Amgen 2007 Annual Report Download - page 108

Eligibility. Incentive stock options may be granted under the 1999 Plan to all employees (including officers)
of Amgen or its affiliates. All employees (including officers) and directors of Amgen or its affiliates and con-
sultants to Amgen or its affiliates, or trusts for the benefit of such an employee, director or consultant or his or
her spouse or members of their immediate family (“permitted trusts”) designated by any such employee, director
or consultant, are eligible to receive Stock Awards other than incentive stock options under the 1999 Plan. For
incentive stock options granted under the 1999 Plan, the aggregate fair market value, determined at the time of
grant, of the shares of common stock with respect to which such options are exercisable for the first time by an
optionee during any calendar year (under all such plans of Amgen or any affiliate of Amgen) may not exceed
$100,000. No person may receive Stock Awards for more than 649,455 shares of common stock in any calendar
year.
Terms of Discretionary Options. The following is a description of the permissible terms of options granted
under the 1999 Plan, other than options awarded to non-employee directors which are described below under the
heading “Terms of Non-Discretionary Options Awarded to Non-Employee Directors” (the options described in
this section are referred to as “Discretionary Options”). Individual Discretionary Option grants may be more re-
strictive as to any or all of the permissible terms described below. The exercise price of Discretionary Options
must be equal to at least 100% of the fair market value of the underlying stock on the date of the option grant.
The exercise price of Discretionary Options must be paid either: (i) in cash at the time the option is exercised or
(ii) at the discretion of the Board of Directors, (a) by delivery of common stock of Amgen that has been held for
the period required to avoid a charge to Amgen’s earnings, (b) pursuant to a deferred payment or other arrange-
ment or (c) in any other form of legal consideration acceptable to the Board of Directors. Generally, optionees
may designate certain specified trusts as beneficiaries with respect to Discretionary Options. In the absence of
such a designation, after the death of the optionee, Discretionary Options shall be exercisable by the person(s) to
whom the optionee’s rights pass by will or by the laws of descent and distribution. Generally, during the lifetime
of an optionee who is a natural person, only the optionee may exercise the Discretionary Option.
The maximum term of Discretionary Options is ten years. Absent death, disability or voluntary retirement in
certain circumstances, Discretionary Options generally terminate three months after termination of the optionee’s
employment or relationship as a consultant or director of Amgen or any affiliate of Amgen. Individual options by
their terms may provide for exercise within a longer period of time following termination of employment or the
relationship as a director or consultant. Discretionary Options either become exercisable in cumulative incre-
ments or are exercisable in full immediately. The Board of Directors has the power to accelerate the beginning of
the period during which an option may be exercised (the “vesting date”). Options granted from the Restatement
Date under the 1999 Plan typically vest at the rate of 25% per year during the optionee’s employment or service
as a consultant and expire seven years from the date of grant. The grants typically provide for the continuation of
the vesting of options if the optionee voluntarily retires at or after age 65 or after age 55, after having been an
employee of Amgen or its affiliate for at least ten consecutive years, and such retirement is not the result of per-
manent and total disability (“Voluntary Retirement”). Generally, if any optionee shall terminate his or her
employment or relationship as a director or consultant with Amgen or an affiliate due to death or disability, then,
in such event, the Discretionary Options granted to such employee, director or consultant or to the permitted trust
of such employee, director or consultant which have not vested as of the date of such employee’s, director’s or
consultant’s termination for reasons of death or disability shall automatically be accelerated in full. In the case of
Voluntary Retirement death or disability, Discretionary Options terminate the earlier of the termination date set
forth in the applicable grant agreement or five years.
The Board of Directors also has the power to accelerate the time during which a Discretionary Option may
be exercised. To the extent provided by the terms of a Discretionary Option, an optionee may satisfy any federal,
state or local tax withholding obligations relating to the exercise of such option by (i) a cash payment upon ex-
ercise, (ii) by authorizing Amgen to withhold a portion of the stock otherwise issuable to the optionee, (iii) by
delivering already-owned stock of Amgen or (iv) by a combination of these means.
Terms of Non-Discretionary Options Awarded to Non-Employee Directors. The Board of Directors may
from time to time adopt award programs under the 1999 Plan providing for the grant of formula or
non-discretionary Stock Awards to directors of Amgen who are not employees of Amgen or any affiliate. The
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