(e) Compensation Arrangements of Certain Officers

2008 Bonuses and 2009 Base Salaries

On January 21, 2009, the Compensation Committee of the Board of Directors (the Committee) set the base salaries for the 2009 fiscal year for (a) those individuals who comprised the Company's named executive officers for the 2008 fiscal year (other than Caroline Dorsa, who resigned as Senior Vice President and Chief Financial Officer of the Company in January 2008) and (b) Robin L. Washington, who was appointed to serve as Senior Vice President and Chief Financial Officer of the Company in May 2008 (collectively, the Executive Officers). The Committee also determined their bonus awards for the 2008 fiscal year based on their individual performance and the Company's attainment of certain financial and non-financial objectives for that year. The Company's Board of Directors ratified the 2008 bonus and 2009 base salary of John C. Martin, Ph.D., the Company's Chairman and Chief Executive Officer. The approved 2008 bonuses and 2009 base salaries for Executive Officers are as follows:

Name and Title                                            2008 Bonus      2009 Base Salary
John C. Martin                                            $ 1,651,650    $        1,250,000
Chairman and Chief Executive Officer

John F. Milligan                                          $   693,589    $          810,000
President and Chief Operating Officer

Norbert W. Bischofberger                                  $   495,180    $          680,000
Executive Vice President, Research and Development and
Chief Scientific Officer

Kevin Young                                               $   440,160    $          600,000
Executive Vice President, Commercial Operations

Gregg H. Alton                                            $   298,125    $          540,000
Senior Vice President and General Counsel

Robin L. Washington                                       $   192,602    $          530,000
Senior Vice President and Chief Financial Officer

On January 21, 2009, the Committee also increased the target 2009 bonus award payable under the Company's Corporate Bonus Plan for the Chief Executive Officer from 110% of base salary to 125% of base salary. The target 2009 bonus award for the President and Chief Operating Officer and the executive vice presidents remained the same at 75% and 60% of base salary, respectively. The Committee increased the target 2009 bonus award for the Senior Vice President General Counsel and Senior Vice President and Chief Financial Officer from 45% to 55% of base salary.

2009 Stock Option and Performance Shares Awards

On January 21, 2009, the Committee granted options to purchase the Company's common stock and performance shares to the Executive Officers under the Company's 2004 Equity Incentive Plan, as amended. The Company's Board of Directors ratified the grants to Dr. Martin.

The options each have an exercise price per share of $47.20, representing the closing price of the Company's common stock on January 20, 2009, the last trading day prior to the grant date. The options will vest as to 20% of the underlying shares on the first anniversary of the date of grant, and the balance vests in successive equal quarterly installments through the fifth anniversary of the date of grant, subject to such individual's continuous service with the Company through each applicable vesting date.

The percentages in the table below represent the percentage of actual shares of the Company's common stock into which the performance shares would convert at the end of the performance period based on the Company's percentile rankings for both revenue growth and TSR relative to the Peer Group Index. For example, if the Company's revenue growth for the period is at the 85th percentile relative to the Peer Group Index and TSR is at the 50th percentile relative to the Peer Group Index, the performance shares would convert into actual shares of common stock equal to 150% of the number of performance shares specified on the grant date. If the Company performance is at or above the 80th percentile of the Peer Group Index for both TSR and revenue growth for the performance period, the performance shares would convert into actual shares of common stock equal to 200% of the number of performance shares specified on the grant date, representing the maximum award opportunity. If the Company's performance is below the 20th percentile of the Peer Group Index for both TSR and revenue growth for the performance period, then the performance shares would not convert into any actual shares of the Company's common stock.

Company TSR vs. the Peer Group Index



† 80th percentile                      100.0%          110.0%          150.0%          175.0%        200.0%

60th to 79th percentile                 75.0%           85.0%          125.0%          150.0%        175.0%

40th to 59th percentile                 50.0%           60.0%          100.0%          125.0%        150.0%

20th to 39th percentile                 10.0%           20.0%           60.0%           85.0%        110.0%

< 20th percentile                        0.0%           10.0%           50.0%           75.0%        100.0%

                                     < 20th      20th to 39th    40th to 59th    60th to 79th      † 80th
                                   percentile     percentile      percentile      percentile     percentile

Should the Executive Officer's continuous service with the Company terminate prior to the completion of the performance period, then his or her performance shares will be forfeited, whether or not the performance goals are met. However, the performance shares may vest in whole or in part on an accelerated basis as follows:

(i) Should the Executive Officer cease continuous service due to death or disability, then a portion of his or her performance shares would convert into actual shares of vested common stock based on the level at which the performance goals are attained for the performance period and the number of calendar months of continuous service he or she completed during that period.

(ii) Should the Executive Officer leave the Company's employ prior to the completion of the performance period, but after completion of at least one year of service during the performance period, by reason of retirement on or after the date his or her combined age and years of service total 70 years or more, then a portion of his or her performance shares would convert into actual shares of vested common stock based on the level at which the performance goals are attained for the performance period and the number of calendar months of continuous service he or she completed during that period.

(iii) Should the Executive Officer remain in continuous service through the closing of a change in control transaction, then his or her performance shares will immediately convert into vested shares of the Company's common stock equal to 100% of the number of performance shares or, if the change in control

An Executive Officer who is a U.S. resident may elect to defer the receipt of any shares of the Company's common stock into which the performance shares may convert to a later date by submitting a deferral election form to the Company within certain specified time periods.

The table below summarizes the 2009 option and performance share grants for the Executive Officers:

                                                                     Performance Share Award
                                                                               Number            Maximum
                                     Stock Option      Minimum Number      of Performance       Number of
Name and Title                          Grant         of Actual Shares         Shares         Actual Shares
John C. Martin                            300,000                    0            100,000           200,000
Chairman and Chief Executive
Officer

John F. Milligan                          140,000                    0             47,000            94,000
President and Chief Operating
Officer

Norbert W. Bischofberger                   79,200                    0             26,400            52,800
Executive Vice President,
Research and Development and
Chief Scientific Officer

Kevin Young                                92,400                    0             30,800            61,600
Executive Vice President,
Commercial Operations

Gregg H. Alton                             50,000                    0             20,000            40,000
Senior Vice President and
General Counsel

Robin L. Washington                        50,000                    0             20,000            40,000
Senior Vice President and Chief
Financial Officer