Abraxis BioScience (ABII)

Compensation Philosophy

Our compensation philosophy is to provide a combination of cash and equity awards, fixed versus variable compensation, and employee benefits for our NEOs, senior executives and other employees to:

14

Attracting and retaining talent. To attract and retain executives with the ability and experience necessary to lead us and deliver strong performance to our stockholders, we target cash compensation and long-term incentives to be competitive with peer companies. Prior to the separation, the Old Abraxis compensation committee approved targeting at the 50th percentile of competing pharmaceutical companies. We continue to review compensation paid to our competitors, but our compensation committee has not targeted executive compensation at any percentile of competitive companies since the separation from Old Abraxis. For each individual officer, we also consider our needs for that officer’s skill set, experience, the contribution that the officer has made or we believe will make, whether the executive officer’s skill set is easily transferable to other potential employers, and the competitive landscape for the executive officer’s skill set and position, because we believe that we compete with our peer group for executive talent.

Inspire teamwork and motivate superior performance. Our compensation committee uses a combination of business unit goals and individual performance measures to inspire teamwork and motivate exceptional performance. Annual incentive compensation awards were based on the actual achievement of certain corporate and business unit performance goals, including certain business initiatives aimed at improving future earnings. The goals were set so that the attainment of the targets is not assured and requires significant effort by our executives.

Similarly, long-term awards were based on our overall and individual performance. Together, our annual and long-term incentive compensation programs were designed to:

Aligning performance with stockholder interests. We seek to align the performance of our NEOs with stockholder interests through the grant of stock options, shares of restricted stock, and/or awards of restricted stock units under our 2007 stock incentive plan. Because the price of our common stock is subject to external factors, we also provide annual incentive compensation linked to our financial, operational and individual performance. Historically, stock options, restricted stock, or restricted stock units granted to our NEOs vest solely based on the passage of time. We continue to believe that time-vested equity awards will encourage long-term value creation and executive retention because executives can realize value from such rewards only if they remain employed by us until the awards vest.

Compensation Philosophy

Our compensation philosophy is to provide a combination of cash and equity awards, fixed versus variable compensation, and employee benefits for our NEOs, senior executives and other employees to:

Attracting and retaining talent. To attract and retain executives with the ability and experience necessary to lead us and deliver strong performance to our stockholders, we target cash compensation and long-term incentives to be competitive with peer companies. Prior to the separation, the Old Abraxis compensation committee approved targeting at the 50th percentile of competing pharmaceutical companies. We continue to review compensation paid to our competitors, but our compensation committee has not targeted executive compensation at any percentile of competitive companies since the separation from Old Abraxis. For each individual officer, we also consider our needs for that officer’s skill set, experience, the contribution that the officer has made or we believe will make, whether the executive officer’s skill set is easily transferable to other potential employers, and the competitive landscape for the executive officer’s skill set and position, because we believe that we compete with our peer group for executive talent.

Inspire teamwork and motivate superior performance. Our compensation committee uses a combination of business unit goals and individual performance measures to inspire teamwork and motivate exceptional performance. Annual incentive compensation awards were based on the actual achievement of certain corporate and business unit performance goals, including certain business initiatives aimed at improving future earnings. The goals were set so that the attainment of the targets is not assured and requires significant effort by our executives.

Similarly, long-term awards were based on our overall and individual performance. Together, our annual and long-term incentive compensation programs were designed to:

8

Aligning performance with stockholder interests. We seek to align the performance of our NEOs with stockholder interests through the grant of stock options, shares of restricted stock, and/or awards of restricted stock units under our 2007 stock incentive plan. Because the price of our common stock is subject to external factors, we also provide annual incentive compensation linked to our financial, operational and individual performance. Historically, stock options, restricted stock, or restricted stock units granted to our NEOs vest solely based on the passage of time. We continue to believe that time-vested equity awards will encourage long-term value creation and executive retention because executives can realize value from such rewards only if they remain employed by us until the awards vest.

Compensation Philosophy

The total compensation philosophy of Old Abraxis was to provide a combination of cash and equity awards, fixed versus variable compensation, and employee benefits for our NEOs, senior executives and other employees to:

16

Attracting and retaining talent. To attract and retain executives with the ability and experience necessary to lead us and deliver strong performance to our stockholders, prior to the separation the Old Abraxis compensation committee approved targeting cash compensation and long-term incentive at the 50th percentile of pharmaceutical companies with $1 billion in revenue, including Angiotech Pharmaceuticals, Endo Pharmaceuticals Holdings Inc., Millennium Pharmaceuticals, Inc. and Par Pharmaceutical Companies, Inc. The Old Abraxis compensation committee had chosen the 50^th percentile because the committee believed that it would allow Old Abraxis to be competitive in attracting and retaining talented executives. The Old Abraxis compensation committee expected that management would have considered these targets when making hiring and advancement decisions and that the compensation of our existing executives would have been adjusted over time. For each individual officer, we also consider our needs for that officer’s skill set, experience, the contribution that the officer has made or we believe will make, whether the executive officer’s skill set is easily transferable to other potential employers and the competitive landscape for the executive officer’s skill set and position because we believe that we compete with our peer group for executive talent.

Inspire teamwork and motivate superior performance. The Old Abraxis compensation committee used a combination of business unit goals and individual performance measures to inspire teamwork and motivate exceptional performance. Annual incentive compensation awards were based on the actual achievement of certain corporate and business unit performance goals, including certain business initiatives aimed at improving future earnings, which were determined by the management at the beginning of each year. The goals were set so that the attainment of the targets is not assured and requires significant effort by our executives.

Similarly, long-term awards were based on our overall and individual performance. Together, the Old Abraxis annual and long-term incentive compensation programs were designed to:

Aligning performance with stockholder interests. Old Abraxis sought to align the performance of the NEOs with stockholder interests through the grant of stock options, shares of restricted stock and other equity awards. Because the price of its common stock was subject to external factors, Old Abraxis historically tied annual incentive compensation to its financial, operational and individual performance. At Old Abraxis, the stock options and other equity awards granted to NEOs vested solely based on the passage of time. The Old Abraxis compensation committee believed that time-vested equity awards encouraged long-term value creation and executive retention because executives could realize value from such rewards only if they remained employed by us until the awards vest. In addition, the Old Abraxis compensation committee generally used stock options because it believed that options would generate value to the recipient only if the stock price increases during the term of the option.

Our compensation committee is currently reviewing the policies adopted by Old Abraxis and will make adjustments as deemed appropriate.

17

Compensation Philosophy

Our total compensation philosophy is to provide a combination of cash and equity awards, fixed versus variable compensation, and employee benefits for our NEOs, senior executives and other employees to:

Attracting and retaining talent. To attract and retain executives with the ability and experience necessary to lead us and deliver strong performance to our stockholders, the Old Abraxis compensation committee approved prior to the separation targeting cash compensation and long-term incentive at the 50th percentile of pharmaceutical companies with $1 billion in revenue, including Angiotech Pharmaceuticals, Endo Pharmaceuticals Holdings Inc., Millennium Pharmaceuticals, Inc. and Par Pharmaceutical Companies, Inc. The Old Abraxis compensation committee had chosen the 50^th percentile because the committee believed that it would allow Old Abraxis to be competitive in attracting and retaining talented executives. The Old Abraxis compensation committee expected that management would have considered these targets when making hiring and advancement decisions and that the compensation of our existing executives would have been adjusted over time. For each individual officer, we also consider our needs for that officer’s skill set, experience, the contribution that the officer has made or we believe will make, whether the executive officer’s skill set is easily transferable to other potential employers and the competitive landscape for the executive officer’s skill set and position because we believe that we compete with our peer group for executive talent. Following the separation, our management engaged Mercer to review our executive compensation based upon us being a stand alone company (including any peer groups that they may use) and to make recommendations to our compensation committee.

11

Inspire teamwork and motivate superior performance. We use a combination of business unit goals and individual performance measures to inspire teamwork and motivate exceptional performance. Annual incentive compensation awards are based on the actual achievement of certain corporate and business unit performance goals, including certain business initiatives aimed at improving future earnings, which are determined by the management at the beginning of each year. The goals are set so that the attainment of the targets is not assured and requires significant effort by our executives.

Similarly, long-term awards are based on our overall and individual performance. Together, our annual and long-term incentive compensation programs are designed to:

Aligning performance with stockholder interests. We seek to align the performance of our NEOs with stockholder interests through the grant of stock options, shares of restricted stock and other equity awards under our stock incentive plan. Because the price of our common stock is subject to external factors, we also tie annual incentive compensation to our financial, operational and individual performance. The stock options and other equity awards granted to our NEOs vest solely based on the passage of time. We believe that time-vested equity awards encourage long-term value creation and executive retention because executives can realize value from such rewards only if they remain employed by us until the awards vest. In addition, we generally use stock options because we believe that options will generate value to the recipient only if our stock price increases during the term of the option.

Compensation Philosophy

Our total compensation philosophy will be to provide a combination of cash and equity awards, fixed versus variable compensation, and employee benefits for our NEOs, senior executives and other employees to:

Attracting and retaining talent. To attract and retain executives with the ability and experience necessary to lead the company and deliver strong performance to our stockholders, we expect to target base salaries and annual cash incentive payments at the 50th percentile of pharmaceutical companies with comparable revenue. In 2006, Old Abraxis, which operated both the hospital-based and proprietary products businesses, targeted pharmaceutical companies with $1 billion in revenue, including Angiotech Pharmaceuticals, Inc., Endo Pharmaceuticals Holdings Inc., Millennium Pharmaceuticals, Inc. and Par Pharmaceutical Companies, Inc. Following the separation and related transactions, and following a review by our compensation committee of comparative compensation data, we may change the specific companies we target. We have chosen the 50th percentile because we believe it allows us to attract and retain talented executives. For each individual

107

Table of Contents

officer, we also expect to consider our needs for that officer’s skill set, experience, the contribution that the officer has made or we believe will make, whether the executive officer’s skill set is easily transferable to other potential employers and the competitive landscape for the executive officer’s skill set and position because we believe that it competes with our peer group for executive talent.

Inspire teamwork and motivate superior performance. We expect to use a combination of business unit goals and individual performance measures to inspire teamwork and motivate exceptional performance. Annual incentive compensation awards will be based on the actual achievement of certain corporate and business unit performance goals, including certain business initiatives aimed at improving future earnings, which will be determined by the management at the beginning of each year. The goals will be set so that the attainment of the targets is not assured and requires significant effort by our executives.

Similarly, long-term awards are expected to be based on our overall and individual performance. Together, our annual and long-term incentive compensation programs will be designed to:

Aligning performance with stockholder interests. We will seek to align the performance of our NEOs with stockholder interests through the grant of stock options and shares of restricted stock under our stock incentive plan. Because the price of our common stock will be subject to external factors, we also expect to provide annual incentive compensation to our financial, operational and individual performance. The stock options granted to our NEOs will vest solely based on the passage of time. We believe that time-vested equity awards will encourage long-term value creation and executive retention because executives can realize value from such rewards only if they remain employed by us until the awards vest. In addition, we use stock options because we believe that options will generate value to the recipient only if our stock price increases during the term of the option.