UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 16, 2005
CELGENE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-16132 22-2711928
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(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification No.)
86 Morris Avenue, Summit, New Jersey 07901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 673-9000
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A DEFINITIVE MATERIAL AGREEMENT
The American Jobs Creation Act of 2004 (the "Act"), which added new Section 409A
to the Internal Revenue Code of 1986, as amended (the "Code"), changes the
income tax treatment and impacts the design and administration of certain plans
that provide for the deferral of compensation. As a result, on February 16,
2005, the Board of Directors adopted the Celgene Corporation 2005 Deferred
Compensation Plan (the "2005 Plan"), effective as of January 1, 2005, which will
operate as the Company's ongoing deferred compensation plan and which will be
governed by Section 409A. The Board of Directors also froze the existing
deferred compensation plan, effective as of December 31, 2004, so that no
additional contributions or deferrals can be made to that plan. Accrued benefits
under the frozen plan will continue to be governed by the terms of the frozen
plan under the tax laws in effect prior to the enactment of Section 409A. The
following is a brief summary of the material terms of the 2005 Plan.
The 2005 Plan is a non-qualified deferred compensation plan maintained for a
select group of management or highly compensated employees. Under the 2005 Plan,
participants may elect to defer all or a portion of their salary and cash
bonuses. The participants' continued ability to defer stock option gains and
restricted stock awards is subject to the requirements of Section 409A and the
Company will comply in good faith with the requirements of Section 409A. Amounts
deferred are credited to the participants' bookkeeping accounts. The Company
will credit accounts with earnings on deferred amounts realized from the
hypothetical investments selected by the participant in accordance with the plan
and, at the sole discretion of the Management Compensation and Development
Committee, may make a discretionary matching contribution on salary deferrals.
Distributions will automatically be paid to participants in five equal annual
installments commencing on the first anniversary of the participant's
termination of employment for any reason, including, without limitation, death,
retirement, disability or dismissal. Prior to the commencement of distributions,
participants can elect to change the installment period to 10 or 15 years if:
(i) such election does not take effect until at least 12 months after the date
on which the election is made; (ii) the first payment with respect to which such
election is made is deferred for a period of at least five years from the date
such payment would otherwise have been made (except in the case of a
distribution upon an "unforeseeable emergency" or a participant's death or
disability); and (iii) such election is made at least 12 months prior to the
payment date.
If a participant's account balance is not more than $10,000, the entire account
will be distributed within 2 1/2 months after the participant's separation from
service, or, if later, by the December 31st of the calendar year in which the
separation of service occurs. In addition, the 2005 Plan provides that if a
"change in control" occurs or if a participant dies prior to the date
distributions from the plan commence, a participant's account will be
distributed in a lump sum payment to the extent no adverse tax consequences are
triggered under Section 409A; otherwise, distributions will be made in
accordance with the normal installment distribution provisions under the plan.
Participants may also request a distribution of all or a portion of their
account on account of hardship resulting from an unforeseeable emergency, but in
no event more than the amount necessary to alleviate the hardship (including
taxes triggered by the distribution).
The 2005 Plan is "unfunded" for tax purposes and for purposes of the Employee
Retirement Income Security Act of 1974, as amended and any benefits payable to
participants are paid by the Company out of its general assets. Accordingly,
benefits are subject to the risk of the Company's creditors and may be forfeited
in the event of the insolvency or bankruptcy of the Company.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CELGENE CORPORATION
Date: February 22, 2005 By: /s/ Robert J. Hugin
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Name: Robert J. Hugin
Title: Senior Vice President and
Chief Financial Officer