Exhibit 10.2


 


SEVERANCE AGREEMENT


 


This Agreement is entered into as of the 1st day of December, 2008 (the
“Effective Date”) by and between
ImmunoGen, Inc., a Massachusetts corporation (the “Company”)
and Mitchel Sayare, Ph.D. (the “Executive”).


 


WHEREAS, the Company recognizes that the Executive’s service to the
Company is very important to the future success of the Company;


 


WHEREAS, the Executive desires to enter into this Agreement to provide
the Executive with certain financial protection in the event that his
employment terminates under certain conditions following a change in control of
the Company; and


 


WHEREAS the Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company to enter into this Agreement.


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive
hereby agree as follows:


 


1.             Definitions.


 


(a)           Cause.  For purposes of this Agreement, “Cause” shall mean that the Executive
has (i) intentionally committed an act or omission that materially harms
the Company; (ii) been grossly negligent in the performance of the Executive’s
duties to the Company; (iii) willfully failed or refused to follow the
lawful and proper directives of the Board; (iv) been convicted of, or
pleaded guilty or nolo contendre, to a felony; (v) committed
an act involving moral turpitude; (vi) committed an act relating to the
Executive’s employment or the Company involving, in the good faith judgment of
the Board, material fraud or theft; (vii) breached any material provision
of this Agreement or any nondisclosure or non-competition agreement between the
Executive and the Company, as all of the foregoing may be amended prospectively
from time to time; or (viii) breached a material provision of any code of
conduct or ethics policy in effect at the Company, as all of the foregoing may
be amended prospectively from time to time.


 


(b)           Change in Control.  For
purposes of this Agreement, a “Change in Control”
shall mean the occurrence of any of the following events; provided  that
“Change in Control” shall be interpreted in a manner, and limited to the extent
necessary, so that it will not cause adverse tax consequences for either party
with respect to Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and Treasury
Regulations 1.409A-3(i)(5), and any successor statute, regulation and
guidance thereto:


 


(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 


 


Executive Severance Agreement
(24)


 

















 


outstanding voting securities (excluding for this purpose any such
voting securities held by the Company or its Affiliates (as defined in the
Company’s 2006 Employer, Director and Consultant Equity Incentive Plan) or by
any employee benefit plan of the Company) pursuant to a transaction or a series
of related transactions which the Board does not approve; or


 


(ii)           Merger/Sale of Assets.  (A) A
merger or consolidation of the Company whether or not approved by the Board,
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) at least
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
stockholders of the Company approve an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets; or


 


(iii)          Change
in Board Composition.  A change in the
composition of the Board, 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 November 11, 2006,
or (B) are elected, or nominated for election, to the Board 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).


 


(c)           Disability.  For purposes of this Agreement, “Disability” shall
mean that the Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits
for a period of not less than three (3) months under a Company-sponsored
group disability plan. Whether the
Executive has a Disability will be determined by a majority of the Board based
on evidence provided by one or more physicians selected by the Board and
approved by the Executive, which approval shall not be unreasonably withheld.


 


(d)           Good
Reason.  For purposes of this
Agreement, “Good Reason” shall mean the
occurrence of one or more of the following without the Executive’s consent: (i) a
change in the principal location at which the Executive performs his duties for
the Company to a new location that is at least forty (40) miles from the
prior location; (ii) a material change in the Executive’s authority,
functions, duties or responsibilities as an executive of the Company, which would cause his position with
the Company to become of less responsibility, importance or scope than his highest
position with the Company at any time from the date of this Agreement to
immediately prior to the Change in Control, provided, however,
that such material change is not in connection with the termination of the
Executive’s employment by the Company for Cause or death or Disability and
further provided  that it shall not be considered a material
change if the Company becomes a subsidiary of another entity and the Executive
continues to hold a position in the subsidiary that is at least as high as the
highest position he held with the Company at any time from the date of this
Agreement to 


 


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immediately prior to the Change in Control; (iii) a material reduction
in the Executive’s annual base salary or (iv) a material reduction in the Executive’s
target annual bonus as compared to the target annual bonus set for the previous
fiscal year.


 


2.             Term
of Agreement.  The term of this
Agreement (the “Term”) shall commence on the Effective Date and shall continue
in effect through June 30, 2009; provided, however, that if
a Change in Control shall have occurred during the Term, the Term shall expire
on the last day of the twenty-fourth (24th) month following the month in which such
Change in Control occurred. Termination of this Agreement shall not constitute
Cause or Good Reason (both terms as defined above).


 


3.             Termination;
Notice; Severance Compensation.


 


(a)           In
the event that within a period of two (2) months before or two (2) years
following the consummation of a Change in Control the Company elects to
terminate the Executive’s employment other than for Cause (but not including
termination due to the Executive’s Disability), then the Company shall give the
Executive no less than sixty (60) days advance notice of such termination
(the “Company’s Notice Period”); provided  that the Company may
elect to require the Executive to cease performing work for the Company so long
as the Company continues the Executive’s full salary and benefits during the
Company’s Notice Period.


 


(b)           In
the event that within a period of two (2) months before or two (2) years
following the consummation of a Change in Control the Executive elects to
terminate his employment for Good Reason, then the Executive shall give the
Company no less than thirty (30) days and no more than sixty (60)
days advance notice of such termination (the “Executive’s Notice Period”); provided
that the Company may elect to require the Executive to cease performing
work for the Company so long as the Company continues the Executive’s full
salary and benefits during the Executive’s Notice Period. In order to effect a
termination for Good Reason pursuant to this Agreement, the Executive must
notice his intent to terminate for Good Reason not later than ninety (90)
days following the occurrence of the Good Reason.


 


(c)           In
the event that within a period of two (2) months before or two (2) years
following the consummation of a Change in Control the Executive’s employment
with the Company is terminated by the Company other than for Cause (but not
including termination due to the Executive’s death or Disability), or by the
Executive for Good Reason, then, contingent upon the Executive’s execution of a
release of claims against the Company in a form reasonably acceptable to the
Company (the “Release”) the Executive shall
be entitled to, in addition to any amounts due to the Executive for services
rendered prior to the termination date:


 


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(i)  the Executive’s target annual bonus for the fiscal year in
which such termination occurs at one hundred percent (100%) of such target
annual bonus, pro-rated by the number of calendar days in which the Executive
is employed by the Company during the applicable year, including any applicable
Notice Period, and less any amount of the target annual bonus for the
applicable year previously paid to the Executive, which shall be paid no later
than sixty (60) days after the Executive’s termination of employment, provided
that the Release is executed and effective by then; and


 


(ii) 
a lump sum payment from the Company in an amount equal to two (2) times
the Executive’s Annual Salary, which shall be paid no later than sixty (60)
days after the Executive’s termination of employment, provided  that
the Release is executed and effective by then;


 


(iii) 
all outstanding options, restricted stock and other similar rights held by the
Executive, which shall become one hundred percent (100%) vested; and


 


(iv) 
continuation of medical insurance coverage for the Executive and the Executive’s
family, subject to COBRA and subject to the Executive’s payment of a premium
co-pay related to the coverage that is no less favorable than the premium
co-pay charged to active employees of the Company electing the same coverage,
for twenty-four (24) months from the Separation Date; provided  that
the Company shall have no obligation to provide such coverage if the Executive
fails to elect COBRA benefits in a timely fashion or if the Executive becomes
eligible for medical coverage with another employer; and provided
that if COBRA continuation coverage is otherwise earlier terminated
under applicable law, then, in lieu of coverage, the Company will pay the same
amount it paid on a monthly basis for COBRA continuation coverage directly to
the Executive each month for the remainder of the relevant period.


 


For purposes of this Agreement, “Annual Salary” shall mean the Executive’s
annual base salary then in effect or, if higher, in effect at the time of the
Change in Control, excluding reimbursements and amounts attributable to stock
options and other non-cash compensation; and the “Severance
Compensation” shall mean the compensation set forth in (ii), (iii),
and (iv) above.


 


(d)           Notwithstanding any other provision with
respect to the timing of payments, if, at the time of the Executive’s
termination, the Executive is deemed to be a “specified employee” (within the
meaning of Code Section 409A, and any successor statute, regulation and
guidance thereto) of the Company, then limited only to the extent necessary to
comply with the requirements of Code Section 409A, any payments to which the
Executive may become entitled under this Agreement which are subject to Code Section 409A
(and not otherwise exempt from its application) will be withheld until the
first (1st) business day of the seventh (7th) month following the termination of the Executive’s employment, at
which time the Executive shall be paid an aggregate amount equal to the
accumulated, but unpaid, payments otherwise due to the Executive under the
terms of this Agreement.


 


(e)           If
any payment or benefit the Executive would receive under this Agreement, when
combined with any other payment or benefit the Executive receives pursuant to a
Change in Control (“Payment”) would (i) constitute a “parachute payment”
within the meaning of Code Section 280G, and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the 


 


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“Excise
Tax”), then such Payment shall be either (x) the full amount of such
Payment or (y) such less amount as would result in no portion of the
Payment being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal, state, and local employments taxes,
income taxes, and the Excise Tax results in the Executive’s receipt, on an
after-tax basis, of the greater amount of the Payment, notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. The Company shall
determine in good faith which payment(s) or benefit(s) to reduce
based on what provides the best economic result for the Executive. The Company
shall provide the Executive with sufficient information to make such
determination and to file and pay any required taxes.


 


4.             No
Duplication of Compensation.  The
Severance Compensation shall replace, and be provided in lieu of, any severance
or similar compensation that may be provided to the Executive under any other
agreement or arrangement in relation to termination of employment, including
without limitation that certain Severance Agreement dated as of November 30,
2006 between the Company and the Executive; provided, however,
that this prohibition against duplication shall not be construed to otherwise
limit the Executive’s rights to payments or benefits provided under any pension
plan (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended), deferred compensation, stock, stock option
or similar plan sponsored by the Company.


 


5.             No
Mitigation.  If the Executive’s
employment with the Company terminates following a Change in Control, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 3
or Section 15.  Except as set forth
in Section 4, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the Company, or
otherwise.


 


6.             Confidentiality,
Non-Competition, and Assignment of Inventions.  The Company’s obligations under this
Agreement are contingent upon the Executive’s execution of the Company’s
Proprietary Information, Inventions, and Competition Agreement (the “Proprietary
Information Agreement”).  The parties
agree that the obligations set forth in the Proprietary Information Agreement
shall survive termination of this Agreement and termination of the Executive’s
employment, regardless of the reason for such termination.


 


7.             Enforceability.  If any provision of this Agreement shall be
deemed invalid or unenforceable as written, this Agreement shall be construed,
to the greatest extent possible, or modified, to the extent allowable by law,
in a manner which shall render it valid and enforceable. No invalidity or
unenforceability of any provision contained herein shall affect any other
portion of this Agreement.


 


8.             Notices.  Except as otherwise specifically provided
herein, any notice required or permitted by this Agreement shall be in writing
and shall be delivered as follows with notice deemed given as indicated: (i) 
by personal delivery when delivered personally; (ii) by overnight courier
upon written verification of receipt; (iii) by telecopy or facsimile
transmission upon acknowledgment of receipt of electronic transmission; or (iv) by
certified or registered mail, return receipt requested, upon verification of
receipt. Notices to the Executive shall be sent to the last known address in
the Company’s records or such other address as the Executive may specify in
writing. Notices to the Company shall be sent to the Company’s Lead Director,
or to such other Company representative as the Company may specify in writing.


 


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9.             Claims
for Benefits.  All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing
and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the
Board within sixty (60) days after notification by the Board that the
Executive’s claim has been denied.


 


10.           Modifications
and Amendments.  The terms and
provisions of this Agreement may be modified or amended only by written
agreement executed by the Company and the Executive. The Company and the
Executive agree that they will jointly execute an amendment to modify this
Agreement to the extent necessary to comply with the requirements of Code Section 409A,
or any successor statute, regulation and guidance thereto; provided  that
no such amendment shall increase the total financial obligation of the Company
under this Agreement.


 


11.           Waivers
and Consents.  The terms and
provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by a written document executed by the party entitled to
the benefits of such terms or provisions. No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect to any other
terms or provisions of this Agreement, whether or not similar. Each such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or
consent.


 


12.           Binding
Effect; Assignment.  The Agreement
will be binding upon and inure to the benefit of (a) the heirs, executors
and legal representatives of the Executive upon the Executive’s death and (b) any
successor of the Company. Any such successor of the Company will be deemed
substituted for the Company under the terms of the Agreement for all purposes. For
this purpose, “successor” means any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires all or substantially all of the assets or business of the
Company. None of the rights of the Executive to receive any form of
compensation payable pursuant to the Agreement may be assigned or transferred
except by will or the laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of the Executive’s right
to compensation or other benefits will be null and void.


 


13.           Governing
Law.  This Agreement and the rights
and obligations of the parties hereunder shall be construed in accordance with
and governed by the law of the Commonwealth of Massachusetts, without giving
effect to the conflict of law principles thereof.


 


14.           Jurisdiction
and Service of Process.  Any legal
action or proceeding with respect to this Agreement shall be brought in the
courts of the Commonwealth of Massachusetts or of the United States of America
for the District of Massachusetts. By execution and delivery of this Agreement,
each of the parties hereto accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.


 


15.           Attorneys’
Fees.  The Company shall pay to the
Executive all legal fees and expenses incurred by the Executive in disputing in
good faith any issue hereunder relating to the termination of the Executive’s
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement. Such payments shall be made within five (5) business
days after 


 


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delivery of the Executive’s written requests for payment accompanied with
such evidence of fees and expenses incurred as the Company reasonably may
require.


 


16.           Withholding.  The Company is authorized to withhold, or to
cause to be withheld, from any payment or benefit under the Agreement the full
amount of any applicable withholding taxes.


 


17.           Tax
Consequences.  The Company does not
guarantee the tax treatment or tax consequences associated with any payment or
benefit arising under this Agreement.


 


18.           Acknowledgment.  The Executive acknowledges that he has had
the opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of the Agreement, and is knowingly and
voluntarily entering into the Agreement.


 


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


 


20.           Section 409A.  The parties hereto intend that this Agreement
comply with the requirements of Code Section 409A and related regulations
and Treasury pronouncements. If any provision provided herein results in the
imposition of an additional tax under the provisions of Code Section 409A,
the Executive and the Company agree that such provision will be reformed to
avoid imposition of any such additional tax in the manner that the Executive
and the Company mutually agree is appropriate to comply with Code Section 409A.


 


 


IN WITNESS WHEREOF, the parties have executed and delivered this
Severance Agreement as of the day and year first above written.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  IMMUNOGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Daniel Junius

  
	
   

  	
  Name:
  Daniel M. Junius

  
	
   

  	
  Title:
  President and Chief Operating

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Mitchel Sayare

  
	
   

  	
  Name: Mitchel Sayare, Ph.D.

  



 


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