RHT » Topics » Cash Compensation

This excerpt taken from the RHT DEF 14A filed Jun 26, 2009.

Cash Compensation

 

Each independent director receives cash fees, paid in equal quarterly amounts, for their Board retainer and committee assignments. See above in the subsection entitled “Committees of the Board” for committee assignments for each of our independent directors. Retainer amounts are paid as follows:

 

Type of Cash Retainer

   Cash Compensation
Payable Under 2008
Director
Compensation Plan ($)

Board Member

   50,000

Lead Director (1)

   30,000

Audit Committee Chair (2)

   30,000

Audit Committee Member

   15,000

Compensation Committee Chair (2)

   20,000

Compensation Committee Member

   10,000

Nominating and Corporate Governance Committee Chair (2)

   10,000

Nominating and Corporate Governance Committee Member

   5,000

 

(1) If the Lead Director also serves as a committee chair, he or she receives the Lead Director and the retainer payable for service on the committee rather than the applicable committee chair retainer.
(2) Committee chairs receive the applicable committee chair retainer in lieu of the retainer payable for service on the committee.

 

Prior to the beginning of each calendar year, independent directors may elect to receive all or a portion of their quarterly cash retainer payment in DSUs, pursuant to our 2004 Long-Term Incentive Plan, as Amended and Restated (the “2004 Long-Term Incentive Plan”). DSUs represent the right to receive shares of our common stock at the time that the director’s Board service is terminated. The number of DSUs granted is determined by dividing the portion of the cash compensation with respect to which the election is made by the closing price of our common stock on the date the cash compensation is due to be paid. DSUs issued in lieu of cash compensation are fully vested. Fractional shares are paid out in cash.

 

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Table of Contents
This excerpt taken from the RHT DEF 14A filed Jun 30, 2008.

Cash Compensation

 

Non-employee directors receive cash fees, paid in equal quarterly amounts, for their board retainer and committee assignments in the aggregate amount described in the table below.

 

Type of Cash Retainer


   Cash Compensation
Payable Under 2006
Director Compensation
Plan ($)


Annual Board

   50,000

Lead Director (1)

   30,000

Audit Committee Chair (2)

   30,000

Audit Committee

   15,000

Compensation Committee Chair (2)

   20,000

Compensation Committee

   10,000

Nominating and Corporate Governance Committee Chair (2)

   10,000

Nominating and Corporate Governance Committee

   5,000

(1) If a Lead Director also serves as a committee chair, he or she receives the Lead Director and the retainer payable for service on the committee rather than the applicable committee chair retainer.

 

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(2) Committee chairs receive the applicable committee chair retainer in lieu of the retainer payable for service on the committee.

 

This excerpt taken from the RHT DEF 14A filed Jun 28, 2007.

Cash Compensation

 

Non-employee directors receive cash fees, paid in equal quarterly amounts, for their board retainer and committee assignments. During Fiscal 2007 non-employee board members received cash compensation under the 2004 Director Compensation Plan until September 30, 2006 and under the 2006 Director Compensation Plan on and after October 1, 2006. A comparison of cash compensation paid out under both of the Director Compensation Plans in effect during Fiscal 2007 is as follows:

 

Type of Cash Retainer


   Cash Compensation
Payable Under 2004
Director Compensation
Plan ($)


   Cash Compensation
Payable Under 2006
Director Compensation
Plan ($)


Annual Board

   30,000    50,000

Lead Director (1)

   20,000    30,000

Audit Committee Chair (2)

   20,000    30,000

Audit Committee

   10,000    15,000

Compensation Committee Chair (2)

   10,000    20,000

Compensation Committee

   5,000    10,000

Nominating and Corporate Governance Committee Chair (2)

   10,000    10,000

Nominating and Corporate Governance Committee

   5,000    5,000

(1) If a Lead Director also serves as a committee chair, he or she receives the retainer payable for service on the committee rather than the applicable committee chair retainer.
(2) Committee chairs receive the applicable committee chair retainer in lieu of the retainer payable for service on the committee.

 

In addition, non-employee directors may elect to convert all or a portion of their cash compensation into fully vested DSUs, which represent the right to receive shares of Common Stock at the earlier of (1) termination of the director’s board service or (2) a future date, at least one year following the date of issuance of the DSU, as designated by the director prior to issuance. The number of DSUs issued in exchange for cash compensation is calculated by dividing the cash compensation deferred by the closing price of Common Stock on the date the DSUs are issued. Fractional shares are paid in cash on the date the DSUs are issued.

 

These excerpts taken from the RHT 8-K filed Sep 29, 2006.

Cash Compensation

 

Basic Retainer:    Each non-employee director of the Board of Directors shall receive an annual cash retainer of $50,000.
Lead Director Retainer:    The non-employee director who serves as Lead Director, in addition to the Basic Retainer, shall receive an annual cash retainer of $30,000.

Committee Member

Retainer:

  

Each non-employee director/member of a standing committee (those presently being the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee), in addition to any other retainer and in lieu of meeting fees, shall receive an annual cash retainer of:

 

Audit Committee Members: $15,000

Compensation Committee Members: $10,000

Nominating Committee Member: $5,000

Committee Chair Retainer:   

Each non-employee director/member of a standing committee who serves as the chair of that committee, in lieu of the Committee Member Retainer, shall receive an annual cash retainer of:

 

Audit Committee Chair: $30,000

Compensation Committee Chair: $20,000

Nominating Committee Chair: $10,000

 

Provided, however, that should the Lead Director also serve as a Committee Chair, said individual shall only receive the Committee Member Retainer and not the Committee Chair Retainer for the committee on which they serve as chair.

Payment of Cash

Compensation :

   All cash compensation shall be paid in equal quarterly amounts on February 15, May 15, August 15 and November 15

Deferred Stock Units in

Lieu of Cash :

  

Each non-employee director may elect to receive all or a portion of such cash retainer payment in deferred stock units (“DSU”) pursuant to the Corporation’s 2004 Long-Term Incentive Plan, as amended. A DSU is a right to receive shares of the Corporation’s common stock at a future date. The number of DSUs to be received is determined by dividing the cash compensation deferred by the closing stock price of the Corporation’s common stock (on such U.S. national exchange on which said stock principally trades) on the date the cash compensation is due to be paid. The DSUs in lieu of cash are fully vested upon issuance. DSUs may be converted into shares of the Corporation’s common stock at the earlier of:

 

(a) termination of the DSU holder’s Board service; or (b) the date designated by the DSU holder at the time of issuance of the DSU, such date to be no earlier than three years following the date of issuance of the DSU.


Equity Compensation

  
Initial Equity Award:    Upon initial election or appointment to the Board of Directors, the Corporation will grant to each non-employee director of the Corporation a non-qualified stock option to purchase 40,000 shares of Red Hat common stock priced at an exercise price equal to the fair market value of the Common Stock on the date of such grant, such options to vest (a) 33.33% on the first anniversary of the date of grant and (b) 8.33% on the first day of each subsequent three month period following the first anniversary of the initial grant date.
Annual Equity Award:    Annually, on the earlier of (a) August 13 of such year or (b) the date of the annual stockholders’ meeting for such year, each non-employee director who has served as a director of the Corporation for at least eight (8) months prior to such date will receive an annual equity grant. Such grant will be a non-qualified stock option to purchase 15,000 shares of Red Hat common stock priced at an exercise price equal to the fair market value of the Common Stock on the date of such grant, such options to vest over a one year period in 25% increments starting on the first day of each three month period following the grant date.
Other Option Provisions:    Any initial equity award or other Equity Award received as stock options shall be subject to the following terms: (a) a total term of 5-years from the date of grant; and (b) an exercise period commencing with vesting and continuing until the expiration of the option (5 years).

Deferred Stock Units in

Lieu of Options :

   Each non-employee director may elect to receive DSU’s or restricted stock awards (“RSA”) in lieu of options pursuant to the Corporation’s 2004 Long-Term Incentive Plan, as amended. The number of DSUs or RSAs to be received is 35% of the number of options granted. The DSUs and RSAs vest on the same basis of the underlying stock options. DSUs may be converted into shares of the Corporation’s common stock at the earlier of: (a) termination of the DSU holder’s Board service; or (b) the date designated by the DSU holder at the time of issuance of the DSU, such date to be no earlier than three years following the date of issuance of the DSU; provided, however, in no case shall such conversion occur prior to vesting.

Cash Compensation

Under the 2006 Director Compensation Plan, non-employee directors receive cash fees, paid in equal quarterly amounts, as follows:

 

    each non-employee director receives an annual cash fee of $50,000 for board service;

 

    the director designated as the Lead Director by the non-employee directors receives an additional annual cash fee of $30,000;

 

    each non-employee director serving on a standing committee will receive an additional annual cash fee of $15,000 (Audit Committee), $10,000 (Compensation Committee) or $5,000 (Nominating and Corporate Governance Committee) for each standing committee on which they serve; and

 

    each chair of a standing committee (other than the Lead Director if he/she also serves as a committee chair) receives an additional annual cash fee of $30,000 (Audit Committee), $20,000 (Compensation Committee) or $10,000 (Compensation or Nominating and Corporate Governance Committee) for each standing committee on which they serve as chair.

All cash compensation shall be paid in equal quarterly installments on February 15, May 15, August 15 and November 15 of each year.

In addition, directors may choose to defer all or a portion of their cash compensation into fully vested deferred stock units, which represent the right to receive shares of the Company’s common stock, at the earlier of (1) termination of the director’s board service or (2) a future date, at least three years following the date of issuance of the deferred stock unit, as designated by the director on or before the issuance of the deferred stock unit. The number of deferred stock units shall be calculated based on the fair market value of the Company’s Common Stock on the date of grant.

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