eliminate relocation expense wherever possible.
Please Note: Upon acceptance of this offer, please fill out the attached "Moving
Forward...With Amgen" acceptance form and fax it to the Relocation Department at
805/447-1985 to initiate your relocation benefits. Xxxx Xxxxxx, our relocation
manager, will contact you as soon as possible to walk you through the process.
Marketing Assistance, Home Sale, and Home Sale Incentive Program
----------------------------------------------------------------
A Marketing Assistance Program is available to assist in the sale of your
current primary residence. Also, through the Home Sale Program, we will
offer you the opportunity for a third party purchase of your current
primary residence if you are unable to sell your home within 90 days.
Under this program, an interest-free equity bridge loan is available to
assist in the purchase of your new residence. The seller's normal, non-
recurring closing costs associated with the sale of your home (i.e., real
estate commission, title expense, etc.) will be paid by Amgen through this
program. You are also eligible for the Home Sale Incentive Program which
is designed to reward you for helping expedite the sale of your home. For
additional information, and to initiate the program contact Xxxx Xxxxxx.
(000) 000-0000. You must contact her before taking any action to sell your
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home.
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Additionally, should you close escrow on the purchase of a home in the
Thousand Oaks area prior to the sale of your current residence, Amgen will
reimburse up to 3 months of your current mortgage payment and other
reasonable related costs (i.e., utilities, prorated taxes, insurance,
etc.).
House Hunting Trip
------------------
Amgen will reimburse you for your out of pocket expenses in connection with
your house hunting efforts. You should call Xxxxxx Xxxxxxxx at 000-000-0000
in Amgen's Corporate Travel Dept. for assistance with your travel plans.
You will receive reimbursement upon presenting trip receipts (in the form
of the airline tickets or hotel xxxx associated with this trip) to our
Relocation Manager.
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
Temporary Living Expenses
-------------------------
Temporary living lodging expense will be covered for up to one year in
Amgen leased lodging units. Since Amgen has contracted for these temporary
lodging accommodations, there is no need to make arrangements on your own.
The Relocation Coordinator will assist in making these lodging arrangements
for you. Amgen will also determine a per diem allowance, to be paid to you
as a lump sum for food, telephone and miscellaneous expenses you may incur
during your temporary living period.
One-Way Travel Expenses
-----------------------
Amgen will reimburse one-way travel expenses for you and your household
members to take residence in the Thousand Oaks area. If Amgen has arranged
for your car to be moved by a moving company, Amgen will also pay for
rental of one automobile, for up to 14 days You should contact Xxxxxx
Xxxxxxxx at 000-000-0000 in Amgen's Corporate Travel Dept. to make your
travel reservations.
Moving Household Goods
----------------------
Amgen will arrange for packing, moving, and unpacking of normal household
possessions, including up to two automobiles. Amgen will also pay for up to
365 days of storage of household goods, if necessary. Amgen will initiate
contact with moving companies and will handle all details with the company
assigned to your move.
3-2-1 Mortgage Subsidy Program
------------------------------
To assist you in the purchase of your new home in the Thousand Oaks area,
Amgen will provide you the option of a temporary mortgage subsidy program.
To participate in this program, you must obtain your first loan through one
of the approved lenders with which Amgen has entered into a subsidy
agreement.
Through this program, Amgen will subsidize your mortgage as follows: 3
points the first 12 months, 2 points the second 12 months and 1 point the
third 12 months. The payment of the mortgage subsidy will be handled
between Amgen and the Mortgage Lender.
Also, you will be reimbursed for Mortgage Loan Origination Fees, in an
amount not to exceed one percent (1%) of the principal balance. An
additional Six Hundred Fifty Dollars ($650.00) is granted for other
Lender's Fees. These fees include, but are not limited to, fees for the
appraisal, credit report, tax service fees, processing fees, flood zone
determination fees, underwriting fees, warehouse fees, rate lock-in fees,
broker fees, lender document preparation fees, commitment fees, lender
courier fees, escrow waiver fees, and loan review fees. You will also be
reimbursed for the customary non-recurring buyer's closing costs for Escrow
and/or Title fees and home inspection.
You will be required to sign an Employee Subsidy Agreement that will detail
the terms of the program.
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
If you choose not to or are unable to utilize the 3-2-1 Mortgage Subsidy
Program, you will be eligible for reimbursement of up to three points (3%)
of the mortgage amount for loan origination or discount expense. You will
also receive reimbursement of the buyer's normal, non-recurring closing
costs associated with the purchase of a home in the "local area".
Please note that you are not required to obtain your first loan through an
approved lender unless you intend to participate in the 3-2-1 Mortgage
Subsidy Program
For more information or to begin the process, please call your Relocation
Specialist.
Adjustable Rate Secured Loan
----------------------------
To aid in the purchase of a home in the Thousand Oaks area, Amgen is
prepared to offer you a five year, adjustable rate loan for up to
$1,000,000 which will be secured by a second mortgage on your new
home. However, you will be expected to provide a minimum down payment
investment of at least 5% of the purchase price from your own funds
or other sources which are not secured by this home.
The loan will be funded prior to close of escrow at a date to be
determined solely by Amgen. This loan will not be funded prior to you
beginning your employment at Amgen.
The 2001 rate on the loan is 5.0%. The rate is adjusted January 1st
of each year based on the average "Introduction Rates" on adjustable
loans as offered by California banks and savings & loans. The most
the rate will change each year is 1% with a cap of 3% over the life
of the initial loan. You will be required to make semi-monthly
interest only payments by payroll deduction.
Principal and accrued interest on the loan will be due and payable
upon the earlier of the 5th anniversary of the loan date or 90 days
after your employment with Amgen terminates for any reason. You may
prepay interest or principal on the loan at any time.
Tax Gross-up Assistance
-----------------------
Amgen will provide for tax assistance (gross-up) for the non-
deductible portion of those reimbursed relocation expenses described
in this Attachment 2 and which are considered as ordinary income for
state or federal income tax purposes.
Duration of Relocation
----------------------
This relocation expense coverage is intended to assist you in getting
established in your new residence in the Thousand Oaks area as quickly as
possible. Therefore, it is required that all relocation assistance provided
for in this attachment and all expense
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
reimbursements for this assistance be completed within one year from your
date of hire in your new location.
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
ATTACHMENT 3
Non-Qualified Deferred Compensation
1. Establishment of DCA. In order to replace certain compensation and benefits
--------------------
you will not receive from your prior employer and in order to provide you with
supplemental retirement benefits and to provide you with an incentive to
continue your employment with Amgen, Amgen will establish a non-qualified
deferred compensation account for your benefit (the "DCA") to which Amgen shall
credit amounts of deferred compensation and which shall be payable to you as set
forth below.
2. Crediting of Compensation on 55th Birthday. If you are actively employed by
------------------------------------------
Amgen on September 16, 2007, the date of your 55th birthday (the "Crediting
Date"), Amgen shall credit the DCA with $10,000,000 (the "DCA Amount").
3. Termination of Employment before 55th Birthday. In the event that your
-----------------------------------------------
active employment with Amgen is terminated before the Crediting Date for any
reason, no credits will be made to the DCA and you will not be paid any portion
of the DCA, except as set forth below.
A. If your employment is terminated by Amgen without Cause before the
Crediting Date, between January 2 and January 31 of the year following the year
in which your employment terminates, Amgen shall pay you a prorated portion of
the DCA Amount (the "Prorated DCA Amount") based upon the ratio of (x) the
number of full months of your active employment with Amgen and (y) 80 months,
provided, however, that if such a termination of employment occurs within 2
years after a Change of Control of Amgen, as defined in the COC Plan, you shall
be paid (i) the Prorated DCA Amount plus (ii) an amount equal to the DCA Amount
----
minus the sum of (x) the Prorated DCA Amount and (y) an amount equal to the
aggregate spread between the exercise prices of your unvested Amgen stock
options which are in the money and the vesting of which is accelerated by the
Change of Control and the NASDAQ closing price of Amgen stock, with such spread
being determined as of the date of the Change of Control. For example, if Amgen
-----------
were to terminate your employment without Cause on August 22, 2003, you would be
paid $3,875,000 ($10,000,000 x 31/80). If, however, such a termination were to
occur within 2 years after a Change of Control of Amgen and on the date of the
Change of Control you hold unvested options for 100,000 shares of Amgen stock
and if each of such options has an exercise price of $80 and the NASDAQ closing
price of Amgen stock on the date of the Change of Control were $120, you would
be paid $6,000,000: ($3,875,000 + ($10,000,000 - $3,875,000 - (($120 - $80) x
100,000))). No interest shall be credited to any such payments.
B. If your employment is terminated by reason of your Permanent and Total
Disability before the Crediting Date, on the second anniversary of the date upon
which you last complete one week of active employment with Amgen, Amgen shall
pay you a pro rata portion of the DCA Amount based upon the ratio of (x) the sum
of the number of full months of your active employment with Amgen plus 24 months
and (y) 80 months. No interest shall be credited on any such payment.
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
4. Crediting of Interest to DCA. No interest shall be credited to the DCA
-----------------------------
prior to the Crediting Date, in any event. However, if you are actively employed
by Amgen on the Crediting Date, from and after the Crediting Date Amgen shall
credit the DCA with interest as set forth below.
A. If you continue to be actively employed by Amgen until January 7,
2011, the date upon which you will complete ten years of active employment with
Amgen (your "normal retirement date," or "NRD"), Amgen shall credit interest
annually on the DCA at a rate equal to 125% of the 10-year moving average yield
on 10-year U.S. Treasury notes, adjusted annually and compounded annually, from
the Crediting Date until the date upon which the DCA and accrued interest is
distributed to you. In the event that you elect to receive your distribution in
installments, as provided below, interest will be credited on the declining
balance of the DCA until it is finally distributed.
B. If your employment with Amgen is terminated for any reason before your
NRD, Amgen shall credit interest on the DCA at a rate equal to 100% of the 10-
year moving average yield on 10-year U.S. Treasury notes, adjusted annually and
compounded annually, from the Crediting Date until the date upon which the DCA,
and accrued interest is distributed to you.
5. Distributions from DCA. If you are actively employed by Amgen on the
-----------------------
Crediting Date, from and after the Crediting Date, Amgen shall make
distributions from the DCA as set forth below.
A. If your employment with Amgen is terminated for any reason before your
NRD, the amount credited to your DCA, plus interest credited to the date of
termination, shall be distributed to you in a lump sum between January 2 and
January 31 of the year following the year in which your employment terminates.
B. If your employment with Amgen is terminated for any reason on or after
your NRD, the amount credited to your DCA shall be distributed to you in a lump
sum between January 2 and January 31 of the year following the year in which
your employment terminates, unless you elect to be paid in ten or less
substantially equal annual installments, beginning between January 2 and January
31 of the year following the year in which your employment terminates. You must
make any election to receive your payments in annual installments at least 13
months prior to the date upon which your employment terminates.
C. In the event of your death, any unpaid amounts with respect to the DCA
shall be paid to your named beneficiaries in a lump sum, or your estate if you
do not designate any beneficiaries, between January 2 and January 31 of the year
following the year of your death.
6. Unfunded Unsecured Promise. Amgen's obligation hereunder shall be merely
---------------------------
that of an unfunded and unsecured promise of Amgen to pay money in the future
and you shall have no greater rights than those of Amgen's unsecured general
creditors. However, Amgen shall have the right to fund its obligations hereunder
through the purchase of assets, including possibly insurance on your life. If
Amgen elects to fund its obligations hereunder, you agree to cooperate with
Amgen in doing so. Amgen shall also have the right to establish a deferred
compensation
Xx. Xxxxx Xxxxxxxxxx
March 2, 2001
plan to discharge its obligations hereunder. Amgen will consult with you on the
details of such plan; however, any such plan shall be finalized and adopted in
Amgen's sole discretion. It is Amgen's intention that the DCA benefits be
unfunded for purposes of the Internal Code and for purposes of Title I of ERISA.
