UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)

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þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

 

CELGENE CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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CELGENE CORPORATION
86 Morris Avenue
Summit, New Jersey 07901

May 4, 2009

Dear Stockholder:

On behalf of the Board of Directors, I cordially invite you to attend the 2009 Annual Meeting of Stockholders, or the Annual Meeting, of Celgene Corporation. The Annual Meeting will be held on June 17, 2009, beginning at 1:00 p.m. Eastern Time at the offices of Celgene Corporation, 86 Morris Avenue, Summit, New Jersey 07901. The formal Notice of Annual Meeting is set forth in the enclosed material.

The matters expected to be acted upon at the meeting are described in the attached Proxy Statement. During the meeting, stockholders will have the opportunity to ask questions and comment on our business operations.

We are pleased this year once again to take advantage of the Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of the attached Proxy Statement and a proxy card. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how each of our stockholders can receive a paper copy of our proxy materials, including the attached Proxy Statement and a form of proxy card. By furnishing the notice, we are lowering the costs and reducing the environmental impact of the Annual Meeting.

It is important that your views be represented whether or not you are able to be present at the Annual Meeting. You may cast your vote by signing and dating the enclosed proxy card and promptly returning it in the provided return envelope. No postage is required if this envelope is mailed in the United States. You have the option to cast your vote in person at the Annual Meeting on June 17, 2009. You also have the option of voting your proxy via the Internet at www.proxyvote.com or by calling toll free via a touch-tone phone at 800-690-6903. You may vote via telephone or the Internet up until 11:59 p.m. Eastern Time on June 16, 2009.

We appreciate your investment in Celgene and urge you to cast your vote as soon as possible.

		Sincerely,
		Sol J. Barer, Ph.D.
		Chairman of the Board and
		Chief Executive Officer

CELGENE CORPORATION
86 Morris Avenue
Summit, New Jersey 07901

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders, or the Annual Meeting, of CELGENE CORPORATION will be held at the offices of Celgene Corporation, 86 Morris Avenue, Summit, New Jersey 07901 on June 17, 2009, beginning at 1:00 p.m. Eastern Time for the following purposes:

	1.		to elect nine directors;
	2.		to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009;
	3.		to approve an amendment and restatement of our 2008 Stock Incentive Plan;
	4.		to act on one stockholder proposal, if the proposal is properly presented at the Annual Meeting; and
	5.		to transact any such other business as may properly come before the Annual Meeting and at any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on April 21, 2009 as the record date for determining stockholders entitled to notice of and to vote at the Annual Meeting.

		By order of the Board of Directors,
		Sol J. Barer, Ph.D.
		Chairman of the Board and
		Chief Executive Officer

May 4, 2009

YOUR VOTE IS IMPORTANT

Please vote via the Internet or telephone.
Internet: www.proxyvote.com
Phone: 800-690-6903

If you request a proxy card, please mark, sign and date the proxy card when received and
return it promptly in the self-addressed, stamped envelope we will provide.

CELGENE CORPORATION
86 Morris Avenue
Summit, New Jersey 07901

PROXY STATEMENT

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors for the annual meeting of stockholders (which we refer to as the Annual Meeting) of Celgene Corporation, a Delaware corporation (“Celgene,” the “Company,” “we,” “our” or “us”), to be held on June 17, 2009, and at any adjournment or postponement thereof. The proxy materials include this proxy statement for the Annual Meeting and a form of proxy card. When we refer to our fiscal year, we mean the 12-month period ending December 31 of the stated year (for example, fiscal 2008 is January 1, 2008 through December 31, 2008).

Electronic Notice and Mailing

Pursuant to the rules promulgated by the Securities and Exchange Commission, or the SEC, we are making our proxy materials available to you on the Internet. Accordingly, we will mail a Notice of Internet Availability of proxy materials (which we refer to as the Notice of Internet Availability) to the beneficial owners of our common stock, par value $0.01 per share, or Common Stock, on or about May 4, 2009. From the date of the mailing of the Notice of Internet Availability until the conclusion of the Annual Meeting, all beneficial owners will have the ability to access all of the proxy materials at www.proxyvote.com. All stockholders will have an opportunity to request a paper or e-mail delivery of these proxy materials.

The Notice of Internet Availability will contain:

•

the date, time and location of the Annual Meeting, the matters to be acted upon at the Annual Meeting and the Board of Directors’ recommendation with regard to each matter;

•

the Internet address that will enable access to the proxy materials;

•

a comprehensive listing of all proxy materials available on the website;

•

a toll-free phone number, e-mail address and Internet address for requesting either paper or e-mail delivery of proxy materials;

•

the last reasonable date a stockholder can request materials and expect them to be delivered prior to the meeting; and

•

instructions on how to access the proxy card.

You may also request a paper or e-mail delivery of the proxy materials on or before the date provided in the Notice of Internet Availability by calling 1-800-579-1639. We will fill your request within three business days. You will also have the option to establish delivery preferences that will be applicable for all your future mailings.

Record Date and Voting Securities

Only stockholders of record at the close of business on April 21, 2009, the record date for the Annual Meeting, or the Record Date, will be entitled to notice of and to vote at the Annual Meeting. On the Record Date we had outstanding 460,283,597 shares of Common Stock, which are our only securities entitled to vote at the Annual Meeting, each share being entitled to one vote.

How to Vote

Stockholders of record (that is, stockholders who hold their shares in their own name) can vote any one of four ways:

(1) By Internet: Go to the website www.proxyvote.com to vote via the Internet. You will need to follow the instructions on your proxy card and the website. If you vote via the Internet, you may incur telephone and Internet access charges.

(2) By Telephone: Call the toll-free number 1-800-690-6903 to vote by telephone. You will need to follow the instructions on your proxy card and the recorded instructions.

(3) By Mail: If you prefer, you can contact us to obtain copies of all proxy materials, including proxy cards, by calling 1-800-579-1639, or by mail: Celgene Corporation, 86 Morris Avenue, Summit, New Jersey 07901, Attention: Corporate Secretary. If you contact us to request a proxy card, please mark, sign and date the proxy card and return it promptly in the self-addressed, stamped envelope, that we will provide. If you sign and return your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors.

(4) In Person: You can attend the Annual Meeting, or send a personal representative with an appropriate proxy, to vote by ballot. Only record or beneficial owners of Common Stock or their proxies may attend the Annual Meeting in person. When you arrive at the Annual Meeting, you must present photo identification, such as a driver’s license. Beneficial owners also must provide evidence of stock holdings, such as a recent brokerage account or bank statement.

If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated and returned your proxy card. If you vote via the Internet or by telephone, do not mail a proxy card.

If your shares are held in the name of a bank, broker or other holder of record (that is, “street name”), you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Internet and telephone voting also will be offered to stockholders owning shares through most banks and brokers.

Revocability of Proxies

Stockholders who execute proxies may revoke them by giving written notice to our Chief Executive Officer at any time before such proxies are voted. Attendance at the Annual Meeting shall not have the effect of revoking a proxy unless the stockholder so attending shall, in writing, so notify the Secretary of the Annual Meeting at any time prior to the voting of the proxy at the Annual Meeting.

Other Matters

The Board of Directors does not know of any matter that is expected to be presented for consideration at the Annual Meeting, other than the election of directors; the ratification of the appointment of our independent registered public accounting firm for fiscal 2009; the adoption of the amended and restated 2008 Stock Incentive Plan; and one stockholder proposal, if the proposal is properly presented at the Annual Meeting. However, if other matters properly come before the Annual Meeting, the persons named in the accompanying proxy intend to vote thereon in accordance with their judgment.

Solicitation Expenses

We will bear the cost of the Annual Meeting and the cost of soliciting proxies, including the cost of mailing the proxy material. In addition to solicitation by mail, our directors, officers and regular employees (who will not be specifically compensated for such services) may solicit proxies by telephone or otherwise. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to forward proxies and proxy material to their principals, and we will reimburse them for their expenses. In addition, we have retained Broadridge Financial Solutions, or Broadridge, to assist in the mailing, collection and administration of the proxy. Broadridge’s fee is estimated to be $350,000 plus reasonable out-of-pocket expenses.

Voting Procedures; Abstentions

All proxies received pursuant to this solicitation will be voted except as to matters where authority to vote is specifically withheld and, where a choice is specified as to the proposal, they will be voted in accordance with such specification. If no instruction is given, the persons named in the proxy solicited by our Board of Directors intend to vote FOR the nominees for election of our directors listed herein, FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal 2009, FOR the amendment and restatement of our 2008 Stock Incentive Plan and AGAINST the stockholder proposal (Proposal Four).

A majority of the outstanding shares of Common Stock entitled to vote on the Record Date, whether present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting and any adjournment or postponement thereof. Abstentions and broker non-votes (i.e., proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other persons eligible to vote shares as to a matter with respect to which the brokers or nominees do not have discretionary power to vote) will be counted as present or represented for purposes of establishing a quorum for the transaction of business.

Abstentions and broker non-votes will have no effect on the election of directors, which is by plurality of the votes cast in person or by proxy.

Abstentions and broker non-votes will have no effect on the proposed (i) ratification of the appointment of KPMG LLP as our independent registered public accounting firm, (ii) amendment and restatement of our 2008 Stock Incentive Plan and (iii) the stockholder proposal (Proposal Four), as each of these items requires the affirmative vote of a majority of shares of Common Stock cast in person or by proxy.

All shares of Common Stock as set forth in this proxy statement have been adjusted to reflect the three-for-one-split we declared and paid on April 14, 2000, or the 2000 Split; the two-for-one-split we declared and paid on October 22, 2004, or the 2004 Split; and the two-for-one-split we declared on February 17, 2006 and paid on February 24, 2006, or the 2006 Split. The 2000 Split, the 2004 Split and the 2006 Split are collectively referred to as the Splits.

MATTERS TO COME BEFORE THE ANNUAL MEETING

PROPOSAL ONE:

Election of Directors

Nominees

At the Annual Meeting, nine directors, who have been nominated by the Nominating and Governance Committee (referred to as the Nominating Committee), are to be elected, each to hold office (subject to our Bylaws) until the next annual meeting and until his or her successor has been elected and qualified. All of the nominees for director currently serve as directors and were elected by the stockholders at the 2008 Annual Meeting.

Each nominee has consented to being named as a nominee in this proxy statement and to serve if elected. If any nominee listed in the table below should become unavailable for any reason, which the Board of Directors does not anticipate, the proxy will be voted for any substitute nominee or nominees who may be selected by the Board of Directors prior to or at the Annual Meeting, or, if no substitute is selected by the Board of Directors prior to or at the Annual Meeting, for a motion to reduce the membership of the Board of Directors to the number of nominees available. Directors will be elected by an affirmative vote of a plurality of the votes cast at the Annual Meeting in person or by proxy. There are no family relationships between any of our directors and executive officers. The information concerning the nominees and their security holdings has been furnished by them to us.

Name		Age				Position
Sol J. Barer, Ph.D.			62			Chief Executive Officer and Chairman of the Board
Robert J. Hugin			54			President, Chief Operating Officer and Director
Michael D. Casey			63			Director
Rodman L. Drake			66			Director
Arthur Hull Hayes, Jr., M.D.			75			Director
Gilla Kaplan, Ph.D.			62			Director
James J. Loughlin			66			Director
Ernest Mario, Ph.D.			71			Director
Walter L. Robb, Ph.D.			81			Director

Sol J. Barer, Ph.D. has served as our Chief Executive Officer since May 1, 2006. Immediately prior, Dr. Barer served as our President, an office he held since October 1993, and as our Chief Operating Officer, an office he held since March 1994. Dr. Barer has served as the Chairman of our Board of Directors since January 2, 2007 and, since March 1994, has served as one of our directors. He is also the Chairman of the Executive Committee of our Board of Directors. Dr. Barer was Senior Vice President—Science and Technology and Vice President/General Manager—Chiral Products from October 1990 to October 1993 and our Vice President—Technology from September 1987 to October 1990. Dr. Barer received a Ph.D. in organic chemistry from Rutgers University and is on the Rutgers Board of Trustees, Rutgers Graduate School Dean’s Advisory Council (Founding Chair) and the Rutgers Bioscience Commercialization Advisory Board. Dr. Barer is also a director of Amicus Therapeutics and serves on the Board of Trustees of BioNJ and the Board of the Brooklyn College Foundation. Dr. Barer previously served as Commissioner of the New Jersey Commission on Science and Technology.

Robert J. Hugin has served as our Chief Operating Officer and President since May 1, 2006. He served as our Senior Vice President and Chief Financial Officer from June 1999 until May 1, 2006. Mr. Hugin has served as one of our directors since December 2001. Previously, Mr. Hugin had been a Managing Director at J.P. Morgan & Co. Inc., which he joined in 1985. Mr. Hugin received an A.B. degree from Princeton University and an M.B.A. from the University of Virginia. Mr. Hugin is also a director of The Medicines Company, Atlantic Health System, Inc., a non-profit health care system, and Family Promise, a national non-profit network assisting homeless families.

Michael D. Casey has served as one of our directors since August 2002, is Chairman of the Nominating Committee and a member of the Executive Committee (since December 2006) and the Management Compensation and Development Committee (referred to as the Compensation Committee) (since April 2006) of our Board of Directors. He became our lead independent director in June 2007. Mr. Casey was a member of the Audit Committee from August 2002 through December 2006. From September 1997 to February 2002, Mr. Casey served as the Chairman, President, Chief Executive Officer and a director of Matrix Pharmaceutical, Inc. From November 1995 to September 1997, Mr. Casey was Executive Vice President at Schein Pharmaceutical, Inc. In December 1996, he was appointed President of the retail and specialty products division of Schein. From June 1993 to November 1995, he served as President and Chief Operating Officer of Genetic Therapy, Inc. Mr. Casey was President of McNeil Pharmaceutical (a unit of Johnson & Johnson) from 1989 to June 1993 and Vice President, Sales and Marketing for Ortho Pharmaceutical Corp. (a subsidiary of Johnson & Johnson) from 1985 to 1989. Mr. Casey is also a director of Allos Therapeutics, Inc., Durect Corp. and AVI BioPharma.

Rodman L. Drake has served as one of our directors since April 2006, is Chairman of the Compensation Committee since June 2007 and a member of the Nominating Committee of our Board of Directors. Since January 2002, Mr. Drake has been Managing Director of Baringo Capital LLC, a private equity group he co-founded. From November 1997 to January 2002, Mr. Drake was president of Continuation Investments Group Inc., a private equity firm. Prior to that, Mr. Drake was co-chairman of the KMR Power Company and Chief Executive Officer and Managing Director of Cresap McCormick and Paget, a leading management consulting firm, and served as President of the Mandrake Group, a consulting firm specializing in strategy and organizational design. He is a member of the boards of directors of The Student Loan Corporation, Jackson Hewitt Tax Service, Inc., Crystal River Capital, Inc. and The Animal Medical Center of New York. He is the Chairman of the Helios Funds and a Trustee of the Columbia Atlantic Funds.

Arthur Hull Hayes, Jr., M.D. has served as one of our directors since 1995 and is a member of the Audit Committee of our Board of Directors. Dr. Hayes was President and Chief Operating Officer of MediScience Associates, a consulting organization that works with pharmaceutical firms, biomedical companies and foreign governments, from July 1991 through December 2005, and clinical professor of medicine and pharmacology at the Pennsylvania State University College of Medicine from 1981 to 2004. From 1986 to 1990, Dr. Hayes was President and Chief Executive Officer of E.M. Pharmaceuticals, a unit of E. Merck AG, and from 1981 to 1983 was Commissioner of the U.S. Food and Drug Administration. Dr. Hayes is also a director of QuantRx Biomedical Corporation.

Gilla Kaplan, Ph.D. has served as one of our directors since April 1998 and is a member of the Audit Committee of our Board of Directors. Dr. Kaplan is head of the Laboratory of Mycobacterial Immunity and Pathogenesis at The Public Health Research Institute Center at the University of Medicine and Dentistry of New Jersey in Newark, New Jersey, where she was appointed full Member in 2002. Dr. Kaplan also was appointed, in 2005, Professor of Medicine at the University of Medicine and Dentistry of New Jersey. Previously, Dr. Kaplan was an immunologist in the Laboratory at Cellular Physiology and Immunology at The Rockefeller University in New York where she was an Associate Professor.

James J. Loughlin has served as one of our directors since January 2007, is Chairman of the Audit Committee (since June 2008) and a member of the Compensation Committee (since June 2008) of our Board of Directors. Mr. Loughlin served as the National Director of the Pharmaceuticals Practice at KPMG, including a five-year term as member of the Board of Directors of KPMG LLP. Additionally, Mr. Loughlin served as Chairman of the Pension and Investment Committee of the KPMG Board from 1995 through 2001. He also served as Partner in charge of Human Resources, Chairman of the Personnel and Professional Development Committee, Secretary and Trustee of the Peat Marwick Foundation and a member of the Pension, Operating and Strategic Planning Committees.

Ernest Mario, Ph.D. has served as one of our directors since August 2007 and is a member of the Nominating Committee (since August 2007) and the Executive Committee (since June 2008) of our Board of Directors. Dr. Mario is a former Deputy Chairman and Chief Executive of Glaxo Holdings plc and a former Chairman and Chief Executive Officer of ALZA Corporation. Dr. Mario has been a Director of Boston Scientific since October 2001 and currently is Chairman of Pharmaceutical Product Development. From 2003 to 2007, he was Chairman and Chief Executive of Reliant Pharmaceuticals. Dr. Mario currently is the Chief Executive Officer and Chairman of Capnia, Inc., a privately held specialty pharmaceutical company in Palo Alto, CA. A former Trustee of Duke University, he serves on the Board of the Duke University Health System. He is a past Chairman of the American Foundation for Pharmaceutical Education and serves as an advisor to the pharmacy schools at the University of Maryland, the University of Rhode Island and The Ernest Mario School of Pharmacy at Rutgers University. Dr. Mario is the recipient of the 2007 Remington Honor Medal, which is the highest recognition given by the American Pharmacists Association.

Walter L. Robb, Ph.D. has served as one of our directors since 1992 and is a member of the Audit Committee of our Board of Directors. He has been a private consultant and President of Vantage Management Inc., a consulting and investor services company, since January 1993. Dr. Robb was Senior Vice President for Corporate Research and Development of General Electric Company, and a member of its Corporate Executive Council from 1986 to December 1992. Dr. Robb is Chairman of the Board of Directors of Capital District Sports. He also is a director of Mechanical Technology, Inc., a public company, and several private companies.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR THE ELECTION OF EACH NOMINEE UNDER PROPOSAL ONE.

Security Ownership of Certain Beneficial Owners and Management

The table below sets forth the beneficial ownership of Common Stock as of March 17, 2009 by (i) each director, (ii) each Named Executive Officer (as defined below), (iii) all of our directors and Named Executive Officers as a group and (iv) all persons known by the Board of Directors to be beneficial owners of more than five percent of the outstanding shares of Common Stock. Shares of Common Stock subject to warrants and/or options that are currently exercisable or exercisable within 60 days of March 17, 2009 are deemed outstanding for computing the ownership percentage of the stockholder holding such warrants and/or options, but are not deemed outstanding for computing the ownership percentage of any other stockholder. Unless otherwise noted, the address of each stockholder is Celgene Corporation, 86 Morris Avenue, Summit, New Jersey 07901.

Name and Address		Amount and Nature				Percent
of Beneficial Ownership		of Beneficial Ownership				of Class
Sol J. Barer, Ph.D.			3,397,650	(1)(2)(3)			*
Robert J. Hugin			2,498,688	(1)(2)(4)			*
David W. Gryska			203,213	(1)(2)			*
Aart Brouwer			511,500	(1)			*
Graham Burton, MBBS, FRCP			410,968	(1)(2)			*
Michael D. Casey			161,000	(1)			*
Rodman L. Drake			46,205	(1)			*
Arthur Hull Hayes, Jr., M.D.			161,000	(1)			*
Gilla Kaplan, Ph.D.			301,000	(1)(5)			*
James J. Loughlin			28,250	(1)			*
Ernest Mario, Ph.D.			30,125	(1)			*
Walter L. Robb, Ph.D.			91,148	(1)			*
All our directors and current executive officers as a group (12 persons)			7,840,747	(6)			1.7	%
FMR LLC (“FMR”)			31,607,169	(7)			6.9	%
82 Devonshire Street Boston, MA 02109
Janus Capital Management LLC (“Janus Capital”)			34,985,929	(8)			7.6	%
151 Detroit Street Denver, CO 80206

Board Independence

No director will be deemed to be independent unless the Board of Directors affirmatively determines that the director has no material relationship with us, directly or as an officer, stockholder or partner of an organization that has such a relationship. The Board of Directors observes all criteria for independence established by the Nasdaq Stock Market, or Nasdaq, under its applicable Marketplace Rules. In its annual review of director independence, the Board of Directors has determined that all of our non-employee directors, constituting a majority of all of our directors, may be classified as “independent” within the meaning of Rule 4200 of the Nasdaq Marketplace Rules. Executive sessions of our independent directors are convened in conjunction with each regularly scheduled Board of Directors meetings.

Board Meetings; Committees and Membership

The Board of Directors held seven meetings during fiscal 2008. During fiscal 2008, each of the directors then in office attended more than 75% of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings of all committees of the Board on which such director served. Our policy is to encourage our Board members to attend all annual meetings and any special meeting of stockholders. All of our directors attended the 2008 Annual Meeting of stockholders.

We maintain the following committees of the Board of Directors: the Executive Committee, the Compensation Committee, the Nominating Committee and the Audit Committee. Except for the Executive Committee, each committee is comprised entirely of directors who may be classified as “independent” within the meaning of Rule 4200 of the Nasdaq Marketplace Rules. Other than the Executive Committee, each committee acts pursuant to a separate written charter, and each such charter has been adopted and approved by the Board of Directors. A copy of the Amended and Restated Audit Committee Charter, the Compensation Committee Charter and the Nominating Committee Charter are available on our website at http://www.celgene.com by choosing the “Investor Relations” link then clicking on the “Corporate Governance” section.

The Executive Committee

The Executive Committee’s current members are Dr. Sol J. Barer, (Chairman), Michael D. Casey and Ernest Mario, Ph.D. (since June 2008). The Executive Committee did not meet in fiscal 2008. The Executive Committee has and may exercise all of the powers and authority of our full Board of Directors, subject to certain exceptions.

The Compensation Committee

The Compensation Committee’s current members are Rodman L. Drake (Chairman), Michael D. Casey and James J. Loughlin (since June 2008). The Compensation Committee held five formal meetings and a series of informal meetings during fiscal 2008. The Compensation Committee annually reviews the total compensation package for all executive officers, including the Chief Executive Officer, considers modification of existing compensation and benefit programs and the adoption of new plans and administers the plans and reviews the compensation of non-employee members of the Board of Directors. The Compensation Committee has (i) the full power and authority to interpret the provisions and supervise the administration of our 1986 Stock Option Plan, the Anthrogenesis Corporation Qualified Employee Incentive Stock Option Plan, the Signal Pharmaceuticals, Inc. 2000 Equity Incentive Plan, our 1992 Long-Term Incentive Plan, our 2008 Stock Incentive Plan and the Pharmion Corporation 2000 Stock Incentive Plan, (ii) the full power and authority to administer and interpret the Celgene Corporation 2005 Deferred Compensation Plan, or the Nonqualified Plan, and (iii) the authority to review all matters relating to our personnel.

The Nominating Committee

The Nominating Committee’s current members are Michael D. Casey (Chairman), Rodman L. Drake and Ernest Mario. The Nominating Committee held five meetings in fiscal 2008. The Nominating Committee determines the criteria for nominating new directors, recommends to the Board of Directors candidates for nomination to the Board of Directors and oversees the evaluation of the Board of Directors. The Nominating Committee’s process to identify and evaluate candidates for nomination to the Board of Directors includes consideration of candidates for nomination to the Board of Directors recommended by stockholders. Such stockholder recommendations must be delivered to our Corporate Secretary, together with the information required to be filed in a proxy statement with the SEC regarding director nominees, and each such nominee must consent to serve as a director if elected, no later than the deadline for submission of stockholder proposals as set forth in our Bylaws and under the section of this proxy statement entitled “Stockholder Nominations.” In considering and evaluating such stockholder proposals that have been properly submitted, the Nominating Committee will apply substantially the same criteria that the Nominating Committee believes must be met by a Nominating Committee-recommended nominee as described below. To date, we have not received any recommendation from stockholders requesting that the Nominating Committee consider a candidate for inclusion among the Nominating Committee’s slate of nominees in our proxy statement.

In addition, certain identification and disclosure rules apply to director candidate proposals submitted to the Nominating Committee by any single stockholder or group of stockholders that has beneficially owned more than five percent of Common Stock for at least one year, referred to as a Qualified Stockholder Proposal. If the Nominating Committee receives a Qualified Stockholder Proposal with the necessary notice, information and consent provisions as referenced above, the proxy statement to which the Qualified Stock Proposal referred will disclose the name of the proposed candidate and the stockholder (or stockholder group) who recommended the candidate and will also disclose whether or not the Nominating Committee chose to nominate the proposed candidate. However, no such disclosure will be made without the written consent of both the stockholder (or stockholder group) and the proposed candidate to be so identified. The procedures described in this paragraph are meant to establish additional requirements and are not meant to replace or limit stockholders’ general nomination rights in any way.

In evaluating director nominees, the Nominating Committee currently considers the following factors:

•

our needs with respect to the particular competencies and experience of our directors;

•

the knowledge, skills and background of nominees, including experience in relevant functional areas, in light of prevailing business conditions and the knowledge, skills, background and experience already possessed by other members of our Board of Directors;

•

familiarity with our business and businesses similar or analogous to ours; and

•

financial acumen and corporate governance experience.

The Nominating Committee identifies nominees first by evaluating the current members of the Board of Directors willing to continue in service. If any member of the Board does not wish to continue in service or if the Nominating Committee or the Board of Directors decides not to re-nominate a member for re-election, the Nominating Committee will identify the required skills, background and experience of a new nominee, in tandem with prevailing business conditions, and will source relevant candidates and present to the Board of Directors suggestions as to individuals who meet the required criteria. The Nominating Committee utilizes the services of an outside search firm to assist it in finding appropriate nominees for the Board of Directors.

The Audit Committee

The Audit Committee’s current members are James J. Loughlin (Chairman), Walter L. Robb, Arthur Hull Hayes, Jr. and Gilla Kaplan. The Audit Committee held nine meetings in fiscal 2008. Each of Dr. Robb and Mr. Loughlin is an “audit committee financial expert” within the meaning of the rules of the SEC and, as such, Dr. Robb and Mr. Loughlin satisfy the requirements of Rule 4350 of the Nasdaq Marketplace Rules. The Audit Committee oversees our financial reporting process on behalf of the Board of Directors. In fulfilling its responsibility, the Audit Committee pre-approves, subject to Board approval and stockholder ratification, the selection of our independent registered public accounting firm. The Audit Committee also reviews our consolidated financial statements and the adequacy of our internal controls. The Audit Committee meets at least quarterly with our management and our independent registered public accounting firm to review and discuss the results of audits or reviews of our consolidated financial statements, the evaluation of the effectiveness of our internal controls over financial reporting and disclosure controls and procedures, the overall quality of our financial reporting and our critical accounting policies and to approve any related-party transactions. The Audit Committee’s responsibility is to monitor and oversee these processes, including the activities of the Internal Audit function. The Audit Committee meets separately, at least quarterly, with the independent registered public accounting firm. In addition, the Audit Committee oversees our existing procedures for the receipt, retention and handling of complaints related to auditing, accounting and internal control issues, including the confidential, anonymous submission by employees of concerns on questionable accounting and auditing matters.

Review and Approval of Transactions with Related Persons

During fiscal 2008, we did not engage in any related person transaction, or series of similar such transactions, which are required to be disclosed pursuant to Regulation S-K, Item 404.

Related Person Transaction Policies and Procedures

At the beginning of each calendar year, each member of our Board of Directors and each company executive officer is required to complete an extensive questionnaire that we utilize when preparing our annual proxy statement as well as our Annual Report on Form 10-K. The purpose of the questionnaire is to obtain information from directors and executive officers to verify disclosures required to be made in these documents. Regarding related party transactions, it serves two purposes; first, to remind each executive officer and director of their obligation to disclose any related party transaction entered into between themselves (or family members or entities in which they hold an interest) and Celgene that in the aggregate exceeds $120,000 (“related person transaction”) that might arise in the upcoming year; and second, to ensure disclosure of any related person transaction that is currently proposed or that occurred during the preceding year. When completing the questionnaire, each director and executive officer is required to report any such transaction.

Compensation Committee Interlocks and Insider Participation

The current members of the Compensation Committee are Rodman L. Drake, Chairman, Michael D. Casey and James L. Loughlin. Each member is an independent director within the meaning of the Nasdaq listing requirements. There was no interlock among any of the members of the Compensation Committee and any of our executive officers.

Code of Ethics

We have adopted a Financial Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer and other financial professionals. This Financial Code of Ethics is posted on our website, http://www.celgene.com by choosing the “Investor Relations” link and clicking on the “Corporate Governance” section. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Financial Code of Ethics by posting such information on our website. We undertake to provide to any person a copy of this Financial Code of Ethics upon request to our Corporate Secretary at our principal executive offices.

Stockholder Nominations

Our Bylaws provide that nominations for the election of directors may be made at an annual meeting: (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder who (i) is a stockholder of record on the date of the giving of the notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) complies with the notice procedures set forth below.

In addition to any other applicable requirement for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to our Corporate Secretary.

To be timely, a stockholder’s notice to the Corporate Secretary must be delivered to or mailed and received at our principal executive offices not less than 60 days nor more than 90 days prior to the date of the annual meeting; provided, however , that in the event that less than 70 days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder (in order to be timely) must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs.

To be in proper written form, a stockholder’s notice to the Corporate Secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director: (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of our capital stock which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice: (i) the name and record address of such stockholder, (ii) the class or series and number of shares of our capital stock which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to nominate the persons named in his or her notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and serving as a director if elected.

Stockholder Communications

Our Board of Directors has determined that, to facilitate communications with the Board of Directors, or any individual member or any Committee of the Board of Directors, stockholders should direct all communication in writing to our Corporate Secretary at our principal executive offices. Our Corporate Secretary will forward all such correspondence to the Board of Directors, individual members of the Board of Directors or applicable chair persons of any Committee of the Board of Directors, as appropriate.

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Exchange Act, each of our directors, executive officers and any person beneficially owning more than 10 percent of Common Stock is required to report his, her or its ownership of Common Stock and any change in that ownership, on a timely basis, to the SEC. We believe that all applicable acquisitions and dispositions of Common Stock, including grants of options under our Directors’ Incentive Plan and the 2008 Stock Incentive Plan, were filed on a timely basis for fiscal 2008, with the following exceptions: (i) Form 4 reports filed on June 24, 2008 with respect to grants of stock options pursuant to our Directors’ Incentive Plan to Michael D. Casey, Rodman L. Drake, Arthur Hull Hayes, Jr., Gilla Kaplan, James J. Loughlin, Ernest Mario and Walter L. Robb; (ii) Form 4 report filed on June 25, 2008 with respect to a grant of stock options to Andre Van Hoek; (iii) Form 4 report filed on August 8, 2008 with respect to a termination of a prepaid variable forward arrangements of Richard C.E. Morgan; and (iv) Form 4 report filed on January 5, 2009 with respect to a sale of shares of our Common Stock by Rodman L. Drake.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our Compensation Discussion and Analysis provides an overview and analysis of our compensation programs, the compensation decisions we have made under those programs and the factors we considered in making those decisions. Later in this section, under the heading “Additional Information Regarding Executive Compensation,” we include a series of tables containing specific information about the compensation earned by the following individuals in fiscal 2008, whom we refer to as our Named Executive Officers:

•

Sol J. Barer, Ph.D., Chief Executive Officer, who joined the Company in September 1987 and assumed this office effective May 1, 2006;

•

Robert J. Hugin, President and Chief Operating Officer, who joined the Company in June 1999 and assumed this office effective May 1, 2006;

•

David W. Gryska, Chief Financial Officer, who joined the Company in December 2006 and assumed this office effective December 6, 2006;

•

Aart Brouwer, Chairman International and Senior Advisor to Celgene Chairman and Chief Executive Officer, who joined the Company in November 2005 and assumed this office effective January 1, 2009; and

•

Graham Burton, MBBS, FRCP, Senior Vice President Global Regulatory Affairs, Pharmacovigilance, Corporate Quality and Compliance, who joined the Company in July 2003 and assumed this office effective July 1, 2003.

This discussion is intended to help you understand the detailed information provided in the tables and to put that information into the context of our overall compensation program.

Executive Summary

Our overall compensation goal is to reward our executive officers in a manner that supports our strong pay-for-performance philosophy while maintaining an overall level of compensation that we believe is reasonable, responsible and competitive. We believe this is accomplished through the following principles and processes that we follow in establishing executive compensation:

1.

Benchmarking. We benchmark executive officer compensation annually against a set of peer group companies that the Compensation Committee reviews each year in order to ensure that our compensation programs are within the competitive range of comparative norms. Our peer group is selected on the basis of employee headcount, industry, revenue, stage of development, complexity and market capitalization.

2.

Target Compensation. We strive to establish our target total direct compensation (defined as base salary, annual short-term incentive bonus, long-term incentive bonus and equity awards) at the 60th percentile of our peer group with the potential to achieve at the 75th percentile based upon delivery of corporate and individual performance objectives.

3.

Fiscal 2008 Corporate Performance. Our fiscal 2008 corporate performance remained strong despite a very challenging external environment and challenges within the healthcare industry. We achieved the following results for fiscal 2008:

a.

Total Revenue. Non-GAAP total revenue increased 59% to $2.238 billion; GAAP total revenue for fiscal 2008 was $2.255 billion.

b.

Revenue by Product. REVLIMID® net product sales increased 71% to $1.325 billion; THALOMID® (inclusive of Thalidomide PharmionTM subsequent to the acquisition of Pharmion Corporation, or Pharmion, on March 7, 2008) net product sales were $505 million; and VIDAZA® net product sales since the acquisition of Pharmion in March 2008 were $207 million.

c.

Net Income/Net Loss. Non-GAAP net income increased to $719 million; GAAP net loss for fiscal 2008 was $1.534 billion.

d.

EPS. Non-GAAP diluted earnings per share increased to $1.56; GAAP loss for fiscal 2008 was $3.46 per diluted share.

			On the basis of these performance factors and other corporate and individual performance assessments made by our Compensation Committee, the actual bonus amounts awarded to our Named Executive Officers for fiscal 2008 ranged from 119.5% to 130% of target.
			In addition to being viewed as metrics to assess the performance of our Named Executive Officers, non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before, during and after certain items that would not otherwise be apparent on a GAAP basis. See “Cash Bonus/Performance-Based Incentive Compensation—Management Incentive Plan” for more information regarding non-GAAP financial measures.
	4.		Performance-Based Compensation. A significant portion of total direct compensation is in the form of variable performance-based cash and stock-based compensation linked directly to company performance and increasing stockholder value. This structure ensures that there is an appropriate balance between our long- and short-term performance as well as a balance between annual operating objectives and long-term delivery of stockholder return. For fiscal 2008, our variable, short-term compensation comprised 13% of the total compensation target for the Named Executive Officers while long-term compensation ranged between 64% to 71% of their total compensation.
	5.		Risk Mitigation. We do not believe that the performance-based nature of our executive compensation program encourages excessive risk-taking by our Named Executive Officers that would potentially threaten the economic viability the Company. Each component of variable performance-based compensation, both short- and long-term, is subject to a cap. As noted above, a significant portion of the Named Executive Officers’ compensation is designed to focus on long-term growth, which ensures focus on the health of our business, the development of a sustainable product pipeline, and the delivery of key performance metrics that will deliver stockholder value over time. Further, effective in fiscal 2009, we added restricted stock units, or RSUs, to our equity program in order to provide an effective incentive award with a strong retention component. Equity awards will be divided between stock options and RSUs based on a two-thirds and one-third mix (respectively) using a three to one ratio of stock options to RSUs in calculating the number of RSUs. In connection with the addition of RSUs, we instituted stock ownership guidelines that encourage our Named Executive Officers to maintain a substantial ownership interest in Celgene, further aligning their interests to those of our stockholders while mitigating the chance of excessive risk-taking.
	6.		Employee Benefits. We do not offer guaranteed retirement, pension benefits or other significant perquisite benefits. Instead, we provide our Named Executive Officers with the opportunity to accumulate retirement income through equity awards, the deferral of current compensation into our Nonqualified Plan and participation in our 401(k) plan.

For fiscal 2008, the actual total compensation for our Named Executive Officers ranged from below the 50^th percentile up to the 75^th percentile of our peer group. Fifty-six percent of our short-term management incentive plan (MIP) is tied to achievement of financial measures (revenue and diluted earnings per share) while the remaining 44% is tied to achievement of key strategic, research and development and organizational objectives. Our long-term, multi-year incentive plan (LTIP) is tied 100% to achievement of financial measures and as such is focused on maximizing long-term stockholder value. Given our strong company performance and performance relative to industry peers, we believe the level of compensation in effect for fiscal 2008 for the Named Executive Officers was reasonable and appropriate.

Compensation Philosophy

Our overall executive compensation philosophy is set by the Compensation Committee of our Board of Directors and links executive pay primarily to the achievement of short- and long-term financial and strategic corporate performance objectives that are directly related to the achievement of our long-term strategic business plan. Within our philosophy, we seek to be competitive with our peer companies, ensure internal equity and be closely aligned with the interests of our stockholders as described below.

Our executive compensation arrangements, which represent a portion of our corporate-wide total rewards program covering all employees including our Named Executive Officers, are designed to:

•

link compensation with corporate performance and stockholder returns over the long-term;

•

enable us to compete for talented executives;

•

attract, motivate and retain executives who are critical to our long-term success; and

•

provide equity compensation to build executive ownership and align financial incentives focused on the achievement of long-term strategic goals (both financial and non-financial). This ensures the long-term health of our business plan in delivering for patients in the area of unmet medical needs as well as ensuring an alignment of executive interests with stockholder interests.

As described below, the components of our executive compensation program are base salary, an annual bonus component linked to key annual (short-term) performance targets (both financial and strategic), a long-term bonus component linked to key three-year performance targets (financial only) and an equity component that aligns our Named Executive Officers’ interests with those of our stockholders. In fiscal 2008, we granted equity compensation to our Named Executive Officers in the form of stock options that vest over time, subject to the Named Executive Officer’s continued service with us. In addition, certain eligible Named Executive Officers received Company matching contributions under our 401(k) plan, as well as, matching contributions on deferred salary.

Our long-term performance program is directly linked to our long-term strategic plan and is designed to focus our Named Executive Officers on key financial metrics that drive long-term stockholder growth. We deliver compensation only if those financial metrics are met. Corporate and individual performance and compensation levels are evaluated and approved by the Compensation Committee annually to ensure that we maintain a focus on delivering results and stockholder value. In fiscal 2009, the equity compensation provided to our Named Executive Officers will include a mix of stock options that are subject to service-based vesting over the first four years, i.e., 25% on each anniversary, and RSUs that are subject to a three-year, service-based cliff vesting schedule. Both the stock options and RSUs are subject to accelerated vesting in certain limited circumstances.

As further described below, our compensation decisions with respect to the components of executive compensation provided to our Named Executive Officers (including base salary, annual incentives and long-term incentives such as stock options and RSUs) are influenced by:

•

the Named Executive Officer’s individual role, scope of responsibility and performance during the year;

•

corporate performance as measured against our corporate objectives; and

•

our assessment of the competitive marketplace, including peer companies.

Overview of Compensation Committee

The Compensation Committee is responsible for overseeing our executive compensation and benefit programs, which include the following plans:

•

Our 2008 Stock Incentive Plan;

•

The Anthrogenesis Corporation Qualified Employee Incentive Stock Option Plan (no future grant);

•

The Signal Pharmaceuticals, Inc. 2000 Equity Incentive Plan (no future grant);

•

The Pharmion Corporation 2000 Stock Incentive Plan (no future grant);

•

Our 1992 Long-Term Incentive Plan (no future grant); and

•

Our Nonqualified Plan.

The Compensation Committee’s responsibilities include, among others, establishment of the base salary, incentive compensation, equity awards and any other compensation for Named Executive Officers, including our Chief Executive Officer, and the review and approval of the Chief Executive Officer’s recommendations for the compensation of certain Named Executive Officers reporting to him. The Compensation Committee relies on the judgment of the Chief Executive Officer regarding setting Named Executive Officers’ performance objectives, evaluating the actual performance of each Named Executive Officer against those objectives through the performance review process and recommending appropriate salary and incentive awards through the compensation review process. The Chief Executive Officer participates in Compensation Committee meetings at the request of the Compensation Committee, and provides relevant assessment and explanation supporting his recommendations. Other members of our management as well as certain advisors, including an independent compensation consultant, attend many Compensation Committee meetings at the request of the Compensation Committee. The Compensation Committee ensures that the total compensation paid to our Named Executive Officers is reasonable, competitive and consistent with market practice and the goal of delivering results to our stockholders.

Overview of Compensation Program

Our short- and long-term executive compensation programs incorporate a pay-for-performance approach that is designed to align the interests of our Named Executive Officers to those of our stockholders. Other than our base salary program, all of our executive cash and stock compensation programs for fiscal 2008 were directly dependent upon the achievement of our performance goals, whether financial, strategic or both.

The compensation package provided to our Named Executive Officers includes:

•

Base Salary, which provides fixed compensation based on competitive market practice.

•

Performance-Based Short-Term Incentive Compensation, which focuses our Named Executive Officers on meeting annual goals that contribute to the overall long-term health of our business. Our short-term incentive program, known as our MIP, is an annual bonus plan that provides variable compensation based on attainment of annual corporate, division functional and individual goals. Payments under our MIP are made in cash.

•

Performance-Based Long-Term Incentive Compensation, is a three-year performance plan whose metrics are solely financial. The LTIP provides a long-term focus and trajectory against business planning and goal achievement and is aligned to stockholder interests in focusing on longer-term financial health and results. Payments under the LTIP may be made in cash or stock, as determined by the Compensation Committee.

•

Equity Compensation, which is designed to reward and motivate our Named Executive Officers by aligning their interests to those of our stockholders and provide them with an opportunity to acquire a proprietary interest in us. Historically, the equity compensation plan has been solely in the form of stock options. Beginning in fiscal 2009, the award will be granted as a mix of stock options that are subject to service-based vesting over the first four years, i.e., 25% on each anniversary, and RSUs that are subject to a three-year, service-based cliff vesting schedule. Both the stock options and RSUs are subject to accelerated vesting in certain limited circumstances. This change is accompanied by the introduction of stock ownership requirements for all Named Executive Officers.

•

401(k) Plan, to which we make matching contributions in the form of shares of our Common Stock to the accounts of our Named Executive Officers as well as other eligible employees who participate in the plan.

•

Deferred Compensation Plan, which is a nonqualified deferred compensation plan intended to provide competitive market-based retirement benefits. We make matching cash contributions to the accounts of our Chief Executive Officer and President and Chief Operating Officer.

•

Perquisites and Other Benefits, which primarily include health and welfare benefits, professional tax and financial counseling and umbrella insurance premiums.

Chief Executive Officer

Other Named Executive Officers

Determination of Appropriate Pay Levels (Competitive Positioning)

To establish appropriate pay levels for our Named Executive Officers, we utilize market-based benchmarking. Benchmarking entails comparing compensation paid to key executives at companies that have financial profiles similar to ours (including projected employee headcount, revenues and market value) to help establish our own compensation levels. Market information regarding pay practices at other companies is compiled, reviewed and considered in assessing the reasonableness and competitiveness of the compensation we award to our Named Executive Officers for their contributions.

With the assistance of an independent compensation consultant, Radford Surveys + Consulting, a business unit of Aon Corporation, which we refer to as “Radford,” we analyze competitive market data every year. Data sources include public company proxy statements and third-party industry compensation surveys. The benchmarking information we obtain is used to determine our competitive position among similarly situated companies in the marketplace and to set our targeted pay at a competitive range relative to our peers.

Radford recommended and the Compensation Committee approved a comparison group of companies that we believe best represents the companies in our industry that compete with us for executive talent. In February 2008, Radford completed a competitive market analysis of the compensation levels of all Named Executive Officers relative to the market based on the compensation paid by the following 12 companies: Allergan, Amgen, Amylin Pharmaceuticals, Biogen Idec, Cephalon, Forest Labs, Genentech, Genzyme, Gilead Sciences, Millennium Pharmaceuticals, Sepracor and Vertex. However, in October 2008, as a result of changes in our profile and stage of product development activities, Radford, in collaboration with management, recommended certain changes to the peer group which included the removal of Millennium Pharmaceuticals (due to its acquisition) and the addition of OSI Pharmaceuticals to replace Forest Labs which better reflected our high-growth profile. Based upon Radford’s recommendation, this revised peer group was approved by the Compensation Committee at its October 2008 meeting. Our peer group currently consists of the following companies, which were selected on the basis of employee headcount, industry, revenue, stage of development, complexity and market capitalization:

In December 2008, this peer group was used in the evaluation of fiscal 2008 cash and equity compensation for the Chief Executive Officer and the other Named Executive Officers, relying on 2008 public filings for specific peers. In addition, the Compensation Committee also considered information in the following surveys: 2008 Radford Global Life Sciences Survey, 2008 Towers Perrin U.S. CBD Pharmaceutical Executive Database, and 2008 SIRS Executive Compensation Survey. Beginning with the December 2008 analysis, we placed greater emphasis on pharmaceutical industry surveys rather than biotechnology industry surveys when reviewing and analyzing our market data, given (among other criteria) the growth of our market capitalization, headcount, revenue and our staffing profile.

Based on Radford’s peer group analysis, the compensation levels of the Named Executive Officers relative to those of the executives of each of the companies in the peer group for fiscal 2008 were as follows:

		Peer Group Benchmarks (Market Percentile)
Elements of Compensation		Sol J. Barer		Robert J. Hugin		David W. Gryska		Aart Brouwer		Graham Burton
Target Total Cash Compensation (base salary plus target bonus opportunity)		Below 50th percentile (adjusted to 60th percentile in 2009)		Above 75th percentile		At 60th percentile		Below 50th percentile		At 60th percentile
Target Total Direct Compensation (includes base salary, target bonus opportunity and annual long-term incentives)		Below 50th percentile (adjusted to 60th percentile in 2009)		Above 75th percentile		At 60th percentile		Below 60th percentile		At 60th percentile

The Compensation Committee generally intends that the target compensation for each Named Executive Officer will be at the 60^th percentile of the competitive market with the potential to be at the market 75^th percentile for outstanding performance. Based on Radford’s peer group analysis completed in December 2008, the cash compensation levels for our Named Executive Officers are generally aligned with the market 60^th percentile while equity values approximate the market 75^th percentile. The exception was Dr. Barer, whose total direct compensation approximated less than the market 50^th percentile.

The Compensation Committee generally seeks to align our Named Executive Officers’ compensation with the competitive market while recognizing corporate and individual performance. In order to better align Dr. Barer’s compensation with the market, his performance as reflected in our corporate results, including revenue growth, earnings per share, or EPS, and total stockholder value, the following adjustments to Dr. Barer’s compensation have been made for fiscal 2009:

•

A base salary increase of $130,000 to bring his base salary just below the 60th percentile;

•

An increase in his short-term MIP bonus target to 120% of his base salary; and

•

An increase in his LTIP bonus target to 125% of his base salary.

However, with respect to both variable components of Dr. Barer’s pay under the MIP and the LTIP, the maximum payout was not increased, so that neither his total MIP bonus nor his total LTIP payout can exceed 200% of target or base salary, respectively. Consistent with the analysis and market comparables, Dr. Barer’s fiscal 2009 equity grant will be 176,667 stock options and 29,444 RSUs. This award reflects the pre-established split adopted in fiscal 2009 by the Compensation Committee under our 2008 Stock Incentive Plan, where a Named Executive Officer will receive his annual award two-thirds in stock options and one-third in RSUs. While Dr. Barer’s base salary still remains below the 60^th percentile, this adjustment better aligns his pay to the corporate performance he has delivered. The Compensation Committee preferred to further reflect adjustment to his total direct compensation in his variable components to align exclusively to corporate performance achievement. The other Named Executive Officers have received base salary adjustments for fiscal 2009 reflecting the achievement of fiscal 2008 corporate objectives, individual performance and changes in their roles and responsibilities.

The Compensation Committee reviews each element of compensation as well as the overall compensation package in a manner designed to enable us to compete for key talent, to motivate and retain our Named Executive Officers and to reward them for their achievement of key short- and long-term corporate financial and strategic objectives. Importantly, our compensation program is designed to deliver compensation that is commensurate with the level of performance achieved and is intended to ensure that the interests of our stockholders are reflected in our overall compensation philosophy. The Compensation Committee considers the following factors in determining the level of compensation awarded to each Named Executive Officer:

•

Overall performance, including performance against corporate, functional and individual objectives;

•

Overall job responsibilities, including organizational scope and impact as well as unique competencies and experience necessary to support our long-term performance;

•

Performance of general management responsibilities, global objectives and execution of company financial and strategic objectives and contributions to our continuing success; and

•

Our overall financial performance and position.

In December 2008, the Compensation Committee, based on Radford’s competitive market analysis and recommendations, made adjustments to the Named Executive Officers’ compensation in order to align their overall compensation with the market 60^th percentile. This generally included increases to base salaries, bonus targets and target stock option awards as follows:

•

Sol J. Barer, Ph.D.: Dr. Barer’s base salary has been increased by $130,000 to $1,101,000 to bring his compensation to the market 60th percentile. In addition, Dr. Barer’s target bonus under the MIP has been increased to 120% of base salary in order to bring his target bonus to the market 60th percentile. Dr. Barer’s compensation increases align his pay closer to our stated pay philosophy and is justified by competitive market data. Additionally, Dr. Barer’s LTIP target has been increased to 125%. In addition, his equity award is 176,667 stock options and 29,444 RSUs beginning with the April 14, 2009 grant.

•

Robert J. Hugin: Mr. Hugin’s base salary has been increased by $30,000 to $780,000 even though his base salary approximated the market 75th percentile. This adjustment reflects Mr. Hugin’s broad organizational role and significant impact within our structure and strategic direction. However, because Mr. Hugin’s target bonus approximates the market 75th percentile, no adjustment to his target bonus under the MIP or the LTIP has been made. In addition, his equity award is 100,000 stock options and 16,667 RSUs beginning with the April 14, 2009 grant.

•

David W. Gryska: Mr. Gryska’s base salary has been increased by $50,000 to $530,000 to bring his compensation to the market 60th percentile. However, because Mr. Gryska’s target bonus approximates the market 60th percentile, no adjustment to his target bonus has been made. In addition, his equity award is 43,333 stock options and 7,222 RSUs beginning with the April 14, 2009 grant.

•

Aart Brouwer: Mr. Brouwer’s base salary has been decreased by 128,949 Swiss francs to 500,000 Swiss francs (or $462,963 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar) to reflect his new job responsibilities discussed below. Mr. Brouwer’s target bonus has been set at 340,000 Swiss francs (or $314,815 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar). In addition, his equity award is 16,667 stock options and 2,778 RSUs beginning with the April 14, 2009 grant.

•

Graham Burton, MBBS, FRCP: Dr. Burton’s base salary has been increased by $25,000 to $475,000 which reflects both a merit and market adjustment to bring his compensation to the market 60th percentile. In addition, Dr. Burton’s target bonus under the MIP has been increased to 55% of base salary in order to bring his target bonus to the market 60th percentile. These adjustments reflect not only a merit-based adjustment based on individual performance, but also Dr. Burton’s responsibility for global regulatory affairs, pharmacovigilance, corporate quality and compliance. In addition, his equity award is 33,333 stock options and 5,556 RSUs beginning with the April 14, 2009 grant.

Despite the current economic environment, the Compensation Committee determined that these changes were appropriate in light of our strong performance and the relevant market data. In addition, for our Named Executive Officers, the mix of compensation generally is weighted toward at-risk pay (annual incentives and long-term incentives). Maintaining this pay mix results in a pay-for-performance orientation for our Named Executive Officers, which is aligned to our stated compensation philosophy of providing compensation commensurate with overall delivery of corporate performance.

Timing of Compensation

As discussed elsewhere, compensation for our Named Executive Officers, including base salary adjustments, incentive plan eligibility, incentive plan goal specifications and incentive plan payments, is established annually (usually in the first quarter) and is reviewed periodically throughout the year. Awards of options to purchase shares of our Common Stock currently are granted under our 2008 Stock Incentive Plan on a quarterly basis. Beginning in fiscal 2009, RSUs will be granted annually and are subject to a three-year, service-based cliff vesting schedule to certain employees, including our Named Executive Officers. To derive the number of RSUs granted, the target number of stock options is divided between a mix of stock options and RSUs based on a two-thirds and one-third mix (respectively) using a three to one ratio of stock options to RSUs in calculating the number of RSUs. The actual grant of stock options is based on Company’s and the individual’s performance during the prior year. All stock option grant dates are approved by the Compensation Committee for the Named Executive Officers in December of the year preceding the year the grants are awarded; grant dates are scheduled in advance without regard to any anticipated earnings or other major announcement by the Company. These dates are set forth for fiscal 2008 in the Grants of Plan-Based Awards Table. The exercise price of each stock option granted under our 2008 Stock Incentive Plan is the closing price of our Common Stock on the date of quarterly grant. Our matching contributions under our 401(k) Plan and Nonqualified Plan are pre-established, as further discussed under the headings “2008 Executive Compensation Components-Matching 401(k) Plan Benefits” and “2008 Executive Compensation Components-Matching Nonqualified Deferred Compensation Plan” and are usually granted in the first quarter of each year for services rendered in the preceding year (for the 401(k) Plan) and bimonthly (for the Nonqualified Plan).

Stock Ownership Requirements

In connection with the Compensation Committee’s decision to change the mix of equity awards by adding RSUs in fiscal 2009, we have also implemented minimum stock ownership guidelines to be achieved within a five-year period of our adoption of the guidelines. These guidelines provide for target stockholdings in an amount equal to three times base salary for Dr. Barer and Mr. Hugin and one times base salary for Messrs. Gryska and Brouwer and Dr. Burton. Such guidelines will be deemed satisfied if the Named Executive Officer holds, by the end of the applicable five-year period, at least that number of shares of our Common Stock equal to the value of the target amount divided by our stock price on the date the Named Executive Officer becomes subject to the guidelines. In determining whether a Named Executive Officer meets the guidelines, we consider owned shares, vested restricted or deferred stock units and vested shares held in the Named Executive Officer’s 401(k) plan account, but we do not consider stock options. Although not yet required, as of April 14, 2009, Dr. Barer and Mr. Hugin met such stock ownership guidelines.

In addition, we maintain a comprehensive securities trading policy which provides, among other things, that Celgene employees who obtain material, non-public information regarding Celgene may not: disclose or trade on such information, transact in derivative securities of Celgene without prior written consent of the Chief Executive Officer, short sell Celgene securities, buy or sell Celgene securities during any blackout period, or hold Celgene stock in a margin account or pledge Celgene stock as collateral for a loan without consulting the Treasurer or the Chief Financial Officer of the Company. Individuals classified as “insiders” (which include the Named Executive Officers) and their family members generally may not buy or sell Celgene securities without our prior approval, except under approved 10b5-1 trading plans. To our knowledge, our Named Executive Officers comply with the policy, and none of our Named Executive Officers currently holds our stock in a margin account or has used our stock as collateral for a loan.

2008 Executive Compensation Components

For fiscal 2008 the principal components of compensation for our Named Executive Officers were:

•

base salary;

•

cash bonus/performance-based incentive compensation;

•

equity grants under our 2008 Stock Incentive Plan;

•

matching contributions to the accounts of the Named Executive Officers who participated in our 401(k) Plan;

•

matching contributions to accounts of our Chief Executive Officer and President and Chief Operating Officer who participate in our Nonqualified Plan; and

•

other benefits, which primarily include health and welfare benefits, professional tax and financial counseling and umbrella insurance premiums.

Base Salary

Salaries are intended to be competitive relative to the biotechnology and pharmaceutical industries, industries in which we compete for our highly skilled talent. Requisite breadth and depth of experience and performance achievement are considered when setting salary ranges for each position. Annual reviews are held and adjustments are made based on attainment of individual goals and market-wide changes in salaries for comparable positions and qualifications.

During the review of fiscal 2008 base salaries for our Named Executive Officers, the following factors were considered by the Compensation Committee:

•

market data provided by compensation surveys;

•

review of each Named Executive Officer’s compensation relative both to our other Named Executive Officers and to executive officers of peer companies; and

•

individual performance of each Named Executive Officer.

We have entered into employment contracts with each of Dr. Barer and Mr. Hugin, effective May 1, 2006, which were further amended to comply with the deferred compensation rules under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), effective on December 31, 2008. We have also entered into a letter agreement with Dr. Burton effective June 2, 2003, further amended April 2, 2008, and an employment agreement with Mr. Brouwer effective November 1, 2008 and a letter agreement with Mr. Gryska effective December 6, 2006, further amended April 2, 2008. Mr. Brouwer’s employment agreement was updated to reflect his new position, the cash compensation provisions of which were effective on January 1, 2009, the effective date of his change in responsibilities. These employment and letter agreements specify an annual base salary for each of the Named Executive Officers. Other than the changes concerning Mr. Brouwer’s new position, no material modification was made to any of the employment agreements with the Named Executive Officers since January 1, 2008. Other than with respect to Dr. Barer and Mr. Hugin, none of our Named Executive Officers is entitled to a golden parachute (280G) excise tax gross-up. Although Dr. Barer and Mr. Hugin are entitled to a “modified” tax gross-up (i.e., only if amounts paid in connection with a change in control is in excess of 105% of the greater amount that could be paid without triggering the excise tax), neither would have received an excise tax gross-up had a change in control occurred on December 31, 2008. We discuss the terms and conditions of these agreements elsewhere in this proxy statement under the heading “Additional Information Regarding Executive Compensation-Employment Agreements.”

Cash Bonus/Performance-Based Incentive Compensation

General

In addition to base salaries, the total cash compensation for our Named Executive Officers in fiscal 2008 included an annual bonus payable under our MIP and our LTIP.

Under the MIP, each of Dr. Barer, Messrs. Hugin and Gryska and Dr. Burton was eligible to receive an annual target incentive bonus for fiscal 2008 of 100%, 75%, 60% and 50%, respectively, and is eligible to receive an annual target incentive bonus for fiscal 2009 of 120%, 75%, 60% and 55%, respectively, of his annual base salary, all of which was approved by the Compensation Committee. As discussed above, the target bonus percentages for Dr. Barer and Dr. Burton were increased as a result of our benchmarking process in fiscal 2009. The annual target incentive bonus for Mr. Brouwer was 50% of base salary for fiscal 2008 and is $314,815 for fiscal 2009.

Under the LTIP, each of Dr. Barer, Messrs. Hugin and Gryska and Dr. Burton is eligible to receive a target incentive bonus for each of the three separate three-year performance cycles (i.e., 2007-2009, 2008-2010 and 2009-2011) described below. Mr. Brouwer is eligible to receive a target incentive bonus for the 2007-2009 and 2008-2010 performance cycles. These bonus targets are expressed as a percentage of the Named Executive Officer’s annual base salary, in each case as approved by the Compensation Committee, and are as follows:

Named Executive Officer		2007 – 2009				2008 – 2010				2009 – 2011
Sol J. Barer, Ph.D.			100	%			100	%			125	%
Robert J. Hugin			100	%			100	%			100	%
David W. Gryska			50	%			100	%			100	%
Aart Brouwer (1)			50	%			50	%		Not Eligible
Graham Burton, MBBS, FRCP			50	%			50	%			50	%

The differences among the bonus targets reflect plan design, each of the Named Executive Officer’s organizational impact and responsibility and are consistent with our benchmarking process and analysis described above. The maximum payout under the LTIP ranges from 100% to 200% of annual base salary at the time of plan approval and the minimum payout is zero.

Based on an analysis prepared by Radford, we are positioned in the top two quartiles of our peer group for financial performance in one- and three-year revenue growth and in total stockholder return. In addition, we are generally positioned in the top quartile for diluted earnings per share three-year growth. As described more fully below, the performance targets for our short- and long-term incentive compensation plans were exceeded as a result of this growth and achievement.

Management Incentive Plan

The MIP is designed to provide variable short-term cash compensation to our Named Executive Officers and certain other employees upon attainment of annual corporate, division and individual goals. Each Named Executive Officer’s goals are set annually by the Compensation Committee and are based upon our business plan for that year. Awards granted under the MIP may be higher or lower than the executive officer’s annual bonus target for each year and are based on achievement of corporate objectives and achievement of individual performance objectives. The maximum total bonus payout under the MIP is 200% of the annual bonus target and the minimum total bonus payout is zero. Dr. Barer’s total bonus payout under the MIP cannot exceed 200% of his annual earned base salary.

Awards generally are payable on the last payroll payment date in February. If a Named Executive Officer retires, has any extended period of absence (such as sick leave or personal leave) or dies, the MIP award will be pro-rated based on the Named Executive Officer’s earned annual base salary.

For fiscal 2008, Dr. Barer and Messrs. Hugin and Gryska received a cash bonus payment entirely determined by the achievement of corporate goals. Mr. Brouwer and Dr. Burton received a cash bonus payment determined 80% on the achievement of corporate goals and 20% on the achievement of individual goals, as evaluated by the Compensation Committee in its sole discretion. For fiscal 2008, as a result of our significant growth and achievements in the past year, the Compensation Committee determined that the MIP was satisfied at 119.5% of target (revised in mid-2008 to reflect the acquisition of Pharmion).

Performance measures for fiscal 2008 were based on the following components, which were weighted as follows:

•

28% on non-GAAP diluted EPS of $1.56;

•

28% on non-GAAP total revenue of $2.238 billion; and

•

44% on non-financial objective milestones, which were weighted as follows:

•

14% on the clinical advancement of REVLIMID® (partially achieved);

•

7% on further clinical development of other product candidates (achieved);

•

7% on research and development findings (achieved);

•

7% on further regulatory advancement of REVLIMID®, apremilast and VIDAZA® (achieved); and

•

9% on specific milestones related to further international and corporate developments important to support our successful long-term health and growth (achieved).

Our total results achieved as compared to target (revised in mid-2008 to reflect the acquisition of Pharmion) for fiscal 2008 were 119.5%, which includes financial performance of 133.9% and non-financial performance of 101%, with weighted scores of 75% and 44.5%, respectively. Past year financial achievements include non-GAAP diluted EPS of $1.56 (a score of 121% achieved) and non-GAAP total revenue of $2.238 billion (a score of 146% achieved). Among the achievements in the clinical area are multiple patient accruals on key strategic studies, both domestically and internationally, clinical pipeline advancements in key products, and the advancement of multiple clinical compounds. Our regulatory function obtained label expansion for VIDAZA^® in the United States and in December 2008 VIDAZA^® was granted full marketing authorization by the European Commission for the treatment of adult patients with myelodysplastic syndromes, or MDS. In the area of research, we defined a rationale for REVLIMID^® efficacy in two additional indications and advanced four out of seven discovery projects. In addition, under corporate and international objectives, we met all key financial and non-financial deliverables of the Pharmion integration.

Financial measures that are not defined by generally accepted accounting principles (GAAP) provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before, during and after certain items that would not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring items that management does not believe affect our basic operations do not meet the GAAP definition of unusual or non-recurring items. Non-GAAP total revenue, non-GAAP net income and non-GAAP diluted earnings per share are not, and should not be viewed as, a substitute for similar GAAP items. The following is a discussion of the differences between each non-GAAP financial measure included in this proxy statement with the most comparable financial measure calculated and presented in accordance with GAAP:

•

Non-GAAP total revenue of $2.238 billion vs. GAAP total revenue of $2.255 billion in fiscal 2008. The difference between the two figures is attributable to sales related to former non-core products of our wholly-owned subsidiary, Pharmion LLC, which are to be divested. Such sales are excluded from the non-GAAP figure, but included in the GAAP figure.

•

Non-GAAP net income of $719 million vs. GAAP net loss of $1.534 billion in fiscal 2008. The difference between the two figures is primarily attributable to (i) the in-process research and development charge related to our acquisition of Pharmion on March 7, 2008, (ii) the purchase of VIDAZA® royalty obligations related to unapproved forms, (iii) the Pharmion inventory step-up adjustment to fair value expensed during the period, (iv) the effects of charges for share-based employee compensation expense associated with the application of the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), “Share Based Payment” (SFAS No. 123R), (v) research charges related to certain collaborative arrangements and (vi) adjustments to the income tax provision for the tax effect of these items. Each of the items (i) through (vi) are excluded from the non-GAAP figure, but included in the GAAP figure.

•

Non-GAAP diluted earnings per share of $1.56 vs. GAAP loss of $3.46 per diluted share in fiscal 2008. The difference between the two figures is primarily attributable to the effect of items (i) through (vi) listed above on the numerator and the effect of increasing the diluted weighted average shares as a result of the change from a net loss to net income on the denominator of the diluted earnings per share calculation. Each of the items (i) through (vi) are excluded from the non-GAAP figure but included in the GAAP figure.

For a reconciliation of the non-GAAP financial measures to the most comparable financial measure calculated and presented in accordance with GAAP for fiscal 2008, see Appendix B.

Under the MIP, the Compensation Committee is required to adjust, modify or amend the performance measures and targets in the plan to reflect certain events that affect such performance measures and targets, including: (i) restructurings, discontinued operations, extraordinary items or events, corporate transactions (including dispositions or acquisitions) and other unusual or non-recurring items and (ii) changes in tax law or accounting standards required by generally accepted accounting principles.

In December 2007, the Compensation Committee preliminarily determined that the non-GAAP diluted EPS, non-GAAP total revenue and certain non-financial measures were appropriate measures for use in the fiscal 2008 MIP as each provides management focus on and an incentive to increase revenues, while meeting a non-GAAP diluted EPS objective. This balanced with our long-term objective of maintaining a significant research and development reinvestment rate fuels our long-term growth. At its February 2008 meeting, the Compensation Committee approved these targets for the 2008 MIP.

In setting these objectives, we considered our fiscal 2007 performance and established the fiscal 2008 targets considering our long-term strategic plan and our commitment to deliver strong financial results to our stockholders.

In determining the MIP bonuses, each of the Named Executive Officer’s actual target modifier was calculated by adding the Named Executive Officer’s corporate target and the individual target (if applicable) as follows:

Corporate

Individual

Weighting X

Weighting X

Actual Target

Named Executive Officer

Corporate Score

Individual Score

Modifier

Sol J. Barer, Ph.D.

100% x 119.5

—

119.5

%

Robert J. Hugin

100% x 119.5

—

119.5

%

David W. Gryska

100% x 119.5

—

119.5

%

Aart Brouwer

80% x 119.5

20% x 130

121.6

%

Graham Burton, MBBS, FRCP

80% x 119.5

20% x 100

115.6

%

We have disclosed the annual target incentive bonus for the fiscal 2009 MIP as a percentage of annual base compensation for each Named Executive Officer. Additionally, below are the financial and several of the non-financial targets for the fiscal 2009 annual MIP:

56% Financial Objectives

•

28% on non-GAAP total revenue — Range of $2.6 billion to $2.7 billion(1)

•

28% on non-GAAP diluted EPS — Range of $2.05 to $2.15 per share(1)

44% Non-Financial Objectives (Selected Strategic Corporate Objectives)

•

Advancement of marketed products REVLIMID® in myeloma and MDS and VIDAZA® in MDS

•

Advancement of late stage products

•

Clinical advancement of early stage products

•

Advancement of preclinical and translational development of drug candidates and marketed products REVLIMID® and VIDAZA®

•

Advancement of specific milestones related to furthering international and corporate developments and key organizational development initiatives

We have not disclosed all of the non-financial performance targets for the fiscal 2009 MIP performance period because we believe that disclosing certain performance targets for the plan will result in competitive harm to us. Such information represents confidential business information that could place us at a competitive disadvantage because it provides insight into our strategic long-term and financial goals including, the development of our proprietary pipeline and research strategies, our clinical development plans, our regulatory strategies and our international expansion plans. The Compensation Committee approves each plan year’s cycle metric under the MIP to ensure an accelerated and ongoing degree of difficulty commensurate with our short and long-term business plan.

Long-Term Incentive Plan

The LTIP is designed to provide our Named Executive Officers and other key employees with long-term performance-based incentive opportunities contingent upon achievement of pre-established corporate performance objectives. Another goal of the LTIP is to create focus on key long-term objectives while creating a retention vehicle to promote management continuity in key functional areas. To qualify for an award under the LTIP, our Named Executive Officers must work each year of a three-year period which we refer to as a “performance cycle.” However, if a Named Executive Officer’s employment is terminated during the performance period due to the Named Executive Officer’s death, permanent disability or retirement (subject to the approval by the Compensation Committee), then the Named Executive Officer is entitled to receive a pro rata LTIP amount upon termination solely based on actual LTIP performance of each performance cycle. In addition, if we have a change in control participants are entitled to an immediate payment equal to their target award, or if higher, an award based on actual performance through the date of the change in control for each performance cycle.

At the end of a three-year performance cycle, the Compensation Committee evaluates the performance of our Named Executive Officers during the last year of the three-year performance cycle against the plan targets. To the extent established targets under the LTIP are not achieved, no LTIP payment will be awarded for such performance cycle. Awards for the 2006 — 2008 performance cycle were paid in cash to each of our Named Executive Officers in the first quarter of fiscal 2009 based on our achievement of 161%, as a result of our significant achievements over the performance cycle.

We currently have three separate three-year performance cycles running concurrently ending December 31, 2009, 2010 and 2011, for the performance periods 2007 — 2009, 2008 — 2010 and 2009 — 2011, respectively. Performance measures for each of these cycles are based on performance delivered against the following plan components achieved over the last year of the three-year cycle and culminating in the achievement of the final plan year forecasted target of: 25% on non-GAAP EPS, 25% on non-GAAP net income and 50% on non-GAAP revenue. For purposes of the 2006-2008 performance period, non-GAAP EPS, non-GAAP net income and non-GAAP revenue have the same meanings as defined above.

We have disclosed the LTIP compensation targets for the 2006-2008, 2007-2009, 2008-2010 and 2009-2011 performance cycles below, and we have disclosed the results achieved for 2006 through 2008 below and in our public filings. However, we have not disclosed the specific performance targets under the LTIP because we believe that disclosing performance targets will result in competitive harm to us. Such information represents confidential business information that could place us at a competitive disadvantage because it provides insight into our long-term performance and financial goals. The LTIP is unique among our peers and provides a competitive retention vehicle with a focus on delivery of long-term corporate performance. As a result, we believe that disclosing the targets will give our competitors insight into the plan and thus an unfair advantage in potentially enticing and recruiting our leadership talent. The Compensation Committee approves each plan year’s cycle metric under the LTIP to ensure an accelerated and ongoing degree of difficulty commensurate with our long-term business plan.

For each of the above-described performance cycles, awards are expressed in the range of 0% to 200% of the Named Executive Officer’s individual annual base salary, and bonus targets within the range are adopted by the Compensation Committee. The potential payouts under the LTIP for the 2006-2008 performance period were as follows:

Name (1)		Threshold (2)				Target (3)				Maximum (4)
Sol J. Barer, Ph.D.		$	324,500			$	649,000			$	1,298,000
Robert J. Hugin		$	284,000			$	568,000			$	1,136,000
Aart Brouwer		$	112,500			$	225,000			$	450,000
Graham Burton, MBBS, FRCP		$	100,048			$	200,095			$	400,190

These amounts were based on the Named Executive Officers’ base salaries in effect on February 1, 2006 as follows: Dr. Barer, $649,000; Mr. Hugin, $568,000; and Dr. Burton, $400,190. Pursuant to our 2008 Stock Incentive Plan, LTIP awards are payable, at the discretion of the Compensation Committee, either in cash or shares of Common Stock (the number of shares would be based on the cash amount divided by the fair market value of our Common Stock at the time of payment).

The potential payouts, expressed as the Named Executive Officer’s base salary multiplied by the applicable percentage (threshold, target or maximum), under the LTIP for the 2007-2009 performance period are as follows:

Name		Threshold (1)				Target (2)				Maximum (3)
Sol J. Barer, Ph.D.		$	375,000			$	750,000			$	1,500,000
Robert J. Hugin		$	313,000			$	626,000			$	1,252,000
David W. Gryska		$	112,500			$	225,000			$	450,000
Aart Brouwer		$	112,500			$	225,000			$	450,000
Graham Burton, MBBS, FRCP		$	104,050			$	208,100			$	416,200

The potential payouts, expressed as the Named Executive Officer’s base salary multiplied by the applicable percentage (threshold, target or maximum), under the LTIP for the 2008-2010 performance period are as follows:

Name		Threshold (1)				Target (2)				Maximum (3)
Sol J. Barer, Ph.D.		$	437,500			$	875,000			$	1,750,000
Robert J. Hugin		$	350,000			$	700,000			$	1,400,000
David W. Gryska		$	225,000			$	450,000			$	900,000
Aart Brouwer		$	137,624			$	275,248			$	550,496
Graham Burton, MBBS, FRCP		$	108,212			$	216,423			$	432,846

The potential payouts, expressed as the Named Executive Officer’s base salary multiplied by the applicable percentage (threshold, target or maximum), under the LTIP for the 2009-2011 performance period are as follows:

Name (1)		Threshold (2)				Target (3)				Maximum (4)
Sol J. Barer, Ph.D.		$	485,500			$	1,213,750			$	1,942,000
Robert J. Hugin		$	375,000			$	750,000			$	1,500,000
David W. Gryska		$	253,500			$	507,000			$	1,014,000
Graham Burton, MBBS, FRCP		$	112,500			$	225,000			$	450,000

In December 2005, the Compensation Committee determined that the non-GAAP diluted EPS, non-GAAP net income and non-GAAP total revenue were appropriate measures for the LTIP three-year cycle which ended on December 31, 2008, as each financial measurement provides management focus and incentive to increase non-GAAP revenues and non-GAAP net income while meeting the non-GAAP EPS objective. See “Cash Bonus/Performance-Based Incentive Compensation—Management Incentive Plan” for more information regarding non-GAAP financial measures.

Accordingly, the Compensation Committee approved the performance measures of the 2006-2008 LTIP, consisting of three financial performance objectives: (1) a pre-established non-GAAP diluted EPS target, (2) a pre-established non-GAAP net income target and (3) a pre-established non-GAAP revenue target. At the time the Compensation Committee established the 2006-2008 LTIP performance measures and targets, these targets represented a significant increase over our 2005 results. These targets were designed to be aligned with our long-term strategic plan and our ongoing commitment to deliver superior financial results to our stockholders.

Performance results for 2006-2008 LTIP were as follows:

•

weighting of 25% on non-GAAP diluted EPS (achieved 104% of target);

•

weighting of 25% on non-GAAP net income (achieved 111% of target); and

•

weighting of 50% on non-GAAP total revenue (achieved 149% of target).

Measure		Results				Total
Non-GAAP diluted EPS		$	1.56				28	%
Non-GAAP net income		$	718,761				33	%
Non-GAAP total revenue		$	2,237,816				100	%
		Total Score					161	%

2008 MIP and LTIP Payments

The goals of the MIP are both financial and strategic; the goals of the LTIP are financial. Both the MIP and LTIP are designed to promote short- and long-term achievement of key corporate objectives and milestones that focus on stockholder return and link a significant portion of compensation to variable and equity-based awards. Achievement of these goals is substantially uncertain at the time such goals are established.

The following payouts of the aggregate incentive awards for the fiscal 2008 MIP and the 2006 — 2008 LTIP performance cycle were approved by the Compensation Committee on February 18, 2009:

		MIP Payments
		(Overall 119.5%				LTIP Payments				Total
Name		Achievement)				(161% Achievement)				Payments (1)
Sol J. Barer, Ph.D.		$	1,122,105			$	1,044,890			$	2,166,995
Robert J. Hugin		$	657,250			$	914,480			$	1,571,730
David W. Gryska		$	350,925				—			$	350,925
Aart Brouwer (2)		$	352,079			$	392,783			$	744,862
Graham Burton, MBBS, FRCP		$	258,448			$	322,153			$	580,601

Equity Grants under our 2008 Stock Incentive Plan

A portion of our Named Executive Officers’ and other employees’ compensation relates to the granting of equity awards, and such grants are based on the successful attainment of corporate and individual goals. Our stock incentive plan is an important component of our total compensation strategy. It promotes focus on short- and long-term financial and strategic goals, enabling us to attract and retain the talented employees necessary to achieve long-term success.

In determining awards to our Named Executive Officers, the Compensation Committee reviews both the value of equity compensation and the average percentage of stock options granted to comparable executive officers at the peer group level as well as factors in total corporate performance. The Compensation Committee’s policy on equity awards is designed to align the interests of our Named Executive Officers with those of our stockholders to achieve exceptional corporate performance over time. The stock option pool is approved each year by the Compensation Committee. Awards of options to purchase shares of our Common Stock currently are granted pursuant to our 2008 Stock Incentive Plan on a quarterly basis to our Named Executive Officers and certain other employees. Such grants vest over a four-year period in equal installments, subject to the Named Executive Officer’s continued service with us or our subsidiaries and his performance through each applicable vesting date, thereby encouraging retention. Stock options are subject to accelerated vesting in certain limited circumstances. In addition, the 2008 Stock Incentive Plan allows for the immediate exercise of stock options whereby shares of Common Stock acquired on exercise of the stock option are subject to the same vesting schedule as the stock option.

Based on the recommendations by our compensation consultant, which among other things, considered equity changes made by other peer companies, we introduced RSUs to our equity incentive program in fiscal 2009. In early fiscal 2009, the Compensation Committee approved the use of time-based RSUs with 100% vesting on the third year after the date of grant. Equity awards will be divided between stock options and RSUs based on a two-thirds and one-third mix (respectively) using a three to one ratio of stock options to RSUs in calculating the number of RSUs. The introduction of RSUs as part of the annual equity incentive program for Named Executive Officers provides a competitive profile within our peer group using a mix of both options and RSUs. Supplementing our stock option grants with RSUs enables us to use fewer shares while continuing to provide a long-term incentive award that serves as an effective retention tool. The number of equity grants awarded to our Named Executive Officers is tied to the practices of comparable companies in the biotechnology and pharmaceutical industries. To determine such comparative data, we rely on outside compensation consultants and third-party industry surveys. Because some of our stock option awards currently are underwater, the retentive value as well as the incentive value of the RSU awards are significant. As expressly provided in our 2008 Stock Incentive Plan, we are prohibited from any repricing of stock options unless we seek to obtain stockholder approval of any such repricing, which we do not currently anticipate seeking.

Stock options granted to our Named Executive Officers and other executives at the vice president level and above between September 19, 2000 and October 1, 2004 contained a reload feature which provides that if (1) the optionee exercises all or any portion of the stock option (a) at least six months prior to the expiration of the stock option, (b) while employed by us or one of our affiliates and (c) prior to the expiration date of the 1998 Stock Incentive Plan (subsequently renamed the 2008 Stock Incentive Plan) and (2) the optionee pays the exercise price for the portion of the stock option so exercised or pays applicable withholding taxes by using Common Stock owned by the optionee for at least six months prior to the date of exercise, the optionee shall be granted a new stock option under the 2008 Stock Incentive Plan on the date all or any portion of the stock option is exercised to purchase the number of shares of Common Stock equal to the number of shares of Common Stock exchanged by the optionee to exercise the stock option or to pay withholding taxes thereon.

The reload stock option will be exercisable on the same terms and conditions as apply to the original stock option except that (1) the reload stock option will become exercisable in full on the day that is six months after the date the original stock option is exercised, (2) the exercise price shall be the fair market value (as defined in the 1998 Stock Incentive Plan (subsequently renamed the 2008 Stock Incentive Plan)) of Common Stock on the date the reload stock option is issued and (3) the expiration of the reload stock option will be the date of expiration of the original stock option. An optionee may not reload the reload stock option unless otherwise permitted by the Compensation Committee. The reload feature was removed from the 2008 Stock Incentive Plan and stock options granted after October 1, 2004 do not contain any reload feature.

Matching 401(k) Plan Benefits

Our 401(k) Plan is a tax-qualified retirement savings plan available to all of our eligible employees, which include certain Named Executive Officers. Under the 401(k) Plan, we make discretionary matching contributions to participants (including certain Named Executive Officers) in the form of shares of our Common Stock to such participant’s plan account of up to 6% of their eligible earnings or the maximum permitted by law.

Eligible Named Executive Officers participated in the 401(k) Plan in fiscal 2008 and received matching contributions under the 401(k) Plan for fiscal 2008 valued as follows:

Name		Matching Contributions under the 401(k) Plan (1)
Sol J. Barer, Ph.D.		225.69 shares of Common Stock (fair value of $12,476)
Robert J. Hugin		225.69 shares of Common Stock (fair value of $12,476)
David W. Gryska		225.69 shares of Common Stock (fair value of $12,476)
Aart Brouwer (2)		N/A
Graham Burton, MBBS, FRCP		225.69 shares of Common Stock (fair value of $12,476)

Matching Nonqualified Deferred Compensation Plan

The Nonqualified Plan is an unfunded nonqualified deferred compensation plan to which certain U.S. management level employees and certain Named Executive Officers may elect to defer up to 90% of their base salary and up to 100% of annual bonus. We make a cash matching contribution to the Nonqualified Plan on behalf of certain Named Executive Officers in the plan at a rate specified by the Compensation Committee (this rate mirrors the investment returns in the funds held by our 401(k) Plan). For further discussion of the Nonqualified Plan, see “Additional Information Regarding Executive Compensation- Nonqualified Deferred Compensation Table” elsewhere in this proxy statement.

Eligible Named Executive Officers participated in our Nonqualified Plan and received matching cash contributions from us for fiscal 2008 under the Nonqualified Plan as follows:

Name		Matching Contributions under the Nonqualified Plan (1)
Sol J. Barer, Ph.D.			$ 186,200
Robert J. Hugin			$ 109,375
David W. Gryska (2)			—
Aart Brouwer (2)			—
Graham Burton, MBBS, FRCP(2)			—

Perquisites and Other Benefits

Each of the Named Executive Officers receives medical, dental, disability and life insurance coverage on the same terms as other employees. Our executive compensation program also includes limited perquisites and other benefits. We reimburse Dr. Barer and Messrs. Hugin, Gryska and Brouwer for reasonable expenses incurred in obtaining professional tax and financial counseling up to a maximum of $15,000 annually with respect to Dr. Barer and Messrs. Hugin and Gryska and 17,000 Swiss francs (or $15,741 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar) with respect to Mr. Brouwer. We believe such reimbursements allow them to focus on managing our business and assist them in optimizing the value received from the various compensation and benefit programs offered. In fiscal 2008, reimbursements of $15,000 were made to Dr. Barer, $8,527 to Mr. Gryska, none to Mr. Hugin and $6,564 to Mr. Brouwer. In connection with hiring Mr. Gryska in December 2006, we reimbursed Mr. Gryska an aggregate of $271,500 for certain relocation costs (of which $81,500 is reported in the Summary Compensation Table with respect to fiscal 2007). All transactions were facilitated through our relocation service provider to manage costs and avoid unnecessary taxes on such costs. In addition, we provide umbrella insurance and pay the applicable insurance premiums for such insurance for Dr. Barer, Mr. Hugin and Dr. Burton. These premium payments are taxable to each of Dr. Barer, Mr. Hugin and Dr. Burton. For fiscal 2008, we made premium payments as follows: $2,875 for each of Dr. Barer and Mr. Hugin and $1,150 for Dr. Burton. Mr. Hugin also received Company contributions to a health savings account in fiscal 2008, equal to $2,250. Attributed costs of the perquisites and other personal benefits described above for our Named Executive Officers for fiscal 2007 and fiscal 2008 are included in column (i) of the Summary Compensation Table.

We have entered into certain employment agreements with our Named Executive Officers as discussed elsewhere in this proxy statement which provide for, in part, termination benefits and, in certain cases, change of control benefits that are designed to promote stability and continuity of senior management. Information regarding applicable payments under such agreements for the Named Executive Officers is provided under the heading “Additional Information Regarding Executive Compensation-Employment Agreements” and “Additional Information Regarding Executive Compensation-Potential Payments Upon Termination or Change in Control” elsewhere in this proxy statement.

Accounting and Tax Considerations

SFAS No. 123R. We have adopted SFAS No. 123R using the modified prospective application method on January 1, 2006. Our estimate of future stock-based compensation expense is affected by our stock price, the number of stock-based awards our Board of Directors may grant in fiscal 2009 and subsequent years, as well as a number of complex and subjective valuation assumptions and the related tax impact. These valuation assumptions include, but are not limited to, the volatility of our stock price and employee stock option exercise behaviors.

Policy with respect to Compensation Deductibility. Our policy with respect to the deductibility limit of Section 162(m) of the Code generally is to preserve the federal income tax deductibility of compensation paid when it is appropriate and is in our best interest. However, we reserve the right to authorize the payment of non-deductible compensation if we deem that it is appropriate to do so under the circumstances.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of our Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

		Respectfully submitted,
		THE COMPENSATION COMMITTEE
		Rodman L. Drake, Chairman
		Michael D. Casey
		James J. Loughlin

ADDITIONAL INFORMATION REGARDING EXECUTIVE COMPENSATION

Executive Officers

Our executive officers and their ages and positions:

Name		Age		Position
Sol J. Barer, Ph.D.		62		Chief Executive Officer and Chairman of the Board
Robert J. Hugin		54		President, Chief Operating Officer and Director
David W. Gryska		53		Chief Financial Officer
Aart Brouwer		69		Chairman International and Senior Advisor to the Celgene Chairman and Chief Executive Officer
Graham Burton, MBBS, FRCP		58		Senior Vice President, Global Regulatory Affairs, Pharmacovigilance and Corporate Quality Assurance and Compliance

Sol J. Barer, Ph.D. is our Chief Executive Officer and Chairman of the Board of Directors. See “Proposal One: Election of Directors—Nominees” for a discussion of Dr. Barer’s business experience.

Robert J. Hugin is our President, Chief Operating Officer and Director. See “Proposal One: Election of Directors—Nominees” for a discussion of Mr. Hugin’s business experience.

David W. Gryska joined us as Senior Vice President and Chief Financial Officer effective December 6, 2006. Mr. Gryska most recently has held several Board positions of biotechnology companies and is currently on the Board of SeattleGenetics. Previously, Mr. Gryska served at Scios, Inc., a biopharmaceutical company, as Senior Vice President and Chief Financial Officer from November 2000 to October 2004, and as Vice President of Finance and Chief Financial Officer from December 1998 to November 2000. From 1993 to December 1998, he served as Vice President, Finance and Chief Financial Officer at Cardiac Pathways Corporation, a medical device company. Prior to Cardiac Pathways, Mr. Gryska served as a partner at Ernst & Young LLP, an accounting firm, for eleven years where he focused on technology industries, with an emphasis on biotechnology and healthcare companies. Mr. Gryska holds a B.A. in accounting and finance from Loyola University and an M.B.A. from Golden Gate University.

Aart Brouwer has served as our Chairman International and Senior Advisor to the Chairman and Chief Executive Officer since January 1, 2009. Mr. Brouwer joined us as President of Celgene International in November 2005. Prior to Celgene, Mr. Brouwer served as a director of IsoTis S.A., a publicly owned medical device company specializing in orthobiologics since 2002 and director of IsoTis, Inc. since 2006. Until 2002, Mr. Brouwer was Vice President of Europe for Amgen Inc. Prior to Amgen, Mr. Brouwer served in a range of senior marketing and management roles in the global pharmaceutical and biotech industries.

Dr. Graham Burton has served as our Senior Vice President, Global Regulatory Affairs, Pharmacovigilance and Corporate Quality Assurance and Compliance from July 2003. Since then, his responsibilities have increased to the extent where he has become one of our executive officers, even though his title remains the same. Previously, Dr. Burton had been Senior Vice President Global Regulatory Affairs and Quality Assurance at Johnson & Johnson Pharmaceutical Research & Development, LLC from 1997 to 2003. Dr. Burton received his medical degree in 1975 from St. George’s Hospital Medical School, London and became a Fellow of the Royal College of Physicians in 1997. He was a practicing physician specializing in internal medicine and cardio-pulmonary disorders from 1975 to 1984 followed by four years as a Senior Medical Officer with the Medicines Control Agency of the UK’s Department of Health. He was the Medical Director for Upjohn UK from 1988 to 1995 and then for two years was Vice President Global Regulatory Affairs in the US with Pharmacia & Upjohn.

SUMMARY COMPENSATION TABLE

The following table sets forth information regarding compensation earned by our Named Executive Officers for the fiscal years ended December 31, 2008, 2007 and 2006.

																										Change in
																										Pension
																										Value and
																										Nonqualified
																						Non-Equity				Deferred
Name and Principal														Stock				Option				Incentive Plan				Compensation				All Other
Position		Year				Salary				Bonus(1)				Awards				Awards(2)				Compensation(3)				Earnings(4)				Compensation(5)				Total
(a)		(b)				(c)				(d)				(e)				(f)				(g)				(h)				(i)				(j)
Sol J. Barer, Ph.D.			2008			$	939,000				—				—			$	5,202,543			$	2,166,995				—			$	216,551			$	8,525,089
Chief Executive			2007			$	833,333				—				—			$	6,392,992			$	2,248,000				—			$	191,898			$	9,666,223
Officer and Chairman			2006			$	716,333				—				—			$	13,248,101			$	1,959,600				—			$	160,295			$	16,084,329
of the Board (6)
Robert J. Hugin			2008			$	733,333				—				—			$	2,726,361			$	1,571,730				—			$	126,976			$	5,158,400
President, Chief			2007			$	675,333				—				—			$	3,202,056			$	1,699,800				—			$	115,694			$	5,692,883
Operating Officer and			2006			$	606,667				—				—			$	5,592,865			$	1,470,100				—			$	108,028			$	7,777,660
Director (7)
David W. Gryska			2008			$	489,435				—				—			$	1,277,135			$	350,925				—			$	21,003			$	2,138,498
Chief Financial			2007			$	450,000				—				—			$	1,161,996			$	270,000				—			$	97,548			$	1,979,544
Officer			2006			$	32,596				—				—			$	41,134				—				—			$	190,000			$	263,730
Aart Brouwer			2008			$	579,078				—				—			$	329,484			$	744,862				—			$	51,686			$	1,705,110	(8)
Chairman Int’l			2007			$	503,250				—				—			$	76,872			$	305,976				—			$	43,477			$	929,575	(8)
and Senior Advisor			2006			$	466,879				—				—				—			$	368,368				—			$	—			$	835,247	(8)
to Celgene Chairman and Chief Executive Officer
Graham Burton, FRCP MBBS,			2008			$	447,141				—				—			$	2,029,530			$	580,601				—			$	13,626			$	3,070,898
Sr. Vice President			2007			$	430,071				—				—			$	435,507			$	590,278				—			$	12,031			$	1,467,887
GRA&P			2006				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A

										Value of				Value of
						Value of				Matching				Matching
						Matching				Contributions				Contributions
						Contributions				To a 401(k)				To a Pension				Professional								Contributions				Value of
						to a				Plan in				Plan Pursuant				Tax and				Umbrella				to Health				Reimbursed
						Nonqualified				Shares of				to Swiss				Financial				Insurance				Savings				Relocation
Name		Year				Plan				Common Stock **				Federal Law				Counseling				Premiums				Account				Expenses				Total
Sol J. Barer, Ph.D.			2008			$	186,200			$	12,476				—			$	15,000			$	2,875				—				—			$	216,551
			2007			$	163,542			$	10,481				—			$	15,000			$	2,875				—				—			$	191,898
			2006			$	143,267			$	17,028				—				—				—				—				—			$	160,295
Robert J. Hugin			2008			$	109,375			$	12,476				—				—			$	2,875			$	2,250				—			$	126,976
			2007			$	100,838			$	10,481				—				—			$	2,875			$	1,500				—			$	115,694
			2006			$	91,000			$	17,028				—				—				—				—				—			$	108,028
David W. Gryska			2008				—			$	12,476				—			$	8,527				—				—				—			$	21,003
			2007				—			$	10,481				—			$	5,567				—				—			$	81,500	*		$	97,548
			2006				—				—				—				—				—				—			$	190,000	*		$	190,000
Aart Brouwer			2008				—				—			$	45,122			$	6,564				—				—				—			$	51,686
			2007				—				—			$	43,477				—				—				—				—			$	43,477
			2006				—				—				—				—				—				—				—			$	—
Graham Burton,			2008				—			$	12,476				—				—			$	1,150				—				—			$	13,626
MBBS, FRCP			2007				—			$	10,481				—				—			$	1,550				—				—			$	12,031
			2006				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A

Employment Agreements

Dr. Barer and Mr. Hugin

Effective as of May 1, 2006, we entered into new employment contracts with Dr. Barer and Mr. Hugin, which were subsequently amended effective December 31, 2008 solely for the purpose of addressing the deferred compensation requirements under Section 409A of the Code. The employment agreements have an initial term of three years, which automatically extends for successive one-year terms unless either we or the executive provide written notice to the other, at least six months prior to the expiration of the then term, of such party’s intention to terminate the executive’s employment at the end of such term, unless terminated sooner as provided in the employment agreements. Effective as of May 1, 2008, the employment agreements provided for an annual base salary of $971,000 and $750,000 and an annual MIP target bonus of 100% and 75% of annual base salary, respectively, for each of Dr. Barer and Mr. Hugin. By action of the Compensation Committee, consistent with their employment agreements, in February 2009, Dr. Barer’s base salary was approved to be increased effective May 1, 2009 to $1,101,000, his MIP target bonus increased to 120% and his annual LTIP bonus established with a threshold, target and maximum bonus of 50%, 125% and 200%, respectively, for the three-year performance cycle 2009 — 2011. Also in February 2009, Mr. Hugin’s base salary was approved to be increased effective May 1, 2009 to $780,000, although his MIP target bonus remained at 75% and he remains eligible to earn an annual LTIP bonus with the threshold, target and maximum bonuses equal to 50%, 100% and 200% of base salary, respectively, for the three-year performance cycle 2009 — 2011. In addition, Dr. Barer’s and Mr. Hugin’s annual option target grant was increased to 265,000 and 150,000 shares of Common Stock, respectively, by action of the Compensation Committee. The employment agreements also provide that Dr. Barer and Mr. Hugin are entitled to reimbursement for reasonable expenses incurred in obtaining professional tax and financial counseling, up to a maximum of $15,000 annually, payment of umbrella insurance premiums, and participation in all group health and insurance programs and all other fringe benefit or retirement plans which are generally available to our employees.

The employment agreements provide that if Dr. Barer’s or Mr. Hugin’s employment is terminated due to his disability or incapacitation or for any reason other than by us for “cause,” or due to his death, the executive is entitled to receive a lump sum payment equal to the executive’s then annual base salary, a pro rata share of the executive’s annual target bonus (based on the assumption that all performance or other criteria had been met) and certain accrued benefits. Further, if Dr. Barer’s or Mr. Hugin’s employment is terminated by us without “cause” or because of disability or incapacitation or by the executive for “good reason” at any time during the two-year period following a “change in control” or if their employment is terminated by us without “cause” or by the executive for “good reason” during the 90-day period prior to a “change in control,” the executive is entitled to receive a lump sum payment equal to three times the executive’s then annual base salary plus three times the executive’s highest annual bonus paid within the three years prior to the change in control, certain accrued benefits, payment of health and welfare premiums for the executive and his dependents for three years or, in certain instances, substitute arrangements on a similar tax basis and, upon the occurrence of a “change in control,” full and immediate vesting of all stock options and equity awards; provided, however, that such payment will be reduced by any payment made to the executive prior to the “change in control” on account of the executive’s termination.

Dr. Barer and Mr. Hugin may also be entitled to receive a gross-up payment in certain circumstances if payments or benefits provided trigger an excise tax under Section 4999 of the Code, but only if the payments and benefits provided exceed 105% of the greatest amount that could be paid without triggering the excise tax. If the payments and benefits provided do not exceed 105% of the greatest amount that could be paid without triggering the excise tax, then the payments and benefits will be reduced to the greatest amount that could be paid without triggering the excise tax. As described under the section entitled “Potential Payments Upon Termination or Change in Control,” no excise tax gross-up would have been paid to either Dr. Barer or Mr. Hugin if a change in control occurred on December 31, 2008, 2007 or 2006.

Dr. Barer and Mr. Hugin are subject to a non-competition provision which applies during the period they are employed by us and until the first anniversary of the date their employment terminates (or, if change in control payments and benefits are paid, generally the second anniversary of the later of the date their employment terminates or the change in control date). In addition, their agreements contain a patent/ inventions provision and a perpetual confidentiality provision.

For purposes of Dr. Barer’s and Mr. Hugin’s employment agreements, “cause” generally means:

•

the conviction of a crime involving moral turpitude or a felony;

•

acts or omissions taken in bad faith and to the detriment of the Company; or

•

a breach of any material term of such agreement.

For purposes of Dr. Barer’s and Mr. Hugin’s employment agreements, “good reason” generally means, without Dr. Barer’s or Mr. Hugin’s consent:

•

the failure to elect or appoint the executive to, or reelect or reappoint the executive to, or removal of the executive from, his position with the Company or as a member of the Board of Directors;

•

a significant change in the nature or scope of the authorities, powers, functions, duties or responsibilities normally attached to the executive’s position;

•

a determination by the executive made in good faith that, as a result of a change in control, he is unable effectively to carry out the authorities, powers, functions, duties or responsibilities attached to his position;

•

a breach by the Company of any material provision of the agreement;

•

a reduction in annual base salary;

•

a 50-mile or greater relocation of the Company’s principal office;

•

the failure of the Company to continue any health or welfare plan, employee benefit plan, pension plan, fringe benefit plan or compensation plan in which the executive is participating immediately prior to a change in control, unless the executive is provided substantially comparable benefits at no greater after-tax cost or the Company’s taking any action which adversely affects the executive’s participation in or which reduces the executive’s benefits under any such plan; or

•

the failure of a successor to assume the agreement.

For purposes of Dr. Barer’s and Mr. Hugin’s employment agreements, “change in control” generally means:

•

any person becomes the beneficial owner of Company securities which represent 30% of the total combined voting power of the Company’s then outstanding securities;

•

a merger, consolidation or other business combination of the Company;

•

the persons who are members of the Board of Directors cease to constitute at least a majority of the Board of Directors; or

•

the approval by the stockholders of the Company of any plan of complete liquidation of the Company or an agreement for the sale of all or substantially all of the Company’s assets.

However, the definition of “change in control” that applies if Dr. Barer or Mr. Hugin is terminated by the Company without cause or by them for good reason during the 90-day period prior to a “change in control” is the definition provided in the Treasury regulations under Section 409A of the Code, which eliminates, among other things, the approval by the Company’s stockholders of any plan of complete liquidation.

Messrs. Gryska and Brouwer and Dr. Burton

Effective as of December 6, 2006, we entered into an employment letter agreement with Mr. Gryska. The letter agreement provides for an initial annual base salary of $450,000 and a target incentive under the MIP equal to 50% of annual base salary (up to a maximum of 200%) and a target LTIP of 50% of annual base salary (up to a maximum of 100%). In February 2008, by action of the Compensation Committee, Mr. Gryska’s base salary was increased to $480,000, his target incentive under the MIP was increased to 60% of annual base salary and his target incentive under LTIP was increased to 100% of annual base salary (up to a maximum of 200%). In February 2009, Mr. Gryska’s base salary was increased to $530,000 effective March 1, 2009 and his annual option target grant was increased to 65,000 shares of Common Stock by action of the Compensation Committee. Mr. Gryska is also entitled to reimbursement for reasonable expenses incurred in obtaining professional tax and financial counseling, up to a maximum of $15,000 annually, and payment of umbrella insurance premiums (which Mr. Gryska waived for fiscal 2008). The letter agreement also provides that Mr. Gryska is entitled to participate in all group health and insurance programs and all other fringe benefit or retirement plans which are generally available to our

employees. In addition, pursuant to the letter agreement, Mr. Gryska is entitled to a grant of an option to purchase 100,000 shares of the Company’s Common Stock and certain relocation benefits which were paid to him in fiscal 2007. The letter agreement also provides that if Mr. Gryska’s employment is terminated by us for any reason other than for cause or as a result of a change in control, he is entitled to receive a lump sum payment equal to 12 months’ base salary and bonus, less applicable taxes. We amended Mr. Gryska’s employment agreement effective April 28, 2008 as follows: (i) to define the term “cause” as such term is defined in Dr. Barer’s employment agreement; (ii) to define “change in control” as such term is defined in the 2008 Stock Incentive Plan; and (iii) to include 12 months of Company-paid benefit coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or COBRA, for health and dental insurance, subject to Mr. Gryska’s payment of premiums at the applicable active rate (at a coverage level equal to or below elected coverage on the day before the termination date) if he is terminated by the Company without cause or if he is terminated by the Company for any reason on or following a change in control. We do not have any separate change in control agreements or arrangements with Mr. Gryska.

Effective as of November 2, 2005, we entered into an employment letter agreement with Mr. Brouwer. The letter agreement provided for an initial annual base salary of 585,000 Swiss francs (or $466,641 based on the 2006 average exchange rate of approximately 1.25 Swiss francs per U.S. dollar), an annual target bonus of 50% of annual base salary and a grant of a fully vested option to purchase 150,000 shares of our Common Stock. In February 2008, by action of the Compensation Committee, Mr. Brouwer’s base salary was increased to 607,680 Swiss francs (or $562,667 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar). We entered into an updated employment agreement with Mr. Brouwer effective November 1, 2008 in connection with the change in his responsibilities and appointment to Senior Advisor to the Chairman & Chief Executive Officer and Chairman, International which provides that, effective January 1, 2009 (i) his base salary is 500,000 Swiss francs (or $462,963 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar); (ii) his bonus target is 340,000 Swiss francs (or $314,815 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar) and 200,000 Swiss francs (or $185,185 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar) for 2009 and 2010, respectively; (iii) he will receive financial planning assistance up to 17,000 Swiss francs (or $15,741 based on the 2008 average exchange rate of approximately 1.08 Swiss francs per U.S. dollar); and (iv) his annual option target grant will be 25,000 shares of Common Stock. In addition, Mr. Brouwer is authorized to use a Company-paid car when commuting for business, and he will no longer participate in the LTIP. Mr. Brouwer is entitled to participate in all employee benefit programs offered by our subsidiary, Celgene International Sarl. The agreement also contains provisions for duties of loyalty, confidentiality, inventions and non-competition (which applies during the period he is employed by us and until the first anniversary of the date his employment terminates). We do not have any change in control agreements or arrangements with Mr. Brouwer. We also make contributions into a non-company sponsored pension plan as required pursuant to the laws of Switzerland.

Effective as of June 2, 2003, we entered into an employment letter agreement with Dr. Burton. The letter agreement provides for an initial annual base salary of $375,000 and an annual target bonus of 40% of annual base salary. In addition, pursuant to his letter agreement, Dr. Burton received an initial grant of an option to purchase 50,000 shares of our Common Stock (at the fair market value of our Common Stock on the grant date) and is entitled to receive an annual grant to purchase 20,000 shares of our Common Stock (at the fair market value of our Common Stock on the grant date). In February 2008, by action of the Compensation Committee, Dr. Burton’s base salary was increased to $450,000, his target incentive under the MIP was increased to 50% of annual base salary, his target LTIP was increased to 50% (with a maximum of 100%), and his annual option grant target to purchase up to 20,000 shares of Common Stock was increased to 25,000 shares of Common Stock. In February 2009, by action of the Compensation Committee, Dr. Burton’s base salary was increased to $475,000 effective March 1, 2009, his annual target bonus was increased to 55% of annual base salary, and his annual option grant target was increased to 50,000 shares of Common Stock. The letter agreement also provides that Dr. Burton is entitled to participate in all group health and insurance programs and all other fringe benefit or retirement plans which are generally available to our employees. In addition, the letter agreement provides that if Dr. Burton’s employment is terminated by us without “cause,” he is entitled to receive a lump sum payment equal to 12 months’ base salary, less applicable taxes. We have amended Dr. Burton’s employment agreement effective April 28, 2008 as follows: (i) to define the term “cause” as such term is defined in Dr. Barer’s employment agreement; (ii) to include bonus in the severance calculation; (iii) to include 12 months of Company-paid COBRA benefit coverage for health and dental insurance, subject to Dr. Burton’s payment of premiums at the applicable active rate (at a coverage level equal to or below elected coverage on the day before the termination date) in the event he is terminated by the Company other than for “cause” and (iv) to provide that if Dr. Burton is terminated by the Company for any reason on or following a “change in control” (as defined in the 2008 Stock Incentive Plan) he will receive the same severance payable if he is terminated by the Company other than for cause. We do not have any separate change in control agreements or arrangements with Dr. Burton.

GRANTS OF PLAN-BASED AWARDS TABLE

The following table provides information about equity and non-equity awards granted to Named Executive Officers eligible to participate in fiscal 2008: (a) the name; (b) the grant date; (c), (d) and (e) the estimated potential/future payouts under: (1) our LTIP non-equity incentive plan awards, which consist of estimated future payouts under the LTIP for the fiscal 2008 — 2010 performance period granted in fiscal 2008 and payable after the three-year performance period if either the threshold, target or maximum goal is satisfied and (2) the target and maximum potential MIP payouts that could have been earned in fiscal 2008; (j) all stock option awards, which consist of the number of shares underlying stock options awarded to Named Executive Officers in fiscal 2008; (k) the exercise price of the stock option awards, which reflects the closing price of the shares of our Common Stock on the date of grant; and (l) the grant date fair value of each equity award computed under SFAS No. 123R.

																																						All Other
																																		All Other				Option
																																		Stock				Awards				Exercise
																						Estimated Future												Awards				Number of				or				Grant Date
										Estimated Potential/Future												Payouts Under Equity												Number of				Securities				Base Price				Fair Value
										Payouts Under Non-Equity												Incentive Plan Awards												Shares of				Underlying				of Option				of Stock
		Grant				Comm				Incentive Plan Awards												Threshold				Target				Maximum				Stock or				Options				Awards				and Option
Name		Date				Action (1)				Threshold				Target				Maximum				(#)				(#)				(#)				Units				(#)(2)				($/Sh)(3)				Awards (4)
(a)		(b)								(c)				(d)				(e)				(f)				(g)				(h)				(i)				(j)				(k)				(l)
Sol J. Barer, Ph.D.			02/04/08	(5)						$	437,500			$	875,000			$	1,750,000
			02/04/08	(6)							—			$	971,000			$	1,942,000
			01/08/08				12/18/07																																60,000			$	49.61			$	1,284,150
			04/08/08				02/04/08																																45,000			$	62.42			$	1,167,300
			07/08/08				02/04/08																																45,000			$	71.82			$	1,270,530
			10/14/08				02/04/08																																45,000			$	57.80			$	1,152,851
Robert J. Hugin			02/04/08	(5)						$	350,000			$	700,000			$	1,400,000
			02/04/08	(6)							—			$	562,500			$	1,125,000
			01/08/08				12/18/07																																30,000			$	49.61			$	642,075
			04/08/08				02/04/08																																30,000			$	62.42			$	778,200
			07/08/08				02/04/08																																30,000			$	71.82			$	847,020
			10/14/08				02/04/08																																30,000			$	57.80			$	768,567
David W. Gryska			02/04/08	(5)						$	225,000			$	450,000			$	900,000
			02/04/08	(6)							—			$	304,200			$	608,400
			01/08/08				12/18/07																																15,000			$	49.61			$	321,038
			04/08/08				02/04/08																																15,000			$	62.42			$	389,100
			07/08/08				02/04/08																																15,000			$	71.82			$	423,510
			10/14/08				02/04/08																																15,000			$	57.80			$	384,284
Aart Brouwer(7)			02/04/08	(5)						$	137,624			$	275,248			$	550,496
			02/04/08	(6)							—			$	291,180			$	582,360
			01/08/08				12/18/07																																6,188			$	49.61			$	132,439
			04/08/08				02/04/08																																8,250			$	62.42			$	214,005
			07/08/08				02/04/08																																8,250			$	71.82			$	232,931
			10/14/08				02/04/08																																8,250			$	57.80			$	211,356
Graham Burton,			02/04/08	(5)						$	108,212			$	216,423			$	432,846
MBBS, FRCP			02/04/08	(6)							—			$	225,000			$	450,000
			01/08/08				12/18/07																																10,313			$	49.61			$	220,724
			03/14/08	(8)																																			27,599			$	56.30			$	551,356
			04/08/08				02/04/08																																8,250			$	62.42			$	214,005
			07/08/08				02/04/08																																8,250			$	71.82			$	232,931
			10/14/08				02/04/08																																8,250			$	57.80			$	211,356
			11/03/08	(8)																																			44,143			$	65.23			$	1,329,326