prospective only for compensation attributable to services performed after the effective date of such election and any amounts covered by such election shall be prorated as necessary. Each non-employee Director shall be deemed to have elected to receive payments in cash for payments in periods prior to any such election or if no timely election shall have been made. Notwithstanding the foregoing, a previous election made by a non-employee Director pursuant to the 2004 Non-Employee Director Compensation Deferred Share Unit Plan or under this policy shall remain in effect for subsequent calendar years until it is changed by the completion, signature and delivery to the Company of a new election form, in accordance with the terms of this policy.
Upon making such election, DSUs shall be granted as described above without any further action by the Compensation Committee. These awards are fully vested as to all of the issued DSUs on the date of grant.
1.Deferred Stock Units.
(a) Initial DSU Awards. New non-employee Directors will automatically be awarded, without any further action by the Compensation Committee, 34,000 DSUs (each DSU relating to one (1) share of Common Stock) on the date of their initial election or appointment to the Board (the “date of grant”). This award will vest pro rata, on a quarterly basis over a three-year period, as to eight and one-third percent (8-1/3%) of the issued DSUs (rounded down to the nearest whole share) per quarter on each of September 1, December 1, March 1 and June 1 following the date of grant, beginning with the first such date to occur following the date of grant.
(b) Annual DSU Awards. Non-employee Directors will automatically be awarded, on an annual basis and without further action by the Compensation Committee, 17,000 DSUs on the earlier of the date of ImmunoGen’s annual meeting of shareholders or June 30 of the applicable year (the “date of grant”). These awards will vest pro rata, on a quarterly basis over a one-year period, as to twenty-five percent (25%) of the issued DSUs (rounded down to the nearest whole share) per quarter on each of September 1, December 1, March 1 and June 1 following the date of grant. 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 shall be 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 Directors 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.3
(c) Terms of Grant. All DSU awards to non-employee Directors under this policy are granted under the 2018 Employee, Director and Consultant Equity Incentive Plan (the “2018 Plan”), and are subject to the terms and conditions set forth in the 2018 Plan and the form of Deferred Stock Unit Agreement approved by the Board of Directors on December 9, 2016. All capitalized terms that are not defined herein shall have the meanings set forth in the 2018 Plan.
3 Any Director who transitions from an employee director to a non-employee Director without a break in service shall not be eligible to receive an award of DSUs under paragraphs 1(a), but shall be eligible to receive awards under paragraph 1(b), beginning with the first annual meeting of shareholders on or after the date on which such Director ceases to be an employee of the Company.