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This excerpt taken from the ADCT DEF 14A filed Jan 16, 2007. Compensation
of Directors
Compensation for nonemployee directors is paid on a calendar
year rather than a fiscal year basis. Our President and Chief
Executive Officer, who is also a director, does not receive any
extra compensation for serving as a director. Compensation for
nonemployee directors consists of a combination of cash payments
and annual stock option and restricted stock unit awards. In
calendar year 2006, nonemployee directors received an annual
retainer of $25,000. Nonemployee directors also received $1,500
for each Board meeting attended and $1,000 for each committee
meeting attended. In addition, the Non-executive Chairman of the
Board received an annual retainer of $100,000, the Chair of the
Audit Committee received an annual retainer of $10,000 and the
Chairs of the remaining Board committees each received an annual
retainer of $5,000.
Annual retainers and fees for Board and Board committee
participation are eligible for deferral pursuant to our
Compensation Plan for Nonemployee Directors. In 2006, directors
could elect to defer their cash compensation into a deferred
cash account or exchange their cash compensation for restricted
stock units subject to forfeiture under our Global Stock
Incentive Plan. These restricted stock units vest on the
Table of Contents
first business day of the calendar year following the year for
which the cash compensation was deferred. The number of
restricted stock units that ADC awards is equal in value to the
dollar amount of the deferral divided by the closing price of
our common stock on the first business day of the year during
which the deferral occurred, rounded to the nearest whole number
of shares. The restricted stock unit shares are issuable upon
the director’s retirement or resignation. Interest is paid
on amounts deferred in the deferred cash account based on the
prime commercial rate of Wells Fargo Bank, National Association.
For calendar year 2006, no directors elected to exchange all or
a portion of their fees for restricted stock units or to defer
all or a portion of their fees into a deferred cash account.
In addition to cash compensation, as of the first business day
after our 2006 Annual Shareowners’ Meeting, each of our
nonemployee directors received an annual option grant to acquire
2,770 shares of common stock and an annual grant of
restricted stock units with a value at the time of grant of
$25,000 under our Global Stock Incentive Plan. The terms of the
restricted stock unit grants are designed to fulfill the
Board’s requirement of stock ownership by its directors.
Each annual grant of restricted stock units vests as of the
first business day of the calendar year following the year of
the grant. However, distribution of shares does not occur until
one year following termination of Board service. This holding
requirement provides the minimum ownership interest that each
director must have in ADC during the term of the director’s
service.
For calendar year 2007, retainers, meeting fees and the value of
the annual restricted stock unit grant will remain the same as
for 2006. The number of stock options granted will change in
light of changes in the market value of our common stock.
However, the aggregate dollar value of the option grant is
intended to be approximately the same as the calendar year 2006
grant.
This excerpt taken from the ADCT DEF 14A filed Jan 19, 2005. Compensation of Directors Compensation for nonemployee directors is paid on a
calendar year rather than a fiscal year basis. Our President and Chief Executive Officer, who is also a director, does not receive any extra
compensation for serving as a director. Compensation for directors consists of a combination of cash payments and annual stock option and restricted
stock unit awards. In 2004, nonemployee directors received an annual retainer of $25,000. Directors also received $1,500 for each Board meeting
attended and $1,000 for each committee meeting attended. In addition, the Non-executive Chairman of the Board receives an annual retainer of $100,000,
the director who acts as Chairman of the Audit Committee receives an annual retainer of $7,500 and directors who act as Chairs of the remaining Board
committees receive an annual retainer of $5,000.
Annual retainers and fees for Board and Board
committee participation were eligible to be deferred pursuant to our Compensation Plan for Nonemployee Directors. In 2004, directors could elect to
defer their
5 cash compensation into a deferred cash account or exchange their cash compensation for restricted stock units subject to forfeiture under our Global Stock Incentive Plan. The restricted stock units would vest on the first business day of the calendar year following the year for which the cash compensation was deferred, have a fair market value equal to the amount of the deferred fees on the date of the grant and be issuable upon the director’s retirement or resignation. Interest is paid on amounts deferred in the deferred cash account based on the prime commercial rate of Wells Fargo Bank N.A. For calendar year 2004, one director elected to
exchange all or a portion of his fees for restricted stock units. No directors elected to defer all or a portion of their fees into a deferred cash
account.
In addition to cash compensation, each of our
nonemployee directors received an annual option grant to acquire 25,000 shares of common stock and an annual grant of restricted stock units with a
value of $25,000 under our Global Stock Incentive Plan unless they joined the Board during the year. Directors who joined the Board in 2004 received an
initial option grant to purchase 40,000 shares upon becoming a Board member and a grant of restricted stock units with value equal to a pro rata
portion of the $25,000 value received by existing directors. The pro ration was based on the number of months left in the calendar year when the
director joined the Board. The options have an exercise price equal to the fair market value of our common stock on the date of grant and a term of ten
years.
For calendar year 2005, our compensation program for
directors will be the same as the program in effect during calendar year 2004. However, the number of shares granted as stock options will change in
light of changes in the market price of our common stock.
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