Directors’ Deferred Compensation Sample Clauses
The Directors’ Deferred Compensation clause establishes a system where compensation owed to company directors is postponed to a future date rather than being paid immediately. Typically, this clause outlines the conditions under which directors can elect to defer their fees or bonuses, specifies the timing and form of eventual payment (such as cash or stock), and may address how deferred amounts accrue interest or are invested. Its core practical function is to provide directors with tax planning flexibility and to align their interests with the long-term success of the company, while also helping the company manage its cash flow.
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Directors’ Deferred Compensation. TXI permits each of its directors (“TXI Director”) to annually defer a portion of his or her director fees pursuant to a Deferred Compensation Agreement (“TXI Director’s Agreement”), and to, in effect, convert the amount of the deferred compensation into hypothetical TXI shares, with a corresponding number of actual TXI shares distributed upon the applicable distribution date set froth in each such TXI Director’s Agreement. Effective on the Distribution Date, Chaparral shall assume and thereafter be solely responsible for all then existing or future Liabilities and administrative responsibilities arising from or related to all TXI Director’s Agreements to which any TXI Director who becomes a Chaparral director (“Chaparral Director”) is a party, and such assumed TXI Director’s Agreements are hereafter referred to as “Chaparral Director’s Agreements”. All of the Agreements will be amended, effective on the Distribution Date, to provide that (i) the additional hypothetical Chaparral shares credited under each TXI Director’s Agreement as a result of the Distribution shall be converted to an equivalent value of TXI shares, and (ii) the hypothetical TXI shares credited under each Chaparral Director’s Agreement shall be converted to an equivalent value of hypothetical Chaparral shares. As a result of such conversions, on the applicable distribution dates TXI Directors will receive only TXI shares and Chaparral Directors will receive only Chaparral shares.
Directors’ Deferred Compensation. Effective on the Distribution Date, Chaparral shall assume and thereafter be solely responsible for all then existing or future Liabilities arising from or related to any deferred compensation agreement covering any TXI director who becomes a Chaparral director and the administration thereof; provided, however, the terms of any such agreement may be amended to denominate the value thereof in shares of Chaparral Common Stock and to adjust the number of such shares so that the value of the deferred account immediately after the Distribution is not affected by the Distribution. TXI shall retain sole responsibility for all then existing or future Liabilities arising from or related to any deferred compensation agreement covering other TXI directors, whether the deferred compensation was earned as a director or as an executive officer.
Directors’ Deferred Compensation