Exhibit 10.7

 

IMMUNOGEN, INC.

 

EMPLOYEE STOCK PURCHASE PLAN

 

The following constitute the provisions of the Employee Stock Purchase Plan (the
“Plan”) of ImmunoGen, Inc. (the “Company”).

 

1.                                      Purpose.  The purpose of the Plan is to
provide Employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company.  It is the intention of the
Company to have the Plan qualify as an “Employee Stock Purchase Plan” under
Section 423 of the Code.  The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.

 

2.                                      Definitions.

 

(a)                                 “Board” shall mean the Board of Directors of
the Company, or a committee of the Board of Directors named by the Board to
administer the Plan.

 

(b)                                 “Code” shall mean the Internal Revenue Code
of 1986, as amended.

 

(c)                                  “Common Stock” shall mean the common stock,
$0.01 par value per share, of the Company.

 

(d)                                 “Company” shall mean ImmunoGen, Inc., a
Delaware corporation.

 

(e)                                  “Compensation” shall mean the regular rate
of salary or wages received by the Employee from the Company or a Designated
Subsidiary that is taxable income for federal income tax purposes, including
payments for overtime and shift premium, but excluding incentive compensation,
incentive payments, bonuses, commissions, relocation, expense reimbursements,
tuition or other reimbursements or compensation received from the Company or a
Designated Subsidiary.

 

(f)                                   “Continuous Status as an Employee” shall
mean the absence of any interruption or termination of service as an Employee. 
Continuous Status as an Employee shall not be considered interrupted in the case
of a leave of absence agreed to in writing by the Company, provided that such
leave is for a period of not more than ninety (90) days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.

 

(g)                                  “Contributions” shall mean all amounts
credited to the account of a participant pursuant to the Plan.

 

(h)                                 “Designated Subsidiaries” shall mean the
Subsidiaries which have been designated by the Board from time to time in its
sole discretion as eligible to participate in the Plan.

 

(i)                                     “Employee” shall mean any person who is
employed by the Company or one of its Designated Subsidiaries for tax purposes
and who is customarily employed for at least twenty (20) hours per week and more
than five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.

 

(j)                                    “Exercise Date” shall mean the last
business day of each Offering Period of the Plan.

 

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

 

(k)                                 “Exercise Price” shall mean with respect to
an Offering Period, an amount equal to 85 % of the fair market value (as defined
in paragraph 7(b)) of a share of Common Stock on the Offering Date or on the
Exercise Date, whichever is lower.

 

(l)                                     “Offering Date” shall mean the first
business day of each Offering Period of the Plan.

 

(m)                             “Offering Period” shall mean a period of six
months as set forth in paragraph 4 of the Plan.

 

(n)                                 “Plan” shall mean this ImmunoGen, Inc.
Employee Stock Purchase Plan.

 

(o)                                 “Subsidiary” shall mean a corporation,
domestic or foreign, of which not less than 50% of the voting shares are held by
the Company or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.

 

3.                                      Eligibility.

 

(a)                                 Any person who has been continuously
employed as an Employee for three (3) months as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan and further, subject to the requirements of paragraph 5(a) and the
limitations imposed by Section 423(b) of the Code.  All Employees granted
options under the Plan with respect to any Offering Period will have the same
rights and privileges except for any differences that may be permitted pursuant
to Section 423.

 

(b)                                 Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary of the Company or
(ii) which permits his or her rights to purchase stock under all employee stock
purchase plans (described in Section 423 of the Code) of the Company and its
Subsidiaries to accrue at a rate which exceeds $25,000 of fair market value of
such stock as defined in paragraph 7(b) (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any time.
In addition, the maximum number of shares of Common Stock that may be purchased
by any participant during an Offering Period shall equal $25,000 divided by the
fair market value of the Common Stock on the first trading day of such Offering
Period, which price shall be adjusted if the price per share is adjusted
pursuant to Section 18.  Any option granted under the Plan shall be deemed to be
modified to the extent necessary to satisfy this paragraph 3(b).

 

4.                                      Offering Periods.  The Plan shall be
implemented by a series of Offering Periods, with a new Offering Period
commencing on January 1 and July 1 of each year or the first business day
thereafter (or at such other time or times as may be determined by the Board). 
The initial Offering Period shall commence on July 1, 2018.

 

5.                                      Participation.

 

(a)                                 An eligible Employee may become a
participant in the Plan by completing an Enrollment Form provided by the Company
and filing it with the Company or its designee at least ten (10) days prior to
the applicable Offering Date, unless a later time for filing the Enrollment
Form is set by the Board for all eligible Employees with respect to a given
Offering Period.  The Enrollment Form and its submission may be electronic as
directed by the Company.  The Enrollment Form shall set forth the percentage of
the

 

2

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

 

participant’s Compensation (which shall be not less than one percent (1%) and
not more than fifteen percent (15%) to be paid as Contributions pursuant to the
Plan.

 

(b)                                 Payroll deductions shall commence with the
first payroll following the Offering Date, unless a later time is set by the
Board with respect to a given Offering Period, and shall end on the last payroll
paid on or prior to the Exercise Date of the Offering Period to which the
Enrollment Form is applicable, unless sooner terminated as provided in paragraph
10.

 

6.                                      Method of Payment of Contributions.

 

(a)                                 Each participant shall elect to have payroll
deductions made on each payroll during the Offering Period in an amount not less
than one percent (1%) and not more than fifteen percent (15%) of such
participant’s Compensation on each such payroll (or such other percentage as the
Board may establish from time to time before an Offering Date).  All payroll
deductions made by a participant shall be credited to his or her account under
the Plan.  A participant may not make any additional payments into such account.

 

(b)                                 A participant may discontinue his or her
participation in the Plan as provided in paragraph 10, or, on one occasion only
during the Offering Period, may decrease, but may not increase, the rate of his
or her Contributions during the Offering Period by completing and filing with
the Company a new Enrollment Form authorizing a change in the deduction rate. 
The change in rate shall be effective as of the beginning of the next payroll
period following the date of filing of the new Enrollment Form, if the
Enrollment Form is completed at least ten business days prior to such date, and,
if not, as of the beginning of the next succeeding payroll period.

 

(c)                                  Notwithstanding the foregoing, to the
extent necessary to comply with Section 423(b)(8) of the Code and paragraph
3(b), a participant’s payroll deductions may be decreased to 0% at such time
during any Offering Period which is scheduled to end during the current calendar
year that the aggregate of all payroll deductions accumulated with respect to
such Offering Period and any other Offering Period ending within the same
calendar year equals $21,250.  Payroll deductions shall recommence at the rate
provided in such participant’s Enrollment Form at the beginning of the first
Offering Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in paragraph 10.

 

7.                                      Grant of Option.

 

(a)                                 On the Offering Date of each Offering
Period, each eligible Employee participating in such Offering Period shall be
granted an option to purchase on the Exercise Date of such Offering Period a
number of shares of the Common Stock determined by dividing such Employee’s
Contributions accumulated prior to such Exercise Date and retained in the
participant’s account as of the Exercise Date by the applicable Exercise Price;
provided however, that such purchase shall be subject to the limitations set
forth in paragraphs 3(b) and 12.  The fair market value of a share of the Common
Stock shall be determined as provided in paragraph 7(b).

 

(b)                                 The fair market value of the Common Stock on
a given date shall be (i) 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 last sale price of the Common
Stock for such date (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), on the composite tape or
other comparable reporting system; or (ii) if the Common Stock is not listed on
a national securities exchange and such price is not regularly reported, the
mean between the

 

3

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

 

bid and asked prices per share of the Common Stock at the close of trading in
the over-the-counter market.

 

8.                                      Exercise of Option.  Unless a
participant withdraws from the Plan as provided in paragraph 10, his or her
option for the purchase of shares will be exercised automatically on the
Exercise Date of the Offering Period, and the maximum number of full shares
subject to the option will be purchased for him or her at the applicable
Exercise Price with the accumulated Contributions in his or her account.  If a
fractional number of shares results, then such number shall be rounded down to
the next whole number and any unapplied cash shall be carried forward to the
next Exercise Date, unless the participant requests a cash payment.  The shares
purchased upon exercise of an option hereunder shall be deemed to be transferred
to the participant on the Exercise Date.  During a participant’s lifetime, a
participant’s option to purchase shares hereunder is exercisable only by him or
her.

 

9.                                      Delivery.  Upon the written request of a
participant, certificates representing the shares purchased upon exercise of an
option will be issued as promptly as practicable after the Exercise Date of each
Offering Period to participants who wish to hold their shares in certificate
form, except that the Board may determine that such shares shall be held for
each participant’s benefit by a broker designated by the Board.  Any payroll
deductions accumulated in a participant’s account which are not sufficient to
purchase a full Share shall be retained in the participant’s account for the
subsequent Offering Period, subject to earlier withdrawal by the participant as
provided in paragraph 10 below.  Any other amounts left over in a participant’s
account after an Exercise Date shall be returned to the participant.

 

10.                               Withdrawal; Termination of Employment.

 

(a)                                 A participant may withdraw all but not less
than all the Contributions credited to his or her account under the Plan at any
time prior to the Exercise Date of the Offering Period by giving written notice
to the Company or its designee.  All of the participant’s Contributions credited
to his or her account will be paid to him or her promptly after receipt of his
or her notice of withdrawal and his or her option for the current period will be
automatically terminated, and no further Contributions for the purchase of
shares will be made during the Offering Period.

 

(b)                                 Upon termination of the participant’s
Continuous Status as an Employee prior to the Exercise Date of the Offering
Period for any reason, including retirement or death, the Contributions credited
to his or her account will be returned to him or her or, in the case of his or
her death, to the person or persons entitled thereto under paragraph 14, and his
or her option will be automatically terminated.

 

(c)                                  In the event an Employee fails to remain in
Continuous Status as an Employee for at least 20 hours per week during the
Offering Period in which the Employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option terminated.

 

(d)                                 A participant’s withdrawal from an Offering
Period will not have any effect upon his or her eligibility to participate in a
succeeding offering or in any similar plan which may hereafter be adopted by the
Company.

 

11.                               Interest.  No interest shall accrue on the
Contributions of a participant in the Plan.

 

4

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

 

12.                               Stock.

 

(a)                                 The maximum number of shares of Common Stock
which shall be made available for sale under the Plan shall be 1,000,000 shares,
plus an annual increase on the first day of each of the Company’s fiscal years
beginning in 2019 and ending on the first day of 2028, equal to the lesser of
(i) 1,000,000 shares, (ii) one percent (1%) of the shares of Common Stock
outstanding on the last day of the immediately preceding fiscal year, or
(iii) such lesser number of shares as is determined by the Board, subject to
adjustment upon changes in capitalization of the Company as provided in
paragraph 18.  If the total number of shares which would otherwise be subject to
options granted pursuant to paragraph 7(a) on the Offering Date of an Offering
Period exceeds the number of shares then available under the Plan (after
deduction of all shares for which options have been exercised), the Company
shall make a pro rata allocation of the shares remaining available for option
grants in as uniform a manner as shall be practicable and as it shall determine
to be equitable.  Any amounts remaining in an Employee’s account not applied to
the purchase of shares pursuant to this paragraph 12 shall be refunded on or
promptly after the Exercise Date.  In such event, the Company shall give written
notice of such reduction of the number of shares subject to the option to each
Employee affected thereby and shall similarly reduce the rate of Contributions,
if necessary.

 

(b)                                 The participant will have no interest or
voting right in shares covered by his or her option until such option has been
exercised.

 

13.                               Administration.  The Board shall supervise and
administer the Plan and shall have full power to adopt, amend and rescind any
rules deemed desirable and appropriate for the administration of the Plan and
not inconsistent with the Plan, to construe and interpret the Plan, and to make
all other determinations necessary or advisable for the administration of the
Plan.

 

14.                               Designation of Beneficiary.

 

(a)                                 A participant may designate a beneficiary
who is to receive any shares and cash, if any, from the participant’s account
under the Plan in the event of such participant’s death subsequent to the end of
the Offering Period but prior to delivery to him or her of such shares and
cash.  In addition, a participant may designate a beneficiary who is to receive
any cash from the participant’s account under the Plan in the event of such
participant’s death prior to the Exercise Date of the Offering Period.  If a
participant is married and the designated beneficiary is not the spouse, spousal
consent shall be required for such designation to be effective.  Beneficiary
designations shall be made either in writing or by electronic delivery as
directed by the Company.

 

(b)                                 Such designation of beneficiary may be
changed by the participant (and his or her spouse, if any) at any time by
submission of the required notice, which may be electronic.  In the event of the
death of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant’s death, the
Company shall deliver such shares and/or cash to the executor or administrator
of the estate of the participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

 

15.                               Transferability.  Neither Contributions
credited to a participant’s account nor any rights with regard to the exercise
of an option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in paragraph 14) by the participant. 
Any such attempt at assignment, transfer, pledge or other

 

5

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

 

disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with paragraph 10.

 

16.                               Use of Funds.  All Contributions received or
held by the Company under the Plan may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such Contributions.

 

17.                               Reports.  Individual accounts will be
maintained for each participant in the Plan.  Statements of account will be
given to participating Employees promptly following the Exercise Date, which
statements will set forth the amounts of Contributions, the per share purchase
price, the number of shares purchased and the remaining cash balance, if any.

 

18.                               Adjustments Upon Changes in Capitalization. 
Subject to any required action by the shareholders of the Company, the number of
shares of Common Stock covered by unexercised options under the Plan, the number
of shares of Common Stock which have been authorized for issuance under the Plan
but are not yet subject to options under paragraph 12(a) and the number of
shares of Common Stock subject to annual increase under paragraph
12(a) (collectively, the “Reserves”),  as well as the price per share of Common
Stock covered by each unexercised option under the Plan, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock. Such adjustment
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive.

 

In the event of the proposed dissolution or liquidation of the Company, an
Offering Period then in progress will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board. 
In the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger, consolidation or other capital reorganization of the
Company with or into another corporation, each option outstanding under the Plan
shall be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by
setting a new Exercise Date (the “New Exercise Date”).  If the Board shortens
the Offering Period then in progress in lieu of assumption or substitution in
the event of a merger or sale of assets, the Board shall notify each participant
in writing, at least ten days prior to the New Exercise Date, that the Exercise
Date for his or her option has been changed to the New Exercise Date and that
his or her option will be exercised automatically on the New Exercise Date,
unless prior to such date he or she has withdrawn from the Offering Period as
provided in paragraph 10.  For purposes of this paragraph, an option granted
under the Plan shall be deemed to be assumed if, following the sale of assets,
merger or other reorganization, the option confers the right to purchase, for
each share of Common Stock subject to the option immediately prior to the sale
of assets, merger or other reorganization, the consideration (whether stock,
cash or other securities or property) received in the sale of assets, merger or
other reorganization by holders of Common Stock for each share of Common Stock
held on the effective date of such transaction (and if such holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however, that if
such consideration received in such transaction was not solely common stock of
the successor corporation or its parent (as defined in Section 424(e) of the
Code), the Board may, with the consent of the successor corporation, provide for
the consideration to be received upon exercise of the option to be solely common
stock of the successor corporation or its parent equal in fair market value to
the per share consideration received by holders of Common Stock in the sale of
assets, merger or other reorganization.

 

6

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

 

The Board may, if it so determines in the exercise of its sole discretion, also
make provision for adjusting the Reserves, as well as the price per share of
Common Stock covered by each outstanding option, in the event that the Company
effects one or more reorganizations, recapitalizations, rights offerings or
other increases or reductions of shares of its outstanding Common Stock, and in
the event of the Company being consolidated with or merged into any other
corporation.

 

19.                               Amendment or Termination.

 

(a)                                 The Board may at any time terminate or amend
the Plan.  Except as provided in paragraph 18, no such termination may affect
options previously granted, nor may an amendment make any change in any option
theretofore granted which adversely affects the rights of any participant
provided that an Offering Period may be terminated by the Board on an Exercise
Date or by the Board’s setting a new Exercise Date with respect to an Offering
Period then in progress if the Board determines that termination of the Offering
Period is in the best interests of the Company and the shareholders or if
continuation of the Offering Period would cause the Company to incur adverse
accounting charges in the generally-accepted accounting rules applicable to the
Plan.  In addition, to the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision or any applicable law or regulation),
the Company shall obtain shareholder approval in such a manner and to such a
degree as so required.

 

(b)                                 Without shareholder consent and without
regard to whether any participant rights may be considered to have been
adversely affected, the Board shall be entitled to change the Offering Periods,
limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in
a currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company’s processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant’s Compensation, and establish such other limitations or procedures
as the Board determines in its sole discretion advisable that are consistent
with the Plan.

 

20.                               Notices.  All notices or other communications
by a participant to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

21.                               Conditions Upon Issuance of Shares.  Shares
shall not be issued with respect to an option unless the exercise of such option
and the issuance and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

 

As a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.

 

22.                               Information Regarding Disqualifying
Dispositions.  By electing to participate in the Plan, each participant agrees
to provide any information about any transfer of shares of Common Stock acquired
under the Plan that occurs within two years after the first business day of the
Offering Period in

 

7

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

 

which such shares were acquired as may be requested by the Company or any
Subsidiaries in order to assist it in complying with the tax laws.

 

23.                               Right to Terminate Employment.  Nothing in the
Plan or in any agreement entered into pursuant to the Plan shall confer upon any
Employee the right to continue in the employment of the Company or any
Subsidiary, or affect any right which the Company or any Subsidiary may have to
terminate the employment of such Employee.

 

24.                               Rights as a Shareholder.  Neither the granting
of an option nor a deduction from payroll shall constitute an Employee the owner
of shares covered by an option.  No Employee shall have any right as a
shareholder unless and until an option has been exercised, and the shares
underlying the option have been registered in the Company’s share register.

 

25.                               Term of Plan.  The Plan became effective upon
its adoption by the Board on March 20, 2018 and shall continue in effect through
June 30, 2028, unless sooner terminated under paragraph 19.

 

26.                               Applicable Law.  This Plan shall be governed
in accordance with the laws of the State of Delaware, applied without giving
effect to any conflict-of-law principles.

 

8

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