Summary of Non-Employee Director Compensation Arrangements for [Company Name]
This agreement outlines the compensation for directors of the company who are not employees. Non-employee directors receive an annual cash retainer, additional fees for committee roles, and stock option grants. All directors are reimbursed for reasonable business expenses. Stock options vest over one or three years, depending on the type of grant. The Board may choose not to issue certain option grants. Employee directors do not receive extra compensation for board service.
Exhibit 10.20
Summary of Key Terms of Non-Employee Director Compensation Arrangements
Directors who are also employees of the Company receive no additional compensation for their services as directors. Directors who are not employees of the Company receive cash compensation and equity compensation as described below. All Directors are also reimbursed for reasonable and necessary travel, communications, and other out-of-pocket business expenses incurred in connection with their attendance at meetings, while on corporate business or for continuing education related to their board service.
| Annual Cash Retainer |
| $25,000 |
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| Additional Annual Cash Retainers for: |
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| Lead Director |
| $30,000 |
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| Audit Committee Chair |
| $20,000 |
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| Audit Committee Member |
| $10,000 |
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| Other Standing Committee Chair |
| $7,500 |
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| Other Standing Committee Member |
| $3,750 |
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| Special Litigation Committee Member |
| $7,500 |
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| Additional fee for excess meetings * |
| $1,000 in-person / $500 teleconference |
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| Initial Option Grant |
| 20,000 shares |
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| Annual Option Grant |
| 12,000 shares |
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| Annual Standing Committee Member Option Grant ** |
| 3,000 shares |
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* In excess of eight meetings per year.
** In 2005 the Board elected not to grant these awards.
All options are granted with an exercise price equal to the fair market value of our stock on the grant date. Initial option grants vest and become exercisable in 36 equal installments on each monthly anniversary of the grant date, such that the stock option will be fully exercisable three years after the grant date. Annual option grants, including annual option grants to standing committee members, are made immediately following each annual shareholder meeting and vest and become exercisable in twelve equal installments on each monthly anniversary of the grant date, such that the stock option will be fully exercisable one year after the grant date. The Board has discretion to elect not to make the automatic annual option grants.
