--------------------------------------------------------------------------------

EXHIBIT 10.1
 
October 5, 2012

Nicolas A. LaBella Jr.

Dear Nick:

This letter agreement (“Agreement”) confirms our mutual agreement regarding the
terms and conditions of your separation from employment with Insmed, Inc.
(“Insmed” or the “Company”).  You and the Company agree as follows:
 
1.
Cessation of Service.  You hereby resign from employment with the Company and
from service with the Company and its affiliates in any other capacity, all
effective as of the date of your execution of this Agreement (the “Last Day of
Employment”).  Promptly following such date, you will receive payment for (i)
base salary earned in the payroll period that includes your Last Day of
Employment, and (ii) vacation days that were accrued and unused as of your Last
Day of Employment.

 
2.
Severance Benefits.  Provided that Paragraph 3 of this Agreement is not revoked
during the seven day period following your execution of this Agreement, the
Company will provide you with the rights, payment and benefits described in the
attached Exhibit A (the “Severance Benefits”).  If you die before all the cash
severance payments are paid, the Company will pay the unpaid amounts to your
estate.  If Paragraph 3 of this Agreement is revoked, no severance benefits will
be owed to you under this Paragraph 2 or under your Employment Agreement with
the Company dated January 31, 2011 (the “Employment Agreement”), but the
remainder of this Agreement will remain in full force and effect.

 
3.
Release.

 
 
a)
In consideration of the Severance Benefits, you hereby waive, release and
forever discharge the Company and each of its past and current parents,
subsidiaries, affiliates and each of its and their respective past and current
directors, officers, trustees, employees, representatives, agents, employee
benefit plans and such plans’ administrators, fiduciaries, trustees,
record-keepers and service providers, and each of its and their respective
successors and assigns, each and all of them in their personal and
representative capacities (collectively the “Company Releasees”) from any and
all claims legally capable of being waived, grievances, injuries, controversies,
agreements, covenants, promises, debts, accounts, actions, causes of action,
suits, arbitrations, sums of money, attorneys’ fees, costs, damages, or any
right to any monetary recovery or any other personal relief, whether known or
unknown, in law or in equity, by contract, tort, law of trust or pursuant to
federal, state or local statute, regulation, ordinance or common law, which you
now have, ever have had, or may hereafter have, based upon or arising from any
fact or set of facts, whether known or unknown to you, from the beginning of
time until the date of execution of this Agreement, arising out of or relating
in any way to your employment relationship with the Company or the Company
Releasees or other associations with the Company or the Company Releasees or any
termination thereof.  Without limiting the generality of the foregoing, this
waiver, release, and discharge includes any claim or right based upon or arising
under any federal, state or local fair employment practices or equal opportunity
laws, including, but not limited to, the New Jersey Law Against Discrimination
(N.J. Stat. Ann. §10:5-1 et seq.), the New Jersey Conscientious Employee
Protection Act (N.J. Stat. Ann. §34:19-3 et seq.), the Age Discrimination in
Employment Act (29 U.S.C. Section 621, et seq.) (“ADEA”), the Older Workers’
Benefits Protection Act, the Rehabilitation Act of 1973, the Worker Adjustment
and Retraining Notification Act, 42 U.S.C. Section 1981, Title VII of the Civil
Rights Act of 1964, the Equal Pay Act, the Employee Retirement Income Security
Act (“ERISA”) (including, but not limited to, claims for breach of fiduciary
duty under ERISA), the Americans With Disabilities Act, and the Family and
Medical Leave Act of 1993, including all amendments thereto.

 
 
 

--------------------------------------------------------------------------------

 
 
 
b)
Notwithstanding the generality of the foregoing, nothing herein constitutes a
release or waiver by you of, or prevents you from making or asserting:  (i) any
claim or right you may have under COBRA; (ii) any claim or right you may have
for unemployment insurance or workers’ compensation benefits; (iii) any claim to
vested benefits under the written terms of a qualified employee pension benefit
plan; (iv) any claim or right that may arise after the execution of this
Agreement; or (v) any claim or right you may have under this Agreement.  In
addition, nothing herein shall prevent you from filing a charge or complaint
with the Equal Employment Opportunity Commission (“EEOC”) or similar federal or
state agency or your ability to participate in any investigation or proceeding
conducted by such agency; provided, however, that pursuant to Paragraph 3(a),
you are waiving any right to recover monetary damages or any other form of
personal relief in connection with any such charge, complaint, investigation or
proceeding.

 
4.
Violations of Any Law or of the Company’s Code of Conduct.  You hereby represent
and warrant that during your employment with the Company, you did not violate
any federal, state or local law, statute or regulation while acting within the
scope of your employment with the Company, nor did you violate the Company’s
Code of Conduct.  You acknowledge and understand that if the Company should
discover any such violation after your execution of this Agreement, it will be
considered a material breach of this Agreement.

 
5.
No Additional Entitlements.  You agree that you have received all entitlements
due from the Company relating to your employment with the Company, other than
the payments, rights and benefits specifically enumerated in this Agreement.

 
6.
Employment Agreement.  You and the Company acknowledge and agree that Sections
6(l), 6(m), 7 through 13, and 15 through 26 of your Employment Agreement survive
the cessation of your employment with the Company.  You further acknowledge and
agree that the other sections of your Employment Agreement do not survive the
cessation of your employment and that you have no further rights in respect
thereof.

 
7.
Protection of Confidential Information.

 
 
a)
You acknowledge and agree that you received adequate consideration in exchange
for agreeing to the covenants contained in Section 7 of your Employment
Agreement, that such covenants remain reasonable and necessary to protect the
Company’s legitimate business interests and that you will continue to comply
with those covenants.

 
 
-2-

--------------------------------------------------------------------------------

 
 
 
b)
In addition, you hereby acknowledge your existing obligation to maintain the
confidentiality of the Company’s information as contained in the Company’s Code
of Conduct.  You affirm that you agreed to be bound by the Company’s Code of
Conduct (which is hereby incorporated by this reference) when you signed that
Code of Conduct in January 2012;

 
 
c)
Without limiting the generality of the foregoing obligations set forth in
Paragraph 7(a) and (b), you agree that, except as expressly permitted in
Paragraph 9 of this Agreement or if otherwise required by law, you will not at
any time, directly or indirectly, disclose any trade secret, confidential or
proprietary information you have learned by reason of your association with the
Company (the “Confidential Information”) or use any such Confidential
Information to the detriment of the Company, its parents, affiliates or
subsidiaries, or to the benefit of any business or enterprise that competes with
the Company, its parents, affiliates or subsidiaries.  Confidential Information
is deemed to include, but is not limited to, information pertaining to Company
strategic plans, advertising and marketing plans, sales plans, formulae,
processes, methods, machines, ideas, concepts, new product developments,
proposed launches, discontinuance of existing products, product and consumer
testing data, sales and market research, technology research and development,
budgets, profit and loss data, raw material costs, identity of suppliers,
customer lists, customer information, employee information, improvements,
inventions, and associations with other organizations that the Company has not
previously made public.  Confidential Information does not include information
that can be shown by written evidence to be in the public domain at the time of
disclosure by you or that is publicized or otherwise becomes part of the public
domain through no fault of your own.

 
8.
Non-Disparagement.

 
 
a)
You agree that you shall not at any time make any written or verbal comments or
statements of a defamatory or disparaging nature regarding the Company and/or
the Company Releasees or their personnel or products and you shall not take any
action that would cause the Company and/or the Company Releasees or their
personnel or products any embarrassment or humiliation or otherwise cause or
contribute to their being held in disrepute.

 
 
b)
The Company agrees that it will use its reasonable best efforts to prevent its
representatives from making any written or verbal comments or statements of a
defamatory or disparaging nature regarding you or taking any action that would
cause you any embarrassment or humiliation or otherwise cause or contribute to
your being held in disrepute while they are employed by the Company and acting
in their capacity as Company representatives.

 
 
-3-

--------------------------------------------------------------------------------

 
 
9.
Permitted Conduct.  Nothing in this Agreement shall prohibit or restrict you,
the Company, or our respective attorneys from: (i) making any disclosure of
relevant and necessary information or documents in any action, investigation, or
proceeding relating to this Agreement, including all exhibits, or as required by
law or legal process; or (ii) participating, cooperating, or testifying in any
action, investigation, or proceeding with, or providing information to, any
governmental agency or legislative body, including, but not limited to, the
Company’s Legal Department, the Securities & Exchange Commission, and/or
pursuant to the Dodd-Frank Act or Sarbanes-Oxley Act; providedthat, to the
extent permitted by law, upon receipt of any subpoena, court order or other
legal process compelling the disclosure of any such information or documents,
the disclosing party gives prompt written notice to the other party so as to
permit such other party to protect such party’s interests in confidentiality to
the fullest extent possible.

 
10.
Non-Admission.  It is understood and agreed that neither the execution of this
Agreement, nor the terms of the Agreement, constitute an admission of liability
to you by the Company or the Company Releasees, and such liability is expressly
denied.  It is further understood and agreed that no person shall use the
Agreement, or the consideration paid pursuant thereto, as evidence of an
admission of liability, inasmuch as such liability is expressly denied.

 
11.
Acknowledgments.  You hereby acknowledge that:

 
 
a)
The Company hereby advises you to consult with an attorney before signing this
Agreement;

 
 
b)
You have obtained independent legal advice from an attorney of your own choice
with respect to this Agreement and all exhibits or you have knowingly and
voluntarily chosen not to do so;

 
 
c)
You freely, voluntarily and knowingly entered into this Agreement after due
consideration;

 
 
d)
You have been provided with 21 days to review and consider this Agreement;

 
 
e)
You have a right to revoke Paragraph 3 of this Agreement by notifying the
undersigned Company representative in writing, via hand delivery, facsimile or
electronic mail, within seven days of your execution of this Agreement;

 
 
f)
In exchange for your waivers, releases and commitments set forth herein,
including your waiver and release of all claims arising under the Age
Discrimination in Employment Act, the payments, benefits and other
considerations that you are receiving pursuant to this Agreement exceed any
payment, benefit or other thing of value to which you would otherwise be
entitled, and are just and sufficient consideration for the waivers, releases
and commitments set forth herein; and

 
 
g)
No promise or inducement has been offered to you, except as expressly set forth
herein, and you are not relying upon any such promise or inducement in entering
into this Agreement.

 
12.
Miscellaneous.

 
 
a)
Entire Agreement.  This Agreement sets forth the entire agreement between you
and the Company and replaces any other oral or written agreement between you and
the Company relating to the subject matter of this Agreement.

 
 
b)
Governing Law.  This Agreement, shall be construed, performed, enforced and in
all respects governed in accordance with the laws of the State of New Jersey,
without giving effect to the principles of conflicts of law
thereof.  Additionally, all disputes arising from or related to this Agreement
and/or exhibits shall be brought in a state or federal court situated in the
State of New Jersey, Mercer County and the parties hereby expressly consent to
the jurisdiction of such courts for all purposes related to resolving such
disputes.

 
 
-4-

--------------------------------------------------------------------------------

 
 
 
c)
Severability.  Should any provision of this Agreement, including any exhibit, be
held to be void or unenforceable, the remaining provisions shall remain in full
force and effect, to be read and construed as if the void or unenforceable
provisions were originally deleted.

 
 
d)
Taxation.  All payments to you from the Company are subject to withholding for
applicable taxes.  Both you and the Company intend for payments and benefits
under this Agreement to be exempt from, or compliant with, the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”).  You acknowledge and agree, however, that the Company does not guarantee
the tax treatment or tax consequences associated with any payment or benefit,
including, without limitation, tax consequences related to Section 409A.

 
 
e)
Amendments.  This Agreement may not be modified or amended, except upon the
express written consent of both you and the Company.

 
 
f)
Waiver.  A waiver by either party hereto of a breach of any term or provision of
the Agreement, including all exhibits, shall not be construed as a waiver of any
subsequent breach.

 
 
g)
Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same agreement.

 
 
-5-

--------------------------------------------------------------------------------

 

If the above accurately states our agreement, including the separation, waiver
and release, kindly sign below and return this original Agreement to me.

 
Sincerely,
     
INSMED, INC.
      By:        
Will Lewis
   
Title: President and CEO

 

  Date:            
UNDERSTOOD, AGREED TO
   
AND ACCEPTED WITH THE
 
INTENTION TO BE LEGALLY BOUND:

 

       
Nicholas A. LaBella Jr.

 

  Date:    

 
 
-6-

--------------------------------------------------------------------------------

 
 
EXHIBIT A

SEVERANCE BENEFITS

(1)
SEVERANCE PAY

You will receive severance pay as follows:

●          $27,490, payable in a lump sum within 30 days following your Last Day
of Employment.

●          $115,456, payable in a lump sum within 30 days following your Last
Day of Employment.

●          $445,331, payable over 12 months in substantially equal periodic
installments in accordance with the Company’s normal payroll schedule,
commencing within 30 days following your Last Day of Employment.
 
(2)
EQUITY AWARDS

 
 
Your outstanding Equity Awards that have not previously vested will vest in
full, effective upon your Last Day of Employment. You will have one year from
the Last Day of Employment to exercise all of your vested Stock Options.

 
(3)
GROUP HEALTH CONTINUATION

 
 
COBRA continuation of your medical, dental and vision insurance will be
subsidized for you and your covered dependents for 12 months following your Last
Day of Employment.  The subsidy will be such that the monthly cost of COBRA
continuation will be the same as the monthly cost for such coverage applicable
to active employees.  As a condition of continuation of such benefits, you must
elect COBRA continuation of this coverage.

 
(4)
OUTPLACEMENT SERVICES

 

 
The Company will pay or reimburse you for the cost of outplacement services
provided by a reputable company on or before the first anniversary of your Last
Day of Employment, up to a maximum of $15,000.  As a condition of this benefit,
you must submit proper documentation of such expenses within 90 days after you
incur them.  The Company will pay or reimburse such expenses within 30 days
following the receipt of proper documentation.

 
 
A-1

--------------------------------------------------------------------------------