A "Director Emeritus" clause typically grants an honorary title to a retiring or former board member in recognition of their past service, allowing them to maintain an association with the organization without the responsibilities or voting rights of an active director. This status often includes the right to attend board meetings and engage in advisory roles, but without a direct influence on decision-making.
Director Resignation. On January 21, 2021, director Kenneth M. Jastrow, II resigned from the KB Home board of directors, effective immediately, in conjunction with being appointed as a Director Emeritus. Mr. Jastrow’s resignation was not due to any disagreement with KB Home or the board of directors on any matter relating to KB Home’s operations, policies or practices, or otherwise.
A copy of the press release KB Home issued on January 25, 2021 announcing Mr. Jastrow’s appointment as a Director Emeritus and Ms. Kozlak’s election to the board of directors is attached as Exhibit 99.1 to this report.
The Board may appoint one or more directors to the position of Director Emerita or Director Emeritus (hereafter, “Director Emeritus”). Director Emeritus appointments, if any, shall be at the Board’s sole discretion, and there shall be no more than two Directors Emeritus at any one time unless the Board determines that it is necessary or appropriate to have three or more Director Emeritus for a particular period. Upon such appointment, any such director shall simultaneously resign from the Board and cease being considered a “director” or “officer” under the DGCL [Delaware General Corporation Law], the Corporation’s Certificate of Incorporation and By-Laws, and for any federal or state legal or regulatory purpose.
A Director Emeritus shall not be an employee of the Corporation. Further, a Director Emeritus shall have no power or authority to manage the Corporation’s business or affairs. Accordingly, a Director Emeritus shall not have any of the responsibilities or liabilities of a “director” or “officer,” nor any of a “director’s” or “officer’s” rights, powers or privileges. Only directors with a service tenure of at least five years, or having expertise or knowledge the Board deems to be especially important, are eligible to be appointed as a Director Emeritus. Each such appointment shall be for a one-year term, subject to re-appointment by the Board for one or more additional one-year terms (provided that the Board may set a shorter term for any Director Emeritus appointment or re-appointment if it deems it appropriate), or until such Director Emeritus’ earlier death, resignation, retirement, removal (for any reason or no reason by the Board), or reaching the retirement age the Board establishes for directors. Directors Emeritus shall provide such advisory services to the Board and its committees as deemed appropriate, including, without limitation, attending and participating in meetings and executive sessions, but they shall not be entitled to vote or be counted for quorum purposes at any such meetings or executive sessions. Directors Emeritus shall be entitled to receive fees for their service in such form and amount as the Board approves, and shall be reimbursed for expenses incurred in connection with their service as a Director Emeritus. Directors Emeritus shall remain subject to all of the Corporation’s policies applicable to directors, including without limitation, any ethics and confidentiality obligations, and requirements applicable to transactions in the Corporation’s securities. Directors Emeritus shall be entitled throughout their service to the same indemnification and insurance coverage benefits and protections accorded to directors under the DGCL, the Corporation’s Certificate of Incorporation and By-Laws, and to the undiminished continuation of any contractual indemnification, defense, advancement of expenses and like personal liability protection terms they have with the Corporation at the time of their appointment as a Director Emeritus.
WHEREAS, the Company recognizes the specialized knowledge and expertise of Mr. Sullivan related to the business affairs of the Company and the oil and gas industry generally, and that upon Mr. Sullivan’s retirement, the Board of Directors of the Company wishes to appoint Mr. Sullivan to the position of Director Emeritus of the Company; and WHEREAS, Mr. Sullivan and the Company desire to enter into this Agreement in order to detail the terms and conditions of such Director Emeritus relationship hereinafter contained;
Effective immediately following the resignation of Mr. Sullivan as a Director on the Effective Date, Mr. Sullivan shall be appointed as a Director Emeritus to serve until September 30, 2021 or until his earlier resignation or removal by the vote of a majority of the Board.
Director Emeritus Duties. (a) Mr. Sullivan’s service as Director Emeritus shall have the following terms and conditions and such other or amended terms and conditions as determined from time to time by the Board: Mr. Sullivan shall serve as a consultant to the Board; may be invited to attend regular meetings of the Board and, if present, may participate in the discussions occurring at such meetings; shall not be counted for the purpose of determining whether a quorum is present and shall have no ability to vote on or consent to any matters brought before the Board; shall not have any of the responsibilities or liabilities of a Director, nor any of a Director’s rights, powers or privileges, including any decision-making power; shall remain subject to the Company’s Code of Business Conduct and Ethics, Insider Trading Policy, and Insider Trading Policy Additional Procedures; shall continue to be subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended; and shall be entitled to an indemnification agreement with the Company is substantially the form of his current indemnification agreement with the Company as a Director of the Company. (b) Mr. Sullivan shall exercise a reasonable degree of skill, prudence and care in performing the services referred to in Section 2(a) above. (c) Mr. Sullivan shall not be obligated to render any services under this Agreement during such period when he is unable to do so due to illness, disability or injury or during reasonable periods of personal leave. (d) Mr. Sullivan shall not enter into any agreements or make commitments on behalf of the Company without the prior written consent or approval of the Company’s Chief Executive Officer and President.
As remuneration for Mr. Sullivan’s service as a Director Emeritus, Mr. Sullivan shall be paid a retainer at the rate of $85,000 per year, with $85,000 payable on June 1, 2020 and $28,333 payable on June 1, 2021 for the period from June 1, 2021 until September 30, 2021.
“Director Emeritus” means an individual designated by the Board, in its sole discretion, as Director Emeritus, pursuant to the Board’s Director Emeritus Policy.
Special Rules and Payment Practices for Director Emeritus Compensation. (i) Except as otherwise provided in Paragraph 3(c)(ii) and Paragraph 3(c)(iii), for the duration of an individual’s service to the Company as a Director Emeritus, the Director Emeritus such shall be entitled to compensation on the same basis as a Non-Employee Director as described in Paragraph 3(a) and subject to the same payment practices as apply to a Non-Employee Director as described in Paragraph 3(b). (ii) Paragraph 3(b)(iii), relating to a Non-Employee Director’s elect to receive up to 50% of the Annual Retainer amount described in Paragraph 3(a)(i) in the form of Shares, shall not apply to a Director Emeritus. All Annual Retainer payments to a Director Emeritus shall be in the form of cash. (iii) This Paragraph 3(c)(iii) shall apply to a Director Emeritus in lieu of the Stock Grant provisions of Paragraph 3(a)(xiii). On November 20, 2020 and each anniversary thereof (or the next following business day if November 20th is not a business day) during which the Director Emeritus is serving as such, the Company shall pay each Director Emeritus a single cash lump sum of $195,000.
A “Director Emeritus” is an honorary title often bestowed upon a retiring or former member of a board of directors as a mark of distinction. This title recognizes their significant contributions and service to the organization. Typically, a Director Emeritus is no longer an active, voting member of the board but may serve as a consultant or advisor, offering their expertise and guidance.
You should consider using the title “Director Emeritus” when a board member retires after significant service or if they have made substantial contributions that the organization wishes to acknowledge formally. It’s often used to honor a sense of continuity and a lasting relationship between the individual and the organization, even after they have stepped down from active duties.
When writing the term “Director Emeritus,” the format can vary slightly, but it is typically capitalized as it is a formal title. It can be presented in a profile or official documentation next to the individual’s name. For example:
John Doe, Director Emeritus
It is important to note that while “Director” relates directly to the organizational role, “Emeritus” signifies honorific status.
Contracts or documents that may contain the title “Director Emeritus” include:
It is crucial for an organization to clearly delineate the role and responsibilities involved in an emeritus position in these documents to prevent confusion or conflict.
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