Base SalaryCash Compensation
We provide our executive officers withEach non-employee director receives an annual meeting fee of $40,000. In addition, the Chair of the Board (or if the Chair is not a levelnon-employee director, the lead independent director) receives an additional annual fee of assured cash compensation in$30,000, the formChair of a base salary that reflects their scopethe Audit Committee receives an additional annual fee of responsibility$20,000, and organizational impact, as well as individual performance. In setting salaries for our executive officers,the Chair of each of the Compensation Committee reviews independently prepared surveys of biotechnology industry compensation as well as other available information on base salaries of executive officers in comparable positions in the most current peer group analysis available to the committee. Comparative factors considered include, but are not limited to, the number of a company’s employees, a company’s annual operating expense, a company’s market capitalization, and the stageGovernance and Nominating Committee receive an additional annual fee of development of a company’s products. For 2017, the committee utilized the collected data contained in the competitive review of executive compensation prepared by Willis Towers Watson described above.
The committee uses the collected data as well as the managerial experience of the$14,000. Other members of the committee to set salaries. As described above, our compensation philosophy allows the committee to take into account, for both currentAudit Committee receive an additional annual fee of $10,000, and new executive officers, recent individual performance (evaluated, in the caseother members of the CEO, by alleach of the non-management directors on our Board), breadth of experience, alignment with the market median, the anticipated level of difficulty in replacing an executive with someone of comparable experience and skill, and the compensation levels required to attract qualified new hires. In setting base salaries for our executive officers (other than the CEO), the Compensation Committee also considers the recommendation of the CEO based on the CEO’s evaluation of their respective individual performance and promotion increases. Based on the foregoing considerations, the committee increased the base salaries for our named executive officers for 2017 between 2% and 3%, all as described below.
Annual Cash Bonus Program
Our executive officers participate in an annual bonus program applicable to all our employees. Each participant in our annual bonus program is eligible to receive a target bonus expressed as a percentage of his or her annual base salary which, once set, remains at that level for each subsequent year unless specifically changed, in the case of our executive officers, by the Compensation Committee. A participant’s annual base salary and target bonus as of the last day of the bonus period are generally used in calculating bonus payouts. For 2017, target bonuses for our executive officers were as follows:
| | | Title
| | Target Bonus
(as % of Annual Base Salary)
| President & CEO
| | 75%
| Executive Vice President
| | 40%
| Vice President
| | 35%
|
Under our annual bonus program, the Compensation Committee annually establishes key performance criteria, based upon the corporate goals and objectives, to be met by ImmunoGen, and evaluates our actual performance against those criteria in its determination of whether annual bonuses will be paid to our employees, including our executives. Key corporate performance criteria may include any or all of the following: (1) our actual financial performance against specified metrics in our operating plan for the applicable fiscal year; (2) achievement of certain research and development milestones, including
internal product development advancement; (3) achievement of key targets associated with our collaborations with third parties, including support of partner programs; (4) the creation and achievement of business development opportunities; and (5) execution of organizational initiatives designed to strengthen our corporate culture and better align it with our strategic objectives. In establishing annual key performance criteria for the annual bonus program, the committee selects specific corporate objectives directed primarily to the future success of our business and the creationGovernance and Nominating Committee receive an additional annual fee of long-term shareholder value. Payments under our$7,000. All of these annual bonus program currently consist entirely of cash.
The Compensation Committee has set a 50% threshold aggregate percentage of achievement against the key corporate performance criteria below which the portion of participants’ annual bonus payable based on corporate performance will not be payable. Prior to the 2016 Transition Period, the pre-established key corporate performance criteria were individually weighted to permit achievement of up to 150% of target.
For 2017, the Compensation Committee established the key corporate performance criteria to be usedfees are paid in determining annualquarterly installments in, at each director’s election, either cash bonuses; however, similar to the 2016 Transition Period, it did not assign weights to specific criteria, preferring to take a more holistic view of the Company’s achievements against the corporate objectives, as well as considerations, where warranted, of exemplary performance. Any upward adjustment, however, would not resultor deferred stock units. Directors are also reimbursed for their reasonable expenses incurred in the portion of the participants’ bonus tied to corporate performance exceeding 150% of target.
The Compensation Committee generally also considers an executive’s individual performance in its determination of whether payments should be made to the executive under our annual bonus program. For 2017, theconnection with attendance at Board and committee based 100% of our CEO’s target bonus on corporate performance. With respect to our other executive officers, 70% of their target bonus was based on corporate performance, and 30% was based on individual performance objectives. Their achievement of their respective individual performance objectives was evaluated by our CEO, and based on these evaluations, the committee determined the amount of our executive officers’ bonus compensation tied to individual performance. The committee also agreed that executive officers were eligible to receive more than 100% of the portion of their bonus tied to individual performance objectives for exemplary achievement. The individual objectives portion of a participant’s target bonus could be earned irrespective of the extent to which the bonuses based on corporate performance were payable. Our CEO was afforded discretion in recommending bonus payouts for our other executive officers tied to individual performance without regard to previously established objectives for exemplary achievement.
The Compensation Committee establishes the corporate performance bonus objectives and individual performance bonus objectives, if any, with the expectation that ImmunoGen and our executives can achieve 100% of the target; however, the objectives are sufficiently difficult that such achievement is not assured at the time they are set. For fiscal years 2015, 2016, and the 2016 Transition Period, 105%, 105% and 97%, respectively, of the portion of our executives’ target bonuses tied to corporate performance were earned (plus, for fiscal year 2015, a discretionary additional 5% of the portion of the target bonus tied to exemplary corporate performance). As described below, for 2017, the portion of our executives’ target bonuses tied to corporate performance was awarded at 150% of target. The portion of our executives’ target bonuses tied to individual performance for 2017 was, in each case, awarded at 100% of target.meetings.
Equity CompensationDeferred Stock Units
ConsistentNon-employee directors receive deferred stock units as follows:
| · | | New non-employee directors are initially awarded 8,000 deferred stock units, or DSUs, with each unit relating to one share of our common stock. These awards vest quarterly over three years from the date of grant, contingent upon the individual remaining a director of ImmunoGen as of each vesting date. |
| · | | Non-employee directors are annually awarded 4,000 DSUs. These awards vest quarterly over approximately one year from the date of grant (generally the date of the annual meeting of shareholders), contingent upon the individual remaining a director of ImmunoGen as of each vesting date. If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, the number of DSUs subject to such non-employee director’s first annual DSU award is pro-rated, based on the number of days between his or her date of election and the date of grant of his or her first annual DSU award. If a non-employee director is first elected to the Board at an annual meeting of shareholders, he or she is ineligible to receive his or her first annual DSU award until the following year. |
Vested deferred stock units are redeemed on the date a director ceases to be a member of the Board, at which time such director’s deferred stock units will generally be settled in shares of our approach described above for allocating overall targeted compensation among the three components of compensation, the Compensation Committee has the authoritycommon stock issued under our equity incentive plan2018 Plan (or its predecessor 2016 or 2006 Employee, Director and Consultant Equity Incentive Plan, depending on the grant date of the deferred stock units) at a rate of one share for each vested deferred stock unit then held. Any deferred stock units that remain unvested at that time will be forfeited. All unvested deferred stock units will automatically vest immediately prior to determine the form(s)occurrence of equity incentive awards,a change of control, as defined in the terms under which equity incentive awards are granted and2018 Plan (or the individuals to whom such awards are granted. While we have historically awarded only stock options,substantially identical definition in the Compensation Committee has the ability under our equity incentive plan to award other forms of equity incentive compensation including, but not limited to, restricted stock awards, which it has done in connection with the new hire awards for certain of our named executive officers. During 2017, the committee awarded both time-based and performance-based restricted stock awards to our executive officers in lieu of stock options, which awards are further described below. All equity incentive awards to our executive officers are granted by the Compensation Committee. The committee has delegated authority to our CEO to grant stock options to other newly hired individuals, and stock options and restricted shares to other existing employees, subject to certain limitations described under the heading “What committees has the Board established? – Compensation Committee” elsewhere in this proxy statement. predecessor Plans, as applicable). We believe that equity participation isthe requirement that non-employee directors hold their deferred stock units for the duration of their tenure on our Board mitigates excessive risk-taking and directly aligns a key componentsubstantial portion of our executivedirector compensation program. Our equity incentive plans are designed to retain our executive officers and other employees and align their long-term interests with the creation of long-term value for our shareholders. We believe,shareholder value. Stock Options Non-employee directors also receive stock option awards as follows: | · | | If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, such non-employee director receives a stock option award covering 18,000 shares of our common stock, which vests quarterly over three years from the date of grant. These awards have an exercise price equal to the fair market value of our common stock on the date of grant, and will expire on the tenth anniversary of the date of grant, contingent upon the individual remaining a director of ImmunoGen during such period. |
| · | | Non-employee directors receive an annual stock option award covering 18,000 shares of our common stock. These awards have an exercise price equal to the fair market value of our common stock on the date of grant (generally the date of the annual meeting of shareholders), vest quarterly over approximately one year from the date of grant, and expire on the tenth anniversary of the date of grant, contingent upon the individual remaining a director of ImmunoGen during such period. If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, the number of shares covered by such non-employee director’s first annual stock award is pro-rated, based on the number of days between his or her date of election and the date of grant of his or her first annual stock option award. If a non-employee director is first elected to the Board at an annual meeting of shareholders, he or she is ineligible to receive his or her first annual stock option award until the following year. |
All unvested stock option awards granted to non-employee directors will automatically vest immediately as of the date of a general matter, thatchange of control, as defined in the 2018 Plan (or, with respect to stock options provide an effective long-term incentive for all employees to create shareholder value asgranted on or before June 20, 2018, the benefitsubstantially identical definition in the predecessor Plans). The Governance and Nominating Committee will periodically review the size of the options cannot be realized unless there is an appreciationforegoing deferred stock unit and stock option awards to ensure that, in light of changes in the market price of our common stock. Stock optionstock, these awards are commonly provided to a broad range of employees in the biotechnology industry duegenerally aligned with equity awards granted to the competitive natureoutside directors of the industry. Historically, our executive officers have participated in our equity incentive plans in the same manner as all of our full-time employees. For the reasons described below, in 2017 we awarded our executive officers full-value awards, although we reverted to 100% stock options for executive officers in 2018.comparable companies. Initial stock option awards for new employees, which are individually determined prior to and/or negotiated in conjunction with the commencement of employment, reflect the new employee’s anticipated contribution to our success and are designed to be competitive with awards granted by other biotechnology companies. Subsequent annual stock option awards take into consideration competitive practices and an individual’s position, individual performance and potential for future impact on our business. All stock options have been granted with an exercise price equal to the fair market value of our common stock on the date of grant as determined in accordance with the terms of our equity incentive plans. For initial awards to new employees, the grant date is the first day of employment. Historically, annual stock option awards were granted in July of each year, which aligned with the determination of annual bonuses for the previous fiscal year ended June 30. In connection with the change in our fiscal year to a calendar year basis, effective January 1, 2017, we began granting annual equity awards in the first quarter of the year.
In 2013, the Compensation Committee adopted a “fixed share” approach for determining the size of annual equity awards for executives. In determining its recommendations for “fixed share” guidelines for consideration by the Compensation Committee, Towers Watson (predecessor to Willis Towers Watson) determined, and the Compensation Committee adopted, the number of option shares required to deliver market median expected value based on the Peer Group as of a measurement date selected by Towers
Watson at
How were the time its work was performed in 2013. Although the committee intendeddirectors compensated for 2019? The compensation paid to periodically review and adjust the guidelines as needed to ensure they remain generally aligned with the market median, it did not do so. In 2017, Willis Towers Watson noted that, given the depressed share price at the time it prepared its competitive assessment for that year, adherence to the then-current “fixed share” guidelines would result in equity awards being below the market 25th percentile on an expected value basis. Willis Towers Watson presented the committee with two alternative proposals for the 2017 annual equity awards: (1) grant options under the then-current “fixed share” guidelines, and supplement those awards with time-based restricted stock awards that would result in the overall equity awards having an expected value aligned with the market 25th percentile; or (2) in a one-time departure from the existing guidelines, grant time-based restricted stock awards having an expected value aligned with the market 25th percentile, and supplement those awards with performance-based restricted stock awards that would result in the overall equity awards having an expected value aligned with the market 50th percentile, pro-rated to 60%non-employee members of the annual amounts to reflect the grants made in the 2016 Transition Period.
The Compensation Committee viewed each of the alternatives as necessitated by our then-depressed share value, which eliminated any retention value of the executive officers’ cumulative long-term incentives, and the need, at that juncture, to retain and incentivize the existing management team. The committee concluded that the first alternative described above would be substantially inconsistent with our compensation philosophy of compensating executives at the market median. Accordingly, as more fully described under the heading “Equity Awards” below, the committee adopted the second alternative described above, and determined that the performance-based restricted stock awards would have the same performance criteria as the performance-based restricted stock awards granted in August 2016.
Share Ownership Guidelines
We also believe that executive compensation will be better aligned with the creation of long-term value for our shareholders if our executive officers maintain a meaningful investment in our shares. In this regard, our Board of Directors with respect to 2019 was as follows:
| | | | | | | | | | | | | Director Compensation for Calendar Year 2019 | Name | | Fees Earned or
Paid in Cash (1) | | Stock Awards ($)
(2)(4) | | Option Awards
($) (3)(4) | | | Total | Stuart Arbuckle | | $ | 47,000 | | $ | 8,400 | | $ | 26,366 | | $ | 81,766 | Mark Goldberg | | | 54,000 | | | 8,400 | | | 26,366 | | | 88,766 | Stephen C. McCluski | | | 90,000 | | | 8,400 | | | 26,366 | | | 124,766 | Dean J. Mitchell | | | 54,000 | | | 8,400 | | | 26,366 | | | 88,766 | Kristine Peterson | | | 64,000 | | | 8,400 | | | 26,366 | | | 98,766 | Richard J. Wallace | | | 57,000 | | | 8,400 | | | 26,366 | | | 91,766 |
| (1) | | This column represents the annual fees described above, and includes any amounts which a director has elected to be paid in deferred stock units in lieu of cash. For calendar year 2019, all of the outside directors elected to be paid their annual fees in cash, except that Dr. Goldberg and Mr. Mitchell both elected to be paid $54,000 of their annual fees in deferred stock units. |
| (2) | | The amounts shown in this column represent the aggregate grant date fair value of the deferred stock units credited to non-employee directors during 2019, which have been calculated in each case by multiplying the number of units by the closing price of our common stock on the Nasdaq Global Select Market on the date(s) as of which such units were credited to the non-employee director. This column does not include the deferred stock units described in the preceding footnote. |
| (3) | | The amounts shown in this column represent the aggregate grant date fair value of the stock option awards granted to non-employee directors during 2019, which has been calculated in accordance with FASB ASC Topic 718 using the Black-Scholes option pricing model, based on the following assumptions for the annual grant on June 20, 2019: expected life of option equal to 6.0 years; expected risk-free interest rate of 1.79%, which is equal to the U.S. Treasury yield in effect at the time of grant for instruments with a similar expected life; expected stock volatility of 81.29%; and expected dividend yield of 0%. |
| (4) | | The following table provides details regarding the aggregate number of each non-employee director’s vested and unvested deferred stock units and shares subject to outstanding options as of December 31, 2019: |
| | | | | | | Deferred Stock Units | | Shares Subject to | | | Outstanding at | | Outstanding Options at | Name | | Calendar Year-End (#) | | Calendar Year-End (#) (a) | Stuart Arbuckle | | 16,000 | | 55,967 | Mark Goldberg | | 78,475 | | 89,510 | Stephen C. McCluski | | 58,458 | | 95,721 | Dean J. Mitchell | | 62,373 | | 88,711 | Kristine Peterson | | 27,954 | | 88,711 | Richard J. Wallace | | 55,326 | | 95,721 |
| (a) | | Includes only options granted to members of the Board in their capacity as non-employee directors. |
Are the outside directors subject to share ownership guidelines? Yes. Our Board of Directors has adopted, effective as of July 1, 2014, share ownership guidelines affecting our executive officers.outside directors. The guidelines provide that executive officersoutside directors are expected to own shares of our common stock having an aggregate value equal to at least twothree times (orthe annual meeting fee (whether such fee is paid in cash or, at the casedirector’s option, in deferred stock units), excluding Lead Director/Chair of our CEO, five times) their annual base salary. Ourthe Board and committee-related fees. The current executive officersoutside directors (other than Dr. Berkenblit, Mr. Enyedy, Dr. Gregory and Dr. McKee) haveArbuckle) had five years from the effective date of the guidelines2014 annual meeting of shareholders to achieve the ownership requirement, and new executive officersoutside directors (including Dr. Berkenblit, Mr. Enyedy, Dr. Gregory and Dr. McKee)Arbuckle) will have a similar five-year period following their date of hire or of designation as an executive officer, whichever is later. Our executive officerselection. The outside directors may satisfy the guidelines with shares owned directly or indirectly in a trust or by a spouse and/or minor children, vested deferred stock units, and with vested stock options. In the case of vesteddeferred stock units or stock options, the aggregate exercise price or other cash consideration, if any, required to be paid for such shares is deducted in determining the aggregate value of the shares represented by such awards. We also The first measurement date for all of the outside directors, with the exception of Mr. Arbuckle, was on November 11, 2019, at which time the reference price for valuing our common stock under our guidelines was $3.04 per share. As of the first measurement date, all of our outside directors subject to the first measurement, except one, met the ownership requirements set forth in our guidelines. The Governance and Nominating Committee reviewed the results of stock ownership by our outside directors as of the first measurement date and agreed that the deviation below the ownership guidelines as of the first measurement date was due to unexpected volatility in our common stock following the announcement of the results of our FORWARD I clinical trial. Based on an increase in the reference valuation price of our common stock to $4.31 per share as of March 31, 2020, all of our outside directors subject to the first measurement met the ownership threshold in our guidelines as of March 31, 2020. As a result, the Governance and Nominating Committee waived the share ownership shortfall as of November 11, 2019 and agreed to reevaluate this director’s ownership on November 11, 2020. AMENDMENT TO OUR RESTATED ARTICLES OF ORGANIZATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 200,000,000 TO 300,000,000
(Notice Item 3) There will be presented at the meeting a proposal to approve an amendment to our Restated Articles of Organization, which amendment was approved by our Board of Directors on April 1, 2020 and is subject to shareholder approval. The amendment increases the number of authorized shares of our common stock from 200,000,000 to 300,000,000. The additional common stock to be authorized by approval of the amendment will have rights that are identical to our currently authorized common stock. Approval of the proposed amendment will not affect the rights of the holders of currently outstanding shares of our common stock, except for the effects incidental to increasing the number of shares of common stock if and when the additional shares are issued. If the amendment is approved, it will become effective upon the filing of Articles of Amendment of our Restated Articles of Organization with the Secretary of the Commonwealth of Massachusetts. As of April 13, 2020, there were 174,398,735 shares of our common stock issued, 24,983,997 shares of common stock reserved for issuance under our equity compensation plans, and 601,719 shares of common stock reserved for issuance upon conversion of our 4.50% Convertible Senior Notes due 2021. Accordingly, as of that date, of the 200,000,000 shares of common stock currently authorized, there were fewer than 25,000 shares of common stock available for general corporate purposes. Recommendation The Board recommends that you vote “FOR” the proposal to amend our Restated Articles of Organization to increase the number of authorized shares of common stock from 200,000,000 to 300,000,000. Purpose of the Proposed Amendment Although as of the mailing date of this proxy statement the Board has no specific plans to issue shares of common stock in excess of the number currently authorized, the Board believes it continues to be in our best interest to have sufficient additional authorized but unissued shares of common stock available in order to provide flexibility for corporate action in the future. Our Board believes that the currently available unissued shares do not provide sufficient flexibility for corporate action in the future, without the delay and expense associated with repeated separate amendments to our Articles of Organization and convening a special meeting of shareholders. The additional shares may be used for various purposes, including, without limitation, raising capital, expanding our business or research and development programs through the acquisition of other businesses or products, equity compensation, and stock splits and dividends. Possible Effects of the Proposed Amendment If the shareholders approve the proposed amendment, the Board may cause the issuance of the additional shares of our common stock without further shareholder approval, except as may be required by law, regulatory authorities, or the rules of the Nasdaq Stock Market or any other stock exchange on which our shares may be listed at the time of any proposed issuance. Under our Restated Articles of Organization, shareholders do not have preemptive rights to subscribe for additional securities that may be issued by us, which means that current shareholders do not have a policyprior right to purchase any new issue of our securities in order to maintain their proportionate ownership of our common stock. In addition, if the Board elects to issue additional shares of common stock, such issuance could have a dilutive effect on earnings per share, voting power and holdings of current shareholders. In addition to the corporate purposes discussed above, the proposed amendment could, under certain circumstances, have an anti-takeover effect, although this is not the intent of the Board. For example, it may be possible for the Board to delay or impede a takeover or transfer of control of ImmunoGen by causing such additional authorized shares to be issued to holders who might side with the Board in opposing a takeover bid that prohibits employeesthe Board determines is not in the best interests of ImmunoGen and directors from engaging in transactions that are designed to orour shareholders. The amendment therefore may have the effect of hedgingdiscouraging unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover attempt, the proposed amendment may limit the opportunity for our shareholders to dispose of their shares at the higher price generally available in takeover attempts or offsettingthat may be available under a merger proposal. However, the Board is not aware of any decrease in the market valueattempt to take control of ImmunoGen shares owned by such employees or directors,and the Board has not presented this proposal with the intent that it be utilized as a descriptiontype of whichanti-takeover defense. EXECUTIVE OFFICERS Who are ImmunoGen’s executive officers? The following persons are our executive officers as of the date of this proxy statement: | | | Name | | Position | Mark J. Enyedy (1) | | President and Chief Executive Officer | Theresa G. Wingrove, PhD | | Senior Vice President, Regulatory Affairs and Quality | Anna Berkenblit, MD (1) | | Senior Vice President and Chief Medical Officer | Thomas Ryll, PhD (1) | | Senior Vice President, Technical Operations |
| (1) | | Mr. Enyedy, Dr. Berkenblit, Dr. Ryll, Dr. Richard J. Gregory, our former Executive Vice President and Chief Scientific Officer, and Mr. Craig Barrows, our former Executive Vice President, General Counsel and Secretary, are the “named executive officers,” or NEOs, for purpose of this proxy statement. |
Where can I obtain more information about ImmunoGen’s executive officers? Biographical information concerning our executive officers and their ages can be found elsewhere in Item 3.1 entitled “Executive Officers” in our annual report on Form 10‑K for the year ended December 31, 2019, which information is incorporated by reference into this proxy statement under statement. EXECUTIVE COMPENSATION“Corporate Governance – Does ImmunoGen Compensation Discussion and Analysis The following Compensation Discussion & Analysis (“CD&A”) describes the philosophy, objectives, and structure of our 2019 executive compensation program. This CD&A is intended to be read in conjunction with the tables following this section which provide further historical compensation information for our Chief Executive Officer (“CEO”) and other named executive officers (“NEOs”) as identified below.
| | Name | Position | Mark J. Enyedy | President and Chief Executive Officer | Anna Berkenblit, MD | Senior Vice President and Chief Medical Officer | Richard J. Gregory, PhD 1 | Former Executive Vice President and Chief Scientific Officer | Thomas Ryll | Senior Vice President, Technical Operations | Craig Barrows 2 | Former Executive Vice President, General Counsel and Secretary | 1 Dr. Gregory’s employment with us ended on August 30, 2019. 2Mr. Barrows’ employment with us ended on February 28, 2020. |
2019 was a challenging year for our Company. Following the disappointing clinical results of FORWARD I, we moved decisively to restructure the business to reduce our costs, prioritize our portfolio to focus on our most promising programs, and work constructively with FDA to define an accelerated path to approval for mirvetuximab. With the benefit of these steps, we have a written policy prohibiting certain transactionsemerged with significant momentum in its shares, such as hedging transactions?”the business for 2020 and subsequent years. Employee BenefitsSay on Pay Results and Shareholder Feedback
We offer employee benefit programs that are intended to provide financial protection and securityOur annual “say-on-pay” proposal for our employees2018 compensation program failed to receive majority support at our 2019 annual shareholder meeting held in June 2019. This was disappointing, as we and to reward them for the total commitment we expect from them in service to ImmunoGen. All of our named executive officers are eligible to participate in these programs on the same basis as our other employees. These benefits include the following: medical, dental and vision insurance; company-paid group life and accident insurance of two times base salary (up to $750,000); employee-paid supplemental group life and accident insurance (up to $500,000); short- and long-term disability insurance; and a qualified 401(k) retirement savings plan with a 50% company match of the first 6% of the participant’s eligible bi-weekly compensation contributed by the participant to the plan.
Tax Deductibility of Compensation
At the time the Compensation Committee made itshave always strived to structure a compensation decisions for 2017, Section 162(m)program that appropriately attracts, retains, and motivates our executive team while aligning executive interests with those of the Internal Revenue Code limited the deduction a public company was permitted for compensation paid to “covered employees”, who are our chief executive officer and our three other most highly compensated executive officers (other than the chief financial officer). Generally, amounts paid in excess of $1,000,000 to a covered employee could not be deducted, unless the compensation was paid pursuant to a plan which is performance related, non-discretionary and has been approved by shareholders. However, this exception for performance-based compensation was repealed effective for taxable years beginning after December 31, 2017, such that compensation paid to our “covered employees” in excess of $1 million will not be deductible unless it meets the performance-based exception and qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
In its deliberations the Compensation Committee has considered ways to maximize deductibility of executive compensation, but nonetheless the committee retains the discretion to compensate executive officers at levels it considers commensurate with their responsibilities and achievements. In light of the recent tax reform it is uncertain whether2019 advisory “say-on-pay” vote, our Compensation Committee concluded that a proactive engagement program should be undertaken to seek shareholder input on our executive incentive compensation thatprogram and determine remedial revisions to more closely align the program with shareholder perspectives and interests.
As a result, we actively engaged with our shareholders, reaching out to our largest institutional shareholders, who together hold over 60% of our outstanding shares, to solicit feedback. A combination of the Chair of the Compensation Committee, intended to structure as performance-based compensation under Section 162(m) will be deductible. We have not adopted a policy that all executive compensation be fully deductible as we believe that it is important for the committee to retain maximum flexibility in designing compensation programs that are in the best interests of ImmunoGenour former General Counsel (Craig Barrows), and our shareholders. Severance Pay Plan for Vice Presidents and Higher
Chief Human Resources Officer participated in these discussions. We maintain a severance pay plan for vice presidents and higher. The Compensation Committee has noted that, in order to induce candidates for executive positions to join ImmunoGen, it has been necessary to offer them certain severance benefits in the event their employment with us was involuntarily terminated without cause outside the context of a change in control. In addition, Towers Watson provided data to the committee in 2014, when the plan was established, showing that this type of benefit was consistent with prevalent market practice for comparable companies. An executive is entitled to severance benefits under this plan if the executive’s employment is terminated by us without cause. Severance benefits include:
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| | salary continuation for the following specified periods: 18 months in the case of the CEO; and 12 months in the case of our other executive officers;
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| | payment of a portion of the executive officer’s annual cash bonus for the bonus period in which termination occurs as follows: 100% of the portion of the executive officer’s bonus tied to personal objectives, if any, and with respect to the portion of the executive officer’s bonus tied to corporate objectives, the executive officer would be entitled to receive the same percentage as the other participants in our annual bonus program, in both cases pro-rated to reflect the actual number of days the executive officer was employed during the applicable bonus period;
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| | if an executive officer elects to continue medical coverage in accordance with COBRA, a subsidy of the executive officer’s COBRA premium at the same percentage as we subsidize coverage for similarly situated active employees, for the duration of the salary continuation period; and
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| | outplacement services lasting not less than six months.
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Change in Control Severance Agreements
We recognize that ImmunoGen, as a publicly-traded company, may become the target of a proposal which could result in a change in control, and that such possibility and the uncertainty and questions which such a proposal may raise among management could causeexplained our executive officers to leave or could distract them in the performance of their duties, to the detriment of ImmunoGencompensation philosophy, and our shareholders. We have entered into severance agreements with eachinstitutional shareholders expressed their views of our executive officers that are designed to compensate them for the loss of their positions and the loss of anticipated benefits under their unvested equity compensation awards following a change in control of ImmunoGen. The agreements are intended to reinforce and encourage the continued attention of our executive officers to their assigned duties without distraction and to ensure the continued availability to ImmunoGen of each of our executive officers in the event of a proposed change in control transaction. We believe that these objectives are in the best interests of ImmunoGen and our shareholders. We also believe that it is in the best interests of ImmunoGen and our shareholders to offer such agreements to our executive officers insofar as ImmunoGen competes for executive talent in a highly competitive market in which companies routinely offer similar benefits to senior executives.
An executive officer is entitled to severance benefits if, within 12 months after a change in control of ImmunoGen, the executive’s employment is terminated (1) by us other than for cause or disability or (2) by the executive for good reason. Severance benefits include:
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| | a lump sum cash payment equal to 1.5 times (or in the case of our CEO, 2 times) the sum of the executive officer’s annual base salary and target annual bonus for the bonus period in which the termination occurs;
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| | vesting of 100% of the executive officer’s unvested stock options and unvested restricted stock awards and other similar rights.
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| | if the executive officer elects to continue medical coverage in accordance with COBRA, a subsidy of the executive officer’s COBRA premium at the same percentage as we subsidized health insurance premiums for the executive officer immediately prior to the date of termination of the executive officer’s employment (or, if more favorable to the executive officer, immediately prior to the consummation of the change in control), for up to 18 months (provided that following the expiration of the CEO’s COBRA coverage period, we will pay a taxable amount to the CEO equal to the COBRA premium subsidy on a monthly basis for a period ending 24 months from the CEO’s termination date); and
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| | payment of the cost of outplacement services up to a maximum of $40,000.
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We believe these severance benefits are reasonable and appropriate for our executive officers in light of the anticipated time it takes high-level executives to secure new positions with responsibilities and compensation that are commensurate with their experience. We further believe that the equity awards granted to our executive officers have been reasonable in amount and that, in the event of a loss of employment within a year following a change in control, it is appropriate that our executive officers receive the full benefit under their equity compensation awards of the increase in ImmunoGen’s value attributable to the performance of the current management team.
For more details concerning our severance pay plan and change in control severance agreements, please refer to “Potential Payments Upon Termination or Change in Control” elsewhere in this proxy statement.
Executive Compensation Determinations for 2017
The following discussion describes the Compensation Committee’s executive compensation determinations for 2017, beginning with a description of the portion of the annual bonus program tied to corporate performance.
The corporate performance criteria were focused on specific actions that furthered the four strategic priorities described below:
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| | Execute on a speed-to-market strategy to complete development and obtain full approval for mirvetuximab soravtansine in platinum-resistant ovarian cancer;
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| | Accelerate the development of our earlier-stage portfolio, with an emphasis on ADCs deploying our new “IGN” DNA-acting payloads;
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| | Continue to drive innovation in ADCs through our expertise in new payloads, linkers, and methods of conjugation; and
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| | Lever our platform to support our existing partnerships and pursue new collaborations that generate revenue, mitigate expenses, enhance our capabilities and expand the reach of our innovation to more patients.
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In light of the foregoing strategic priorities, the Compensation Committee established specific corporate objectives for 2017 as described in the following table.program. Considerations discussed included:
| | Corporate ObjectiveWhat We Heard
| AchievementDiscussion
| Achieve accrual targets for key studiesPay and Performance Misalignment
| FORWARD I patient accrual target substantially met; full enrollment expected● In 2018, after analyzing market positioning and trends, we determined that our CEO did not have sufficient stock ownership as compared to be achievedhis peers in first half of 2018 per previously established timelinethe industry. To help rectify that issue, we granted him a large option grant in 2018.
FORWARD II patient accrual target exceeded
IMGN779 Phase 1 study accrued rapidly without reaching determination of maximum tolerated dose due to absence of dose limiting toxicities● Shareholders did not feel that the rationale provided was sufficient, particularly in a year when our share price declined.
| Sign material co-development, co-commercialization partnership for IMGN779 and IMGN632Lack of Performance-based Equity Awards
| Partnered IMGN779 and IMGN632 with Jazz Pharmaceuticals with option● Certain shareholders expressed the desire to co-commercialize at least one product insee the US
| Secure cash balance at year-end sufficient to fund planned operations for at least the next 12 months
| Divested IMGN529 program for $55 million
Granted Sanofi paid up licenses to collaboration programs for $30 million
Partnered IMGN779 and IMGN632 programs with Jazz Pharmaceuticals for $75 million upfront payment, plus R&D funding up to $100 million over the research term and the opportunity for milestones and royalties
Raised $101.6 million net proceeds from secondary public offering
Converted $98 million in debt toexpansion of performance-based equity
Cash balance at year-end was sufficient to fund planned operations awards into the fourth quarterlong-term incentive mix for our executives.
● Shareholders expressed interest in seeing future performance-based awards that are closely tied to our most important clinical research programs, which are milestone-based, over a minimum of 2019 with approximately $2 million in debt on the balance sheet | Execute comparability effort to enable bridging of pivotal material into FORWARD I study by end of Q2
| Introduced pivotal material into FORWARD I in June 2017
| File IND for IMGN632 in Q3
| Filed IND for IMGN632 in September 2017
| Reach go/no go decision on ADAM9 program by end of Q2
| “Go” decision made in May; transition to further development in Q4
| Execute culture transformation initiatives
| Enacted defined cultural initiatives, including an enhanceda two-year performance management process, service award programs, professional development series, and our first day of service, with over 80% of our employees participatingperiod.
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The Compensation Committee appreciated the feedback, which significantly influenced and informed the Compensation Committee’s decision making related to the current compensation program and modifications to the program on a “go-forward” basis. Specifically, the Compensation Committee made the following changes to the compensation program for our NEOs for 2020 in response to the 2019 advisory vote and to address the feedback from shareholders:
| | 
| Reduced Equity Awards to our CEO | | ● The Compensation Committee determined that it was appropriate to lower the number of options granted to our CEO, as well as our other NEOs, going forward. ● Given our share price performance, lowering the number of awards also resulted in a dramatically lower grant date fair value of these awards ($7.6 million in 2018 compared to $2.7 million in 2019) |
| Improved CD&A Disclosure | | ● After receiving feedback that the rationale for the larger option grants in 2018 was not fully understood by some shareholders, the Compensation Committee committed to improving the clarity and readability of the CD&A going forward. |
| Introducing Performance-based Stock Options in 2020 | | ● The Compensation Committee determined, based directly on shareholder input, that over 50% of the 2020 long-term incentive grant to our executive team would be delivered as performance-based stock options. ○ To this end, in February 2020, the Compensation Committee approved delivering 60% of 2020 long-term incentive value as performance-based stock options. ● Shareholder input, which was confirmed with market trend analysis, influenced the structure of these awards, as the Compensation Committee implemented clinical and regulatory milestones as performance metrics. ● Specific terms of these awards: ○ 25% based on Acceptance of BLA of mirvetuximab by the FDA. ○ 75% based on the Receipt of marketing approval for mirvetuximab from the FDA. ○ 4-year performance period to achieve these goals. |
In addition to considering our achievements toward each corporate objective, theHow Our Pay Program Works
The Compensation Committee also considered the overall impact of these achievementshas structured our executive compensation program to ensure that our NEOs are compensated in a manner consistent with shareholder interests as a reflectionwell as with competitive and appropriate pay practices for our industry. The following are important features of the year-over-year improvement indesign and operation of our progress and prospects. In this regard, the committee considered that during the 12 months since the 2017 corporate objectives had been established, our share price had increased almost four-fold and its market capitalization had increased almost six-fold, reflecting positive investor sentiment that we had effectively executed our business plan and, correspondingly, were better positioned to realize our strategic objectives and generate value for shareholders. Based on the foregoing, the committee determined the portionexecutive compensation program: Components of the annual bonus program tied to achievement of the corporate objectives would be based on 150% achievement.Pay The Compensation Committee’s determinationcomponents of the executives’ salariesour executive compensation program consist primarily of elements that are available to all of our employees, including base salary, annual performance-based bonuses, equity awards, and bonuses for 2017, including the portion, if any, tied to individual performance, is discussed below on an individual-by-individual basis.broad-based benefits. | | | | Cash Compensation Each non-employee director receives an annual meeting fee of $40,000. In addition, the Chair of the Board (or if the Chair is not a non-employee director, the lead independent director) receives an additional annual fee of $30,000, the Chair of the Audit Committee receives an additional annual fee of $20,000, and the Chair of each of the Compensation Committee and the Governance and Nominating Committee receive an additional annual fee of $14,000. Other members of the Audit Committee receive an additional annual fee of $10,000, and other members of each of the Compensation Committee and the Governance and Nominating Committee receive an additional annual fee of $7,000. All of these annual fees are paid in quarterly installments in, at each director’s election, either cash or deferred stock units. Directors are also reimbursed for their reasonable expenses incurred in connection with attendance at Board and committee meetings. Deferred Stock Units Non-employee directors receive deferred stock units as follows: | · | | New non-employee directors are initially awarded 8,000 deferred stock units, or DSUs, with each unit relating to one share of our common stock. These awards vest quarterly over three years from the date of grant, contingent upon the individual remaining a director of ImmunoGen as of each vesting date. |
| · | | Non-employee directors are annually awarded 4,000 DSUs. These awards vest quarterly over approximately one year from the date of grant (generally the date of the annual meeting of shareholders), contingent upon the individual remaining a director of ImmunoGen as of each vesting date. If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, the number of DSUs subject to such non-employee director’s first annual DSU award is pro-rated, based on the number of days between his or her date of election and the date of grant of his or her first annual DSU award. If a non-employee director is first elected to the Board at an annual meeting of shareholders, he or she is ineligible to receive his or her first annual DSU award until the following year. |
Vested deferred stock units are redeemed on the date a director ceases to be a member of the Board, at which time such director’s deferred stock units will generally be settled in shares of our common stock issued under our 2018 Plan (or its predecessor 2016 or 2006 Employee, Director and Consultant Equity Incentive Plan, depending on the grant date of the deferred stock units) at a rate of one share for each vested deferred stock unit then held. Any deferred stock units that remain unvested at that time will be forfeited. All unvested deferred stock units will automatically vest immediately prior to the occurrence of a change of control, as defined in the 2018 Plan (or the substantially identical definition in the predecessor Plans, as applicable). We believe that the requirement that non-employee directors hold their deferred stock units for the duration of their tenure on our Board mitigates excessive risk-taking and directly aligns a substantial portion of director compensation with the creation of long-term shareholder value. Stock Options Non-employee directors also receive stock option awards as follows: | · | | If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, such non-employee director receives a stock option award covering 18,000 shares of our common stock, which vests quarterly over three years from the date of grant. These awards have an exercise price equal to the fair market value of our common stock on the date of grant, and will expire on the tenth anniversary of the date of grant, contingent upon the individual remaining a director of ImmunoGen during such period. |
| · | | Non-employee directors receive an annual stock option award covering 18,000 shares of our common stock. These awards have an exercise price equal to the fair market value of our common stock on the date of grant (generally the date of the annual meeting of shareholders), vest quarterly over approximately one year from the date of grant, and expire on the tenth anniversary of the date of grant, contingent upon the individual remaining a director of ImmunoGen during such period. If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, the number of shares covered by such non-employee director’s first annual stock award is pro-rated, based on the number of days between his or her date of election and the date of grant of his or her first annual stock option award. If a non-employee director is first elected to the Board at an annual meeting of shareholders, he or she is ineligible to receive his or her first annual stock option award until the following year. |
All unvested stock option awards granted to non-employee directors will automatically vest immediately as of the date of a change of control, as defined in the 2018 Plan (or, with respect to stock options granted on or before June 20, 2018, the substantially identical definition in the predecessor Plans). The Governance and Nominating Committee will periodically review the size of the foregoing deferred stock unit and stock option awards to ensure that, in light of changes in the market price of our common stock, these awards are generally aligned with equity awards granted to the outside directors of comparable companies. How were the directors compensated for 2019? The compensation paid to non-employee members of our Board of Directors with respect to 2019 was as follows: | | | | | | | | | | | | | Director Compensation for Calendar Year 2019 | Name | | Fees Earned or
Paid in Cash (1) | | Stock Awards ($)
(2)(4) | | Option Awards
($) (3)(4) | | | Total | Stuart Arbuckle | | $ | 47,000 | | $ | 8,400 | | $ | 26,366 | | $ | 81,766 | Mark Goldberg | | | 54,000 | | | 8,400 | | | 26,366 | | | 88,766 | Stephen C. McCluski | | | 90,000 | | | 8,400 | | | 26,366 | | | 124,766 | Dean J. Mitchell | | | 54,000 | | | 8,400 | | | 26,366 | | | 88,766 | Kristine Peterson | | | 64,000 | | | 8,400 | | | 26,366 | | | 98,766 | Richard J. Wallace | | | 57,000 | | | 8,400 | | | 26,366 | | | 91,766 |
| (1) | | This column represents the annual fees described above, and includes any amounts which a director has elected to be paid in deferred stock units in lieu of cash. For calendar year 2019, all of the outside directors elected to be paid their annual fees in cash, except that Dr. Goldberg and Mr. Mitchell both elected to be paid $54,000 of their annual fees in deferred stock units. |
| (2) | | The amounts shown in this column represent the aggregate grant date fair value of the deferred stock units credited to non-employee directors during 2019, which have been calculated in each case by multiplying the number of units by the closing price of our common stock on the Nasdaq Global Select Market on the date(s) as of which such units were credited to the non-employee director. This column does not include the deferred stock units described in the preceding footnote. |
| (3) | | The amounts shown in this column represent the aggregate grant date fair value of the stock option awards granted to non-employee directors during 2019, which has been calculated in accordance with FASB ASC Topic 718 using the Black-Scholes option pricing model, based on the following assumptions for the annual grant on June 20, 2019: expected life of option equal to 6.0 years; expected risk-free interest rate of 1.79%, which is equal to the U.S. Treasury yield in effect at the time of grant for instruments with a similar expected life; expected stock volatility of 81.29%; and expected dividend yield of 0%. |
| (4) | | The following table provides details regarding the aggregate number of each non-employee director’s vested and unvested deferred stock units and shares subject to outstanding options as of December 31, 2019: |
| | | | | | | Deferred Stock Units | | Shares Subject to | | | Outstanding at | | Outstanding Options at | Name | | Calendar Year-End (#) | | Calendar Year-End (#) (a) | Stuart Arbuckle | | 16,000 | | 55,967 | Mark Goldberg | | 78,475 | | 89,510 | Stephen C. McCluski | | 58,458 | | 95,721 | Dean J. Mitchell | | 62,373 | | 88,711 | Kristine Peterson | | 27,954 | | 88,711 | Richard J. Wallace | | 55,326 | | 95,721 |
| (a) | | Includes only options granted to members of the Board in their capacity as non-employee directors. |
Are the outside directors subject to share ownership guidelines? Yes. Our Board of Directors has adopted, effective as of July 1, 2014, share ownership guidelines affecting our outside directors. The guidelines provide that outside directors are expected to own shares of our common stock having an aggregate value equal to at least three times the annual meeting fee (whether such fee is paid in cash or, at the director’s option, in deferred stock units), excluding Lead Director/Chair of the Board and committee-related fees. The current outside directors (other than Mr. Enyedy. Arbuckle) had five years from the date of the 2014 annual meeting of shareholders to achieve the ownership requirement, and new outside directors (including Mr. Arbuckle) will have a similar five-year period following their election. The outside directors may satisfy the guidelines with shares owned directly or indirectly in a trust or by a spouse and/or minor children, vested deferred stock units, and vested stock options. In February 2017, the committeecase of deferred stock units or stock options, the aggregate exercise price or other cash consideration, if any, required to be paid for such shares is deducted in determining the aggregate value of the shares represented by such awards. The first measurement date for all of the outside directors, with the exception of Mr. Arbuckle, was on November 11, 2019, at which time the reference price for valuing our common stock under our guidelines was $3.04 per share. As of the first measurement date, all of our outside directors subject to the first measurement, except one, met the ownership requirements set Mr. Enyedy’sforth in our guidelines. The Governance and Nominating Committee reviewed the results of stock ownership by our outside directors as of the first measurement date and agreed that the deviation below the ownership guidelines as of the first measurement date was due to unexpected volatility in our common stock following the announcement of the results of our FORWARD I clinical trial. Based on an increase in the reference valuation price of our common stock to $4.31 per share as of March 31, 2020, all of our outside directors subject to the first measurement met the ownership threshold in our guidelines as of March 31, 2020. As a result, the Governance and Nominating Committee waived the share ownership shortfall as of November 11, 2019 and agreed to reevaluate this director’s ownership on November 11, 2020. AMENDMENT TO OUR RESTATED ARTICLES OF ORGANIZATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 200,000,000 TO 300,000,000
(Notice Item 3) There will be presented at the meeting a proposal to approve an amendment to our Restated Articles of Organization, which amendment was approved by our Board of Directors on April 1, 2020 and is subject to shareholder approval. The amendment increases the number of authorized shares of our common stock from 200,000,000 to 300,000,000. The additional common stock to be authorized by approval of the amendment will have rights that are identical to our currently authorized common stock. Approval of the proposed amendment will not affect the rights of the holders of currently outstanding shares of our common stock, except for the effects incidental to increasing the number of shares of common stock if and when the additional shares are issued. If the amendment is approved, it will become effective upon the filing of Articles of Amendment of our Restated Articles of Organization with the Secretary of the Commonwealth of Massachusetts. As of April 13, 2020, there were 174,398,735 shares of our common stock issued, 24,983,997 shares of common stock reserved for issuance under our equity compensation plans, and 601,719 shares of common stock reserved for issuance upon conversion of our 4.50% Convertible Senior Notes due 2021. Accordingly, as of that date, of the 200,000,000 shares of common stock currently authorized, there were fewer than 25,000 shares of common stock available for general corporate purposes. Recommendation The Board recommends that you vote “FOR” the proposal to amend our Restated Articles of Organization to increase the number of authorized shares of common stock from 200,000,000 to 300,000,000. Purpose of the Proposed Amendment Although as of the mailing date of this proxy statement the Board has no specific plans to issue shares of common stock in excess of the number currently authorized, the Board believes it continues to be in our best interest to have sufficient additional authorized but unissued shares of common stock available in order to provide flexibility for corporate action in the future. Our Board believes that the currently available unissued shares do not provide sufficient flexibility for corporate action in the future, without the delay and expense associated with repeated separate amendments to our Articles of Organization and convening a special meeting of shareholders. The additional shares may be used for various purposes, including, without limitation, raising capital, expanding our business or research and development programs through the acquisition of other businesses or products, equity compensation, and stock splits and dividends. Possible Effects of the Proposed Amendment If the shareholders approve the proposed amendment, the Board may cause the issuance of the additional shares of our common stock without further shareholder approval, except as may be required by law, regulatory authorities, or the rules of the Nasdaq Stock Market or any other stock exchange on which our shares may be listed at the time of any proposed issuance. Under our Restated Articles of Organization, shareholders do not have preemptive rights to subscribe for additional securities that may be issued by us, which means that current shareholders do not have a prior right to purchase any new issue of our securities in order to maintain their proportionate ownership of our common stock. In addition, if the Board elects to issue additional shares of common stock, such issuance could have a dilutive effect on earnings per share, voting power and holdings of current shareholders. In addition to the corporate purposes discussed above, the proposed amendment could, under certain circumstances, have an anti-takeover effect, although this is not the intent of the Board. For example, it may be possible for the Board to delay or impede a takeover or transfer of control of ImmunoGen by causing such additional authorized shares to be issued to holders who might side with the Board in opposing a takeover bid that the Board determines is not in the best interests of ImmunoGen and our shareholders. The amendment therefore may have the effect of discouraging unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover attempt, the proposed amendment may limit the opportunity for our shareholders to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. However, the Board is not aware of any attempt to take control of ImmunoGen and the Board has not presented this proposal with the intent that it be utilized as a type of anti-takeover defense. EXECUTIVE OFFICERS Who are ImmunoGen’s executive officers? The following persons are our executive officers as of the date of this proxy statement: | | | Name | | Position | Mark J. Enyedy (1) | | President and Chief Executive Officer | Theresa G. Wingrove, PhD | | Senior Vice President, Regulatory Affairs and Quality | Anna Berkenblit, MD (1) | | Senior Vice President and Chief Medical Officer | Thomas Ryll, PhD (1) | | Senior Vice President, Technical Operations |
| (1) | | Mr. Enyedy, Dr. Berkenblit, Dr. Ryll, Dr. Richard J. Gregory, our former Executive Vice President and Chief Scientific Officer, and Mr. Craig Barrows, our former Executive Vice President, General Counsel and Secretary, are the “named executive officers,” or NEOs, for purpose of this proxy statement. |
Where can I obtain more information about ImmunoGen’s executive officers? Biographical information concerning our executive officers and their ages can be found in Item 3.1 entitled “Executive Officers” in our annual report on Form 10‑K for the year ended December 31, 2019, which information is incorporated by reference into this proxy statement. EXECUTIVE COMPENSATION Compensation Discussion and Analysis The following Compensation Discussion & Analysis (“CD&A”) describes the philosophy, objectives, and structure of our 2019 executive compensation program. This CD&A is intended to be read in conjunction with the tables following this section which provide further historical compensation information for our Chief Executive Officer (“CEO”) and other named executive officers (“NEOs”) as identified below.
| | Name | Position | Mark J. Enyedy | President and Chief Executive Officer | Anna Berkenblit, MD | Senior Vice President and Chief Medical Officer | Richard J. Gregory, PhD 1 | Former Executive Vice President and Chief Scientific Officer | Thomas Ryll | Senior Vice President, Technical Operations | Craig Barrows 2 | Former Executive Vice President, General Counsel and Secretary | 1 Dr. Gregory’s employment with us ended on August 30, 2019. 2Mr. Barrows’ employment with us ended on February 28, 2020. |
2019 was a challenging year for our Company. Following the disappointing clinical results of FORWARD I, we moved decisively to restructure the business to reduce our costs, prioritize our portfolio to focus on our most promising programs, and work constructively with FDA to define an accelerated path to approval for mirvetuximab. With the benefit of these steps, we have emerged with significant momentum in the business for 2020 and subsequent years. Say on Pay Results and Shareholder Feedback Our annual “say-on-pay” proposal for our 2018 compensation program failed to receive majority support at our 2019 annual shareholder meeting held in June 2019. This was disappointing, as we and our Compensation Committee have always strived to structure a compensation program that appropriately attracts, retains, and motivates our executive team while aligning executive interests with those of shareholders. In light of the 2019 advisory “say-on-pay” vote, our Compensation Committee concluded that a proactive engagement program should be undertaken to seek shareholder input on our executive incentive compensation program and determine remedial revisions to more closely align the program with shareholder perspectives and interests. As a result, we actively engaged with our shareholders, reaching out to our largest institutional shareholders, who together hold over 60% of our outstanding shares, to solicit feedback. A combination of the Chair of the Compensation Committee, our former General Counsel (Craig Barrows), and our Chief Human Resources Officer participated in these discussions. We explained our compensation philosophy, and our institutional shareholders expressed their views of our executive compensation program. Considerations discussed included: | | What We Heard | Discussion | Pay and Performance Misalignment | ● In 2018, after analyzing market positioning and trends, we determined that our CEO did not have sufficient stock ownership as compared to his peers in the industry. To help rectify that issue, we granted him a large option grant in 2018. ● Shareholders did not feel that the rationale provided was sufficient, particularly in a year when our share price declined. | Lack of Performance-based Equity Awards | ● Certain shareholders expressed the desire to see the expansion of performance-based equity awards into the long-term incentive mix for our executives. ● Shareholders expressed interest in seeing future performance-based awards that are closely tied to our most important clinical research programs, which are milestone-based, over a minimum of a two-year performance period. |
The Compensation Committee appreciated the feedback, which significantly influenced and informed the Compensation Committee’s decision making related to the current compensation program and modifications to the program on a “go-forward” basis. Specifically, the Compensation Committee made the following changes to the compensation program for our NEOs for 2020 in response to the 2019 advisory vote and to address the feedback from shareholders:
| |
| Reduced Equity Awards to our CEO | | ● The Compensation Committee determined that it was appropriate to lower the number of options granted to our CEO, as well as our other NEOs, going forward. ● Given our share price performance, lowering the number of awards also resulted in a dramatically lower grant date fair value of these awards ($7.6 million in 2018 compared to $2.7 million in 2019) |
| Improved CD&A Disclosure | | ● After receiving feedback that the rationale for the larger option grants in 2018 was not fully understood by some shareholders, the Compensation Committee committed to improving the clarity and readability of the CD&A going forward. |
| Introducing Performance-based Stock Options in 2020 | | ● The Compensation Committee determined, based directly on shareholder input, that over 50% of the 2020 long-term incentive grant to our executive team would be delivered as performance-based stock options. ○ To this end, in February 2020, the Compensation Committee approved delivering 60% of 2020 long-term incentive value as performance-based stock options. ● Shareholder input, which was confirmed with market trend analysis, influenced the structure of these awards, as the Compensation Committee implemented clinical and regulatory milestones as performance metrics. ● Specific terms of these awards: ○ 25% based on Acceptance of BLA of mirvetuximab by the FDA. ○ 75% based on the Receipt of marketing approval for mirvetuximab from the FDA. ○ 4-year performance period to achieve these goals. |
How Our Pay Program Works The Compensation Committee has structured our executive compensation program to ensure that our NEOs are compensated in a manner consistent with shareholder interests as well as with competitive and appropriate pay practices for our industry. The following are important features of the design and operation of our executive compensation program: Components of Pay The components of our executive compensation program consist primarily of elements that are available to all of our employees, including base salary, annual performance-based bonuses, equity awards, and broad-based benefits. | | | | Base Salary | Base salaries provide the only fixed pay element and are set to be competitive to our peers while reflecting an executive officer’s responsibilities, demonstrated performance, and expected future contributions. | Short-Term Incentives | An annual cash incentive award pool is determined based on the achievement of certain corporate strategic goals, which can range from 0% to 150%. After the bonus pool is established, an individual performance multiplier is applied. This multiplier, which can range from 0% to 125%, is based on achievement against pre-established individual objectives, as evaluated by the CEO for the other NEOs (the CEO award is entirely tied to corporate objectives, which are approved by the Compensation Committee), and then multiplied by the corporate performance percentage to determine an individual’s earned bonus for the year. | Long-Term Incentives | Long-term equity awards provide a retention vehicle for our executives, while incentivizing executives to deliver long-term shareholder value. For 2019, long-term incentives were delivered as stock options with three-year ratable vesting. For 2020, a majority of long-term incentives are performance-based options utilizing important clinical milestones as performance criteria. |
Target Pay Mix The Compensation Committee does not have any formal policies for allocating total compensation among the various components. Instead, the Compensation Committee uses its judgment, in consultation with Radford, part of the Rewards Solutions practice at $670,000, effective March 1, 2017, which representsAon plc (Radford), the Compensation Committee’s independent executive compensation consultant, to establish a 3% increase over his annual base salarymix of current, short-term, and long-term incentive compensation, and cash and equity compensation for each NEO. As can be seen in the graphs below, a large percentage of executive pay is variable and “at-risk” (82% for the 2016 Transition Period. Mr. Enyedy’s target bonus of 75% of base salary remained unchangedCEO, and 71% on average for other NEOs), meaning that value will only be received by the executive if corporate and stock price performance are strong. In this sense, we have established a pay-for-performance culture and pay program. The balance between these components may change from the 2016 Transition Period. The new base salary, together with his target bonus, resulted in Mr. Enyedy’s target total cash compensation being aligned with the 50th percentile of target total cash compensation for comparable positions at the Peer Group.year to year based on corporate strategy and objectives, among other considerations. For 2017, Mr. Enyedy’s2019, our NEOs had the following target bonus was tied solelypay mix:  
Pay and Performance As indicated above, the Compensation Committee has designed an executive compensation program that carefully balances our desire to our achievementattract, retain, and motivate the industry’s top talent, while focusing on creating long-term sustainable growth in shareholder value. We believe the foundation of this type of program is a pay-for-performance philosophy. As indicated below in the corporate objectives. Accordingly, Mr. Enyedy’s bonus for 2017, as showngraphic of CEO pay over the past three years, the reported pay value – pay that is displayed in the Summary Compensation Table below, constituted 112.5%– is much different than the realizable pay that the CEO may actually receive. The value of his base salary earnedthe pay package as of the end of 2019 is displayed in 2017.the green bar. The vast difference in values is attributable to share price movement, a clear picture of our pay-for-performance philosophy in action, as well as an example of how management and shareholder interests are closely aligned. Mr. Johnston.  In February 2017, the committee set Mr. Johnston’s annual base salary at $405,951, effective March 1, 2017, which represents a 2% increase over his annual base salary for the 2016 Transition Period. Mr. Johnston’s target bonus of 40% of base salary remained unchanged from the 2016 Transition Period. The new base salary, together with his target bonus, resulted in Mr. Johnston’s target total cash compensation being aligned with the 50th percentile of target total cash compensation for comparable positions at the Peer Group.
Governance Practices The Compensation Committee regularly reviews best practices in executive compensation and uses the following guidelines to design our compensation programs: ü ü ü ü | ü ü | What We Do | √ Align compensation with shareholder interests √ Pay-for-performance philosophy and culture √ Majority of pay is performance-based and not guaranteed √ Comprehensive clawback policy √ "Double-trigger" change-in-control provisions | √ Rigorous stock ownership requirements for all executives √ Perform an annual risk assessment of our compensation program √ Retain a compensation consultant | What We Don’t Do | X No hedging of our stock X No pledging of our stock without General Counsel approval X No guaranteed bonuses | X No backdating or repricing of stock option awards X No supplemental executive retirement plans X No excessive perquisites X No excise tax gross-ups |
| II. | | Our Executive Compensation Philosophy and Objectives |
Our executive compensation philosophy is designed to enable us to attract, retain, and motivate key executives to achieve our long-term objective of creating significant shareholder value through our antibody-drug conjugate (“ADC”) technology and expertise. In this regard, we set executive compensation with two principal goals: first, generally to align fixed compensation and target incentive compensation with the market median for our peer group; and second, to align a substantial portion of that compensation with the creation of long-term value for our shareholders. Attracting and retaining key executives is particularly challenging in the biotechnology industry, where executives are required to remain focused and committed throughout years of product development, regulatory approvals, and, at times, financial instability. The market for executive talent in our industry is highly competitive, with many biotechnology companies that are at a similar stage of development and located in general proximity to our corporate office outside of Boston, Massachusetts. | III. | | Process for Setting Executive Compensation |
Role of the Compensation Committee The Compensation Committee has responsibility for our executive compensation philosophy and the design of executive compensation programs, as well as for setting actual executive compensation. Information about the Compensation Committee, including its composition, responsibilities, and processes, can be found elsewhere in this proxy statement. In addition to evaluating our executives’ contributions and performance in light of corporate objectives and individual performance, we also base our compensation decisions on market considerations. The Compensation Committee benchmarks our cash and equity incentive compensation against programs available to employees in comparable roles at peer companies. All forms of compensation are evaluated relative to the market median for our peer group. Individual compensation pay levels may vary from this reference point based on recent individual performance and other considerations, including breadth of experience, the anticipated out-of-pocket costs and level of difficulty in replacing an executive with someone of comparable experience and skill, and the initial compensation levels required to attract qualified new hires. Role of Independent Compensation Consultant The Compensation Committee retained the services of Radford as our independent executive compensation consultant due to its extensive analytical and compensation expertise in the biotechnology and pharmaceutical industry. In this capacity, Radford has advised the Compensation Committee on compensation matters related to the executive and director compensation programs. In 2019, Radford assisted the Compensation Committee with, among other things: | · | | executive and director market pay analysis; |
| · | | reviewing and suggesting changes to the compensation peer group; |
| · | | developing and refining of executive and director pay programs; and |
| · | | drafting this CD&A and other proxy statement disclosures. |
The Compensation Committee has the sole authority to engage and terminate Radford’s services, as well as to approve their compensation. Radford makes recommendations to the Compensation Committee, but has no authority to make compensation decisions on our behalf or on behalf of the Compensation Committee. Radford reported to the Compensation Committee and had direct access to the Chair and the other members of the Compensation Committee. Beyond advice related to the executive and director compensation programs, Radford did not provide other services to us in 2019. The Compensation Committee conducted a specific review of its relationship with Radford in the past year and determined that Radford’s work for the Compensation Committee did not raise any conflicts of interest. Radford’s work has conformed to the independence factors and guidance provided by the Dodd-Frank Act, the SEC, and the Nasdaq. Role of Management To aid the Compensation Committee in its responsibilities, the CEO presents to the Compensation Committee assessments of the performance and achievements for each of the NEOs (other than himself) for the prior year. The Compensation Committee gives considerable weight to the CEO’s performance evaluations of the other NEOs, since he has direct knowledge of the criticality of their work, performance, and contributions. Our CEO does not participate in the Compensation Committee’s deliberations or decisions regarding his own compensation. The Compensation Committee has delegated to our CEO the authority to grant stock options and restricted stock awards under our 2018 Plan to individuals who are not subject to the reporting and other requirements of Section 16 of the Securities Exchange Act of 1934, including: | · | | New hire awards. The CEO is authorized to grant stock options to newly-hired individuals within certain guidelines established by the Compensation Committee. |
| · | | Equity recognition awards. The CEO is also authorized to grant stock options and restricted stock units to employees (other than new hires) for recognition and retention purposes. In any year, the aggregate number of shares subject to options and restricted stock units awarded by the CEO pursuant to this authorization may not exceed 100,000, with each share covered by a stock option counting as one share against such total, and each share subject to a restricted stock unit counting as two shares against such total. With respect to these CEO-granted awards, no individual may receive in any year a combination of stock options and restricted shares such that the sum of shares covered by stock options and two times the number of shares covered by restricted stock units exceeds 20,000. |
Use of Market Data and Peer Group Analysis When considering executive compensation decisions, the Compensation Committee believes it is important to be informed as to current compensation practices of comparable publicly held companies in the life sciences industry, especially to understand the demand and competitiveness for attracting and retaining an individual with each executive’s specific expertise and experience. As in prior years, the Compensation Committee considered numerous factors when setting executive pay levels for 2019. Referencing peer group compensation levels as part of this process is helpful in determining market-competitive compensation for our executives; however, the Compensation Committee has determined to not directly tie any pay elements to specific benchmarks within the peer group. Instead, the Compensation Committee considers these peer data as a market-check analysis, which is considered in conjunction with assessments of numerous other factors, including: employee knowledge, skill, and experience; individual performance and contribution; scope of current and expected future responsibilities; and any retention concerns. 2019 Peer Group Market pay practices are one of many factors we consider when setting executive pay levels and designing compensation programs. The Compensation Committee uses our compensation peer group as one data point when setting executive pay packages. Although useful as a reference, the Compensation Committee does not target any particular percentile or range within this peer group as a specific objective. Instead, compensation decisions are based on many factors, including, but not limited to, individual and corporate performance, market data, internal equity, experience, strategic needs, and responsibilities. In August 2018, based on the recommendations and assistance of Radford, the Compensation Committee reviewed the members of our then-current peer group to determine if each continued to be an appropriate company to reference while making 2019 executive compensation decisions. With the assistance of Radford, the Compensation Committee considered several factors in determining the peers, including: | · | | Sector: U.S.-based public, biopharmaceutical companies |
| · | | Stage of development: Late-stage, pre-commercial companies or early-stage commercial companies to reflect our talent market |
| · | | Market capitalization: Generally, between 1/3x and 3x of our then-current market capitalization (~$1.6 billion at time of peer group development) |
| · | | Revenue: Revenues of generally under $200 million to reflect companies of similar scale to us |
| · | | Number of employees: headcount between 100 and 900 employees |
Using the aforementioned criteria, the Compensation Committee and Radford determined that the 2019 peer group would consist of the following 21 companies:
| | | Acceleron Pharma | Cytokinetics | Puma Biotechnology * | Acorda Therapeutics | Dynavax Technologies | Retrophin * | Amicus Therapeutics * | Enanta Pharmaceuticals | Rigel Pharmaceuticals | Arena Pharmaceuticals | Epizyme | Sangamo Therapeutics | Array BioPharm | Immunomedics * | Spectrum Pharmaceuticals | Atara BioPharma * | MacroGenics | Theravance Biopharma | Clovis Oncology * | Momenta Pharmaceuticals | Xencor * |
* New for 2019 Compensation Risk Oversight Our executive compensation program aims to avoid any incentives for executives to take imprudent risks that might harm us or our shareholders. Our Compensation Committee has reviewed the compensation program with regards to compensation-related risk and concluded that our compensation policies and practices are not reasonably likely to have a material adverse effect on us. | IV. | | Elements of Compensation |
Our total compensation program consists of fixed elements, such as base salary and benefits, and variable performance-based elements, such as annual and long-term incentives. Our fixed compensation elements are designed to provide a predictable source of income to our executives. Our variable performance-based elements are designed to reward performance at three levels: individual performance, actual corporate performance compared to annual business goals, and long-term shareholder value creation. We compensate our executives principally through base salary, performance-based annual cash incentives, and equity awards. The objective of this three-part approach is to remain competitive with other companies in our industry, while ensuring that our executives are given the appropriate incentives to achieve near-term objectives and at the same time create long-term shareholder value. Base Salaries We provide our executive officers with a level of assured cash compensation in the form of a base salary that reflects their scope of responsibility and organizational impact, as well as individual performance. In setting salaries for our executive officers, the Compensation Committee reviews independently prepared surveys of biotechnology industry compensation as well as other available information on base salaries in our peer group for executive officers in comparable positions. When setting base salaries, considerations include, but are not limited to: | · | | each executive officer’s position and specific responsibilities; |
| · | | recent individual performance; |
| · | | level and breadth of experience; |
| · | | achievement of corporate and strategic goals; |
| · | | a review of competitive pay levels at comparable positions at peer companies; |
| · | | retention considerations, including the anticipated level of difficulty in replacing an executive with someone of comparable experience and skill; and |
| · | | the compensation levels required to attract qualified new hires. |
The Compensation Committee does not apply any specific formulas to determine increases in base salaries for our executive officers, but instead makes an evaluation of the aforementioned considerations. In setting base salaries for our executive officers (other than the CEO), the Compensation Committee will also consider the recommendation of the CEO and the CEO’s evaluation of each executive’s respective performance. Based on the foregoing considerations, the Compensation Committee adjusted base salaries for our NEOs for 2019, effective as of March 1, 2019, as follows: | | | | Name | 2018
Base Salary | 2019
Base Salary | % Change | Mark J. Enyedy | $690,100 | $714,254 | 3.5% | Anna Berkenblit, MD | $435,080 | $466,624 | 7.25% | Richard J. Gregory, PhD 1 | $469,065 | $485,482 | 3.5% | Thomas Ryll 2 | $366,083 | $395,370 | 8.0% | Craig Barrows 3 | $409,734 | $424,075 | 3.5% | 1 Dr. Gregory’s employment with us ended on August 30, 2019. 2 Mr. Ryll received a 2% increase in base salary to $403,277 in November 2019 as a part of his promotion to SVP, Technical Operations. 3 Mr. Barrows’ employment with us ended on February 28, 2020. |
Annual Performance-Based Cash Incentives Historically, we have provided our executives with short-term incentive compensation through our annual cash incentive program. We believe that annual incentives hold executives accountable, reward executives based on actual business results, and help create a “pay-for-performance” culture. 2019 Incentive Opportunities Under our annual bonus plan, every employee, including each NEO, has an established annual performance-based incentive target, which is equal to a percentage of the employee’s base salary. This percentage increases as levels of responsibility increase. A participant’s annual base salary and target bonus opportunity as of the last day of the bonus period are generally used in calculating earned incentives. The actual earned annual incentive amount, (“AIP”), if any, is calculated based on the achievement of corporate and individual goals and objectives. For 2019, our NEOs had the following annual cash incentive opportunities: | | Executive | Target AIP (as % of base salary) | Mark J. Enyedy | 75% | Anna Berkenblit, MD | 35% | Richard J. Gregory, PhD | 40% | Thomas Ryll | 35% | Craig Barrows | 40% |
2019 Performance Criteria Annual incentives are based on two sets of objectives: corporate and individual. First, the Compensation Committee annually establishes key performance criteria, based upon the corporate goals and objectives, and evaluates our performance against those criteria in its determination of whether annual bonuses will be paid to our employees, including our executives. Key corporate performance criteria may include any or all of the following: | · | | our actual financial performance against specified metrics in our operating plan for the applicable year; |
| · | | achievement of certain research, development, and manufacturing milestones, including internal product development advancement; |
| · | | the creation and achievement of business development opportunities; and |
| · | | execution of organizational initiatives designed to strengthen our corporate culture and better align it with our strategic objectives. |
In establishing annual key performance criteria for the annual bonus program, the Compensation Committee selects specific corporate objectives directed primarily to the future success of our business and the creation of long-term shareholder value. For 2019, the Compensation Committee established the key corporate performance criteria to be used in determining annual cash bonuses. However, consistent with recent practice, the Compensation Committee chose to not assign weights to specific criteria, preferring to take a more holistic view of our achievements against the corporate objectives, as well as considerations, where warranted, of exemplary performance. Once achievement versus corporate objectives is determined, our CEO will evaluate the other executive officers’ achievement against pre-established individual objectives, and based on these evaluations, the Compensation Committee will determine a percentage for each executive officer that can range from 0% to 125%, which percentage will then be applied to the corporate performance percentage to determine the executive officer’s bonus payout. Our CEO’s bonus payout under our incentive bonus plan is based solely on the corporate performance percentage. To illustrate, bonuses are determined as follows: 
2019 Corporate Objectives The Compensation Committee determines an overall bonus pool consisting of a percentage of the aggregate target bonuses for all eligible employees based on the achievement of pre-established corporate objectives. The percentage may range from 0% to 150%. If the Compensation Committee determines that, based on its evaluation of our performance toward the corporate objectives, the bonus percentage would be less than 50% of target, then no bonuses would be paid. Establishing a corporate performance percentage exceeding 100% would be based on the Compensation Committee’s determination of exceptional performance. In July 2019, the Compensation Committee revised the 2019 corporate objectives to realign with the strategy and priorities of the business as restructured following the negative outcome of FORWARD I. The revised corporate objectives, and achievement versus those objectives, were as follows in the past year: | | 2019 Corporate Objective | Achievement | Achieve accrual targets for key studies ● Initiate next mirvetuximab monotherapy registration study (MIRASOL) by the end of Q4 ● 402 (FORWARD II) – Enroll target number of patients in bevacizumab platinum agnostic cohort by the end of Q4 ● Make decision regarding continuation IMGN779 in Q2 ● 801 (IMGN632 Phase 1) – Determine recommended Phase 2 dosing and schedule and initiate BPDCN expansion ● 802 (IMGN632 Phase 2) – Enroll target number of R/R AML patients by the end of Q4 | ● MIRASOL initiated ● 402 cohort fully enrolled in Q3 ● Decision taken to discontinue IMGN779 program in June ● Phase 2 dosing schedule selected and expansion initiated ● Timeline for 802 start revised and enrollment target not achieved | Align on process improvements for mirvetuximab antibody production | ● Completed | Advance IMGC936 to support an IND in H1 2020 | ● Program on track to file IND in H1 2020 | Generate data by year-end to support D3 transition for next-generation anti-FRα in Q2 2020 | ● Program on track to support D3 in Q2 2020 | Amend Jazz agreement to reflect continued development of IMGN632 as the sole asset subject to the collaboration | ● Agreement amended | Execute at least one out-licensing transaction | ● Completed | Secure a cash balance at year-end sufficient to fund planned operations for the next 24 months | ● Closing of follow-on offering in January of 2020 provided cash into 2022 | Consolidate leased office in light of restructuring to facilitate subleasing of unoccupied premises | ● Completed, with one tenant secured | Maintain attrition at target | ● Target achieved |
After considering our holistic performance versus these corporate objectives, the Compensation Committee approved 90% achievement for 2019. Individual Objectives Individual performance multipliers for each NEO (other than the CEO, whose annual incentive opportunity is entirely tied to corporate objectives) were determined through an evaluation by our CEO of the other executive officers’ achievement against pre-established individual objectives. These individual objectives were tailored based on the executive’s role, responsibilities, and oversight. For 2017, 70% of Mr. Johnston’s target bonus was tied2019, these individual objectives were as follows: | | Executive | Individual Objectives | Anna Berkenblit, MD | ● Drive Clinical Development and Translational Sciences contributions to mirvetuximab program -- 1) presentation of 0403 and 0402 data; 2) 0416 study start before the end of 2019; 3) update platinum sensitive / combo strategy ● Gather additional IMGN632 monotherapy data in AML and BPDCN; initiate IMGN632 combination work in AML ● Improve executive contributions to ensure greater organizational effectiveness ● Support GCP Quality initiatives | Richard J. Gregory, PhD | ● Not applicable; employment ended with us on August 30, 2019 | Thomas Ryll | ● Lead mirvetuximab CMC activities ● Provide oversight for key CMO relationships ● Support transition of IMGC936 and IMGN151 development milestones ● Develop potential successors to manage transition leadership in 2021 | Craig Barrows | ● Lead negotiation and delivery of material contracts ● Support financing efforts; complete all due diligence and related efforts as predicates for a secondary offering ● Assist business development in key transactions ● Begin transitioning General Counsel activities to designated successor |
2019 Earned Cash Bonuses After reviewing achievement versus the corporate performance,objectives as outlined above, and 30% was tied to individual performance. With respect to the portion tied to individual performance assessments, the committee’s determination was based on Mr. Enyedy’s evaluation of Mr. Johnston’s accomplishment of specific actionsCompensation Committee determined annual bonus amounts were earned for 2019 as set forth in the areas identified in the following table.table below: | | | | | | | | Target | | Actual | | Secure a cash balance at year end sufficient to fund planned operations for at least the next 12 months | | 50 | % | 50 | % | Execute investor communications strategy | | 20 | % | 20 | % | Convert financial reporting to calendar year from fiscal year | | 10 | % | 10 | % | Implement or begin preparations for upgrading of specific support functions | | 10 | % | 10 | % | Continue improvement within specified areas of the financial organization | | 10 | % | 10 | % | Total | | 100 | % | 100 | % |
| | | | | | | | | | Annual Incentive
Opportunity | Achievement | Actual | Executive | 2019 Base Salary 1 | Target
(as % of base salary) | Target
($) | Corporate | Individual | 2019 Earned
Award | As a % of Target | Mark J. Enyedy | $714,254 | 75% | $535,691 | 90% | -- | $482,121 | 90% | Anna Berkenblit, MD | $466,624 | 35% | $163,318 | 90% | 90% | $132,288 | 81% | Richard J. Gregory, PhD 2 | $485,482 | 40% | $194,193 | 90% | 100% | $115,398 | 59% | Thomas Ryll 3 | $403,277 | 35% | $141,147 | 90% | 100% | $127,032 | 90% | Craig Barrows 4 | $424,075 | 40% | $169,630 | 90% | 100% | $152,667 | 90% | 1 Bonus opportunities are based on salary at the end of the fiscal year. 2 Dr. Gregory’s employment with us ended on August 30, 2019. 3 Base salary and bonus opportunity for Mr. Ryll reflects his promotion as of November 2019 to SVP Technical Operations. 4 Mr. Barrows’ employment with us ended on February 28, 2020. |
Based on the foregoing, Mr. Johnston’s bonus for 2017, as shown in the Summary Compensation Table below, constituted approximately 54% of his base salary earned in 2017.
Dr. Gregory. In February 2017, the committee set Dr. Gregory’s annual base salary at $455,403, effective March 1, 2017, which represents a 2% increase over his annual base salary for the 2016 Transition Period. Dr. Gregory’s target bonus of 40% of base salary remained unchanged from the 2016 Transition Period. Dr. Gregory’s base salary, together with his target bonus, resulted in Dr. Gregory’s target total cash compensation being aligned with the 50th percentile of target total cash compensation for comparable positions at the Peer Group.
For 2017, 70% of Dr. Gregory’s target bonus was tied to corporate performance, and 30% was tied to individual performance. With respect to the portion tied to individual performance, the committee’s determination was based on Mr. Enyedy’s evaluation of Dr. Gregory’s accomplishment of specific actions in the areas identified in the following table.
| | | | | | | | Target | | Actual | | Support advancement of development portfolio | | 20 | % | 20 | % | Maintain strong pipeline of pre-clinical candidates | | 20 | % | 20 | % | Advance platform research to enable next generation of ADC products | | 20 | % | 20 | % | Support collaboration partners and partnering business development activities | | 20 | % | 20 | % | Sponsor organizational excellence initiative | | 10 | % | 10 | % | Ensure STAT organization’s participation in our environmental, health and safety (EH&S) goals and objectives | | 10 | % | 10 | % | Total | | 100 | % | 100 | % |
Based on the foregoing, Dr. Gregory’s bonus for 2017, as shown in the Summary Compensation Table below, constituted approximately 54% of his base salary earned in 2017.
Mr. Barrows. In February 2017, the committee set Mr. Barrows’s annual base salary at $397,800, effective March 1, 2017, which represents a 2% increase over his base salary for the 2016 Transition Period. Mr. Barrows’s target bonus of 40% of annual base salary remained unchanged from the 2016
Transition Period. Mr. Barrows’s base salary, together with his target bonus, resulted in Mr. Barrows’s target total cash compensation being aligned with the 50th percentile of target total cash compensation for comparable positions at the Peer Group.
For 2017, 70% of Mr. Barrows’s target bonus was tied to corporate performance, and 30% was tied to individual performance. With respect to the portion tied to individual performance, the committee’s determination was based on Mr. Enyedy’s evaluation of Mr. Barrows’s accomplishment of specific actions in the areas identified in the following table.
| | | | | | | | Target | | Actual | | Provide legal support for business development activities | | 25 | % | 25 | % | Provide legal support for all financing transactions | | 25 | % | 25 | % | Provide legal support for creation of mirvetuximab soravtansine commercial supply chain | | 25 | % | 25 | % | Provide legal support for financial reporting and human resources functions | | 20 | % | 20 | % | Support corporate objective for culture transformation initiatives | | 5 | % | 5 | % | Total | | 100 | % | 100 | % |
Based on the foregoing, Mr. Barrows’s bonus for 2017, as shown in the Summary Compensation Table below, constituted approximately 54% of his base salary earned in 2017.
Dr. Berkenblit. In February 2017, the committee set Dr. Berkenblit’s annual base salary was set at $408,526, effective March 1, 2017, which represents a 2% increase over her annual base salary for the 2016 Transition Period. Dr. Berkenblit’s target bonus of 35% of base salary remained unchanged from the 2016 Transition Period. Dr. Berkenblit’s base salary, together with her target bonus, resulted in Dr. Berkenblit’s target total cash compensation being aligned with the 50th percentile of target total cash compensation for comparable positions at the Peer Group.
For 2017, 70% of Dr. Berkenblit’s target bonus was tied to corporate performance, and 30% was tied to individual performance. With respect to the portion tied to individual performance, the committee’s determination was based on Mr. Enyedy’s evaluation of Dr. Berkenblit’s accomplishment of specific actions in the areas identified in the following table.
| | | | | | | | Target | | Actual | | Support corporate objective for patient enrollment in FORWARD I | | 35 | % | 35 | % | Support corporate objective for IND filing for IMGN632 | | 15 | % | 15 | % | Support corporate objective for dose escalation of IMGN779 | | 15 | % | 15 | % | Support corporate objective for culture transformation initiatives | | 15 | % | 15 | % | Set strategy to advance mirvetuximab soravtansine into earlier lines of therapy and other indications as appropriate | | 15 | % | 15 | % | Support investor relations through participation in earnings calls and analyst meetings | | 5 | % | 50 | % | Total | | 100 | % | 100 | % |
Based on the foregoing, Dr. Berkenblit’s bonus for 2017, as shown in the Summary Compensation Table below, constituted approximately 47.25% of her base salary earned in 2017.
Equity Awards On February 16, 2017,We believe that equity participation is a key component of our executive compensation program. Our equity incentive plans are designed to retain our executive officers and other employees and align their long-term interests with the creation of long-term value for our shareholders.
Historically, we have primarily relied on stock options to provide a long-term incentive for our executives to focus on creating long-term value and to help us to attract and retain key talent. We believe, as a general matter, that stock options provide an effective long-term incentive for all employees to create shareholder value as the benefit of the options cannot be realized unless there is an appreciation in the price of our common stock. Stock option awards are commonly provided to a broad range of employees in the biotechnology industry due to the competitive nature of the industry. In early 2019, our Compensation Committee considered shareholder input from outreach conducted in January 2019, corporate performance over the prior year, and competitive market positioning when determining annual equity grant levels for 2019. After all considerations and input, the Compensation Committee ultimately decided that it was appropriate to reduce the value of the awards granted time-based restrictedto our executives in 2019, other than Dr. Berkenblit, who received additional value due to an award related to her promotion in January 2019. The following table shows the 2019 stock options granted to our NEOs on January 31, 2019 and compares those awards to the named executive officers2018 stock options granted to our NEOs in 2018: | | | | | Name | 2018
Stock Options
(#) | 2018
Stock Options
($) | 2019
Stock Options
(#) | 2019
Stock Options
($) | Mark J. Enyedy | 1,100,000 | $7,558,279 | 785,000 | $2,716,181 | Anna Berkenblit, MD | 175,000 | $1,202,454 | 348,550 | $1,206,019 | Richard J. Gregory, PhD 1 | 256,500 | $1,762,453 | 289,150 | $1,000,489 | Thomas Ryll 2 | 160,000 | $1,099,386 | 221,900 | $767,796 | Craig Barrows 3 | 225,000 | $1,546,012 | 231,750 | $801,879 |
1Dr. Gregory’s employment with us ended on August 30, 2019. 2In addition to his annual grant, Mr. Ryll received a grant of 110,950 options in November 2019 upon his promotion to SVP, Technical Operations. 3Mr. Barrows’ employment with us ended on February 28, 2020. In accordance with our equity grant practices, the exercise price for these stock option grants was equal to the closing price of our common stock as reported by the Nasdaq Global Select Market on the date of grant. All stock options in the following amounts: Mr. Enyedy – 500,000 shares; Mr. Johnston – 191,750 shares; Dr. Gregory – 237,250 shares; Dr. Berkenblit – 157,300 shares; and Mr. Barrows – 140,400 shares. Each award vests inabove table vest annually over three equal annual installments, beginningyears, starting on the first anniversary of the date of grant, provided the employee continues to provide us services. The dollar amounts shown in this chart represent the aggregate grant date fair value of the stock option awards granted, which has been calculated in accordance with FASB ASC Topic 718 using the Black-Scholes option pricing model | V. | | Additional Compensation Policies and Practices |
Clawback Policy We have adopted an incentive compensation recoupment policy that is applicable to our executive officers, and such other of our senior executive team as may be determined by the Compensation Committee. If we determine that we must restate our financial results as reported in a periodic or other report filed with the SEC to correct an accounting error due to material noncompliance with any financial reporting requirement under the U.S. securities laws, we will seek to recover, at the direction of the Compensation Committee, after it has reviewed the facts and circumstances that led to the requirement of the restatement and the costs and benefits of seeking recovery, incentive compensation, both cash and equity-based, awarded or paid to an officer covered by the policy whose intentional misconduct caused or contributed to the need for the restatement for a fiscal period if a lower award or payment would have been made to such officer based on the restated financial results. Executive Stock Ownership Guidelines We also believe that executive compensation will be better aligned with the creation of long-term value for our shareholders if our executive officers maintain a meaningful investment in our shares. In this regard, our Board of Directors adopted, effective as of July 1, 2014, share ownership guidelines affecting our executive officers. | | Position | Required Ownership
(as a multiple of base salary) | President and CEO | 5x | All other executive officers | 2x |
Each NEO has five years from the later of the effective date of grant (February 21, 2017). Also on February 16, 2017, the committee granted performance-based restricted stock awardsguidelines, from their hiring date or from the date of designation as an executive officer, to achieve the namedownership requirement. Our executive officers may satisfy the guidelines with shares owned directly or indirectly in a trust or by a spouse and/or minor children and with vested stock options. In the
case of vested stock options, the aggregate exercise price required to be paid for such shares is deducted in determining the aggregate value of the shares represented by such awards. Anti-Hedging and Pledging Policies As part of our insider trading policy, we prohibit employees and directors from engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the following amounts: Mr. Enyedy – 239,000 shares; Mr. Johnston – 103,250 shares; Dr. Gregory – 127,750 shares; Dr. Berkenblit – 84,700; and Mr. Barrows – 75,600 shares. The performance-based restricted stock awards vest in three equal installments upon the achievement, within the performance period, which ends on August 12, 2021,market value of our shares owned by such employees or directors. In particular, our insider trading policy prohibits the following performance goals:transactions:
| · | | Mirvetuximab soravtansine meeting its primary endpointTrading in our shares on a registration trial (i.e., a clinical trial designed to (i) ascertain efficacy and safety of mirvetuximab soravtansine that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling and (ii) support the preparation and submission of a biologics license application, or BLA, for the indication under investigationshort-term basis. Any shares purchased in the study as andopen market must be held for a minimum of six months. This rule does not apply to sales made within six months before or after the extent defined in 21 C.F.R. §312.21(c), or its successor regulation.exercise of options that were granted by us.
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| · | | AcceptanceShort sales of a BLA for mirvetuximab soravtansine by the U.S. Food and Drug Administration (FDA).our shares.
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| · | | ReceiptUse of marketing approval for mirvetuximab soravtansine from the FDA.our shares to secure a margin or other loan.
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| · | | Transactions in straddles, collars, or other similar risk reduction devices. |
| · | | Transactions in publicly-traded options relating to our shares (i.e., options that are not granted by us). |
The determinationWith respect to the last three items described above, the policy does authorize our General Counsel to approve such transactions in limited cases. However, no director or employee has requested approval to engage in any such transaction, nor has our General Counsel determined any circumstances under which such approval would be granted.
Broad-Based Benefits We offer employee benefit programs that are intended to provide financial protection and security for our employees and to reward them for the total commitment we expect from them while employed by us. All of achievementour named executive officers are eligible to participate in these programs on the same basis as our other employees. These benefits include the following: medical, dental, and vision insurance; company-paid group life and accident insurance in an amount equal to two times base salary (up to $750,000); employee-paid supplemental group life and accident insurance (up to $500,000); short- and long-term disability insurance; and a qualified 401(k) retirement savings plan with a 50% company match of the performance goals will be based on certificationfirst 6% of achievementthe participant’s eligible bi-weekly compensation contributed by the participant to the plan. Severance Pay Plan for Vice Presidents and Higher We maintain a severance pay plan for vice presidents and higher in which our NEOs participate. The Compensation Committee has noted that, in order to induce candidates for executive positions to join us, it has been necessary to offer them certain severance benefits in the event their employment with us was involuntarily terminated without cause outside the context of a performance goalchange in control. An executive is entitled to severance benefits under this plan if the executive’s employment is terminated by us without cause outside the Compensation Committee. Any shares subjectcontext of a change in control. Severance benefits include: | · | | salary continuation for the following specified periods: 18 months in the case of the CEO and 12 months in the case of our other executive officers; |
| · | | payment of the executive officer’s annual cash bonus, as determined in accordance with our annual bonus program, for the calendar year in which termination occurs, pro-rated to reflect the actual number of days the executive officer was employed during the applicable calendar year; |
| · | | if an executive officer elects to continue medical coverage in accordance with COBRA, a subsidy of the executive officer’s COBRA premium at the same percentage as we subsidize coverage for similarly situated active employees, for the duration of the salary continuation period; and |
| · | | outplacement services lasting not less than six months. |
Change in Control Severance Agreements We recognize that as a publicly-traded company, we may become the target of a proposal which could result in a change in control, and that such possibility and the uncertainty and questions which such a proposal may raise among management could cause our executive officers to these awards that have not vested by the expiration ofleave or could distract them in the performance period, orof their duties, to our detriment and that of our shareholders. We have entered into severance agreements with each of our executive officers that are designed to compensate them for the date on whichloss of their positions and the loss of anticipated benefits under their unvested equity compensation awards following a change in control. The agreements are intended to reinforce and encourage the continued attention of our executive ceasesofficers to be an employee, director or consultanttheir assigned duties without distraction and to ensure the continued availability of ImmunoGen, if earlier, are forfeited. As of the date of this proxy statement, none of the performance objectives has been achieved. The foregoing awards were granted under our 2016 Employee, Director and Consultant Equity Incentive Plan, or the 2016 Plan. At the time of the awards, the maximum number of shares that could be subject of awards granted under the 2016 Plan to an individual in a single year was 500,000. As a consequence, the grant of 239,000 performance-based restricted shares to Mr. Enyedy was made contingent on shareholder approval of an amendment to the 2016 Plan raising that maximum limit. At the 2017 annual meeting, shareholders approved amendments to the 2016 Plan providing, among other things, for an increase in the maximum number of shares that can be subject to awards granted to participants under the 2016 Plan in a single year to 2,000,000. Accordingly, Mr. Enyedy’s award of 239,000 performance-based shares became effective on the business day immediately following the date of the annual meeting (June 14, 2017).
each of our executive officers in the event of a proposed change in control transaction. We believe that these objectives are in our best interests and that of our shareholders. We also believe that it is in our best interests and that of our shareholders to offer such agreements to our executive officers insofar as we compete for executive talent in a highly competitive market in which companies routinely offer similar benefits to senior executives. An executive officer is entitled to severance benefits if, within a period of two months before or 12 months after a change in control, the executive’s employment is terminated (1) by us other than for cause or disability or (2) by the executive for good reason. Severance benefits include: | · | | a lump sum cash payment equal to 1.5 times (or in the case of our CEO, 2 times) the sum of the executive officer’s annual base salary and target annual bonus for the bonus period in which the termination occurs; |
| · | | vesting of 100% of the executive officer’s unvested stock options, unvested restricted stock awards, and other similar rights; |
| · | | if the executive officer elects to continue medical coverage in accordance with COBRA, a subsidy of the executive officer’s COBRA premium at the same percentage as we subsidized health insurance premiums for the executive officer immediately prior to the date of termination of the executive officer’s employment (or, if more favorable to the executive officer, immediately prior to the consummation of the change in control), for up to 18 months (provided that following the expiration of the CEO’s COBRA coverage period, we will pay a taxable amount to the CEO equal to the COBRA premium subsidy on a monthly basis for a period ending 24 months from the CEO’s termination date); and |
| · | | payment of the cost of outplacement services up to a maximum of $40,000. |
We believe these severance benefits are reasonable and appropriate for our executive officers in light of the anticipated time it takes high-level executives to secure new positions with responsibilities and compensation that are commensurate with their experience. We further believe that the equity awards granted to our executive officers have been reasonable in amount and that, in the event of a loss of employment within a year following a change in control, it is appropriate that our executive officers receive the full benefit under their equity compensation awards of the increase in our value attributable to the performance of the current management team. Tax and Accounting Implications of Executive Compensation The Compensation Committee considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, or Code, in designing, establishing, and implementing our executive compensation policies and practices. Section 162(m) generally prohibits us from deducting any compensation over $1 million per taxable year paid to certain of our executive officers unless, under tax laws in effect prior to January 1, 2018, such compensation is treated as “performance-based compensation” within the meaning of Section 162(m) of the Code. The Tax Cuts and Jobs Act (the “Tax Act”) among other changes, repealed the exception from the deduction limit under Section 162(m) for performance-based compensation effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017 that are not materially modified after that date. However, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) as revised by the Tax Act, including the uncertain scope of the transition relief adopted in connection with repealing Section 162(m)’s performance-based compensation exception, no assurance can be given that previously granted compensation intended to satisfy the requirements for performance-based compensation will in fact qualify for such exception. The Compensation Committee may administer any awards granted prior to November 2, 2017 which qualify as performance-based compensation under Section 162(m), as amended by the Tax Act, in accordance with the transition rules applicable to binding contracts in effect on November 2, 2017, and will have the sole discretion to revise compensation arrangements to conform with the Tax Act and our Compensation Committee’s administrative practices. In determining the form and amount of compensation for our executive officers, the Compensation Committee will continue to consider all elements of the cost of such compensation, including the potential impact of Section 162(m). While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes. In addition to considering the tax consequences, the Compensation Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards. We have not adopted a policy that all executive compensation be fully deductible as we believe that it is important for the Compensation Committee to retain maximum flexibility in designing compensation programs that are in our best interests and those of our shareholders. Additional detail regarding each of the foregoing awards can be found in the Grants of Plan-Based Awards table and Outstanding Awards at Fiscal Year-End table elsewhere in this proxy statement. Executive Compensation Tables and Other Information How were the executive officers compensated for 2017?2019? The following table sets forth all compensation paid to our principal executive officer, (who, in 2019, also served as our principal financial officerofficer) and each of our other threefour most highly compensated executive officers, who are collectively referred to as the “named executive officers,” in all capacities for 2017, the 2016 Transition Period (2016TP)2019, 2018, and the preceding two fiscal years.2017. Summary Compensation Table | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | Name and | | | | | | | | | | Stock | | Option | | Incentive Plan | | All Other | | | | | | | | | | | | | Stock | | Option | | Incentive Plan | | All Other | | | | Principal Position | | Year | | Salary | | Bonus (1) | | Awards (2) | | Awards (2) | | Compensation (3) | | Compensation (4) | | Total | | Year | | Salary | | Bonus | | Awards (1) | | Awards (1) | | Compensation (2) | | Compensation (3) | | Total | Mark J. Enyedy (5) | | 2017 | | $ | 670,000 | | | - | | $ | 1,235,000 | | | - | | $ | 753,750 | | $ | 8,784 | | $ | 2,667,534 | | 2019 | | $ | 710,228 | | | - | | | - | | $ | 2,716,181 | | $ | 482,121 | | $ | 9,030 | | $ | 3,917,560 | President and Chief | | 2016TP | | | 325,000 | | | - | | | - | | | - | | | 236,438 | | | 7,542 | | | 568,980 | | 2018 | | | 686,750 | | | - | | | - | | | 7,558,279 | | | 569,333 | | | 8,880 | | | 8,823,242 | Executive Officer | | 2016 | | | 80,357 | | $ | 430,000 | | | 423,750 | | $ | 1,015,157 | | | - | | | 836 | | | 1,950,100 | | 2017 | | | 670,000 | | | - | | | 1,235,000 | | | - | | | 753,750 | | | 8,784 | | | 2,667,534 | | | | | | | | | | | | | | | | | | | | | | | | | | David B. Johnston | | 2017 | | | 405,951 | | | - | | | 473,623 | | | - | | | 219,214 | | | 8,604 | | | 1,107,392 | | Executive Vice President | | 2016TP | | | 198,996 | | | - | | | - | | | 203,634 | | | 77,927 | | | 2,516 | | | 483,073 | | and Chief Financial Officer | | 2016 | | | 385,091 | | | - | | | - | | | 1,045,067 | | | 159,428 | | | 9,604 | | | 1,599,190 | | | | 2015 | | | 355,250 | | | 4,974 | | | - | | | 624,943 | | | 146,220 | | | 9,459 | | | 1,140,846 | | | | | | | | | | | | | | | | | | | | | | | | | | | Richard J. Gregory (6) | | 2017 | | | 455,403 | | | - | | | 586,008 | | | - | | | 245,918 | | | 8,784 | | | 1,296,113 | | Executive Vice President | | 2016TP | | | 223,237 | | | - | | | - | | | 203,634 | | | 87,419 | | | 1,821 | | | 516,111 | | Anna Berkenblit | | | 2019 | | | 461,367 | | | - | | | - | | | 1,206,019 | | | 132,288 | | | 9,030 | | | 1,808,704 | Senior Vice President and Chief | | | 2018 | | | 430,654 | | | - | | | - | | | 1,202,454 | | | 167,506 | | | 8,880 | | | 1,809,494 | Medical Officer | | | 2017 | | | 408,526 | | | - | | | 388,531 | | | - | | | 193,029 | | | 8,784 | | | 998,870 | Richard J. Gregory (4) | | | 2019 | | | 496,001 | | | - | | | - | | | 1,000,489 | | | 115,398 | | | 9,030 | | | 1,620,918 | Former Executive Vice President | | | 2018 | | | 466,788 | | | - | | | - | | | 1,762,453 | | | 206,388 | | | 8,880 | | | 2,444,509 | and Chief Scientific Officer | | 2016 | | | 431,375 | | | 5,177 | | | - | | | 522,533 | | | 178,589 | | | 7,645 | | | 1,145,319 | | 2017 | | | 455,403 | | | - | | | 586,008 | | | - | | | 245,918 | | | 8,784 | | | 1,296,113 | | | 2015 | | | 206,597 | | | 152,892 | | | 163,250 | | | 564,995 | | | 85,532 | | | 342 | | | 1,173,608 | | | | | | | | | | | | | | | | | | | | | | | | | | | Craig Barrows | | 2017 | | | 397,800 | | | - | | | 346,788 | | | - | | | 214,812 | | | 8,784 | | | 968,184 | | Executive Vice President, | | 2016TP | | | 195,000 | | | - | | | | | | 191,933 | | | 76,362 | | | 2,966 | | | 466,261 | | Thomas Ryll | | | 2019 | | | 391,430 | | | - | | | - | | | 1,040,526 | | | 127,032 | | | 7,764 | | | 1,566,752 | Senior Vice President, | | | 2018 | | | 362,359 | | | - | | | - | | | 1,099,386 | | | 155,036 | | | 7,653 | | | 1,624,434 | Technical Operations | | | 2017 | | | 343,740 | | | - | | | 263,302 | | | - | | | 162,417 | | | 8,727 | | | 778,186 | Craig Barrows (5) | | | 2019 | | | 421,685 | | | - | | | - | | | 801,879 | | | 152,667 | | | 9,030 | | | 1,385,261 | Former Executive Vice President, | | | 2018 | | | 407,745 | | | - | | | - | | | 1,546,012 | | | 162,255 | | | 8,880 | | | 2,124,892 | General Counsel and | | 2016 | | | 355,103 | | | - | | | - | | | 731,547 | | | 128,636 | | | 9,173 | | | 1,224,459 | | 2017 | | | 397,800 | | | - | | | 346,788 | | | - | | | 214,812 | | | 8,784 | | | 968,184 | Secretary | | 2015 | | | 344,093 | | | - | | | - | | | 437,460 | | | 127,418 | | | 8,254 | | | 917,225 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Anna Berkenblit (7) | | 2017 | | | 408,526 | | | - | | | 388,531 | | | - | | | 193,029 | | | 8,784 | | | 998,870 | | Vice President and Chief | | 2016TP | | | 200,258 | | | - | | | - | | | 174,060 | | | 66,516 | | | 2,459 | | | 443,293 | | Medical Officer | | | | | | | | | | | | | | | | | | | | | | | | |
| 1) | | The amount shown in this column for fiscal year 2016 for Mr. Enyedy represents his sign-on bonus. The amount shown in this column for Mr. Gregory for fiscal year 2016 represents the discretionary bonus paid to him for that fiscal year. The amounts shown in this column for fiscal year 2015 represent the discretionary bonuses paid for that fiscal year and, for Dr. Gregory, his $150,000 sign-on bonus.
|
| 2)
| | The amounts shown in these columns represent the aggregate grant date fair value of the time-based restricted stock awards and stock option awards for the years indicated, computed in accordance with FASB ASC Topic 718. Additional information can be found in the footnotes to the Grants of Plan-Based Awards table elsewhere in this proxy statement and in Note B to the consolidated financial statements included in our annual report on Form 10‑K for the year ended December 31, 2017.2019. |
| 3)2)
| | The amounts shown in this column represent payments under our annual bonus program for each of the fiscal yearsperiods shown. |
| 4)3)
| | The table below shows the components of this column for 2017:2019: |
| | | | | | | | | | | | | | | | | | | Name | | 401(k) Plan
Matching
Contribution (a) | | Term Life
Insurance
Premiums | | Total All Other
Compensation | | 401(k) Plan
Matching
Contribution (a) | | Term Life
Insurance
Premiums | | Total All Other
Compensation | Mark J. Enyedy | | $ | 8,100 | | $ | 684 | | $ | 8,784 | | $ | 8,400 | | $ | 630 | | $ | 9,030 | David B. Johnston | | | 7,920 | | | 684 | | | 8,604 | | Anna Berkenblit | | | | 8,400 | | | 630 | | | 9,030 | Richard J. Gregory | | | 8,100 | | | 684 | | | 8,784 | | | 8,400 | | | 630 | | | 9,030 | Thomas Ryll | | | | 7,134 | | | 630 | | | 7,764 | Craig Barrows | | | 8,100 | | | 684 | | | 8,784 | | | 8,400 | | | 630 | | | 9,030 | Anna Berkenblit | | | 8,100 | | | 684 | | | 8,784 | |
| a) | | The amounts in this column represent our matching contributions allocated to each of the named executive officers who participatesparticipated in our 401(k) retirement savings plan.plan in 2019. All such matching contributions were fully vested upon contribution. |
| 5)4)
| | Mr. Enyedy joined ImmunoGenDr. Gregory’s employment with us ended on May 16, 2016.August 30, 2019.
|
| 6)5)
| | Dr. Gregory joined ImmunoGenMr. Barrows’ employment with us ended on January 5, 2015.February 28, 2020.
|
| 7)
| | Dr. Berkenblit was designated an executive officer by our Board of Directors on December 9, 2016.
|
Grants of Plan-Based Awards The following table shows all awards granted to each of the named executive officers during 2017.2019. Grants of Plan-Based Awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards | | Estimated Future Payouts Under
Equity Incentive Plan Awards | | All Other
Stock
Awards:
Number
of
Shares | | All Other
Option
Awards:
Number of
Securities
Underlying | | Exercise
or Base
Price of
Option | | Grant Date
Fair Value
of Stock and | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards | | Estimated Future Payouts Under
Equity Incentive Plan Awards | | All Other
Stock
Awards:
Number
of
Shares | | All Other
Option
Awards:
Number of
Securities
Underlying | | Exercise
or Base
Price of
Option | | Grant Date
Fair Value
of Stock and | Name | | Grant Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | of Stock
(#) | | Options
(#) | | Awards
($/sh) | | Option
Awards (1) | | Grant Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | of Stock
(#) | | Options
(#) | | Awards
($/sh) | | Option
Awards (1) | Mark J. Enyedy | | (2) | | $ | 251,250 | | $ | 502,500 | | $ | 502,500 | | - | | - | | - | | - | | - | | | - | | | - | | (2) | | $ | 267,846 | | $ | 535,691 | | $ | 803,537 | | - | | - | | - | | - | | - | | | - | | | - | | | 2/21/2017 (3) | | | - | | | - | | | - | | - | | - | | - | | 500,000 | | - | | $ | 2 | | $ | 1,235,000 | | 1/31/2019 (3) | | | - | | | - | | | - | | - | | - | | - | | - | | 785,000 | | $ | 5.25 | | $ | 2,716,181 | | | 6/14/2017 (4) | | | - | | | - | | | - | | - | | 239,000 | | 239,000 | | - | | - | | | - | | | - | | David B. Johnston | | (2) | | | - | | | 219,214 | | | 219,214 | | - | | - | | - | | - | | - | | | - | | | - | | Anna Berkenblit | | | (2) | | | - | | | 163,318 | | | 306,221 | | - | | - | | - | | - | | - | | | - | | | - | | | 2/21/2017 (3) | | | - | | | - | | | - | | - | | - | | - | | 191,750 | | - | | | 2 | | | 473,623 | | 1/31/2019 (3) | | | - | | | - | | | - | | - | | - | | - | | - | | 256,050 | | | 5.25 | | | 885,959 | | | 2/21/2017 (4) | | | - | | | - | | | - | | - | | 103,250 | | 103,250 | | - | | - | | | - | | | - | | 1/31/2019 (4) | | | - | | | - | | | - | | - | | - | | - | | - | | 92,500 | | | 5.25 | | | 320,059 | Richard J. Gregory | | (2) | | | - | | | 245,918 | | | 245,918 | | - | | - | | - | | - | | - | | | - | | | - | | (2) | | | - | | | 194,193 | | | 364,112 | | - | | - | | - | | - | | - | | | - | | | - | | | 2/21/2017 (3) | | | - | | | - | | | - | | - | | - | | - | | 237,250 | | - | | | 2 | | | 586,008 | | 1/31/2019 (3) | | | - | | | - | | | - | | - | | - | | - | | - | | 289,150 | | | 5.25 | | | 1,000,489 | Thomas Ryll | | | (2) | | | - | | | 141,147 | | | 264,651 | | | | | | | | | | - | | | - | | | - | | | 2/21/2017 (4) | | | - | | | - | | | - | | - | | 127,750 | | 127,750 | | - | | - | | | - | | | - | | 1/31/2019 (3) | | | - | | | - | | | - | | - | | - | | - | | - | | 221,900 | | | 5.25 | | | 767,796 | Craig Barrows | | (2) | | | - | | | 214,812 | | | 214,812 | | | | | | | | - | | - | | | - | | | - | | (2) | | | - | | | 169,630 | | | 318,056 | | | | | | | | | | - | | | - | | | - | | | 2/21/2017 (3) | | | - | | | - | | | - | | - | | - | | - | | 140,400 | | - | | | 2 | | | 346,788 | | 1/31/2019 (3) | | | - | | | - | | | - | | - | | - | | - | | - | | 231,750 | | | 5.25 | | | 801,879 | | | 2/21/2017 (4) | | | - | | | - | | | - | | - | | 75,600 | | 75,600 | | - | | - | | | - | | | - | | Anna Berkenblit | | (2) | | | - | | | 193,029 | | | 193,029 | | | | | | | | - | | - | | | - | | | - | | | | 2/21/2017 (3) | | | - | | | - | | | - | | - | | - | | - | | 157,300 | | - | | | 2 | | | 388,531 | | | | 2/21/2017 (4) | | | - | | | - | | | - | | - | | 84,700 | | 84,700 | | - | | - | | | - | | | - | |
| 1) | | The amounts shown in this column have been calculated in accordance with FASB ASC Topic 718. Additional information can be found in Note B to the consolidated financial statements in our annual report on Form 10‑K for the year ended December 31, 2017.2019. |
| 2) | | The amounts shown in these rows reflect the possible cash amounts that could have been earned upon achievement of the threshold, target and maximum performance objectives for the annual executive bonus program for 2017.2019. In the case of Mr. Enyedy, whose bonus was tied solely to corporate performance, the threshold amount represents 50% of his target bonus, reflecting the minimum achievement required for any payout based on corporate performance. The maximum represents 150% of his target, the highest percentage that can be achieved for corporate performance. In the case of the remaining executive officers, for whom 30% of their respective target bonuses was tied to individual performance, there was effectively no threshold payment since the compensation committee reserved the discretion to determine payouts under the portion of the bonus tied to individual performance without regard to any minimum achievement of previously-establishedpreviously established goals. The maximum bonus for this group is based on the assumption of corporate performance reaching the maximum 150%, and the achievement of 125% of their personal goals. |
| 3) | | These restricted stock awards were granted under our 2016 Plan. Theas part of an annual grant date fair value of these awards has been calculated by multiplying the number of shares granted by the closing price ($2.47) of our common stock on the NASDAQ Global Select Market on theoptions to all employees. |
| 4) | | This grant date. These awards are also describedwas awarded in the Outstanding Equity Awards at Fiscal Year-End table.conjunction with Dr. Berkenblit’s promotion to Senior Vice President. |
| 4)
| | These performance based restricted stock awards were granted under our 2016 Plan. The grant date fair value of this award has been calculated based upon the probable outcome of the performance goals, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. These awards are also described in the Compensation Discussion and Analysis and the Outstanding Equity Awards at Fiscal Year-End table.
|
Outstanding Equity Awards at 20172019 Year-End The following table shows information on all outstanding stock options and unvested restricted stock awards held by the named executive officers at the end of the last fiscal year. The table also shows the market value of unvested time-based restricted shares and unearned performance-based restricted shares at the end of the last fiscal year. The amounts shown represent the number of unvested or unearned restricted shares at the end of 2017,2019, multiplied by the closing price ($6.41)5.11) of our common stock on the NASDAQNasdaq Global Select Market on December 29, 2017.31, 2019. Outstanding Equity Awards at Fiscal Year-End | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Awards (1) | | | | | | | | | | | Stock Awards | | | Option Awards (1) | | | | | | | Equity
Incentive
Plan
Awards: | | Equity
Incentive
Plan | | Option Awards (1) | | | | | | | Equity Incentive Plan Awards: | | Equity Incentive Plan | Name | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Option
Exercise
Price ($) | | Option
Expiration
Date
(mm/dd/yyyy) | | Number
of
Shares
of Stock
That
Have
Not
Vested (#) | | Market
Value of
Shares of
Stock That
Have Not
Vested ($) | | Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested ($) | | Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($) | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Option
Exercise
Price ($) | | Option
Expiration
Date
(mm/dd/yyyy) | | Number
of
Shares
of Stock
That
Have
Not
Vested (#) | | Market
Value of
Shares of
Stock That
Have Not
Vested ($) | | Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested ($) | | Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($) | Mark J. Enyedy | | 75,000 | | 225,000 | (2) | $ | 5.65 | | 5/16/2026 | | | | | | | - | | | - | | 225,000 | | 75,000 | (2) | $ | 5.65 | | 5/16/2026 | | - | | | - | | - | | | - | | | - | | - | | | - | | - | | 56,250 | (3) | $ | 360,563 | | - | | | - | | | | - | | - | | | - | | - | | 500,000 | (4) | | 3,205,000 | | 239,000 | (5) | $ | 1,531,990 | | David B. Johnston | | | | | | | | | | | - | | | - | | - | | | - | | | | 150,000 | | | | | 15.08 | | 12/30/2023 | | - | | | - | | - | | | - | | | | 90,000 | | | | | 10.79 | | 7/17/2024 | | - | | | - | | - | | | - | | | | 66,667 | | 33,333 | (6) | | 16.72 | | 7/13/2025 | | - | | | - | | - | | | - | | | | 36,667 | | 73,333 | (7) | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | | | - | | - | | | - | | - | | - | | | - | | 20,000 | (5) | | 128,200 | | | | - | | - | | | - | | - | | 191,750 | (4) | | 1,229,118 | | 103,250 | (5) | | 661,833 | | Richard J. Gregory | | 75,000 | | 75,000 | (8) | | 6.53 | | 1/5/2025 | | - | | | - | | - | | | - | | | | - | | - | | | - | | - | | 12,500 | (9) | | 80,125 | | - | | | - | | | | 33,334 | | 16,666 | (6) | | 16.72 | | 7/13/2025 | | - | | | - | | - | | | - | | | | 36,667 | | 73,333 | (7) | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | | | - | | - | | | - | | - | | - | | | - | | 20,000 | (5) | | 128,200 | | | | - | | - | | | - | | - | | 237,250 | (4) | | 1,520,773 | | 127,750 | (5) | | 818,878 | | Craig Barrows | | 55,000 | | - | | | 9.88 | | 7/24/2019 | | - | | | - | | - | | | - | | | | 40,000 | | - | | | 9.14 | | 7/23/2020 | | - | | | - | | - | | | - | | | | 55,000 | | - | | | 15.20 | | 7/22/2021 | | - | | | - | | - | | | - | | | | 70,000 | | - | | | 15.83 | | 7/20/2022 | | - | | | - | | - | | | - | | | | 70,000 | | - | | | 19.02 | | 7/16/2023 | | - | | | - | | - | | | - | | | | 70,000 | | - | | | 10.79 | | 7/17/2024 | | - | | | - | | - | | | - | | | | 46,667 | | 23,333 | (6) | | 16.72 | | 7/13/2025 | | - | | | - | | - | | | - | | | | 23,334 | | 46,666 | (7) | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | - | | - | | | - | | - | | 18,750 | (3) | $ | 95,719 | | - | | | - | | | 13,750 | | 41,250 | (10) | | 1.84 | | 12/9/2026 | | - | | | - | | - | | | - | | - | | - | | | - | | - | | 166,666 | (4) | | 850,830 | | 239,000 | (5) | $ | 1,220,095 | | | - | | - | | | - | | - | | - | | | - | | 12,600 | (5) | | 80,766 | | 366,667 | | 733,333 | (6) | | 10.65 | | 2/15/2028 | | - | | | - | | - | | | - | | | - | | - | | | - | | - | | 140,400 | (4) | | 899,964 | | 75,600 | (5) | | 484,596 | | - | | 785,000 | (6) | | 5.25 | | 1/31/2029 | | - | | | - | | - | | | - | Anna Berkenblit | | 62,500 | | 62,500 | (11) | | 8.94 | | 4/1/2025 | | - | | | - | | - | | | - | | 125,000 | | - | | | 8.94 | | 4/1/2025 | | - | | | - | | - | | | - | | | 7,334 | | 3,666 | (6) | | 16.72 | | 7/13/2025 | | - | | | - | | - | | | - | | 11,000 | | - | | | 16.72 | | 7/13/2025 | | - | | | - | | - | | | - | | | 1,334 | | 2,666 | (12) | | 5.75 | | 6/1/2026 | | - | | | - | | - | | | - | | 4,000 | | - | | | 5.75 | | 6/1/2026 | | - | | | - | | - | | | - | | | 16,667 | | 33,333 | (7) | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | 50,000 | | - | | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | | 16,667 | | 33,333 | (13) | | 2.68 | | 9/30/2026 | | - | | | - | | - | | | - | | 50,000 | | - | | | 2.68 | | 9/30/2026 | | - | | | - | | - | | | - | | | - | | - | | | - | | - | | - | | | - | | 10,000 | (5) | | 64,100 | | - | | - | | | - | | - | | - | | | - | | 10,000 | (5) | | 51,050 | | | - | | - | | | - | | - | | 157,300 | (4) | | 1,008,293 | | 84,700 | (5) | | 542,927 | | - | | - | | | - | | - | | 52,433 | (4) | | 267,670 | | 84,700 | (5) | | 432,394 | | | | 58,334 | | 116,666 | (6) | | 10.65 | | 2/15/2028 | | - | | | - | | - | | | - | | | | - | | 348,550 | (6) | | 5.25 | | 1/31/2029 | | - | | | - | | - | | | - | Richard J. Gregory (8) | | | - | | - | | | - | | | | - | | | - | | - | | | - | Thomas Ryll | | | 60,000 | | - | | | 14.56 | | 8/17/2025 | | - | | | - | | - | | | - | | | | 4,000 | | - | | | 5.75 | | 6/1/2026 | | - | | | - | | - | | | - | | | | 40,000 | | - | | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | | | 38,000 | | - | | | 2.68 | | 9/30/2026 | | - | | | - | | - | | | - | | | | - | | - | | | - | | - | | 35,533 | (4) | | 181,396 | | 57,400 | (5) | | 293,027 | | | | 53,334 | | 106,666 | (6) | | 10.65 | | 2/15/2028 | | - | | | - | | - | | | - | | | | - | | 221,900 | (6) | | 5.25 | | 1/31/2029 | | - | | | - | | - | | | - | | | | - | | 110,950 | (6) | | 3.48 | | 11/19/2029 | | - | | | - | | - | | | - | Craig Barrows (9) | | | 40,000 | | - | | | 9.14 | | 7/23/2020 | | - | | | - | | - | | | - | | | | 55,000 | | - | | | 15.20 | | 7/22/2021 | | - | | | - | | - | | | - | | | | 70,000 | | - | | | 15.83 | | 7/20/2022 | | - | | | - | | - | | | - | | | | 70,000 | | - | | | 19.02 | | 7/16/2023 | | - | | | - | | - | | | - | | | | 70,000 | | - | | | 10.79 | | 7/17/2024 | | - | | | - | | - | | | - | | | | 70,000 | | | | | 16.72 | | 7/13/2025 | | - | | | - | | - | | | - | | | | 70,000 | | | | | 3.05 | | 7/18/2026 | | - | | | - | | - | | | - | | | | 41,250 | | 13,750 | (7) | | 1.84 | | 12/9/2026 | | - | | | - | | - | | | - | | | | - | | - | | | - | | - | | - | | | - | | 12,600 | (5) | | 64,323 | | | | - | | - | | | - | | - | | 46,800 | (4) | | 238,914 | | 75,600 | (5) | | 385,938 | | | | 75,000 | | 150,000 | (6) | | 10.65 | | 2/15/2028 | | - | | | - | | - | | | - | | | | - | | 231,750 | (6) | | 5.25 | | 1/31/2029 | | - | | | - | | - | | | - |
| 1) | | AllThe above option awards granted by ImmunoGen are subject to time-based vesting. Accordingly, there are no unearned option awards outstanding. Securities underlying options are shares of our common stock.
|
| 2) | | This option award vests in four equal installments on each of the first four anniversaries of the grant date (May 16, 2016), contingent on Mr. Enyedy remaining an employee, director or consultant of ImmunoGen as of each such date. |
| 3) | | This restricted stock award vests in four equal installments on each of the first four anniversaries of the grant date (May 16, 2016), contingent on Mr. Enyedy remaining an employee, director or consultant of ImmunoGen as of each such date. |
| 4) | | These time-based restricted stock awards vest in three equal installments on each of the first three anniversaries of the grant date (February 21, 2017), contingent on the executive remaining an employee, director or consultant of ImmunoGen as of each such date. |
| 5) | | These performance-based restricted stock awards, which were granted in 2016 and 2017, will vest inbased on ImmunoGen meeting three equal installments upon the achievement, within the performance period, which is the five-year period commencing onbusiness development milestones by August 12, 2016,2021. For each milestone that is met by that date, one- |
third of certain performance goals, which are more fully described in the Compensation and Discussion Analysis elsewhere in this proxy statement, and areshares originally granted will vest, contingent on the executive remaining an employee, director or consultant of ImmunoGen as of each such date. |
| 6) | | These option awards vest in three equal installments on each of the first three anniversaries of the grant date (July 13, 2015)(February 15, 2018), contingent, in each case, on the executive remaining either an employee (in the case of an incentive stock option) or an employee, director or consultant (in the case of a non-qualified stock option) of ImmunoGen as of each such date. |
| 7) | | These option awards vest in three equal installments on each of the first three anniversaries of the grant date (July 18, 2016), contingent in each case on the executive remaining an employee, director or consultant of ImmunoGen as of each such date.
|
| 8)
| | This option award vests in four equal installments on each of the first four anniversaries of the grant date (January 5, 2015), contingent on Dr. Gregory remaining either an employee (in the case of an incentive stock option) or an employee, director or consultant (in the case of a non-qualified stock option) of ImmunoGen as of each such date.
|
| 9)
| | This restricted stock award vests in four equal installments on each of the first four anniversaries of the grant date (January 5, 2015), contingent on Dr. Gregory remaining either an employee, director or consultant of ImmunoGen as of each such date.
|
| 10)
| | This option award vests in three equal installments on each of the first three anniversaries of the grant date (December 9, 2016), contingent on Mr. Barrows remaining an employee, director or consultant of ImmunoGen as of each such date. |
| 11)8)
| | This option award vests in four equal installmentsDr. Gregory’s employment with us ended on each of the first four anniversaries of the grant date (April 1, 2015), contingent on Dr. Berkenblit remaining either an employee (in the case of an incentive stock option) or an employee, director or consultant (in the case of a non-qualified stock option) of ImmunoGen as of each such date.August 30, 2019.
|
| 12)9)
| | This option award vests in three equal installmentsMr. Barrows’ employment with us ended on each of the first three anniversaries of the grant date (June 1, 2016), contingent on Dr. Berkenblit remaining an employee, director or consultant of ImmunoGen as of each such date.February 28, 2020.
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| 13)
| | This option award vests in three equal installments on each of the first three anniversaries of the grant date (September 30, 2016), contingent on Dr. Berkenblit remaining an employee, director or consultant of ImmunoGen as of each such date.
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Options Exercised and Stock Awards Vested The following table shows information regarding stock option exercises and stock award vesting by the named executive officers during 2017.2019. Option Exercises and Stock Vested | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Option Awards | | Stock Awards | Name | | Number of
Shares
Acquired on
Exercise (#) | | Value Realized on
Exercise ($) | | Number of
Shares
Acquired on
Vesting (#) | | Value Realized on
Vesting ($) | | Number of
Shares
Acquired on
Exercise (#) | | Value Realized on
Exercise ($) | | Number of
Shares
Acquired on
Vesting (#) | | Value Realized on
Vesting ($) | Mark J. Enyedy | | — | | | — | | 18,750 | | $ | 91,125 | | — | | | — | | 185,417 | | $ | 963,606 | David B. Johnston | | — | | | — | | — | | | — | | Anna Berkenblit | | | — | | | — | | 52,433 | | | 291,527 | Richard J. Gregory | | — | | | — | | 6,250 | | | 14,813 | | 110,000 | | | 28,798 | | 85,333 | | | 470,576 | Thomas Ryll | | | — | | | — | | 35,533 | | | 197,563 | Craig Barrows | | 50,000 | | $ | 115,762 | | — | | | — | | — | | | — | | 46,800 | | | 260,208 | Anna Berkenblit | | — | | | — | | — | | | — | |
Potential Payments Upon Termination or Change in Control Termination of Employment Not Following a Change in Control Prior to the adoption of our severance pay plan for vice presidents and higher, we had entered into written agreements with certain of our executive officers to provide severance benefits in addition to those required by applicable law in connection with the termination of the executive’s employment with us outside the context of a change in control. In connection with the adoption of this plan, each of those executive officers terminated those written agreements.
All of our named executive officers whose employment is terminated by us without cause are eligible to participate in our severance pay plan for vice presidents and higher. “Cause” under the severance pay plan is defined to include an executive’s willful act or omission that materially harms ImmunoGen, willful failure or refusal to follow the lawful and proper directives of our CEO or our Board, conviction of the executive for a felony, commission of an act of moral turpitude that is reasonably expected to be injurious to ImmunoGen or its reputation, material fraud or theft relating to ImmunoGen, or breach of our Code of Corporate Conduct, Senior Officer and Financial Personnel Code of Ethics, or other contractual obligation to ImmunoGen. Severance benefits under the plan include: | · | | salary continuation for the following specified periods: 18 months in the case of the CEO;CEO and 12 months in the case of our other named executive officers; |
| · | | payment of a portion of the named executive officer’s annual cash bonus for the year in which termination occurs, as follows: 100% of the portion of the named executive officer’s bonus tied to personal objectives, if any; anddetermined in accordance with respect to the portion of the named executive officer’s bonus tied to corporate objectives, the named executive officer would be entitled to receive the same percentage as the other participants in our annual bonus program, in both casesif, and when bonuses are paid to our similarly situated active employees as of the date such bonuses are paid, and pro-rated to |
reflect the actual number of days the named executive officer was employed during the applicable fiscal year; |
| · | | if the executive officer elects to continue medical insurance coverage in accordance with COBRA, a subsidy of the executive’s COBRA premium at the same percentage as the premium subsidy provided to other similarly situated active employees for the duration of the salary continuation period; and |
| · | | payment of the cost for outplacement services lasting not less than six months. |
Payment of the above-described severance benefits is subject to the named executive officer releasing all of his or her claims against ImmunoGen other than claims that arise from our obligations under the plan. In addition, no benefits are payable under the plan in circumstances where the named executive officer is entitled to receive severance compensation under the terms of any separate written agreement, including the change in control severance agreements described below. After February 15, 2018, determination of the portion of the named executive officer’s annual cash bonus payable under the plan was changed to provide that such amount would be calculated in the same manner as bonuses are calculated for other participants in our annual bonus program, with no guaranteed achievement of the part of the calculation determined by achievement toward personal objectives, pro-rated as described above. The following table illustrates the potential benefits that would have been received by the named executive officers under our severance pay plan for vice presidents and higher, assuming we had terminated each executive’s employment without cause on December 31, 20172019 outside the context of a change in control. Potential Payments Upon Termination of Employment Not Following a Change in Control (Without Cause and Not foras a Result of a Disability) | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Salary
Continuation | | Bonus Lump
Sum (1) | | Healthcare
Continuation (2) | | Total | | Salary
Continuation | | Bonus Lump
Sum (1) | | Healthcare
Continuation (2) | | Total | Mark. J. Enyedy | | $ | 1,005,000 | | $ | 753,750 | | $ | 42,658 | | $ | 1,801,408 | | $ | 1,071,381 | | $ | 482,121 | | $ | 83,727 | | $ | 1,637,229 | David B. Johnston | | | 405,951 | | | 219,214 | | | 28,439 | | | 653,604 | | Richard J. Gregory | | | 455,403 | | | 245,918 | | | 28,439 | | | 729,760 | | Anna Berkenblit | | | | 466,624 | | | 132,288 | | | 55,818 | | | 654,730 | Thomas Ryll | | | | 403,277 | | | 127,032 | | | 55,818 | | | 586,127 | Craig Barrows | | | 397,800 | | | 214,812 | | | 28,439 | | | 641,051 | | | 424,075 | | | 152,667 | | | 55,818 | | | 632,560 | Anna Berkenblit | | | 408,526 | | | 193,029 | | | 28,439 | | | 629,994 | |
| 1) | | Amounts represent 100% ofequal the portion ofbonuses earned by each named executive officer’s bonus tied to personal objectivesofficer for 2019, and 100% of each named executive officer’s bonus tied to corporate objectives, based on achievement of 150% ofshown in the corporate objectives achieved for 2017.summary compensation table as “non-equity incentive plan compensation.” |
| 2) | | Amounts represent payments equal to each executive’s COBRA premiums for 12 months (or in the case of Mr. Enyedy, 18 months) for the type of healthcare coverage ImmunoGen carried for each named executive officer as of December 31, 2017.2019. |
salary continuation ($485,482), the annual cash bonus for 2019 ($115,398), twelve months of medical insurance coverage ($55,818) and outplacement services. Termination of Employment Following a Change in Control We have entered into change in control severance agreements with each named executive officer providing for certain benefits in the event of a change in control of ImmunoGen. A change in control includes any of the following events: | · | | the acquisition by any person of 50% or more of our outstanding common stock pursuant to a transaction which our Board of Directors does not approve; |
| · | | a merger or consolidation of ImmunoGen, whether or not approved by our Board, where our voting securities remain outstanding and continue to represent, or are converted into securities of the surviving corporation (or its parent) representing, less than 50% of the total voting power of the surviving entity (or its parent) following such transaction; |
| · | | our shareholders approve an agreement for the sale of all or substantially all of ImmunoGen’s assets; or |
| · | | the “incumbent directors” cease to constitute at least a majority of the members of our Board. “Incumbent directors” include the current members of our Board, plus any future members who are elected or nominated for election by at least a majority of the incumbent directors at the time of such election or nomination, with certain exceptions relating to actual or threatened proxy contests relating to the election of directors to our Board. |
Each named executive officer is entitled to severance benefits if, within the period of two months before or 12 months after a change in control of ImmunoGen, the executive’s employment is terminated (1) by us other than for cause or disability or (2) by the executive for good reason. “Cause” is“Cause,” as defined to includein each named executive officer’s severance agreement, includes the executive’s willful act or omission that materially harms ImmunoGen; willful failure or refusal to follow the lawful and proper directives of the Board; conviction of the executive for a felony; commission of an act of moral turpitude that is reasonably expected to be injurious to ImmunoGen or its reputation; material fraud or theft relating to ImmunoGen; or breach of our Code of Corporate Conduct, Senior Officer and Financial Personnel Code of Ethics, or other contractual obligation to ImmunoGen. “Good reason” is defined in each agreement to include the occurrence of the following events without the executive’s consent: a change in the principal location at which the executive performs his duties for us to a new location that is at least 40 miles from the prior location; a material change in the executive’s authority, functions duties or responsibilities as compared to her or his highest position with ImmunoGen; or a material reduction in the executive’s base salary or target annual bonus. Severance benefits under each agreement include the following: | · | | a lump sum payment equal to 1.5 times (or in the case of Mr. Enyedy, 2 times) the sum of the executive officer’s then current annual base salary and the executive’s target annual bonus for the fiscal year in which the termination occurs; |
| · | | vesting of 100% of the executive officer’s unvested stock options and unvested restricted stock awards and other similar rights; |
| · | | if the executive officer elects to continue medical coverage in accordance with COBRA, a subsidy of the executive officer’s COBRA premium at the same percentage as we subsidized health |
insurance premiums for the executive officer immediately prior to the date of termination of the executive officer’s employment (or, if more favorable to the executive officer, immediately prior to the consummation of the change in control), for up to 18 months (provided that following the expiration of the CEO’s COBRA coverage period, we will pay a taxable amount to the CEO equal to the COBRA premium subsidy on a monthly basis for a period ending 24 months from the CEO’s termination date); and |
| · | | payment of the cost of out-placement services up to a maximum of $40,000. |
Payment of the above-described severance benefits is subject to the named executive officer releasing all his or her claims against ImmunoGen other than claims that arise from ImmunoGen’sImmunogen’s obligations under the severance agreement. In addition, the severance benefits will replace any similar compensation that may be provided to the executive under any other agreement or arrangement in relation to termination of employment, with certain exceptions. Each severance agreement provides for a reduction of payments and benefits to be received by the named executive officer pursuant to a change in control to a level where the executive would not be subject to the excise tax pursuant to section 4999 of the Code, but only if such reduction would put the executive in a better after-tax position than if the payments and benefits were paid in full. In addition, each agreement provides for the payment by ImmunoGen of the executive’s legal fees and expenses incurred in connection with the agreement. Each severance agreement continues in effect for two years from its effective date, subject to automatic one-year extensions thereafter unless notice is given of our or the executive’s intention not to extend the term of the agreement; provided, however, that the agreement continues in effect for 12 months following a change in control that occurs during the term of the agreement. The following table illustrates the potential benefits that would have been received by the named executive officers under the severance agreements described above, assuming we had terminated each executive’s employment without cause on December 31, 2017,2019, following a change in control occurring on that date, and using the closing price ($6.41)5.11) of our common stock on the NASDAQNasdaq Global Select Market on December 29, 2017. 31, 2019. Potential Payments Upon Termination of Employment Following a Change in Control (Without Cause and Not foras a Result of a Disability) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Salary/Bonus
Lump Sum (1) | | Stock Option
Acceleration (2) | | Restricted
Stock
Acceleration | | Healthcare
Continuation (3) | | Total | | Salary/Bonus
Lump Sum (1) | | Stock Option
Acceleration (2) | | Restricted
Stock
Acceleration | | Healthcare
Continuation (3) | | Outplacement
Services | | Total | Mark J. Enyedy | | $ | 1,879,712 | | $ | 171,000 | | $ | 5,097,553 | | $ | 56,877 | | $ | 7,205,142 | | $ | 2,499,889 | | $ | - | | $ | 2,166,644 | | $ | 111,636 | | $ | 40,000 | | $ | 4,818,169 | David B. Johnston | | | 852,497 | | | 246,399 | | | 2,019,150 | | | 42,658 | | | 3,160,704 | | Richard J. Gregory | | | 956,346 | | | 246,399 | | | 2,547,975 | | | 42,658 | | | 3,793,378 | | Anna Berkenblit | | | | 944,914 | | | - | | | 751,114 | | | 83,727 | | | 40,000 | | | 1,819,755 | Thomas Ryll | | | | 816,636 | | | 180,294 | | | 474,423 | | | 83,727 | | | 40,000 | | | 1,595,080 | Craig Barrows | | | 817,807 | | | 345,310 | | | 1,465,326 | | | 42,658 | | | 2,671,101 | | | 890,558 | | | 44,894 | | | 689,175 | | | 83,727 | | | 40,000 | | | 1,748,354 | Anna Berkenblit | | | 827,265 | | | 238,091 | | | 1,615,320 | | | 42,658 | | | 2,723,334 | |
| 1) | | Amounts represent the salary and target bonus-based lump sum payments described above. The amounts in this column for Messrs. Enyedy and Barrows reflect reductions in their respective salary-based lump sum payments to a level where they would not be subject to the excise tax pursuant to Section 4999 of the Internal Revenue Code. |
| 2) | | Any amounts shown in this column represent payment of the difference between $6.41$5.11 and the exercise price of any in-the-money unvested stock option that would have become exercisable upon termination of the executive’s employment without cause following a change in control, multiplied in each case by the number of shares subject to such option. |
| 3) | | Amounts represent payments equal to each executive’s COBRA premiums for 18 months (or in the case of Mr. Enyedy, 24 months) for the type of healthcare coverage ImmunoGen carried for each named executive officer as of December 31, 2017.2019. |
CEO Pay Ratio For 2017,2019, Mr. Enyedy’s total compensation was $2,667,534,$3,917,560, as shown in the Summary Compensation Table. The total compensation for the median employee (excluding Mr. Enyedy) was $142,843$223,674. Accordingly, Mr. Enyedy’s total compensation was 18.717.5 times that of the median employee’s total compensation in 2017.2019. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records, as well as the methodology described below. The compensation elements that were considered in the identification of the median employee were actual base pay during 20172019 and annual bonus payout for 2017,2019, which was paid in March 2018.2020. Due to a significant restructuring of ImmunoGen during 2019, the median employee was recalculated for this year. The total number of employees as of December 29, 201731, 2019 was 293,85, which included 10 employees who were terminated at the end of whom 280the year but were included in the population usedentitled to determine the median employee. Employees not eligible to receive a bonus under the 2017 bonus program were excluded. Once identified, the total compensationpayout for the median employee was calculated pursuant to the requirements of the Summary Compensation Table.2019. REPORT OF THE COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement, and based on such review and discussion, the Compensation Committee recommended to ImmunoGen’s Board that the Compensation Discussion and Analysis be included in this proxy statement and be incorporated by reference into ImmunoGen’s Annual Report on Form 10‑K for the year ended December 31, 2017.2019. | | | By the Compensation Committee of the
Board of Directors of ImmunoGen, Inc. | | Dean J. Mitchell, ChairmanChair | | Stuart A. Arbuckle | | Mark Goldberg | | Kristine Peterson
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ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS, AS DESCRIBED IN THIS PROXY STATEMENT (Notice Item 5)4) We are providing our shareholders with the opportunity to cast an advisory (non-binding) vote on executive compensation, or a “say-on-pay” vote. Under Section 14A of the Securities Exchange Act of 1934, as amended, we must hold this advisory vote at least once every three years. At the 2017 annual meeting of shareholders, we asked shareholders to vote on an advisory basis with respect to whether future say-on-pay votes should be held once every year, or once every two or three years (the “say-on-frequency” vote). Shareholders indicated by their advisory vote their preference to hold say-on-pay votes on an annual basis. After taking into consideration the results of the say-on-frequency vote at the 2017 annual meeting, our Board determined to include say-on-pay advisory votes in our proxy materials on an annual basis until the next required “say-on-frequency” vote by shareholders. Our compensation philosophy is designed to align each executive’s compensation with our short-term and long-term performance and to provide the compensation and incentives needed to attract, motivate and retain key executives who are crucial to our long-term success. Consistent with this philosophy, a significant portion of the total compensation opportunity for each of our executives is directly related to performance factors that measure our progress against the goals of our strategic and operating plans, as well as our performance against that of our peer companies. The say-on-pay vote is a non-binding vote on the compensation paid to our named executive officers, as described elsewhere in this proxy statement under the heading “Executive Compensation,“EXECUTIVE COMPENSATION,” and includes the “Compensation Discussion and Analysis,” or “CD&A,” tabular disclosure regarding such compensation and accompanying narrative disclosure set forth elsewhere in this proxy statement. The Executive Compensation section describes our compensation philosophy and objectives, how we determine executive compensation, the elements of total compensation, and the actual compensation of our named executive officers identified in that section. The Compensation Committee and our Board believe that the policies and practices described in the CD&A are effective in implementing our compensation philosophy and objectives and that the compensation of our named executive officers for 20172019 reflects and supports those policies and practices. In accordance with the rules of the SEC, the following resolution, commonly known as a “say-on-pay” vote, is being submitted for a shareholder vote at the 2020 annual meeting: “RESOLVED, that the compensation paid to the named executive officers of ImmunoGen, Inc., as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the related material disclosed in the proxy statement for the 2020 annual meeting, is hereby APPROVED.” The say-on-pay vote is not binding on the Compensation Committee or our Board. However, the committee and the Board will take into account the result of the vote when determining future executive compensation arrangements. Recommendation The Board recommends a vote “FOR” the proposal to approve, on an advisory basis, the compensation paid to our named executive officers, as described in this proxy statement. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUDIT FEES
(Notice Item 6)
Our Audit Committee has appointed Ernst & Young LLP (“EY”) served as our independent registered public accounting firm for the year endingended December 31, 2018. 2019 and has served in this capacity since 2001. During the five years ended December 31, 2019, there were no disagreements between us and EY on any matter of accounting principles or practices, financial statements disclosure, or auditing scope or procedure.
The Audit Committee is directly responsible for the appointment, retention, compensation and oversight of the work of our independent registered public accounting firm (including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The Audit Committee has not appointed an independent registered public accounting firm for the year ending December 31, 2020 because it is currently engaged in a competitive proposal process to make such appointment and, therefore, does not propose that our shareholders ratify the appointment of any independent registered public accounting firm for the year ending December 31, 2020 at the annual meeting. EY continues to serve as our independent registered public accounting firm and is included in the proposal process. We believe that our process reflects good corporate governance and is not due to a disagreement with EY on any matter related to its audits or reviews, EY resigning or declining to stand for re-appointment, or the existence of reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. The Audit Committee expects to complete its review by June 30, 2020. Ratification of the appointment of our independent registered public accounting firm by our shareholders is not required by our Restated Articles of Organization, by-laws or otherwise. We intend, however, to submit proposals regarding the ratification of the appointment of our independent registered public accounting firm to our shareholders at future annual meetings. Should our shareholders not ratify the appointment of our independent registered public accounting firm in future years, the Audit Committee will reconsider the appointment. In making its determination regarding whether to appoint or retain a particular independent registered public accounting firm, the Audit Committee takes into account the views of management, and will take into account the vote of our shareholders with respect to the ratification of the appointment of our independent registered public accounting firm. Ernst & Young LLP served as our independent registered public accounting firm for the year ended December 31, 2017. We expect that a representative of Ernst & Young LLP will be present at the meeting and will have the opportunity to make a statement if he or she desires and to respond to appropriate questions.
Recommendation
The Board recommends a vote “FOR” the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018.
What were the fees of our independent registered public accounting firm for services rendered to us during the last two fiscal years? The aggregate fees for professional services rendered to us by Ernst & Young LLPEY for 2017, the 2016 Transition Period,2019 and the fiscal year ended June 30, 20162018 were as follows: | | | | | | | | | | | | | | | | | | | Category | | 2017 | | 2016 Transition
Period | | FY 2016 | | FY 2015 | | 2019 | | 2018 | Audit | | $ | 1,304,313 | | $ | 778,313 | | $ | 867,528 | | $ | 797,410 | | $ | 1,247,280 | | $ | 1,208,636 | Audit-Related | | | - | | | - | | | - | | | - | | | - | | | - | Tax | | | - | | | - | | | - | | | - | | | - | | | - | All Other | | | - | | | - | | | - | | | - | | | - | | | - | | | $ | 1,304,313 | | $ | 778,313 | | $ | 867,528 | | $ | 797,410 | | $ | 1,247,280 | | $ | 1,208,636 |
Audit fees for all periods shown above were for professional services provided for the audits of our consolidated financial statements and our internal control over financial reporting as well as reviews of the financial statements included in each of our quarterly reports on Form 10‑Q. Audit fees for fiscal year 2016 also include amounts related to our issuance of convertible senior notes. Audit fees for 2017, the 2016 Transition Period2019 and fiscal year 20152018 also include amounts related to consents relating to registration statements. What is the Audit Committee’s pre-approval policy? Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation, and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. The Audit Committee pre-approves all auditing services and the terms of non-audit services provided by our independent registered public accounting firm, but only to the extent that the non-audit services are not prohibited under applicable law and the committee determines that the non-audit services do not impair the independence of the independent registered public accounting firm. In situations where it is impractical to wait until the next regularly scheduled quarterly meeting, the chairmanChair of the committeeAudit Committee has been delegated authority to approve audit and non-audit services to be provided by our independent registered public accounting firm. Fees payable to our independent registered public accounting firm for any specific, individual service approved by the chairmanChair pursuant to the above-described delegation of authority may not exceed $100,000, plus reasonable and customary out-of-pocket expenses, and the chairmanChair is required to report any such approvals to the full committeeAudit Committee at its next scheduled meeting. The pre-approval requirement is waived with respect to the provision of non-audit services by our independent registered public accounting firm if (1) the aggregate amount of all such non-audit services provided to us constitutes not more than five percent of the total fees paid by us to our independent registered public accounting firm during the fiscal year in which such non-audit services were provided, (2) such services were not recognized at the time of the engagement to be non-audit services, and (3) such services are promptly brought to the attention of the Audit Committee and approved by the committee or by one or more of its members to whom authority to grant such approvals has been delegated by the committee prior to the completion of the independent registered public accounting firm’s audit. Ernst & Young LLPEY did not provide non-audit services during 2017, the 2016 Transition Period,2019 or fiscal year 2016.2018. REPORT OF THE AUDIT COMMITTEE The Audit Committee has reviewed ImmunoGen’s audited financial statements for the year ended December 31, 2017,2019, and discussed these financial statements with ImmunoGen’s management. The Audit Committee also has reviewed and discussed the audited financial statements and the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Audit Standards No. 1301 (“Communication with Audit Committees”) with Ernst & Young LLP, ImmunoGen’s independent registered public accounting firm. In addition, the Audit Committee received the letter from Ernst & Young LLP required by PCAOB Rule 3526 (“Communication with Audit Committees Concerning Independence”), and has discussed with Ernst & Young LLP its independence. Based on its review and the discussions referred to above, the Audit Committee recommended to ImmunoGen’s Board that the audited financial statements be included in ImmunoGen’sImmunogen’s Annual Report on Form 10‑K for the year ended December 31, 2017.2019 for filing with the SEC. | | | By the Audit Committee of the
Board of Directors of ImmunoGen, Inc. | | Stephen C. McCluski, ChairmanChair | | Kristine Peterson | | Richard J. Wallace |
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors and certain persons beneficially owning more than 10% of our outstanding common stock to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Officers, directors, and beneficial owners of more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on copies of such forms furnished as provided above, and written representations from our officers and directors that no Forms 5 were required, we believe that during the year ended December 31, 2017 all2019, one Section 16(a) filing requirements applicable to our officers, directors and beneficial owners of greater than 10% of our common stock were complied with.reporting one transaction, by one person, David Foster, was not timely filed. SHAREHOLDER PROPOSALS FOR THE 20192021 ANNUAL MEETING Under regulations adopted by the SEC, any shareholder proposal submitted for inclusion in ImmunoGen’s proxy statement relating to the 20192021 annual meeting of shareholders must be received at our principal executive offices on or before December 31, 2018.29, 2020. In addition to the SEC requirements regarding shareholder proposals, our by-laws contain provisions regarding matters to be brought before shareholder meetings. If shareholder proposals, including proposals relating to the election of directors, are to be considered at the 20192021 annual meeting of shareholders, notice of them, whether or not they are included in ImmunoGen’s proxy statement and form of proxy, must be given by personal delivery or by United StatesU.S. mail, postage prepaid, to our corporate secretary no earlier than February 14, 201912, 2021 and no later than March 16, 2019.14, 2021. The notice must include the information set forth in our by-laws. Proxies solicited by the Board will confer discretionary voting authority with respect to these proposals, subject to SEC rules governing the exercise of this authority. Our by-laws do not affect any rights of shareholders to request the inclusion of proposals in ImmunoGen’s proxy statement pursuant to Rule 14a‑8 under the Securities Exchange Act of 1934.1934, as amended. All shareholder proposals should be marked for the attention of Joseph J. Kenny, Secretary, ImmunoGen, Inc. 830 Winter Street, Waltham, MA. It is suggested that any shareholder proposal be submitted by certified mail, return receipt requested. CERTAIN MATTERS RELATING TO PROXY MATERIALS The SEC has adopted a rule that allows us or your broker to send a single set of proxy materials and annual reports to any household at which two or more of our shareholders reside, if we or your broker believe that the shareholders are members of the same family. This practice, referred to as “householding,” benefits both you and us. It reduces the volume of duplicate information received at your household and helps us reduce our expenses. The rule applies to our annual reports, proxy materials (including the Notice), and information statements. Once you receive notice from your broker or from us that communications to your address will be “householded,” the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Each shareholder will continue to receive a separate proxy card or voting instruction card. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice and, if applicable, other proxy materials, please notify your broker, or if you are holding a physical stock certificate, direct your written or oral request to Broadridge Corporate Issuer Solutions, Inc., P.O. Box 1342, Brentwood, New York 11717, telephone number 1‑855‑697‑4961. Shareholders who currently receive multiple copies of the Notice and, if applicable, other proxy materials at their address and would like to request “householding” of their communications should contact their broker or Broadridge Corporate Issuer Solutions, Inc. OTHER MATTERS We know of no matters which may properly be and are likely to be brought before the meeting other than the matters discussed in this proxy statement. However, if any other matters properly come before the meeting, the persons named in the accompanying proxy card will vote in accordance with their best judgment. ANNUAL REPORT ON FORM 10‑K You may obtain a copy of our annual reportAnnual Report on Form 10‑K which includes our financial statements for the year ended December 31, 20172019 (without exhibits), without charge by writing to: Investor Relations, ImmunoGen, Inc., 830 Winter Street, Waltham, MA 02451.Additionally, you can find a copy of our Annual Report on Form 10-K, on the website of the SEC, at www.sec.gov, or on our website at www.immunogen.com on the Investors & Media page under “Financials & Filings”. | | | By Order of the Board of
Directors | | CRAIG BARROWS,
JOSEPH J. KENNY,
Secretary
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April 30, 201828, 2020 Exhibit A
IMMUNOGEN, INC.
2018 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN
Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, have the following meanings:
Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator means the Committee.
Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.
Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan, in such form as the Administrator shall approve.
Board of Directors means the Board of Directors of the Company.
Cause shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non‑feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any Affiliate, and conduct substantially prejudicial to the business of the Company or any Affiliate provided, however that any provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of “cause” for termination and which is in effect at the time of such termination, shall supersede the definition in this Plan with respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and the Company.
Change of Control means the occurrence of any of the following events:
| (i)
| | Ownership. Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d‑3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its Affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board of Directors does not approve; or
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| (ii)
| | Merger/Sale of Assets. (A) A merger or consolidation of the Company whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction requiring shareholder approval; or
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| (iii)
| | Change in Board Composition. A change in the composition of the Board of Directors, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of March 28, 2018, or (B) are elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company);
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provided, that if any payment or benefit payable hereunder upon or following a Change of Control would be required to comply with the limitations of Section 409A(a)(2)(A)(v) of the Code in order to avoid an additional tax under Section 409A of the Code, such payment or benefit shall be made only if such Change in Control constitutes a change in ownership or control of the Company, or a change in ownership of the Company’s assets in accordance with Section 409A of the Code.
Code means the United States Internal Revenue Code of 1986, as amended, including any successor statute, regulation and guidance thereto.
Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan.
Common Stock means shares of the Company’s common stock, $.01 par value per share.
Company means ImmunoGen, Inc., a Massachusetts corporation.
Consultant means any natural person who is an advisor or consultant that provides bona fide services to the Company or its Affiliates, provided that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.
Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.
Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.
Fair Market Value of a Share of Common Stock means:
| (1)If the Common Stock is listed on a national securities exchange or traded in the over‑the‑counter market and sales prices are regularly reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date, and if such applicable date is not a trading day, the last market trading day prior to such date;
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| (2)If the Common Stock is not traded on a national securities exchange but is traded on the over‑the‑counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market for the trading day on which Common Stock was traded on the applicable date, and if such applicable date is not a trading day, the last market trading day prior to such date; and
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| (3)If the Common Stock is neither listed on a national securities exchange nor traded in the over‑the‑counter market, such value as the Administrator, in good faith, shall determine in compliance with applicable laws.
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Full Value Award means a Stock Grant or other Stock-Based Award whose intrinsic value is not solely dependent on appreciation in the price of the Common Stock after the date of grant.
ISO means an option meant to qualify as an incentive stock option under Section 422 of the Code.
Non‑Qualified Option means an option which is not intended to qualify as an ISO.
Option means an ISO or Non‑Qualified Option granted under the Plan.
Participant means an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan. As used herein, “Participant” shall include “Participant’s Survivors” where the context requires.
Performance Based Award means a Stock Grant or Stock-Based Award which vests based on attainment of Performance Goals as set forth in Paragraph 9 hereof.
Performance Goals means performance goals determined by the Committee in its sole discretion and set forth in an Agreement. The satisfaction of Performance Goals shall be subject to certification by the Committee. The Committee has the authority to take appropriate action with respect to the Performance Goals (including, without limitation, to make adjustments to the Performance Goals or determine the satisfaction of the Performance Goals, in each case, in connection with a Corporate Transaction) provided that any such actions do not otherwise violate the terms of the Plan.
Plan means this ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan.
Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 25 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.
Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a Stock Grant.
Stock Grant means a grant by the Company of Shares under the Plan.
Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan -- an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.
Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.
The Plan is intended to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non‑Qualified Options, Stock Grants and Stock-Based Awards.
| 3.
| | SHARES SUBJECT TO THE PLAN.
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| (a)The number of Shares which may be issued from time to time pursuant to this Plan shall be the sum of: (i) 7,500,000 shares of Common Stock and (ii) any shares of Common Stock that are represented by awards granted under the Company’s 2006 or 2016 Employee, Director and Consultant Equity Incentive Plan that are forfeited, expire or are cancelled without delivery of shares of Common Stock or which result in the forfeiture of shares of Common Stock back to the Company on or after March 28, 2018 (but in no event more than 19,500.000 Shares shall be added to the Plan pursuant to this clause (ii)), or the
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equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 25 of this Plan.
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| (b)If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company’s or an Affiliate’s tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for purposes of the limitations set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued and any stock appreciation right to be settled in shares of Common Stock shall be counted in full against the number of Shares available for issuance under the Plan, regardless of the number of exercise gain shares issued upon settlement of the stock appreciation right. In addition, Shares repurchased by the Company with the proceeds of the option exercise price may not be reissued under the Plan.
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| (c)For purposes of determining the number of Shares available for issuance under Paragraph 3(a) above, (i) for the grant of any Option or similar Stock-Based Award one Share for each Share actually subject to such Option or similar Stock-Based Award shall be deducted, and (ii) for the grant of any Full Value Award, one and one-quarter (1.25) Shares for each Share actually subject to any such Full Value Award shall be deducted. If a Full Value Award expires, is forfeited, or otherwise lapses, the Shares that were subject to the Full Value Award shall be restored to the total number of Shares available for grant as were deducted as Full Value Awards pursuant to this paragraph. Except in the case of death, disability or Change of Control, or as provided in the next sentence, no Stock Right shall vest, and no right of the Company to restrict or reacquire Shares subject to Full Value Awards shall lapse, less than one (1) year from the date of grant. Notwithstanding the foregoing, Stock Rights may be granted having time-based vesting of less than one (1) year from the date of grant so long as no more than five percent (5%) of the Shares reserved for issuance under the Plan pursuant to Paragraph 3(a) above (as adjusted under Paragraph 25 of this Plan) may be granted in the aggregate pursuant to such awards.
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| 4.
| | ADMINISTRATION OF THE PLAN.
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The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:
| a.
| | Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;
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| b.
| | Determine which Employees, directors and Consultants shall be granted Stock Rights;
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| c.
| | Determine the number of Shares for which a Stock Right or Stock Rights shall be granted provided, that the aggregate grant date fair value of Shares to be granted to any non-employee director under the Plan in any calendar year may not exceed $500,000 dollars except that the foregoing limitation on Stock Rights granted to non-employee directors shall not apply to Stock Rights made pursuant to an election by a non-employee director to receive the Stock Right in lieu of cash for all or a portion of cash fees to be received for service on the Board of Directors or any Committee thereof.
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| d.
| | Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;
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| e.
| | Make any adjustments in the Performance Goals included in any Performance-Based Awards;
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| f.
| | Amend any term or condition of any outstanding Stock Right, other than reducing the exercise price or purchase price or extending the expiration date of an Option, provided that (i) such term or condition as amended is not prohibited by the Plan; (ii) any such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant’s consent or in the event of death of the Participant the Participant’s Survivors; and (iii) any such amendment shall be made only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including, but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below with respect to ISOs and pursuant to Section 409A of the Code; and
|
| g.
| | Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company or to Plan Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right;
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provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of (i) preserving the tax status under Section 422 of the Code of those Options which are designated as ISOs; and (ii) not causing any adverse tax consequences under Section 409A of the Code. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.
To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected by it; provided that only a Committee consisting solely of non-employee directors (or the full Board when only non-employee directors are present and voting) shall have the authority to grant Options, Stock Grants or Stock-Based Awards to non-employee directors, or to amend the terms of any such awards in a manner that would accelerate the exercisability or vesting of, or lapsing of any right by the Company to restrict or reacquire Shares subject to,
all or any portion of any such award. The Board of Directors or the Committee may revoke any such allocation or delegation at any time.
| 5.
| | ELIGIBILITY FOR PARTICIPATION.
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The Administrator will, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be an Employee, director or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees who are deemed residents of the United States for tax purposes. Non‑Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights or any grants under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.
| 6.
| | TERMS AND CONDITIONS OF OPTIONS.
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Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company (or provided in electronic form by the Company) and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:
| a.
| | Non‑Qualified Options: Each Option intended to be a Non‑Qualified Option shall be subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non‑Qualified Option:
|
| i.
| | Exercise Price: Each Option Agreement shall state the exercise price (per share) of the Shares covered by each Option, which exercise price shall be determined by the Administrator but shall not be less than the Fair Market Value per share of Common Stock on the date of grant of the Option.
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| ii.
| | Number of Shares: Each Option Agreement shall state the number of Shares to which it pertains.
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| iii.
| | Vesting Periods: Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, provided that each Non‑Qualified Option shall terminate not more than ten years from the date of the grant. Each Option Agreement may provide that the Option rights
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accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated performance goals or events.
|
| iv.
| | Option Conditions: Exercise of any Option may be conditioned upon the Participant’s execution of a Share purchase agreement in form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders, including requirements that:
|
| A.
| | The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and
|
| B.
| | The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.
|
| b.
| | ISOs: Each Option intended to be an ISO shall be issued only to an Employee and be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:
|
| v.
| | Minimum standards: The ISO shall meet the minimum standards required of Non‑Qualified Options, as described in Paragraph 6(a) above.
|
| vi.
| | Exercise Price: Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section 424(d) of the Code:
|
| A.
| | 10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Common Stock on the date of the grant of the ISO; or
|
| B.
| | More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value per share of the Common Stock on the date of the grant of the ISO.
|
| iii.
| | Term of Option: For Participants who own:
|
| A.
| | 10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or
|
| B.
| | More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five years from the date of the grant or at such earlier time as the Option Agreement may provide.
|
| iv.
| | Limitation on Yearly Exercise: The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined at the time each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant in any calendar year does not exceed $100,000.
|
| 7.
| | TERMS AND CONDITIONS OF STOCK GRANTS.
|
Each Stock Grant to a Participant shall state the principal terms in an Agreement, duly executed by the Company (or provided in electronic form by the Company) and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:
| (a)
| | Each Agreement shall state the purchase price (per share), if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by the Massachusetts General Corporation Law on the date of the grant of the Stock Grant;
|
| (b)
| | Each Agreement shall state the number of Shares to which the Stock Grant pertains;
|
| (c)
| | Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time period or attainment of Performance Goals upon which such rights shall accrue and the purchase price therefor, if any; and
|
| (d)
| | Dividends (other than stock dividends to be issued pursuant to Section 25 of the Plan) may accrue but shall not be paid prior to the time, and only to the extent that, the restrictions or rights to reacquire the Shares subject to the Stock Grant lapse.
|
| 8.
| | TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.
|
The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards, stock units deferred or otherwise. The principal terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company (or provided in electronic form by the Company) and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and
conditions which the Administrator determines to be appropriate and in the best interest of the Company. Each Agreement shall include the terms of any right of the Company including the right to terminate the Stock-Based Award without the issuance of Shares, the terms of any vesting conditions, Performance Goals or events upon which Shares shall be issued provided that dividends (other than stock dividends to be issued pursuant to Section 25 of the Plan) or dividend equivalents may accrue but shall not be paid prior to and only to the extent that, the Shares subject to the Stock-Based Award vest. Under no circumstances may the Agreement covering stock appreciation rights (a) have an exercise price (per share) that is less than the Fair Market Value per share of Common Stock on the date of grant or (b) expire more than ten years following the date of grant.
The Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 8.
| 9.
| | PERFORMANCE BASED AWARDS.
|
The Committee shall determine whether, with respect to a performance period, the applicable Performance Goals have been met with respect to a given Participant and, if they have, to so certify and ascertain the amount of the applicable Performance-Based Award. No Performance-Based Awards will be issued for such performance period until such certification is made by the Committee. The number of Shares issued in respect of a Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion after the end of such performance period and any dividends (other than stock dividends to be issued pursuant to Section 25 of the Plan) or dividend equivalents that accrue shall only be paid in respect of the number of Shares earned in respect of a Performance-Based Award.
| 10.
| | EXERCISE OF OPTIONS AND ISSUE OF SHARES.
|
An Option (or any part or installment thereof) shall be exercised by giving written notice (in a form acceptable to the Administrator which may include electronic notice) to the Company or its designee, together with provision for payment of the aggregate exercise price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option and held for at least six months (if required to avoid negative accounting treatment), or (c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price of the number of Shares being exercised, or (d) at the discretion of the Administrator, in accordance with a cashless exercise program
established with a securities brokerage firm, and approved by the Administrator, or (e) at the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above or (f) at the discretion of the Administrator, payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s Survivors, as the case may be). In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise of any installment of any Option; provided that the Administrator shall not accelerate the exercise date of any installment of any Option granted to an Employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Paragraph 28) without the prior approval of the Employee, if such acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).
The Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is not prohibited by the Plan, (ii) any such amendment shall be made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant’s Survivors, if the amendment is adverse to the Participant, and (iii) any such amendment of any Option shall be made only after the Administrator determines whether such amendment would constitute a “modification” of any Option which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holder of such Option including, but not limited to, pursuant to Section 409A of the Code.
| 11.
| | ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.
|
A Stock Grant or Stock-Based Award (or any part or installment thereof) shall be accepted by executing the applicable Agreement and delivering it to the Company or its designee, together with provision for payment of the full purchase price, if any, in accordance with this Paragraph for the Shares as to which such Stock Grant or Stock-Based Award is being accepted, and upon compliance with any other conditions set forth in the applicable Agreement. Payment of the purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being accepted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of acceptance of the Stock Grant or Stock Based-Award to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion of the Administrator, by any combination of (a) and (b) above; or (d) at the discretion of the Administrator, payment of such other lawful consideration as the Administrator may determine.
The Company shall then, if required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was accepted to the Participant (or to the
Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance.
| 12.
| | RIGHTS AS A SHAREHOLDER.
|
No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right, except after due exercise of the Option or issuance of Shares as set forth in any Agreement, and tender of the aggregate exercise or full purchase price, if any, for the Shares being purchased pursuant to such exercise or acceptance and registration of the Shares in the Company’s share register in the name of the Participant.
| 13.
| | ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
|
By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement; provided that no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above, a Stock Right shall only be exercisable or may only be accepted, during the Participant’s lifetime, by such Participant (or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.
| 14.
| | EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.
|
Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:
| a.
| | A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 15, 16, and 17, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in a Participant’s Option Agreement.
|
| b.
| | Except as provided in Subparagraph (c) below, or Paragraph 16 or 17, in no event may an Option intended to be an ISO, be exercised later than three months after the Participant’s termination of employment.
|
| c.
| | The provisions of this Paragraph, and not the provisions of Paragraph 16 or 17, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination of employment, director status or consultancy, the Participant or the Participant’s Survivors may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option.
|
| d.
| | Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then such Participant shall forthwith cease to have any right to exercise any Option.
|
| e.
| | A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater than ninety days, unless pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option on the 181st day following such leave of absence.
|
| f.
| | Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.
|
| 15.
| | EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.
|
Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that all his or her outstanding Options have been exercised:
| a.
| | All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause will immediately be forfeited.
|
| b.
| | Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited.
|
| 16.
| | EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.
|
Except as otherwise provided in a Participant’s Option Agreement:
| a.
| | A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability may exercise any Option granted to such Participant:
|
| (i)To the extent that the Option has become exercisable but has not been exercised on the date of Disability; and
|
| (ii)In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of Disability.
|
| b.
| | A Disabled Participant may exercise such rights only within the period ending one year after the date of the Participant’s Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not become Disabled and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.
|
| c.
| | The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.
|
| 17.
| | EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
|
Except as otherwise provided in a Participant’s Option Agreement:
| a.
| | In the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate, such Option may be exercised by the Participant’s Survivors:
|
| (i)To the extent that the Option has become exercisable but has not been exercised on the date of death; and
|
| (ii)In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.
|
| b.
| | If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.
|
| 18.
| | EFFECT OF TERMINATION OF SERVICE ON STOCK GRANTS AND STOCK-BASED AWARDS.
|
In the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required, such offer shall terminate.
For purposes of this Paragraph 18 and Paragraph 19 below, a Participant to whom a Stock Grant or a Stock-Based Award has been issued under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.
In addition, for purposes of this Paragraph 18 and Paragraph 19 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.
| 19.
| | EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.
|
Except as otherwise provided in a Participant’s Agreement, in the event of a termination of service (whether as an Employee, director or Consultant), other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 20, 21, and 22, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant or Stock-Based Award as to which the Company’s forfeiture or repurchase rights have not lapsed.
| 20.
| | EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR CAUSE.
|
Except as otherwise provided in a Participant’s Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:
| a.
| | All Shares subject to any Stock Grant or a Stock-Based Award that remain subject to forfeiture provisions or as to which the Company shall have a repurchase right shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated for Cause.
|
| b.
| | Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then all shares subject to any Stock Grant or Stock-Based Award that remained subject to forfeiture provisions or as to which the Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.
|
| 21.
| | EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR DISABILITY.
|
Except as otherwise provided in a Participant’s Agreement, the following rules apply if a Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of Disability as would have lapsed had the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.
The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.
| 22.
| | EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
|
Except as otherwise provided in a Participant’s Agreement, the following rules apply in the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed
on the date of death, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of death as would have lapsed had the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s death.
| 23.
| | PURCHASE FOR INVESTMENT.
|
Unless the offering and sale of the Shares to be issued upon the particular exercise or acceptance of a Stock Right shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled:
| a.
| | The person(s) who exercise(s) or accept(s) such Stock Right shall warrant to the Company, prior to the receipt of such Shares, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon the certificate(s) evidencing their Shares issued pursuant to such exercise or such grant:
|
“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”
| b.
| | At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise or acceptance in compliance with the 1933 Act without registration thereunder.
|
| 24.
| | DISSOLUTION OR LIQUIDATION OF THE COMPANY.
|
Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.
Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement:
| a.Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made, including in the exercise or purchase price per share and Performance Goals applicable to outstanding Performance-Based Awards, to reflect such events. The number of Shares subject to the limitations in Paragraph 3(a) and 4(c) shall also be proportionately adjusted upon the occurrence of such events.
|
| b.Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a merger, consolidation, or sale of all or substantially all of the Company’s assets or the acquisition of all of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a single entity other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A) to the extent then exercisable, or (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of such notice, at the end of which period the Options shall terminate; or (iii) terminate such Options in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then exercisable, or (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph) less the aggregate exercise price thereof. For purposes of determining the payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of Directors.
|
With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall either (i) make appropriate provisions for the continuation of such Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) terminate all Stock Grants in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to the holder of the number of shares of Common Stock comprising such Stock Grant (to the
extent such Stock Grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived upon such Corporate Transaction).
In taking any of the actions permitted under this Paragraph 25(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically.
| c.Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the price paid upon such exercise or acceptance, if any, the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.
|
| d.Adjustments to Stock-Based Awards. Upon the happening of any of the events described in Subparagraphs a, b or c above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 25, including, but not limited to the effect if any, of a Change of Control and, subject to Paragraph 4, its determination shall be conclusive.
|
| e.Modification of Options. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph a, b or c above with respect to Options shall be made only after the Administrator determines whether such adjustments would constitute a “modification” of any ISOs (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holders of such Options. If the Administrator determines that such adjustments made with respect to Options would constitute a modification or other adverse tax consequence, it may refrain from making such adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of such “modification” on his or her income tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).
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| 26.
| | ISSUANCES OF SECURITIES.
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Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.
No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.
| 28.
| | CONVERSION OF ISOs INTO NON‑QUALIFIED OPTIONS; TERMINATION OF ISOs.
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The Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant’s ISOs (or any portions thereof) that have not been exercised on the date of conversion into Non‑Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an Employee of the Company or an Affiliate at the time of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant) may impose such conditions on the exercise of the resulting Non‑Qualified Options as the Administrator in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s ISOs converted into Non‑Qualified Options, and no such conversion shall occur until and unless the Administrator takes appropriate action. The Administrator, with the consent of the Participant, may also terminate any portion of any ISO that has not been exercised at the time of such conversion.
In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the exercise or acceptance of a Stock Right or upon the lapsing of any forfeiture provision or right of repurchase or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer.
| 30.
| | NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
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Each Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.
| 31.
| | TERMINATION OF THE PLAN.
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The Plan will terminate on March 28, 2028. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.
| 32.
| | AMENDMENT OF THE PLAN AND AGREEMENTS.
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The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment as may be afforded incentive stock options under Section 422 of the Code (including deferral of taxation upon exercise), and to the extent necessary to qualify the shares issuable upon exercise or acceptance of any outstanding Stock Rights granted, or Stock Rights to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers, provided that any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall also be subject to obtaining such shareholder approval. Other than as set forth in Paragraph 25 of the Plan, the Administrator may not without shareholder approval reduce the exercise price of an Option or cancel any outstanding Option in exchange for a replacement option having a lower exercise price, any Stock Grant, any other Stock-Based Award or for cash. In addition, the Administrator may not take any other action that is considered a direct or indirect “repricing” for purposes of the shareholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Shares are listed, including any other action that is treated as a repricing under generally accepted accounting principles. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her, unless such amendment is required by applicable law or necessary to preserve the economic value of such Stock Right. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to the Participant. Notwithstanding the foregoing, except in the case of death, disability or Change of Control, outstanding Agreements may not be amended by the Administrator (or the Board) in a manner that would accelerate the exercisability or vesting of, or lapsing of any right by the Company to restrict or reacquire Shares subject to, all or any portion of any Option, Stock Grant or other Stock-Based Award. Nothing in this Paragraph 32 shall limit the Administrator’s authority to take any action permitted pursuant to Paragraph 25.
| 33.
| | EMPLOYMENT OR OTHER RELATIONSHIP.
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Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.
34.CLAWBACK.
Notwithstanding anything to the contrary contained in this Plan, the Company may recover from a Participant any compensation received from any Stock Right (whether or not settled) or cause a Participant to forfeit any Stock Right (whether or not vested) in the event that the Company’s Incentive Compensation Recoupment Policy then in effect is triggered.
35.SECTION 409A.
If a Participant is a “specified employee” as defined in Section 409A of the Code (and as applied according to procedures of the Company and its Affiliates) as of his separation from service, to the extent any payment under this Plan or pursuant to the grant of a Stock-Based Award constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, no payments due under this Plan or pursuant to a Stock-Based Award may be made until the earlier of: (i) the first day of the seventh month following the Participant’s separation from service, or (ii) the Participant’s date of death; provided, however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum, without interest, on the first day of the seventh month following the Participant’s separation from service.
The Administrator shall administer the Plan with a view toward ensuring that Stock Rights under the Plan that are subject to Section 409A of the Code comply with the requirements thereof and that Options under the Plan be exempt from the requirements of Section 409A of the Code, but neither the Administrator nor any member of the Board, nor the Company nor any of its Affiliates, nor any other person acting hereunder on behalf of the Company, the Administrator or the Board shall be liable to a Participant or any Survivor by reason of the acceleration of any income, or the imposition of any additional tax or penalty, with respect to a Stock Right, whether by reason of a failure to satisfy the requirements of Section 409A of the Code or otherwise.
This Plan shall be construed and enforced in accordance with the law of The Commonwealth of Massachusetts.
Exhibit B
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.
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| (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.
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| (b)"Code" shall mean the Internal Revenue Code of 1986, as amended.
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| (c)"Common Stock" shall mean the common stock, $0.01 par value per share, of the Company.
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| (d)"Company" shall mean ImmunoGen, Inc., a Delaware corporation.
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| (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.
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| (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.
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| (g)"Contributions" shall mean all amounts credited to the account of a participant pursuant to the Plan.
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| (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.
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| (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.
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| (j)"Exercise Date" shall mean the last business day of each Offering Period of the Plan.
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| (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.
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| (l)"Offering Date" shall mean the first business day of each Offering Period of the Plan.
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| (m)"Offering Period" shall mean a period of six months as set forth in paragraph 4 of the Plan.
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| (n)"Plan" shall mean this ImmunoGen, Inc. Employee Stock Purchase Plan.
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| (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.
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| (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.
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| (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).
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| 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.
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| (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 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.
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| (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.
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| 6.Method of Payment of Contributions.
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| (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.
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| (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.
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| (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.
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| (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).
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| (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 bid and asked prices per share of the Common Stock at the close of trading in the over-the-counter market.
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| 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.
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| 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.
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| 10.Withdrawal; Termination of Employment.
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| (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.
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| (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.
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| (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.
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| (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.
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| 11.Interest. No interest shall accrue on the Contributions of a participant in the Plan.
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| (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.
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| (b)The participant will have no interest or voting right in shares covered by his or her option until such option has been exercised.
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| 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.
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| 14.Designation of Beneficiary.
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| (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.
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| (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.
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| 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 disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with paragraph 10.
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| 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.
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| 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.
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| 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
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adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.
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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.
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.
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| (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
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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.
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| (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.
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| 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.
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| 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.
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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 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.
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| 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.
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| 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.
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| 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.
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| 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.
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| VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. IMMUNOGEN, INC. 830 WINTER STREET WALTHAM, MA 02451 ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E42624-P01243 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. IMMUNOGEN, INC. The Board of Directors recommends you vote FOR the following: For Withhold For All AllAllExcept To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. ! ! ! 2. Election of Directors Nominees: 01) Stephen C. McCluski 02) Richard J. Wallace 03) Mark Goldberg, MD 04) Dean J. Mitchell 05) Kristine Peterson 06) Mark J. Enyedy 07) Stuart A. Arbuckle For Against Abstain For Against Abstain The Board of Directors recommends you vote FOR the following proposals: ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018. 1. To fix the number of members of the Board of Directors at seven (7). 3. To approve the 2018 Employee, Director and Consultant Equity Incentive Plan. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournments thereof. 4. To approve the Employee Stock Purchase Plan. 5. To approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed in our proxy statement. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS INDICATED, SUCH SHARES WILL BE VOTED "FOR" ITEMS 1, 2, 3, 4, 5 AND 6. ! For address changes and/or comments, please check this box and write them on the back where indicated. ! Yes ! No Please indicate if you plan to attend this meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
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| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. E42625-P01243 IMMUNOGEN, INC. This proxy is solicited by the Board of Directors Annual Meeting of Shareholders 6/20/2018 9:00 AM The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement dated April 30, 2018, and does hereby appoint Mark J. Enyedy and David B. Johnston, or either of them (the "proxies"), as the undersigned's attorneys-in-fact and proxies, with full power of substitution in each, for and in the name of the undersigned, with all the powers the undersigned would possess if personally present, hereby revoking any proxy heretofore given, to appear and represent and vote all shares of Common Stock of IMMUNOGEN, INC. (the "Company") which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held at the University of Massachusetts Club, One Beacon Street, 32nd Floor, Boston, Massachusetts on Wednesday, June 20, 2018, at 9:00 AM, Eastern Daylight Time, and any adjournment or postponement thereof. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side Address Changes/Comments: |
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