Document:

Exhibit No.
10.7(g)

 

Millennium/Aventis

Third Amendment to Collaboration
and License Agreement

Execution
Version

 

Confidential
Materials omitted and filed separately with the 

Securities and Exchange Commission. Asterisks denote omissions.

 

THIRD
AMENDMENT TO COLLABORATION AND LICENSE AGREEMENT

 

This Third Amendment to Collaboration and License
Agreement (this “Third Amendment”) effective as of October 31, 2005 (the “Third
Amendment Date”) is by and between Millennium Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the State of Delaware and
having its principal office at 75 Sidney Street, Cambridge, Massachusetts 02139
(“Millennium”) and Aventis Pharmaceuticals Inc., a member of the sanofi-aventis
Group and a corporation organized and existing under the laws of the State of
Delaware and having its principal office at Route 202-206, P.O. Box 6800,
Bridgewater, New Jersey 08807 (“Aventis”). All capitalized terms used in this
Third Amendment and not otherwise defined in this Third Amendment have the
meanings assigned them in the Collaboration Agreement (as that term is defined
in the first recital paragraph, below).

 

RECITALS

 

WHEREAS, Millennium and Aventis entered into a
Collaboration and License Agreement dated as of June 22, 2000 (as previously
amended, the “Collaboration Agreement”);

 

WHEREAS, in general, the Research Program Term under
the Collaboration Agreement expired on July 21, 2005, but the Parties entered
into a letter agreement dated July 20, 2005 
extending certain aspects of the Research Program for a limited time to
permit the Parties to discuss further collaborative activities (the “Extension
Letter”); and

 

WHEREAS, Millennium and Aventis have agreed to the
following changes to the Collaboration Agreement to facilitate the Parties’
continued work together.

 

AGREEMENT

 

NOW, THEREFORE, Millennium and Aventis hereby agree as
follows:

 

1.                                       End
of Research Program Term. Effective as of the Third Amendment Date, the
Research Program and the Research Program Term have expired for all matters for
which the Research Program Term was extended under the Extension Letter. The
Parties acknowledge the Research Program Term expired on July 21, 2005 for all
other matters.

 

2.                                       Interim
Research Period. After the expiration of the Research Program Term, the
Parties will continue to conduct Pre-EDC Research Evaluation solely on the
Program Compounds identified in this Section 2 and for the specific period (the
“Interim Research Period”) applicable to that Program Compound. The sole
purpose of this continued Pre-EDC Research Evaluation will be to determine
whether one or more of the listed compounds qualifies

 

1

 

as an EDC pursuant to the terms of the Collaboration
Agreement as amended by this Third Amendment. For this purpose, the Parties
will apply the same EDC qualification criteria, governing structures and
decision-making processes as if the Research Program Term had not expired and
the Parties will have the same “opt-in” and “opt-out” rights for any resulting
EDCs as for EDCs identified prior to the expiration of the Research Program
Term. The research licenses granted by each Party to the other Party pursuant
to Sections 7.1.1(a) and 7.2.1(a) of the Collaboration Agreement will be
extended during the applicable Interim Research Period solely to permit the
work contemplated under this Section 2.

 

a.                                       [**]
and [**]. The Parties acknowledge that the only data remaining to determine
whether the Program Compounds known as [**] and/or [**], both of which are
aimed at the Program Target known as [**], meet the requirements to be
classified as an EDC is data for each compound [**] at Aventis as of the date
of signature of this Third Amendment. The Interim Research Period will end as
to each of [**] and [**] upon the earliest to occur of (a) a determination that
such Program Compound meets the requirements for EDC, (b) a determination that
such Program Compound does not meet the requirements for EDC, or (c) 30 days or
the next meeting of the Joint Development Committee, whichever is later, after
receipt of the [**] Program
Compound.

 

b.                                      [**].
Millennium will conduct additional Pre-EDC Research Evaluation of the Program
Compound known as [**], which is aimed at the Program Target known as [**], to
determine whether [**] meets the requirements to be classified as an EDC. Aventis
will reimburse Millennium [**]percent ([**]%) of the FTE Costs and other costs
incurred by Millennium in the course of conducting this Pre-EDC Research
Evaluation during the extended Research Program Term and the Interim Research
Period for [**] up to a maximum of $[**] U.S. The Interim Research Period will
end as to [**] upon the earliest to occur of (a) a determination that [**]
meets the requirements for EDC, or (b) a determination that [**] does not meet
the requirements for EDC. If [**] does not meet the requirements to become an
EDC, [**] will be distributed to Millennium as a Millennium Single-Party
Research Target, effective as of the end of the Interim Research Period for [**].
If [**] is so distributed, then Millennium will have the same rights and
obligations with regard to [**] and the Small Molecules related to [**] as if
[**] was a Pre-EDC Exempt Target distributed to Millennium upon expiration of
the Research Program through the selection process described in Section
2.7.5(c)(ii) of the Collaboration Agreement. For clarity, and subject to the
exclusivity period regarding SPRT Compounds specified in Section 2.7.3(b) of
the Collaboration Agreement, Aventis retains the right at any time to use [**]
for further validation and drug discovery activities, [**]. For further
clarity, this Section 2(b) provides the final disposition of [**] made during
the Research Program Term and such research assets shall not be further subject
to Section 2.7.5 of the Collaboration Agreement.

 

c.                                       [**].
Aventis will, at its sole cost, conduct additional Pre-EDC Research Evaluation
of the Program Compound known as [**], which is aimed at the Program Target
known as [**], to determine whether [**] meets the requirements to be
classified as an EDC. The Interim Research Period will end as to [**] upon the
earliest to occur of (a) a determination that [**] meets the requirements for EDC,
or (b) a determination that

 

2

 

[**] does not meet the requirements for EDC. If [**]
does not meet the requirements to become an EDC, [**] will be distributed to
Aventis as an Aventis Single-Party Research Target, effective as of the end of
the Interim Research Period for [**]. If [**] is so distributed, then Aventis
will have the same rights and obligations with regard to [**] related to [**]
as if [**] was a Pre-EDC Exempt Target distributed to Aventis upon expiration
of the Research Program through the selection process described in Section
2.7.5(c)(ii) of the Collaboration Agreement. For clarity, and subject to the
exclusivity period regarding SPRT Compounds specified in Section 2.7.3(b) of
the Collaboration Agreement, Millennium retains the right at any time to use
[**] for further validation and drug discovery activities, [**]. For further
clarity, this Section 2(c) provides the final disposition of [**] made during
the Research Program Term and such research assets shall not be further subject
to Section 2.7.5 of the Collaboration Agreement.

 

3.                                       [**].
Effective as of the Third Amendment Date, the Program Target known as [**] will
become an Aventis Single-Party Research Target. Aventis will have the same
rights and obligations with regard to [**] related to [**] as if [**] was a
Pre-EDC Exempt Target distributed to Aventis upon expiration of the Research
Program through the selection process described in Section 2.7.5(c)(ii) of the
Collaboration Agreement. For clarity, and subject to the exclusivity period
regarding SPRT Compounds specified in Section 2.7.3(b) of the Collaboration
Agreement, Millennium retains the right at any time to use [**] for further
validation and drug discovery activities, [**]. For further clarity, this
Section 3 provides the final disposition of [**] made during the Research
Program Term and such research assets shall not be further subject to Section
2.7.5 of the Collaboration Agreement.

 

4.                                       Additional
Indications for Current JDCs. The Parties agree to cooperate in
investigating additional indications, [**], for all JDCs in the interest of
maximizing the value of those assets. Decisions regarding new indications will
be made jointly by the Parties in accordance with the procedures in the
Collaboration Agreement as amended by this Third Amendment, including, but not
limited to, the governing structures, decision-making processes, cost sharing
and profit sharing provisions.

 

5.                                       “Second
Generation” Programs for [**]. A new Section 3.13 is added to the
Collaboration Agreement to read as follows:

 

3.13                           “Second
Generation” Programs

 

3.13.1                  Programs.
Aventis may , at its sole cost but in its discretion, make efforts to identify,
test and qualify Small Molecules to serve as back-up or follow-on compounds for
any EDCs approved by the Parties aimed at [**].

 

(a)                                  The
Joint Research Committee will meet no less frequently than [**] to discuss
Aventis’s activities and progress in identifying, testing and qualifying such
Small Molecules or, if the Parties agree in a particular instance, Aventis may
provide to

 

3

 

Millennium a written report of its activities and
progress in lieu of a meeting.

 

(b)                                 Millennium
will cooperate reasonably with Aventis in transferring any Program Technology
or Program Materials necessary for Aventis to fulfill its obligations under
this Section 3.13.1.

 

(c)                                  Any
decision whether any Small Molecule identified by Aventis in accordance with
this Section 3.13.1 qualifies as an EDC will be made jointly by the Parties
using the same EDC qualification criteria, governing structures and
decision-making processes as if the Research Program Term had not expired and
the Parties will have the same “opt-in” and “opt-out” rights for any resulting
EDCs as for EDCs identified prior to the expiration of the Research Program
Term.

 

(d)                                 In
addition to the above, Aventis will provide to Millennium a research plan
describing the activities that Aventis intends to undertake to identify, test
and qualify such Small Molecules aimed at [**] within [**] days after signature
of the Third Amendment to this Agreement. If at any time Aventis fails to
pursue the activities described in the research plan for a consecutive [**]
period, Aventis will, at Millennium’s request, transfer the program back to
Millennium at no cost to Millennium, and Millennium will have the right, in its
discretion, to continue to identify, test and qualify such Small Molecules. If
Millennium decides to continue to identify, test and qualify such Small
Molecules, then the provisions of Section 3.13.1(c) shall apply to any Small
Molecules identified by Millennium.

 

3.13.2                  Royalty
and Profit-Sharing Adjustments.

 

(a)                                  If
any Small Molecule directed to [**] identified by Aventis under Section 3.13.1
becomes a Joint Development Product or a Unilateral Development Product, all
applicable royalties due Millennium will be [**] percent ([**]%) from what is
provided in Section 8 of this Agreement.

 

4

 

(b)                                 If
(i) a Small Molecule directed to [**]identified by Aventis under Section 3.13.1
becomes a Joint Development Product or a Unilateral Development Product and
(ii) such Joint Development Product or Unilateral Development Product is not based on or derived from [**], then:

 

1.                                       In the case of a Joint Development
Product, Aventis will receive [**] percent ([**]%) and Millennium will receive
[**] percent ([**]%) of the resulting
Pre-tax Profit or Loss; and

 

2.                                       In
the case of a Joint Development Product or a Unilateral Development Product,
all applicable royalties due Millennium will be [**] percent ([**]%) from what
is provided in Section 8 of this Agreement.

 

(c)                                  If
(i) a Small Molecule directed to [**] identified by Aventis under Section
3.13.1 becomes a Joint Development Product or a Unilateral Development Product
and (ii) such Joint Development Product or Unilateral Development Product is not based on or derived from [**], then:

 

1.                                       In the case of a Joint Development
Product, Aventis will receive [**] percent ([**]%) and Millennium will receive
[**]e percent ([**]%) of the resulting
Pre-tax Profit or Loss; and

 

2.                                       In the case of a Joint Development Product or
a Unilateral Development Product, all applicable royalties due Millennium will
be [**] percent ([**]%) from what is provided in Section 8 of this Agreement.

 

(d)                                 Except
as expressly set forth in this Section 3.13.2, all other sharing of Pre-tax
Profit or Loss or payment of royalties will be in accordance with Section 8 of
this Agreement.

 

3.13.3                  Designation
of EDC Family Compounds.

 

(a)                                  All
compounds first synthesized by either Party after [**] pursuant to Section
3.13.1 directed to [**]

 

5

 

that are based on or are made through the use of
Program Technology or Program Materials shall be deemed members of the EDC
Family for [**] and [**] (even if such compounds number more than [**]).

 

(b)                                 All
compounds directed to [**] first synthesized by Aventis pursuant to Section
3.13.1 or by Millennium that are (i) based on or made through the use of
Program Technology or Program Materials; and either (ii) based on or derived
from [**]; or (iii) not based on or derived from [**] but first synthesized
prior to [**],  shall be deemed members
of the EDC Family for [**] (even if such compounds number more than [**]) if
[**] is declared an EDC. If [**] is not declared an EDC, then the last 4
sentences of Section 2.b of this Third Amendment shall apply.

 

(c)                                  All
compounds directed to [**] first synthesized by Aventis pursuant to Section
3.13.1 or by Millennium that are (i) based on or made through the use of
Program Technology or Program Materials; and either (ii) based on or derived
from [**]; or (iii) not based on or derived from [**] but first synthesized
prior to [**],  shall be deemed members
of the EDC Family for [**] (even if such compounds number more than [**]) if
[**] is declared an EDC. If [**] is not declared an EDC then the last 4
sentences of Section 2.c of this Third Amendment shall apply.

 

(d)                                 The
provisions of this Section 3.13.3 will only apply as long as the Parties wish
to continue working together on Small Molecules aimed at the relevant Program
Target, either because the Parties are working together on a JDC or JDP
directed at the relevant Program Target or, in the absence of a JDC or JDP, the
Parties are continuing to work together to qualify EDCs aimed at the relevant
Program Target.

 

6.                                       Development
Program Governance. The following new Section 3.3.3 is added to the
Collaboration Agreement:

 

6

 

3.3.3                        Identification
of Development Lead Party.

 

(a)                                  In
addition to the allocation of Development activities provided under Section
3.3.2, the Global Development Plan for each JDC will designate one Party or the
other as the lead Party for the implementation of the Development Plan of the applicable
JDC through the Proof of Concept Study (the “Pre-POC Development Lead”). For
the purposes of this Section 3.3.3, “Proof of Concept Study” means the first clinical study in the target
patient population for the applicable indication where the JDC is shown to be
active as defined by the agreed-upon clinical endpoints or validated surrogate
endpoints or such other endpoints as the Joint Development Committee agrees
demonstrate proof of concept, thereby validating the mechanism of action of the
JDC.

 

(i)                                     The
Pre-POC Development Lead will be permitted to execute against the approved plan
and within the budget approved by the Joint Steering Committee, plus the
allowable variance from that budget approved by the Joint  Steering Committee at the time of budget
approval, for the activities for which the Party has been designated as Pre-POC
Development Lead. As long as activities are within that range, the “non-lead”
Party would have input, but the Pre-POC Development Lead would have final
decision authority. This right would include, but not be limited to, the right
to subcontract activities without the consent of the “non-lead” Party as long
as the activities were within the range of expenditures permitted under the
approved budget and the arrangements otherwise met the requirements of Section
3.11. Any activities that would result in expenditures outside of the permitted
range would have to be approved by the Joint Development Committee and the
Joint Steering Committee. For avoidance of doubt, as part of the approval of
the plan,  “non-lead” Party will have the
right to approve the key elements of the design of all clinical trials
contemplated in the plan and the right to approve any material alterations to
those elements.

 

(ii)                                  Without
limiting the generality of the foregoing, the Parties agree that (a) Millennium
will be the Pre-POC Development Lead for the JDCs known as [**]; and (b)
Aventis will be the Pre-POC Development Lead should any of those Program
Compounds become EDCs for [**] and any Program Compounds aimed at [**]
developed under Section 3.13.1.

 

7

 

(iii)                               Notwithstanding
anything to the contrary in Section 5.2.1, except in extraordinary
circumstances as determined by the Joint Development Committee, the Pre-POC
Development Lead for a particular JDC in a particular indication will also be
the global Regulatory Lead for all activities relating to that JDC in that
indication.

 

(b)                                 If
a JDC progresses beyond Proof of Concept, the Global Development Plan for such
JDC will designate one Party or the other as the lead Party for the Development
of the applicable JDC for each post-Proof of Concept clinical study (the “Post-POC
Development Lead”).

 

(i)                                     Responsibilities
for Post-POC Development Lead will be assigned according to the following
principles:

 

(1)                                  Aventis
will be the Post-POC Development Lead for all trials in [**].

 

(2)                                  The
Post-POC Development Lead for all other trials will be determined by the Joint
Development Committee such that the Parties have substantially equal
opportunities, subject to the factors set forth below, to act as the Post-POC
Development Lead within the collaboration. Assignment of such responsibilities
shall, where possible, be on an indication-by-indication basis for each JDC. In
making this determination, the Joint Development Committee may take into
account the capacity and capabilities of the Parties given such factors as the
cost of the trial, the number of patients in the trial, the number of sites in
the trial, the Parties’ relative experience and expertise, the Parties’
relative resources (including whether the work will be conducted internally or
externally), and the existence and timing of either Parties’ development
programs for Small Molecules aimed at the same Program Target taking place
outside the Parties’ collaborative efforts.

 

(ii)                                  Notwithstanding
anything to the contrary in Section 5.2.1, except in extraordinary
circumstances as determined by the Joint Development Committee, the Post-POC
Development Lead for a particular JDC in a particular indication will also be
the global Regulatory Lead for all activities relating to that JDC in that
indication. It is the understanding of the

 

8

 

Parties that the term
Regulatory Lead has the meaning set forth in Article 5 of this Agreement. For
the avoidance of doubt, the final decision making authority for the Post-POC
Development Lead with respect to development matters does not mean that such
Party shall have final decision making authority with respect to regulatory
matters.

 

(iii)                               The
Post-POC Development Lead will be permitted to execute against the approved
plan and within the budget approved by the Joint Steering Committee, plus the
allowable variance from that budget approved by the Joint  Steering Committee at the time of budget
approval, for the activities for which the Party has been designated as
Post-POC Development Lead. As long as activities are within that range, the “non-lead”
Party would have input, but the Post-POC Development Lead would have final
decision authority. This right would include, but not be limited to, the right
to subcontract activities without the consent of the “non-lead” Party as long
as the activities were within the range of expenditures permitted under the
approved budget and the arrangements otherwise met the requirements of Section
3.11. Activities that would result in expenditures outside of the permitted
range would have to be approved by the Joint Development Committee and the
Joint Steering Committee. For avoidance of doubt, as part of the approval of
the plan, “non-lead” Party will have the right to approve the key elements of
the design of all clinical trials contemplated in the plan and the right to
approve any material alterations to those elements.

 

(c)                                  Notwithstanding
anything to the contrary in Article 12, if the Joint Development Committee is
unable to agree on which Party will be the Post-POC Development Lead for any
set of activities, the dispute will be immediately referred to the Joint
Steering Committee for resolution. If the Joint Steering Committee is unable to
resolve the dispute within ten (10) working days after such referral, then the
chairs of the Joint Steering Committee shall each choose an arbitrator which
arbitrators shall then agree on a third arbitrator which will form an
arbitration panel of three for arbitration on the sole question of which Party
should be the Post-POC Development Lead for the applicable set of activities. The
arbitrators will be required to render a decision within three (3) months after
submission of the question for decision. In rendering a decision, the
arbitrators will only be empowered to select the proposal of one Party or the
other in its entirety on the issue(s) submitted for decision (i.e., “baseball
style”  arbitration) based on

 

9

 

the criteria in Section
3.3.3(b)(i)(3). The arbitrators’ decision (majority rule) will be final and
binding on both Parties. The Parties agree to discuss and agree upon the
process for selection of the arbitrator and the procedures to be followed in
the arbitration within six (6) months
after the execution of the Third Amendment to this Agreement.

 

7.                                       CMC
Lead. Section 4.1 of the Collaboration Agreement is deleted in its entirety
and replaced with the following:

 

4.1                                 Clinical Supply. As part of the first Global Development
Plan for each Joint Development Compound, the Joint Development Committee shall
specify which Party shall be responsible for manufacturing quantities of such
compound for use in pre-clinical and clinical trials (the “CMC Lead”). It is
expected that only one Party shall be responsible for manufacturing all
quantities of a Joint Development Compound and the related Joint Development
Product necessary for pre-clinical and clinical studies throughout the
Territory. The CMC Lead will be permitted to execute against the approved plan
and within the budget approved by the Joint Steering Committee, plus the
allowable variance from that budget approved by the Joint  Steering Committee at the time of budget
approval, for the activities for which the Party has been designated as CMC
Lead. As long as activities are within that range, the “non-lead” Party would
have input, but the  CMC Lead would have
final decision authority. This right would include, but not be limited to, the
right to subcontract activities without the consent of the “non-lead” Party as
long as the activities were within the range of expenditures permitted under
the approved budget and the arrangements otherwise met the requirements of
Section 4.4. Any activities that would result in expenditures outside of the
permitted range would have to be approved by the Joint Development Committee
and the Joint Steering Committee. The Parties agree that (a) Millennium will be
the CMC Lead for [**]; and (b) Aventis will be the CMC Lead for all other JDCs.

 

8.                                       Regulatory
Lead. The phrase “Except as provided in Section 3.3.3(b),” is added to the
beginning of the second sentence of Section 5.2.1.

 

9.                                       Freeze
of FTE Rate. Notwithstanding anything to the contrary in Exhibit B to the
Collaboration Agreement, the FTE Rate will remain $[**] U.S. per FTE per year
until [**]. Thereafter, the FTE Rate will increase by [**] percent ([**]%) per
annum to reflect inflation.

 

10

 

The Parties will, no later than [**], commence good
faith discussions regarding different ways of calculating the FTE Rate after
[**].

 

10.                                 Change
to Roll-In Letter. The phrase “Aventis and Millennium shall each have” at
the beginning of Paragraph 3(iii) of the letter agreement between the Parties
dated July 27, 2001 is amended to read “Millennium shall have.”

 

12.                                 Elimination
of June 3, 2003 Letter Agreement. The Parties acknowledge that (a) the
Program Compound known as [**] (formerly known as [**]) ceased to be part of
the Research Program when it was designated as an EDC on June 6, 2005; and (b)
none of the other Program Compounds that were Designated Compounds under the
terms of the June 3, 2003 letter agreement between the Parties regarding “Addition
of Research Rights Relating to Certain Program Compounds” (the “[**] Research
Letter”) reached EDC status by July 21, 2005 when the Research Program expired
as to those Program Compounds. Therefore, the Parties acknowledge that, except
for the obligation to share data from research conducted under the auspices of
the [**] Research Letter that was commenced prior to June 6, 2005 with regard
to [**] and July 22, 2005 with regard to
the other Designated Compounds, the [**]Research Letter is of no further force
and effect.

 

13.                                 Publication
Approval Process. The reference in the fifth sentence Section 10.4 of the
Collaboration to “sixty (60) days” is amended to read “forty-five (45) days.”
Further, the reference in the sixth sentence of Section 10.4 to “ninety (90)
days” is amended to read “sixty (60) days.”

 

14.                                 Changes
to Dispute Resolution Provisions. The Parties agree to discuss possible
changes in the method of resolving disputes that may arise between the Parties
relating to JDCs within three (3) months after the execution of this Third
Amendment.

 

15.                                 Continuing
Effect. Except as otherwise specifically set forth herein, all terms and
conditions of the Collaboration Agreement remain in full force and effect.

 

16.                                 Counterparts.
This Third Amendment may be executed in one or more counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original, and all of which counterparts, taken together, shall constitute one
and the same instrument.

 

11

 

IN WITNESS WHEREOF, each of the Parties has caused
this Third Amendment to be executed as of the date first set forth above.

 

	
  Millennium
  Pharmaceuticals, Inc.

  	
   

  	
  Aventis
  Pharmaceuticals Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
                 /s/

  	
  A. Protopapas

  	
   

  	
  By:

  	
           /s/

  	
  Larry Bangh

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  A. Protopapas

  	
   

  	
  Name:

  	
   

  	
  Larry Bangh

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP, Corporate
  Develop.

  	
   

  	
  Title:

  	
   

  	
  Site Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
           /s/

  	
  Mark L. Staudenne

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Mark L. Staudenne

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  V.P. Finance

  	
   

  
									

 

12Exhibit 10.26

 

MILLENNIUM PHARMACEUTICALS, INC.
 
KEY EMPLOYEE CHANGE IN CONTROL SEVERANCE PLAN
 
SECTION 1. INTRODUCTION
 
The Millennium Pharmaceuticals, Inc. Key Employee Change in Control Severance Plan (the “Plan”) is designed to provide separation pay and benefits to certain eligible employees of the Company whose employment is involuntarily terminated without cause or voluntarily terminated for good reason. This document constitutes the written instrument under which the Plan is maintained and except as provided 4(f) below, supersedes any prior plan or practice of the Company that provides severance benefits to eligible employees. The Plan was approved by the Board and the Compensation and Talent Committee of the Board (the “Committee”) of the Company effective March 3, 2006.
 
SECTION 2. DEFINITIONS
 
For purposes of this Plan, the following terms shall have the meanings set forth below:
 
(a) “BASE SALARY” means your annual base salary as in effect on the effective date of a Change in Control, or as increased thereafter.
 
(b) “BOARD” means the Board of Directors of the Company.
 
(c) “CAUSE” means, in the reasonable determination of the Company, the occurrence of any of the following events: (i) your conviction of, or plea of, nolo contendere with respect to a felony or a crime involving moral turpitude, (ii) your commission of an act of personal dishonesty or breach of fiduciary duty involving personal profit in connection with the Company, (iii) your commission of an act, or failure to act, which the Board of Directors of the Company shall reasonably have found to have involved willful misconduct or gross negligence on your part, in the conduct of your duties as an employee of the Company, (iv) habitual absenteeism, alcoholism or drug dependence on your part which interferes with the performance of your duties as an employee of the Company, (v) your willful and material failure or refusal to perform your services as an employee of the Company, (vi) any material breach by you to fulfill the terms and conditions under which you are employed by the Company, or (vii) your willful and material failure or refusal to carry out a direct, lawful written request of the Board of Directors, the Company’s Chief Executive Officer or your immediate supervisor.
 
(d) “CHANGE IN CONTROL” means any of the following events and shall be deemed to have occurred at any of the following times:

 

1

 

(i)            when a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) acquires beneficial ownership of the Company’s capital stock equal to 50% or more of either: (X) the then-outstanding shares of the Company’s common stock or (Y) the combined voting power of the Company’s then-outstanding securities to vote generally in the election of directors;
 
(ii)           upon the consummation by the Company of (X) a reorganization, merger or consolidation, provided that, in each case, the persons who were the Company’s stockholders immediately prior to the reorganization, merger or consolidation do not, immediately after, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding voting securities, or (Y) a liquidation or dissolution of the Company or the sale of all or substantially all of the Company’s assets;
 
(iii)          when the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board of Directors (X) who was a member of the Board of Directors on the date of the initial adoption of this provision by the Board of Directors or (Y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board of Directors was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election. But, any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board of Directors, is excluded from clause (iii)(Y) above; or
 
(iv)          upon the occurrence of any other event which a majority of the Continuing Directors, in its sole discretion, determines constitutes a Change in Control.
 
(e) “COMPANY” means Millennium Pharmaceuticals, Inc. or, following a Change in Control, the surviving entity resulting from such transaction.
 
(f) “INVOLUNTARY TERMINATION WITHOUT CAUSE” means your dismissal or discharge by the Company (or, if applicable, by any successor entity) for a reason other than Cause. The termination of your employment will not be deemed to be an “Involuntary Termination Without Cause” if your termination occurs as a result of your death or disability.
 
(g) “VOLUNTARY TERMINATION FOR GOOD REASON” means any action by the Company without your prior consent which results in you voluntarily terminating your employment with the Company (or, if applicable, with any successor entity) after any of the following are undertaken by the Company (or, if applicable, by any successor entity) without your express consent: (i) any requirement by the Company that you

 

2

 

perform your principal duties outside a radius of 50 miles from the Company’s Cambridge, Massachusetts location; (ii) any material diminution in your title, position, duties, responsibilities or authority; (iii) any breach by the Company of any material provision of any employment letter or contract not cured within thirty days of written notice thereof; (iv) a reduction in your base salary or a reduction of your target bonus percentage (unless such reduction is effected in connection with a general and proportionate reduction of compensation for all employees of your level); or (v) any acquisition, merger or change of control involving the Company which results in your ceasing to serve in your current position or an equivalent position for the surviving entity.
 
SECTION 3. ELIGIBILITY AND PARTICIPATION
 
You are eligible to participate in the Plan if you are a member of the Company’s Management Team or a Senior Vice President of the Company at any time during the one (1) month period prior to a Change in Control or your termination of employment with the Company, and such employment terminates due to an Involuntary Termination Without Cause or a Voluntary Termination for Good Reason, in either case within one (1) month before or twelve (12) months following the effective date of a Change in Control.
 
SECTION 4. BENEFITS
 

As a participant in the Plan, you are
eligible to receive the following benefits on the following conditions:

 

(a) SALARY AND BONUS PAYOUT. Commencing
in the first month following the month of the qualifying termination, you will
be paid in periodic installments consistent with the Company’s payroll
procedures as then in effect and continuing for a number of months equal to the
product of your “Severance Multiple” (as set forth below) times 12, a total sum
equal to: (i) your Severance Multiple times your base salary at your rate
of pay in effect on the date of termination; (ii) your Severance Multiple
times your target bonus on the date of termination; and (iii) your target
bonus on the date of termination multiplied by
a fraction, the numerator of which shall equal the number of days you were
employed by the Company in the Company fiscal year in which the termination
occurs and the denominator of which shall equal 365.

 

Severance Multiple shall be based on the following:

 

CEO-2.0
 
Section 16b executive officer/EVP/SVPII-1.5
 
SVPI (other than Section 16b executive officers)-1.0
 

Payment of amounts or benefits due pursuant to this Plan will be
deferred and paid no earlier than six months following your termination of
employment if, and only to the

 

3

 

extent, required to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”). In such event, the first payment
made will be for an aggregate amount equal to what would have been paid under
this Plan over the course of such deferred period. In the event this Section 4(a) fails
to meet the limitations or requirements of Section 409A of the Code and
the regulations promulgated thereunder, then this Section 4(a) shall
be modified by action of the Committee to the extent necessary to satisfy the
requirements of the Code and transitional relief with respect to Section 409A
of the Code.

 

(b) HEALTH BENEFITS. Provided that you elect continued coverage under federal COBRA law, the Company shall pay, on your behalf, the portion of premiums of your group health insurance coverage, including coverage for your eligible dependents, that the Company paid prior to your termination of employment for a period following your Involuntary Termination Without Cause or Voluntary Termination for Good Reason based on your level as follows:
 
CEO-18 months
 
Section 16b executive officer/EVP/SVPII-18 months
 
SVPI (other than Section 16b executive officers)-12 months
 
provided, however, that the Company will pay such premiums for you and your eligible dependents only for coverage for which you and those dependents were enrolled immediately prior to your termination of employment. You will continue to be required to pay that portion of the premium of your group health insurance coverage, including coverage for your eligible dependents that you were required to pay as an active employee immediately prior to your termination of employment (subject to change). For the balance of the period that you are entitled to coverage under federal COBRA law, you shall be entitled to maintain coverage for yourself and your eligible dependents at your own expense.
 

(c) PARACHUTE PAYMENTS. In the event it
shall be determined that any payment, benefit or distribution (or combination
thereof) by the Company to or for your benefit (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan, or otherwise)
(a “Payment”) is subject to the excise tax imposed by Section  4999
of the Code or any interest or penalties are incurred by you with respect to
such excise tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the “Excise Tax”), you shall
be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by you of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and the Excise Tax imposed upon the Gross-Up Payment, you retain an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding
the foregoing provisions of this Section 4(c), if it shall be determined
that you are entitled to a Gross-Up Payment, but that the Payment does not
exceed 110%

 

4

 

of the greatest amount that could be paid to you without giving rise to
any Excise Tax (the “Safe Harbor Amount”), then no Gross-Up Payment shall be
made to you and the amounts payable under this Plan shall be reduced so that
the Payment, in the aggregate, is reduced to the Safe Harbor Amount. The
reduction of the amounts payable hereunder, if applicable, shall be made by
first reducing the payments under Section 4(a), unless an alternative
method of reduction is elected by you.

 

(d) EARNED BUT UNPAID BENEFITS. As of
your termination date you will also be eligible to receive any earned but
unpaid benefits including salary earned but unpaid, annual bonus for the most
recently completed financial year and payment for unused accrued vacation.

 

(e) RELEASE. To receive benefits under this Plan, you must execute a release of claims in favor of the Company, in the form attached to this Plan as Exhibit A and such release must become effective in accordance with its terms.
 
(f) OTHER AGREEMENTS. Unless otherwise specified in a written agreement between you and the Company or any successor to the Company or any affiliate thereof, the total amount of severance benefits you may receive pursuant to:
 
(i) this Plan;
 
(ii) any written agreement between you and the Company or any successor to the Company or any affiliate thereof, and
 
(iii) any other written plan, written practice or statutory obligation of the Company or any successor to the Company or any affiliate thereof,
 
shall equal the greatest of the total amount of severance benefits provided under subsections (i), (ii) or (iii) of this Section 4(f).
 
(g) TERMINATION OF BENEFITS. Benefits under this Plan shall terminate immediately if you, at any time, violate any proprietary information or confidentiality obligation to the Company.
 
(h) NON-DUPLICATION OF BENEFITS. You are not eligible to receive benefits under this Plan more than one time.
 
(i) TAX WITHHOLDING. Any payments that you receive under this Plan shall be subject to all required tax withholding.
 
SECTION 5. ADMINISTRATION AND OPERATION OF THE PLAN
 
The Company is the “Plan Sponsor” and the “Plan Administrator” of the Plan, as such terms are defined in the Employee Retirement Income Security Act of 1974 (“ERISA”). The Company, in its capacity as Plan Administrator of the Plan, is the named

 

5

 

fiduciary that has the authority to control and manage the operation and administration of the Plan. The Company has the sole discretion to make such rules, regulations, and interpretations of the Plan and to make such computations and to take such other action to administer the Plan as it may deem appropriate in its sole discretion. Such rules, regulations, interpretations, computations, and other actions shall be conclusive and binding upon all persons. The Company may engage the services of such persons or organizations to render advice or perform services with respect to its responsibilities under the Plan as it shall determine to be necessary or appropriate. Such persons or organizations may include (without limitation) actuaries, attorneys, accountants and consultants.
 
Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan. The responsibilities of the Company under the Plan shall be carried out on its behalf by its directors, officers, employees and agents, acting on behalf or in the name of the Company in their capacity as directors, officers, employees and agents and not as individual fiduciaries. The Company may delegate any of its fiduciary responsibilities under the Plan to another person or persons pursuant to a written instrument that specifies the fiduciary responsibilities so delegated to each such person.
 
SECTION 6. CLAIMS, INQUIRIES AND APPEALS
 
APPLICATIONS FOR BENEFITS AND INQUIRIES. Applications for benefits should be in writing, signed and submitted to: Plan Administrator, Key Employee Change in Control Severance Plan, Millennium Pharmaceuticals, Inc., 40 Landsdowne Street, Cambridge, MA 02139.
 
DENIAL OF CLAIMS. If any application for benefits is denied in whole or in part, the Plan Administrator must notify you, in writing, of the denial of the application, and of your right to review the denial. The written notice of denial will be set forth in a manner designed to be understood, and will include specific reasons for the denial, specific references to the Plan provision upon which the denial is based, a description of any information or material that the Plan Administrator needs to complete the review and an explanation of the Plan’s review procedure.
 
This written notice will be given to you within ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional ninety (90) days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to you before the end of the initial 90-day period.
 
This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application. If written notice of denial of the application for benefits is not furnished within the specified time, the application shall be deemed to be denied. You will then be permitted to appeal the denial in accordance with the review procedure described below.

 

6

 

REQUEST FOR REVIEW. You (or your authorized representative) may appeal a denied benefit claim by submitting a written request for a review to: Review Panel, Key Employee Change in Control Severance Plan, Millennium Pharmaceuticals, Inc., 40 Landsdowne Street, Cambridge, MA 02139. The Review Panel shall be comprised of two (2) or more persons to be appointed by the Company. Your appeal must be submitted within sixty (60) days after the application is denied (or deemed denied). The Review Panel will give you (or your representative) an opportunity to review pertinent documents in preparing a request for a review.
 
A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that you or your representative feel are pertinent. The Review Panel may require you or your representative to submit additional facts, documents or other material as it may find necessary or appropriate in making its review.
 
DECISION ON REVIEW. The Review Panel will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days) for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished within the initial 60-day period. The Review Panel will give written notice of its decision to the applicant. In the event that the Review Panel confirms the denial of the application for benefits in whole or in part, the notice will outline the specific Plan provisions upon which the decision is based. If written notice of the Review Panel’s decision is not given within the time prescribed above, the application will be deemed denied on review.
 
RULES AND PROCEDURES. The Plan Administrator and/or the Review Panel may establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out their responsibilities in reviewing benefit claims. If you wish to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits, you may be required to do so at your own expense.
 
EXHAUSTION OF REMEDIES. No legal action for benefits under the Plan may be brought until (i) a written application for benefits has been submitted in accordance with the procedures described above, (ii) the person claiming benefits has been notified by the Plan Administrator that the application is denied (or the application is deemed denied due to the Plan Administrator’s failure to act on it within the time prescribed), (iii) a written request for a review of the application has been submitted in accordance with the appeal procedure described above and (iv) the person appealing the denial has been notified in writing that the Review Panel has denied the appeal (or the appeal is deemed to be denied due to the Review Panel’s failure to take any action on the claim within the time prescribed).

 

7

 

SECTION 7. OTHER TERMINATIONS
 
You are NOT eligible to receive benefits under this Plan if (i) your employment terminates due to death, disability or any other reason other than an Involuntary Termination Without Cause or Voluntary Termination for Good Reason that occurs within one (1) month prior or twelve (12) months following the effective date of a Change in Control; or (ii) you are terminated within thirty (30) days of your refusal to accept an offer of comparable employment by any successor to the Company (provided that “comparable employment” shall mean employment at a business office whose location is not violative of Section 2(g)(i), with duties and responsibilities not violative of Section 2(g)(ii) and with a reduction in your base salary or a reduction of your target bonus percentage not violative of 2(g)(iv).
 
SECTION 8. BASIS OF PAYMENTS TO AND FROM THE PLAN
 
All benefits under the Plan shall be paid by the Company. The Plan shall be unfunded and benefits hereunder shall be paid only from the general assets of the Company.
 
SECTION 9. AMENDMENT AND TERMINATION
 
The Company reserves the right to amend or terminate this Plan at any time; provided, however, that this Plan may not be amended or terminated following the effective date of a Change in Control.
 
SECTION 10. NON-ALIENATION OF BENEFITS
 
No Plan benefit may be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or charged, and any attempt to do so will be void.
 
SECTION 11. SUCCESSORS AND ASSIGNS
 
This Plan shall be binding upon any surviving entity resulting from a Change in Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such person actively adopts or formally continues the Plan. Covered Employees, to the extent they are otherwise eligible for benefits under the Plan, are intended third party beneficiaries of this provision. Upon the death of a Covered Employee, any remaining benefits payable under the Plan shall be payable to the Covered Employee’s trust(s), estate or other beneficiaries, and their permitted successors and assigns.
 
SECTION 12. LEGAL CONSTRUCTION
 
This Plan shall be interpreted in accordance with ERISA and, to the extent not preempted by ERISA, with the laws of the Commonwealth of Massachusetts. This Plan

 

8

 

constitutes both a plan document and a summary plan description for purposes of ERISA. This Plan will be construed in a manner consistent with, and is intended to comply with, Section 409A of the Code.

 

9

 

EXHIBIT A
 
RELEASE
 
Certain capitalized terms used in this Release are defined in the Millennium Pharmaceuticals, Inc. Key Employee Change in Control Severance Plan (the “Plan”) which I have reviewed.
 
I hereby confirm my obligations under the Company’s [Invention, Non-Disclosure and Non-Competition Agreement].
 
Except as otherwise set forth in this Release, I hereby release, acquit and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, shareholders, predecessor, successors, assigns and affiliates as well as its and their representatives, insurers and reinsurers, and employee benefit programs (and the trustees, administrators, fiduciaries and insurers of such programs), past, present and future, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way related to claims and demands directly or indirectly arising out of my employment with the Company or the termination of that employment, including but not limited to, claims or demands related to salary, bonuses, commissions, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of disputed compensation, any claims under the Age Discrimination in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act, 29 U.S.C. §1001 et seq., the Worker Adjustment and Retraining Notification Act (and related state statute notification obligations), and all other federal, state and local statutory or common laws that prohibit discrimination, harassment or retaliation (including without limitation, claims of discrimination based on race, age, religion, national origin, sex, disability or handicap, and sexual orientation) and any claims with respect to breach of contract (express and/or implied), wrongful termination, intentional or negligent infliction of emotional distress, interference with contractual or advantageous business relations, loss of consortium, invasion of privacy, defamation, payment of debts, costs or expenses, attorneys’ fees and other damages which I now have, may have, or may have had from the beginning of time to the final date of my employment with the Company; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to indemnify me from any third party action brought against me based on my employment with the Company, pursuant to any applicable agreement or applicable law or to reduce or eliminate any coverage I may have under the Company’s director and officer liability policy, if any.
 
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under ADEA. I also acknowledge that the consideration given under the Agreement for the waiver and release in the preceding paragraph hereof is in

 

10

 

addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise on or after the date I execute this Release; (B) I should consult with an attorney prior to executing this Release; (C) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following the execution of this Release by the parties to revoke the Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Release is executed by me.

 

 

	
  [NAME OF EMPLOYEE]

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

11

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