Exhibit 10.1

IMMUNOGEN, INC.

 

INDUCEMENT EQUITY INCENTIVE PLAN

 

 

1.DEFINITIONS.

 

Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this ImmunoGen, Inc. Inducement Equity Incentive
Plan, have the following meanings:

 

Administrator means the Board of Directors, unless it has delegated power to act
on its behalf to the Committee, in which case the Administrator means the
Committee.

 

Affiliate means a corporation which, for purposes of Section 424 of the Code, is
a parent or subsidiary of the Company, direct or indirect.

 

Agreement means an agreement between the Company and a Participant delivered
pursuant to the Plan, in such form as the Administrator shall approve.

 

Board of Directors means the Board of Directors of the Company.

 

Cause shall include (and is not limited to) dishonesty with respect to the
Company or any Affiliate, insubordination, substantial malfeasance or
non‑feasance of duty, unauthorized disclosure of confidential information,
breach by the Participant of any provision of any employment, consulting,
advisory, nondisclosure, non-competition or similar agreement between the
Participant and the Company or any Affiliate, and conduct substantially
prejudicial to the business of the Company or any Affiliate provided, however
that any provision in an agreement between the Participant and the Company or an
Affiliate, which contains a conflicting definition of “cause” for termination
and which is in effect at the time of such termination, shall supersede the
definition in this Plan with respect to that Participant.  The determination of
the Administrator as to the existence of Cause will be conclusive on the
Participant and the Company.

 

Change of Control means the occurrence of any of the following events:

 

(i)Ownership.  Any “Person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities (excluding for this purpose any
such voting securities held by the Company or its Affiliates or by any employee
benefit plan of the Company)

 

 

pursuant to a transaction or a series of related transactions which the Board of
Directors does not approve; or

 

(ii)Merger/Sale of Assets.  (A) A merger or consolidation of the Company whether
or not approved by the Board of Directors, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or the parent of such corporation) more than 50% of the total voting power
represented by the voting securities of the Company or such surviving entity or
parent of such corporation, as the case may be, outstanding immediately after
such merger or consolidation; or (B) the sale or disposition by the Company of
all or substantially all of the Company’s assets in a transaction requiring
shareholder approval; or

 

(iii)Change in Board Composition.  A change in the composition of the Board of
Directors, as a result of which fewer than a majority of the directors are
Incumbent Directors.  “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of March 28, 2018, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company);

 

provided, that if any payment or benefit payable hereunder upon or following a
Change of Control would be required to comply with the limitations of Section
409A(a)(2)(A)(v) of the Code in order to avoid an additional tax under Section
409A of the Code, such payment or benefit shall be made only if such Change in
Control constitutes a change in ownership or control of the Company, or a change
in ownership of the Company’s assets in accordance with Section 409A of the
Code.

 

Code means the United States Internal Revenue Code of 1986, as amended,
including any successor statute, regulation and guidance thereto.

 

Committee means the compensation committee of the Board of Directors (as
constituted in compliance with Rule 5605(d)(2) of the Nasdaq Listing Rules) in
order to comply with the exemption from the stockholder approval requirement for
“inducement grants” provided under Rule 5635(c)(4) of the Nasdaq Listing Rules.

 

Common Stock means shares of the Company’s common stock, $.01 par value per
share.

 

Company means ImmunoGen, Inc., a Massachusetts corporation.

 

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Disability or Disabled means permanent and total disability as defined in
Section 22(e)(3) of the Code.

 

Employee means any employee of the Company or of an Affiliate designated by the
Administrator to be eligible to be granted one or more Stock Rights under the
Plan.

 

Fair Market Value of a Share of Common Stock means:

 

(1)If the Common Stock is listed on a national securities exchange or traded in
the over‑the‑counter market and sales prices are regularly reported for the
Common Stock, the closing or, if not applicable, the last price of the Common
Stock on the composite tape or other comparable reporting system for the trading
day on the applicable date,  and if such applicable date is not a trading day,
the last market trading day prior to such date;  

 

(2)If the Common Stock is not traded on a national securities exchange but is
traded on the over‑the‑counter market, if sales prices are not regularly
reported for the Common Stock for the trading day referred to in clause (1), and
if bid and asked prices for the Common Stock are regularly reported, the mean
between the bid and the asked price for the Common Stock at the close of trading
in the over-the-counter market for the trading day on which Common Stock was
traded on the applicable date,  and if such applicable date is not a trading
day, the last market trading day prior to such date; and

 

(3)If the Common Stock is neither listed on a national securities exchange nor
traded in the over‑the‑counter market, such value as the Administrator, in good
faith, shall determine in compliance with applicable laws.

 

Full Value Award means a Stock Grant or other Stock-Based Award whose intrinsic
value is not solely dependent on appreciation in the price of the Common Stock
after the date of grant.

 

Non‑Qualified Option means an option which is not intended to qualify as an
incentive stock option under Section 422 of the Code.

 

Option means a Non‑Qualified Option granted under the Plan.

 

Participant means an Employee of the Company or an Affiliate to whom one or more
Stock Rights are granted under the Plan. As used herein, “Participant” shall
include “Participant’s Survivors” where the context requires.

 

Performance Based Award means a Stock Grant or Stock-Based Award which vests
based on attainment of Performance Goals as set forth in Paragraph 9 hereof.

 

Performance Goals means performance goals determined by the Committee in its
sole discretion and set forth in an Agreement.  The satisfaction of Performance

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Goals shall be subject to certification by the Committee. The Committee has the
authority to take appropriate action with respect to the Performance Goals
(including, without limitation, to make adjustments to the Performance Goals or
determine the satisfaction of the Performance Goals, in each case, in connection
with a Corporate Transaction) provided that any such actions do not otherwise
violate the terms of the Plan.

 

Plan means this ImmunoGen, Inc. Inducement Equity Incentive Plan.

 

Shares means shares of the Common Stock as to which Stock Rights have been or
may be granted under the Plan or any shares of capital stock into which the
Shares are changed or for which they are exchanged within the provisions of
Paragraph 25 of the Plan.  The Shares issued under the Plan may be authorized
and unissued shares or shares held by the Company in its treasury, or both.

 

Stock-Based Award means a grant by the Company under the Plan of an equity award
or an equity based award which is not an Option or a  Stock Grant.

 

Stock Grant means a grant by the Company of Shares under the Plan.

 

Stock Right means a right to Shares or the value of Shares of the Company
granted pursuant to the Plan -- a Non-Qualified Option, a Stock Grant or a
Stock-Based Award.

 

Survivor means a deceased Participant’s legal representatives and/or any person
or persons who acquired the Participant’s rights to a Stock Right by will or by
the laws of descent and distribution.

 

 

2.PURPOSES OF THE PLAN.

 

The Plan is intended to advance the interests of the Company’s shareholders by
enhancing the Company’s ability to attract new Employees who are expected to
make important contributions to the Company and by providing such persons with
equity ownership opportunities that are intended to better align the interests
of such persons with those of the Company’s shareholders.  The Plan provides for
the granting of Non‑Qualified Options, Stock Grants and Stock-Based Awards.  The
Company intends that the Plan be reserved for persons to whom the Company may
issue securities without shareholder approval as an inducement pursuant to
Listing Rule 5635(c)(4) of the corporate governance rules of the Nasdaq Stock
Market.

 

 

3.SHARES SUBJECT TO THE PLAN.

 

(a)The number of Shares which may be issued from time to time pursuant to this
Plan shall be 1,500,000 shares of Common Stock, or the equivalent of such number
of Shares after the

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Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 25 of this Plan.

 

(b)If an Option ceases to be “outstanding”, in whole or in part (other than by
exercise), or if the Company shall reacquire (at not more than its original
issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based
Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise
terminated or results in any Shares not being issued, the unissued or reacquired
Shares which were subject to such Stock Right shall again be available for
issuance from time to time pursuant to this Plan. Notwithstanding the foregoing,
if a Stock Right is exercised, in whole or in part, by tender of Shares or if
the Company’s or an Affiliate’s tax withholding obligation is satisfied by
withholding Shares, the number of Shares deemed to have been issued under the
Plan for purposes of the limitations set forth in Paragraph 3(a) above shall be
the number of Shares that were subject to the Stock Right or portion thereof,
and not the net number of Shares actually issued and any stock appreciation
right to be settled in shares of Common Stock shall be counted in full against
the number of Shares available for issuance under the Plan, regardless of the
number of exercise gain shares issued upon settlement of the stock appreciation
right. In addition, Shares repurchased by the Company with the proceeds of the
option exercise price may not be reissued under the Plan. 

 

(c)For purposes of determining the number of Shares available for issuance under
Paragraph 3(a) above, (i) for the grant of any Option or similar Stock-Based
Award one Share for each Share actually subject to such Option or similar
Stock-Based Award shall be deducted, and (ii) for the grant of any Full Value
Award, one and one-quarter (1.25) Shares for each Share actually subject to any
such Full Value Award shall be deducted.  If a Full Value Award expires, is
forfeited, or otherwise lapses, the Shares that were subject to the Full Value
Award shall be restored to the total number of Shares available for grant as
were deducted as Full Value Awards pursuant to this paragraph.  Except in the
case of death, disability or Change of Control, or as provided in the next
sentence, no Stock Right shall vest, and no right of the Company to restrict or
reacquire Shares subject to Full Value Awards shall lapse, less than one (1)
year from the date of grant.  Notwithstanding the foregoing, Stock Rights may be
granted having time-based vesting of less than one (1) year from the date of
grant so long as no more than five percent (5%) of the Shares reserved for
issuance under the Plan pursuant to Paragraph 3(a) above (as adjusted under
Paragraph 25 of this Plan) may be granted in the aggregate pursuant to such
awards.

 

 

4.ADMINISTRATION OF THE PLAN.

 

The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator.  Subject to the provisions of the
Plan, the Administrator is authorized to:

 

a.Interpret the provisions of the Plan and all Stock Rights and to make all
rules and determinations which it deems necessary or advisable for the
administration of the Plan;

 

b.Determine which Employees shall be granted Stock Rights; 

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c.Determine the number of Shares for which a Stock Right or Stock Rights shall
be granted;

 

d.Specify the terms and conditions upon which a Stock Right or Stock Rights may
be granted;

 

e.Make any adjustments in the Performance Goals included in any
Performance-Based Awards;

 

f.Amend any term or condition of any outstanding Stock Right, other than
reducing the exercise price or purchase price or extending the expiration date
of an Option, provided that (i) such term or condition as amended is not
prohibited by the Plan; (ii) any such amendment shall not impair the rights of a
Participant under any Stock Right previously granted without such Participant’s
consent or in the event of death of the Participant the Participant’s Survivors;
and (iii) any such amendment shall be made only after the Administrator
determines whether such amendment would cause any adverse tax consequences to
the Participant, including, but not limited to, pursuant to Section 409A of the
Code;  and

 

g.Adopt any sub-plans applicable to residents of any specified jurisdiction as
it deems necessary or appropriate in order to comply with or take advantage of
any tax or other laws applicable to the Company or to Plan Participants or to
otherwise facilitate the administration of the Plan, which sub-plans may include
additional restrictions or conditions applicable to Stock Rights or Shares
issuable pursuant to a Stock Right;

 

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of not causing any
adverse tax consequences under Section 409A of the Code.  Subject to the
foregoing, the interpretation and construction by the Administrator of any
provisions of the Plan or of any Stock Right granted under it shall be final,
unless otherwise determined by the Board of Directors, if the Administrator is
the Committee.  In addition, if the Administrator is the Committee, the Board of
Directors may take any action under the Plan that would otherwise be the
responsibility of the Committee.

 

Notwithstanding the foregoing, any grants of Stock Rights under the Plan made by
the Board of Directors must be approved by a majority of the Company’s
independent directors (as defined in rule 5605(a)(2) of the Nasdaq Listing
Rules) in order to comply with Nasdaq Listing Rule 5635(c)(4).

 

 

5.ELIGIBILITY FOR PARTICIPATION.

 

The Administrator will, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be an Employee of the
Company or of an Affiliate at the time a Stock Right is granted and a person to
whom the Company may issue securities without

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shareholder approval as an inducement pursuant to Listing Rule 5635(c)(4) of the
corporate governance rules of the Nasdaq Stock Market.  Notwithstanding the
foregoing, the Administrator may authorize the grant of a Stock Right to a
person not then an Employee of the Company or of an Affiliate; provided,
however, that the actual grant of such Stock Right shall be conditioned upon
such person becoming eligible to become a Participant at or prior to the time of
the execution of the Agreement evidencing such Stock Right.  The granting of any
Stock Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Stock Rights or
any grants under any other benefit plan established by the Company or any
Affiliate for Employees.

 

 

6.TERMS AND CONDITIONS OF OPTIONS.

 

Each Option shall be set forth in writing in an Option Agreement, duly executed
by the Company (or provided in electronic form by the Company) and, to the
extent required by law or requested by the Company, by the Participant.  The
Administrator may provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically required under
this Plan, as the Administrator may deem appropriate.  The Option Agreements
shall be subject to at least the following terms and conditions:

 

Each Option shall be a Non‑Qualified Option and shall be subject to the terms
and conditions which the Administrator determines to be appropriate and in the
best interest of the Company, subject to the following minimum standards for any
such Non‑Qualified Option:

 

a.Exercise Price: Each Option Agreement shall state the exercise price (per
share) of the Shares covered by each Option, which exercise price shall be
determined by the Administrator but shall not be less than the Fair
Market Value per share of Common Stock on the date of grant of the Option.  

 

b.Number of Shares: Each Option Agreement shall state the number of Shares to
which it pertains.

 

c.Vesting Periods:  Each Option Agreement shall state the date or dates on which
it first is exercisable and the date after which it may no longer be exercised,
provided that each Option shall terminate not more than ten years from the date
of the grant.  Each Option Agreement may provide that the Option rights accrue
or become exercisable in installments over a period of months or years, or upon
the occurrence of certain conditions or the attainment of stated performance
goals or events.    

 

d.Option Conditions:  Exercise of any Option may be conditioned upon the
Participant’s execution of a Share purchase agreement in form satisfactory to
the Administrator providing for certain protections for the Company and its
other shareholders, including requirements that:

 

i.The Participant’s or the Participant’s Survivors’ right to sell or transfer
the Shares may be restricted; and

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ii.The Participant or the Participant’s Survivors may be required to execute
letters of investment intent and must also acknowledge that the Shares will bear
legends noting any applicable restrictions.

 

 

7.TERMS AND CONDITIONS OF STOCK GRANTS.

 

Each Stock Grant to a Participant shall state the principal terms in an
Agreement, duly executed by the Company (or provided in electronic form by the
Company) and, to the extent required by law or requested by the Company, by the
Participant.  The Agreement shall be in a form approved by the Administrator and
shall contain terms and conditions which the Administrator determines to be
appropriate and in the best interest of the Company, subject to the following
minimum standards:

 

(a)Each Agreement shall state the purchase price (per share), if any, of the
Shares covered by each Stock Grant, which purchase price shall be determined by
the Administrator but shall not be less than the minimum consideration required
by the Massachusetts General Corporation Law on the date of the grant of the
Stock Grant;

 

(b)Each Agreement shall state the number of Shares to which the Stock Grant
pertains;

 

(c)Each Agreement shall include the terms of any right of the Company to
restrict or reacquire the Shares subject to the Stock Grant, including the time
period or attainment of Performance Goals upon which such rights shall accrue
and the purchase price therefor, if any; and

 

(d)Dividends (other than stock dividends to be issued pursuant to Section 25 of
the Plan) may accrue but shall not be paid prior to the time, and only to the
extent that, the restrictions or rights to reacquire the Shares subject to the
Stock Grant lapse.

 

 

8.TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.

 

The Administrator shall have the right to grant other Stock-Based Awards based
upon the Common Stock having such terms and conditions as the Administrator may
determine, including, without limitation, the grant of Shares based upon certain
conditions, the grant of securities convertible into Shares and the grant of
stock appreciation rights, phantom stock awards, stock units deferred or
otherwise.  The principal terms of each Stock-Based Award shall be set forth in
an Agreement, duly executed by the Company (or provided in electronic form by
the Company) and, to the extent required by law or requested by the Company, by
the Participant.  The Agreement shall be in a form approved by the Administrator
and shall contain terms and conditions which the Administrator determines to be
appropriate and in the best interest of the Company.  Each Agreement shall
include the terms of any right of the Company including the right to terminate
the Stock-Based Award without the issuance of Shares, the terms of any vesting
conditions, Performance Goals or events upon which Shares shall be issued
provided that dividends (other

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than stock dividends to be issued pursuant to Section 25 of the Plan) or
dividend equivalents may accrue but shall not be paid prior to and only to the
extent that, the Shares subject to the Stock-Based Award vest.   Under no
circumstances may the Agreement covering stock appreciation rights (a) have an
exercise price (per share) that is less than the Fair Market Value per share of
Common Stock on the date of grant or (b) expire more than ten years following
the date of grant.

 

The Company intends that the Plan and any Stock-Based Awards granted hereunder
be exempt from the application of Section 409A of the Code or meet the
requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of
the Code, to the extent applicable, and be operated in accordance with Section
409A so that any compensation deferred under any Stock-Based Award (and
applicable investment earnings) shall not be included in income under Section
409A of the Code.  Any ambiguities in the Plan shall be construed to effect the
intent as described in this Paragraph 8.

 

 

9.PERFORMANCE BASED AWARDS.

 

The Committee shall determine whether, with respect to a performance period, the
applicable Performance Goals have been met with respect to a given Participant
and, if they have, to so certify and ascertain the amount of the applicable
Performance-Based Award.  No Performance-Based Awards will be issued for such
performance period until such certification is made by the Committee. The number
of Shares issued in respect of a Performance-Based Award determined by the
Committee for a performance period shall be paid to the Participant at such time
as determined by the Committee in its sole discretion after the end of such
performance period and any dividends (other than stock dividends to be issued
pursuant to Section 25 of the Plan) or dividend equivalents that accrue shall
only be paid in respect of the number of Shares earned in respect of a
Performance-Based Award. 

 

 

10.EXERCISE OF OPTIONS AND ISSUE OF SHARES.

 

An Option (or any part or installment thereof) shall be exercised by giving
written notice (in a form acceptable to the Administrator which may include
electronic notice) to the Company or its designee, together with provision for
payment of the aggregate exercise price in accordance with this Paragraph for
the Shares as to which the Option is being exercised, and upon compliance with
any other condition(s) set forth in the Option Agreement.  Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Option Agreement.  Payment of the
exercise price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Administrator, through delivery of shares of Common Stock
having a Fair Market Value equal as of the date of the exercise to the cash
exercise price of the Option and held for at least six months (if required to
avoid negative accounting treatment), or (c) at the discretion of the
Administrator, by having the Company retain from the Shares otherwise issuable
upon exercise of the Option, a number of shares having a Fair Market Value equal
as of the date of exercise to the aggregate exercise price of the number of
Shares being exercised, or (d) at the discretion of the Administrator, in
accordance

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with a cashless exercise program established with a securities brokerage firm,
and approved by the Administrator, or (e) at the discretion of the
Administrator, by any combination of (a), (b), (c) and (d) above or (f) at the
discretion of the Administrator, payment of such other lawful consideration as
the Administrator may determine.

 

The Company shall then reasonably promptly deliver the Shares as to which such
Option was exercised to the Participant (or to the Participant’s Survivors, as
the case may be).  In determining what constitutes “reasonably promptly,” it is
expressly understood that the issuance and delivery of the Shares may be delayed
by the Company in order to comply with any law or regulation (including, without
limitation, state securities or “blue sky” laws) which requires the Company to
take any action with respect to the Shares prior to their issuance.  The Shares
shall, upon delivery, be fully paid, non-assessable Shares.

 

The Administrator shall have the right to accelerate the date of exercise of any
installment of any Option.

 

The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is not
prohibited by the Plan, (ii) any such amendment shall be made only with the
consent of the Participant to whom the Option was granted, or in the event of
the death of the Participant, the Participant’s Survivors, if the amendment is
adverse to the Participant, and (iii) any such amendment of any Option shall be
made only after the Administrator determines whether such amendment would cause
any adverse tax consequences for the holder of such Option including, but not
limited to, pursuant to Section 409A of the Code.

 

 

11.ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.

 

A Stock Grant or Stock-Based Award (or any part or installment thereof) shall be
accepted by executing the applicable Agreement and delivering it to the Company
or its designee, together with provision for payment of the full purchase price,
if any, in accordance with this Paragraph for the Shares as to which such Stock
Grant or Stock-Based Award is being accepted, and upon compliance with any other
conditions set forth in the applicable Agreement.  Payment of the purchase price
for the Shares as to which such Stock Grant or Stock-Based Award is being
accepted shall be made (a) in United States dollars in cash or by check, or (b)
at the discretion of the Administrator, through delivery of shares of Common
Stock held for at least six months (if required to avoid negative accounting
treatment) and having a Fair Market Value equal as of the date of acceptance of
the Stock Grant or Stock Based-Award to the purchase price of the Stock Grant or
Stock-Based Award, or (c) at the discretion of the Administrator, by any
combination of (a) and (b) above; or (d) at the discretion of the Administrator,
payment of such other lawful consideration as the Administrator may determine.

 

The Company shall then, if required by the applicable Agreement, reasonably
promptly deliver the Shares as to which such Stock Grant or Stock-Based Award
was accepted to the Participant (or to the Participant’s Survivors, as the case
may be), subject to any escrow provision set forth in the applicable
Agreement.  In determining what constitutes “reasonably promptly,” it

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is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or “blue sky” laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.

 

 

12.RIGHTS AS A SHAREHOLDER.

 

No Participant to whom a Stock Right has been granted shall have rights as a
shareholder with respect to any Shares covered by such Stock Right, except after
due exercise of the Option or issuance of Shares as set forth in any Agreement,
and tender of the aggregate exercise or full purchase price, if any, for the
Shares being purchased pursuant to such exercise or acceptance and registration
of the Shares in the Company’s share register in the name of the Participant.

 

 

13.ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.

 

By its terms, a Stock Right granted to a Participant shall not be transferable
by the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as approved by the Administrator in its discretion and set
forth in the applicable Agreement; provided that no Stock Right may be
transferred by a Participant for value.  The designation of a beneficiary of a
Stock Right by a Participant, with the prior approval of the Administrator and
in such form as the Administrator shall prescribe, shall not be deemed a
transfer prohibited by this Paragraph.  Except as provided above, a Stock Right
shall only be exercisable or may only be accepted, during the Participant’s
lifetime, by such Participant (or by his or her legal representative) and shall
not be assigned, pledged or hypothecated in any way (whether by operation of law
or otherwise) and shall not be subject to execution, attachment or similar
process.  Any attempted transfer, assignment, pledge, hypothecation or other
disposition of any Stock Right or of any rights granted thereunder contrary to
the provisions of this Plan, or the levy of any attachment or similar process
upon a Stock Right, shall be null and void.

 

 

14.EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR
DISABILITY.

 

Except as otherwise provided in a Participant’s Option Agreement, in the event
of a termination of service (whether as an Employee, director or consultant)
with the Company or an Affiliate before the Participant has exercised an Option,
the following rules apply:

 

a.A Participant who ceases to be an Employee, director or consultant of the
Company or of an Affiliate (for any reason other than termination for Cause,
Disability, or death for which events there are special rules in Paragraphs 15,
16, and 17, respectively), may exercise any Option granted to him or her to the
extent that the Option is exercisable on the date of such termination of
service, but only within such term as the Administrator has designated in a
Participant’s Option Agreement.

 

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b.[Reserved]

 

c.The provisions of this Paragraph, and not the provisions of Paragraph 16 or
17, shall apply to a Participant who subsequently becomes Disabled or dies after
the termination of employment, director status or consultancy; provided,
however, in the case of a Participant’s Disability or death within three months
after the termination of employment, director status or consultancy, the
Participant or the Participant’s Survivors may exercise the Option within one
year after the date of the Participant’s termination of service, but in no event
after the date of expiration of the term of the Option.

 

d.Notwithstanding anything herein to the contrary, if subsequent to a
Participant’s termination of employment, termination of director status or
termination of consultancy, but prior to the exercise of an Option, the
Administrator determines that, either prior or subsequent to the Participant’s
termination, the Participant engaged in conduct which would constitute Cause,
then such Participant shall forthwith cease to have any right to exercise any
Option.

 

e.A Participant to whom an Option has been granted under the Plan who is absent
from the Company or an Affiliate because of temporary disability (any disability
other than a Disability as defined in Paragraph 1 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such absence, be
deemed, by virtue of such absence alone, to have terminated such Participant’s
employment, director status or consultancy with the Company or with an
Affiliate, except as the Administrator may otherwise expressly provide.

 

f.Except as required by law or as set forth in a Participant’s Option Agreement,
Options granted under the Plan shall not be affected by any change of a
Participant’s status within or among the Company and any Affiliates, so long as
the Participant continues to be an Employee, director or consultant of the
Company or any Affiliate.

 

 

15.EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.

 

Except as otherwise provided in a Participant’s Option Agreement, the following
rules apply if the Participant’s service (whether as an Employee, director or
consultant) with the Company or an Affiliate is terminated for Cause prior to
the time that all his or her outstanding Options have been exercised:

 

a.All outstanding and unexercised Options as of the time the Participant is
notified his or her service is terminated for Cause will immediately be
forfeited.

 

b.Cause is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of
Cause occur prior to termination.  If the Administrator determines, subsequent
to a

12

 

Participant’s termination of service but prior to the exercise of an Option,
that either prior or subsequent to the Participant’s termination the Participant
engaged in conduct which would constitute Cause, then the right to exercise any
Option is forfeited.

 

 

16.EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except as otherwise provided in a Participant’s Option Agreement:

 

a. A Participant who ceases to be an Employee, director or consultant of the
Company or of an Affiliate by reason of Disability may exercise any Option
granted to such Participant:

 

(i)To the extent that the Option has become exercisable but has not been
exercised on the date of Disability; and

 

(ii)In the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of Disability of any additional
vesting rights that would have accrued on the next vesting date had the
Participant not become Disabled.  The proration shall be based upon the number
of days accrued in the current vesting period prior to the date of Disability.

 

b.A Disabled Participant may exercise such rights only within the period ending
one year after the date of the Participant’s Disability, notwithstanding that
the Participant might have been able to exercise the Option as to some or all of
the Shares on a later date if the Participant had not become Disabled and had
continued to be an Employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.

 

c.The Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such
determination).  If requested, the Participant shall be examined by a physician
selected or approved by the Administrator, the cost of which examination shall
be paid for by the Company.

 

 

17.EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

Except as otherwise provided in a Participant’s Option Agreement:

 

a.In the event of the death of a Participant while the Participant is an
Employee, director or consultant of the Company or of an Affiliate, such Option
may be exercised by the Participant’s Survivors:

13

 

 

(i)  To the extent that the Option has become exercisable but has not been
exercised on the date of death; and

 

(ii)In the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of death of any additional vesting
rights that would have accrued on the next vesting date had the Participant not
died.  The proration shall be based upon the number of days accrued in the
current vesting period prior to the Participant’s date of death.

 

b.If the Participant’s Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one year after the date of death
of such Participant, notwithstanding that the decedent might have been able to
exercise the Option as to some or all of the Shares on a later date if he or she
had not died and had continued to be an Employee, director or consultant or, if
earlier, within the originally prescribed term of the Option.

 

 

18.EFFECT OF TERMINATION OF SERVICE ON STOCK GRANTS AND STOCK-BASED AWARDS.

 

In the event of a termination of service (whether as an Employee, director or
consultant) with the Company or an Affiliate for any reason before the
Participant has accepted a Stock Grant or a Stock-Based Award and paid the
purchase price, if required, such offer shall terminate.

 

For purposes of this Paragraph 18 and Paragraph 19 below, a Participant to whom
a Stock Grant or a Stock-Based Award has been issued under the Plan who is
absent from work with the Company or with an Affiliate because of temporary
disability (any disability other than a Disability as defined in Paragraph 1
hereof), or who is on leave of absence for any purpose, shall not, during the
period of any such absence, be deemed, by virtue of such absence alone, to have
terminated such Participant’s employment, director status or consultancy with
the Company or with an Affiliate, except as the Administrator may otherwise
expressly provide.

 

In addition, for purposes of this Paragraph 18 and Paragraph 19 below, any
change of employment or other service within or among the Company and any
Affiliates shall not be treated as a termination of employment, director status
or consultancy so long as the Participant continues to be an Employee, director
or consultant of the Company or any Affiliate.

 

 

19.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE OTHER
THAN FOR CAUSE OR DEATH OR DISABILITY.

 

Except as otherwise provided in a Participant’s Agreement, in the event of a
termination of service (whether as an Employee, director or consultant), other
than termination for Cause, Disability, or death for which events there are
special rules in Paragraphs 20, 21, and 22, respectively, before all forfeiture
provisions or Company rights of repurchase shall have lapsed,

14

 

then the Company shall have the right to cancel or repurchase that number of
Shares subject to a Stock Grant or Stock-Based Award as to which the Company’s
forfeiture or repurchase rights have not lapsed.

 

 

20.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR
CAUSE.

 

Except as otherwise provided in a Participant’s Agreement, the following rules
apply if the Participant’s service (whether as an Employee, director or
consultant) with the Company or an Affiliate is terminated for Cause:

 

a.All Shares subject to any Stock Grant or a Stock-Based Award that remain
subject to forfeiture provisions or as to which the Company shall have a
repurchase right shall be immediately forfeited to the Company as of the time
the Participant is notified his or her service is terminated for Cause.

 

b.Cause is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of
Cause occur prior to termination.  If the Administrator determines, subsequent
to a Participant’s termination of service, that either prior or subsequent to
the Participant’s termination the Participant engaged in conduct which would
constitute Cause, then all shares subject to any Stock Grant or Stock-Based
Award that remained subject to forfeiture provisions or as to which the Company
had a repurchase right on the date of termination shall be immediately forfeited
to the Company.

 

 

21.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR
DISABILITY.

 

Except as otherwise provided in a Participant’s Agreement, the following rules
apply if a Participant ceases to be an Employee, director or consultant of the
Company or of an Affiliate by reason of Disability: to the extent the forfeiture
provisions or the Company’s rights of repurchase have not lapsed on the date of
Disability, they shall be exercisable; provided, however, that in the event such
forfeiture provisions or rights of repurchase lapse periodically, such
provisions or rights shall lapse to the extent of a pro rata portion of the
Shares subject to such Stock Grant or Stock-Based Award through the date of
Disability as would have lapsed had the Participant not become Disabled.  The
proration shall be based upon the number of days accrued prior to the date of
Disability.

 

The Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such
determination).  If requested, the Participant shall be examined by a physician
selected or approved by the Administrator, the cost of which examination shall
be paid for by the Company.

15

 

 

 

22.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF DEATH WHILE AN EMPLOYEE,
DIRECTOR OR CONSULTANT.

 

Except as otherwise provided in a Participant’s Agreement, the following rules
apply in the event of the death of a Participant while the Participant is an
Employee, director or consultant of the Company or of an Affiliate:  to the
extent the forfeiture provisions or the Company’s rights of repurchase have not
lapsed on the date of death, they shall be exercisable; provided, however, that
in the event such forfeiture provisions or rights of repurchase lapse
periodically, such provisions or rights shall lapse to the extent of a pro rata
portion of the Shares subject to such Stock Grant or Stock-Based Award through
the date of death as would have lapsed had the Participant not died.  The
proration shall be based upon the number of days accrued prior to the
Participant’s death.

 

 

23.PURCHASE FOR INVESTMENT.

 

Unless the offering and sale of the Shares to be issued upon the particular
exercise or acceptance of a Stock Right shall have been effectively registered
under the Securities Act of 1933, as now in force or hereafter amended (the
“1933 Act”), the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been
fulfilled:

 

a.The person(s) who exercise(s) or accept(s) such Stock Right shall warrant to
the Company, prior to the receipt of such Shares, that such person(s) are
acquiring such Shares for their own respective accounts, for investment, and not
with a view to, or for sale in connection with, the distribution of any such
Shares, in which event the person(s) acquiring such Shares shall be bound by the
provisions of the following legend which shall be endorsed upon the
certificate(s) evidencing their Shares issued pursuant to such exercise or such
grant:

 

“The shares represented by this certificate have been taken for investment and
they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such
shares shall be effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel satisfactory to it that an
exemption from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities laws.”

 

b.At the discretion of the Administrator, the Company shall have received an
opinion of its counsel that the Shares may be issued upon such particular
exercise or acceptance in compliance with the 1933 Act without registration
thereunder.

 

 

16

 

24.DISSOLUTION OR LIQUIDATION OF THE COMPANY.

 

Upon the dissolution or liquidation of the Company, all Options granted under
this Plan which as of such date shall not have been exercised and all Stock
Grants and Stock-Based Awards which have not been accepted, to the extent
required under the applicable Agreement, will terminate and become null and
void; provided, however, that if the rights of a Participant or a Participant’s
Survivors have not otherwise terminated and expired, the Participant or the
Participant’s Survivors will have the right immediately prior to such
dissolution or liquidation to exercise or accept any Stock Right to the extent
that the Stock Right is exercisable or subject to acceptance as of the date
immediately prior to such dissolution or liquidation.  Upon the dissolution or
liquidation of the Company, any outstanding Stock-Based Awards shall immediately
terminate unless otherwise determined by the Administrator or specifically
provided in the applicable Agreement.

 

 

25.ADJUSTMENTS.

 

Upon the occurrence of any of the following events, a Participant’s rights with
respect to any Stock Right granted to him or her hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in a Participant’s
Agreement:

 

a.Stock Dividends and Stock Splits.  If (i) the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock, each Stock Right and the number of
shares of Common Stock deliverable thereunder shall be appropriately increased
or decreased proportionately, and appropriate adjustments shall be made,
including in the exercise or purchase price per share and Performance Goals
applicable to outstanding Performance-Based Awards, to reflect such events.  The
number of Shares subject to the limitations in Paragraph 3(a) and 4(c) shall
also be proportionately adjusted upon the occurrence of such events.

 

b.Corporate Transactions.  If the Company is to be consolidated with or acquired
by another entity in a merger, consolidation, or sale of all or substantially
all of the Company’s assets or the acquisition of all of the outstanding voting
stock of the Company in a single transaction or a series of related transactions
by a single entity other than a transaction to merely change the state of
incorporation (a “Corporate Transaction”), the Administrator or the board of
directors of any entity assuming the obligations of the Company hereunder (the
“Successor Board”), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Corporate Transaction or securities of any successor or
acquiring entity; or (ii) upon written notice to the Participants, provide that
such Options must be exercised (either (A) to the extent then exercisable, or
(B) at the discretion of the Administrator, any such Options being made
partially or fully exercisable for purposes of this Subparagraph), within a
specified number of days of the date of such notice, at the end of which period
the Options shall terminate; or (iii) terminate

17

 

such Options in exchange for payment of an amount equal to the consideration
payable upon consummation of such Corporate Transaction to a holder of the
number of shares of Common Stock into which such Option would have been
exercisable (either (A) to the extent then exercisable, or (B) at the discretion
of the Administrator, any such Options being made partially or fully exercisable
for purposes of this Subparagraph) less the aggregate exercise price thereof.
 For purposes of determining the payments to be made pursuant to Subclause (iii)
above, in the case of a Corporate Transaction the consideration for which, in
whole or in part, is other than cash, the consideration other than cash shall be
valued at the fair value thereof as determined in good faith by the Board of
Directors.

 

With respect to outstanding Stock Grants, the Administrator or the Successor
Board, shall either (i) make appropriate provisions for the continuation of such
Stock Grants on the same terms and conditions by substituting on an equitable
basis for the Shares then subject to such Stock Grants either the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Corporate Transaction or securities of any successor or acquiring
entity; or (ii) terminate all Stock Grants in exchange for payment of an amount
equal to the consideration payable upon consummation of such Corporate
Transaction to the holder of the number of shares of Common Stock comprising
such Stock Grant (to the extent such Stock Grant is no longer subject to any
forfeiture or repurchase rights then in effect or, at the discretion of the
Administrator, all forfeiture and repurchase rights being waived upon such
Corporate Transaction).

 

In taking any of the actions permitted under this Paragraph 25(b), the
Administrator shall not be obligated by the Plan to treat all Stock Rights, all
Stock Rights held by a Participant, or all Stock Rights of the same type,
identically.

 

c.Recapitalization or Reorganization.  In the event of a recapitalization or
reorganization of the Company other than a Corporate Transaction pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, a Participant upon exercising
an Option or accepting a Stock Grant after the recapitalization or
reorganization shall be entitled to receive for the price paid upon such
exercise or acceptance, if any, the number of replacement securities which would
have been received if such Option had been exercised or Stock Grant accepted
prior to such recapitalization or reorganization.

 

d.Adjustments to Stock-Based Awards.  Upon the happening of any of the events
described in Subparagraphs a,  b or c above, any outstanding Stock-Based Award
shall be appropriately adjusted to reflect the events described in such
Subparagraphs.  The Administrator or the Successor Board shall determine the
specific adjustments to be made under this Paragraph 25, including, but not
limited to the effect if any, of a Change of Control and, subject to Paragraph
4, its determination shall be conclusive.

 

e.Modification of Options.  Notwithstanding the foregoing, any adjustments made
pursuant to Subparagraph a, b or c above with respect to Options shall be made
only after the Administrator determines whether such adjustments would cause any
adverse tax consequences for the holders of such Options.  If the Administrator
determines that such adjustments made with respect to Options would cause an
adverse tax consequence, it may refrain from making such

18

 

adjustments, unless the holder of an Option specifically agrees in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such adjustment on his or her income tax
treatment with respect to the Option.

 

 

26.ISSUANCES OF SECURITIES.

 

Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares subject to Stock Rights.  Except as expressly
provided herein, no adjustments shall be made for dividends paid in cash or in
property (including without limitation, securities) of the Company prior to any
issuance of Shares pursuant to a Stock Right.

 

 

27.FRACTIONAL SHARES.

 

No fractional shares shall be issued under the Plan and the person exercising a
Stock Right shall receive from the Company cash in lieu of such fractional
shares equal to the Fair Market Value thereof.

 

 

28.[RESERVED]

 

 

29.WITHHOLDING.

 

In the event that any federal, state, or local income taxes, employment taxes,
Federal Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts
are required by applicable law or governmental regulation to be withheld from
the Participant’s salary, wages or other remuneration in connection with the
exercise or acceptance of a Stock Right or upon the lapsing of any forfeiture
provision or right of repurchase or for any other reason required by law, the
Company may withhold from the Participant’s compensation, if any, or may require
that the Participant advance in cash to the Company, or to any Affiliate of the
Company which employs or employed the Participant, the statutory minimum amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company’s Common Stock is authorized by the Administrator
(and permitted by law).  For purposes hereof, the fair market value of the
shares withheld for purposes of payroll withholding shall be determined in the
manner set forth under the definition of Fair Market Value provided in Paragraph
1 above, as of the most recent practicable date prior to the date of
exercise.  If the Fair Market Value of the shares withheld is less than the
amount of payroll withholdings required, the Participant may be required to
advance the difference in cash to the Company or the Affiliate employer. 

 

30.[RESERVED]

 

 

19

 

31.TERMINATION OF THE PLAN.

 

The Plan will terminate on December 19, 2029.  The Plan may be terminated at an
earlier date by vote of the Board of Directors of the Company; provided,
however, that any such earlier termination shall not affect any Agreements
executed prior to the effective date of such termination.  Termination of the
Plan shall not affect any Stock Rights theretofore granted.

 

 

32.AMENDMENT OF THE PLAN AND AGREEMENTS.

 

The Plan may be amended by the Administrator, including, without limitation, to
the extent necessary to qualify the shares issuable upon exercise or acceptance
of any outstanding Stock Rights granted, or Stock Rights to be granted, under
the Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers.  Other than as set
forth in Paragraph 25 of the Plan, the Administrator may not without shareholder
approval reduce the exercise price of an Option or cancel any outstanding Option
in exchange for a replacement option having a lower exercise price, any Stock
Grant, any other Stock-Based Award or for cash. In addition, the
Administrator may not take any other action that is considered a direct or
indirect “repricing” for purposes of the shareholder approval rules of the
applicable securities exchange or inter-dealer quotation system on which the
Shares are listed, including any other action that is treated as a repricing
under generally accepted accounting principles.  Any modification or amendment
of the Plan shall not, without the consent of a Participant, adversely affect
his or her rights under a Stock Right previously granted to him or her, unless
such amendment is required by applicable law or necessary to preserve the
economic value of such Stock Right.  With the consent of the Participant
affected, the Administrator may amend outstanding Agreements in a manner which
may be adverse to the Participant but which is not inconsistent with the
Plan.  In the discretion of the Administrator, outstanding Agreements may be
amended by the Administrator in a manner which is not adverse to the
Participant.  Notwithstanding the foregoing, except in the case of death,
disability or Change of Control, outstanding Agreements may not be amended by
the Administrator (or the Board) in a manner that would accelerate the
exercisability or vesting of, or lapsing of any right by the Company to restrict
or reacquire Shares subject to, all or any portion of any Option, Stock Grant or
other Stock-Based Award.  Nothing in this Paragraph 32 shall limit the
Administrator’s authority to take any action permitted pursuant to Paragraph 25.

 

 

33.EMPLOYMENT OR OTHER RELATIONSHIP.

 

Nothing in this Plan or any Agreement shall be deemed to prevent the Company or
an Affiliate from terminating the employment, consultancy or director status of
a Participant, nor to prevent a Participant from terminating his or her own
employment, consultancy or director status or to give any Participant a right to
be retained in employment or other service by the Company or any Affiliate for
any period of time.

 

 

20

 

34.CLAWBACK.

 

Notwithstanding anything to the contrary contained in this Plan, the Company may
recover from a Participant any compensation received from any Stock Right
(whether or not settled) or cause a Participant to forfeit any Stock Right
(whether or not vested) in the event that the Company’s Incentive Compensation
Recoupment Policy then in effect is triggered.

 

 

35.SECTION 409A.

 

If a Participant is a “specified employee” as defined in Section 409A of the
Code (and as applied according to procedures of the Company and its Affiliates)
as of his separation from service, to the extent any payment under this Plan or
pursuant to the grant of a Stock-Based Award constitutes deferred compensation
(after taking into account any applicable exemptions from Section 409A of the
Code), and to the extent required by Section 409A of the Code, no payments due
under this Plan or pursuant to a Stock-Based Award may be made until the earlier
of: (i) the first day of the seventh month following the Participant’s
separation from service, or (ii) the Participant’s date of death; provided,
however, that any payments delayed during this six-month period shall be paid in
the aggregate in a lump sum, without interest, on the first day of the seventh
month following the Participant’s separation from service.

 

The Administrator shall administer the Plan with a view toward ensuring that
Stock Rights under the Plan that are subject to Section 409A of the Code comply
with the requirements thereof and that Options under the Plan be exempt from the
requirements of Section 409A of the Code, but neither the Administrator nor any
member of the Board, nor the Company nor any of its Affiliates, nor any other
person acting hereunder on behalf of the Company, the Administrator or the Board
shall be liable to a Participant or any Survivor by reason of the acceleration
of any income, or the imposition of any additional tax or penalty, with respect
to a Stock Right, whether by reason of a failure to satisfy the requirements of
Section 409A of the Code or otherwise.

 

 

36.GOVERNING LAW.

 

This Plan shall be construed and enforced in accordance with the law of The
Commonwealth of Massachusetts.

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