A retainer clause outlines the initial payment provided by a client to secure the services of a professional, ensuring their commitment and availability for a specified period. It typically specifies the amount, payment schedule, and terms under which the retainer can be refunded or adjusted.
In addition to any Equity Retainer (as defined below), an annual equity award with a target award value of $175,000 (the “Annual Equity Grant”), divided equally between options and RSUs; provided, however, that, at the sole discretion of the Compensation and Management Development Committee or the Board of Directors, such Annual Equity Grant may be comprised solely of RSUs. The options, if any, are fully vested as of the grant date. The RSU component of the Annual Equity Grant shall vest upon the earlier of (1) the first anniversary of the grant date, or (2) the date of, and immediately prior to, the next annual meeting of Vontier shareholders following the grant date, and will be converted into shares of Vontier common stock upon or as soon as practicable after vesting, subject to any applicable deferral election under the DCP.
Moreover, each non-chair member of the Audit Committee receives an annual retainer of $15,000 (the “AC Member Retainer”), each non-chair member of the Compensation and Management Development Committee receives an annual retainer of $10,000 (the “CC Member Retainer”), each non-chair member of the Capital Deployment Advisory Group receives and annual retainer of $10,000 (the “CDAG Member Retainer”) and each non-chair member of the Nominating and Governance Committee receives an annual retainer of $7,500 (together with the AC Member Retainer, the CC Member Retainer and the CDAG Member Retainer, the “Annual Member Retainer”), which Annual Member Retainers are payable, based upon the Payment Election, either in cash (“Cash Member Retainer” and, together with the Cash Base Retainer, the Cash Board Chair Retainer, and the Cash Committee Chair Retainer, the “Cash Retainer”) equal to the corresponding Annual Member Retainer amount, in a RSU grant (“Equity Member Retainer” and, together with the Equity Base Retainer, the Equity Board Chair Retainer, and the Equity Committee Chair Retainer, the “Equity Retainer”) with a target award value of the Annual Member Retainer amount, or in a combination of Cash Member Retainer and Equity Member Retainer, with the allocation between Cash Member Retainer and Equity Member Retainer determined based on the Payment Election.
Annual Retainer Starting on January 1, 2022, each Outside Director who has not entered into an Outside Director Letter (as defined below) will be eligible to receive an annual retainer of $400,000 (the “Annual Retainer”) for services performed during the then-current calendar year. There are no per-meeting attendance fees for attending Board meetings. Any portion of the Annual Retainer that the Outside Director does not elect to forego in favor of receiving Retainer Options (as defined below) in accordance with the provisions of Section 2 of this Policy will be paid in cash in approximately equal monthly installments on the fifteenth (15th) day of each calendar month in the then-current calendar year, subject to the individual continuing to remain an Outside Director on the applicable payment date. If an individual first becomes an Outside Director after January 1 of any calendar year, such Outside Director will receive a pro-rated portion of the Annual Retainer with such pro-rated amount equal to the Annual Retainer multiplied by a fraction with a numerator equal to the number of calendar months remaining in the calendar year in which the individual first becomes an Outside Director (with the month the individual first becomes an Outside Director counted as a remaining calendar month) and a denominator equal to 12. For purposes of example only, if an individual first becomes an Outside Director on April 15, the Outside Director will receive an Annual Retainer of $300,000 or ((9/12) * $400,000) for such calendar year.
Retainer Options Each Outside Director may elect to convert all or a portion of his or her Annual Retainer into a number of Options (“Retainer Options,” and such election, a “Retainer Option Election”). The number of Shares subject to each Retainer Option will be equal to the quotient of (i) 1/12th of the dollar value of the Annual Retainer that the Outside Director elects to forego over the course of the annual period covered by a Retainer Option Election in favor of receiving Retainer Options divided by (ii) the Value on the grant date of the applicable Retainer Option, provided that the number of Shares covered by each Retainer Option shall be rounded to the nearest whole Share using standard rounding principles (i.e., 0.5 or higher, round up, and below 0.5, round down). By way of example, if the Annual Retainer for the annual period covered by a Retainer Option Election is $400,000, and the Outside Director elects to convert 50% of the Annual Retainer into Retainer Options, and the Value to purchase one Share on the grant date of the applicable Retainer Option is $10, the Outside Director would receive a Retainer Option to purchase 1,667 Shares ((1/12th) * $200,000) / $10/Share = 1,667 Shares). Notwithstanding the foregoing, if an Outside Director first becomes an Outside Director after January 31 of a calendar year, the number of Shares subject to each Retainer Option will be calculated based on the number of Retainer Option grant dates remaining in the applicable calendar year. Retainer Options shall be subject to certain terms and conditions as provided for in Section 3 of this Policy.
Retainer Option Election Mechanics Each Retainer Option Election must be submitted to Stock Administration in the form and manner specified by the Board or Compensation Committee. An individual who fails to make a timely Retainer Option Election shall not receive Retainer Options and instead shall receive the full Annual Retainer payable in cash. Retainer Option Elections must comply with the following timing requirements:
Terms of Retainer Options a. Grant Date. Each Retainer Option will be granted on the last calendar day of each month of the calendar year to which the Retainer Option Election applies, subject to the individual continuing to remain an Outside Director on the applicable grant date; provided, however, that if the last calendar day of the month is not a Trading Day, the Retainer Option will be granted on the previous Trading Day prior to such date. b. Vesting Schedule. Each Retainer Option will be fully vested on the grant date. c. Value. For purposes of this Policy, “Value” means, with respect to a Retainer Option, its grant date value calculated in accordance with the Black-Scholes option valuation methodology, or such other methodology the Board or Compensation Committee may determine prior to the grant of the Retainer Option becoming effective, as applicable. d. Type of Option. Each Retainer Option will be a Nonstatutory Stock Option. e. Term of Retainer Option. Each Retainer Option will have a 10-year term from the grant date, subject to earlier termination as provided in the Plan. f. Fair Market Value. The exercise price per Share of each Retainer Option will equal 100% of the Fair Market Value of one Share on the grant date of such Retainer Option. g. Automatic and Nondiscretionary. All grants of Retainer Options pursuant to Section 2 of this Policy will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the terms of the Plan, the form of stock option agreement adopted for use thereunder and this Policy.
Change in Retainer Cash Payments. If an Outside Director makes a Retainer Option Election with respect to an Annual Retainer for a calendar year, but (i) if the Outside Director’s Annual Retainer is increased during such period, the Outside Director must receive the increased amount of Annual Retainer in cash payable in accordance with the terms of Section 1 of this Policy, or (ii) if the Annual Retainer is decreased during such period, no change will be made to any already granted Retainer Option(s), with the number of Shares subject to any Retainer Options granted after such decrease adjusted to reflect the decrease.
Annual Government Advisory Committee Retainer (Amounts and Payment Mechanic): Non-employee directors serving on the Government Advisory Committee during 2022 will receive an additional annual retainer of $15,000 in the form of RSUs, subject to vesting and the limitations described below regarding RSU grants. Non-employee directors serving on the Government Advisory Committee may not make an election to receive the Annual Government Advisory Committee Retainer in any other form.
Annual Board Retainer Elections: Non-employee directors may elect to receive all or a portion of $50,000 of the Annual Board Retainer in cash or RSUs (elections to receive cash or RSUs must be made in 5% increments). The remaining $175,000 of the Annual Board Retainer is paid in the form of RSUs and no election may be made with respect to such amount.
Annual Committee Chair Retainers: The following amounts will be payable for each calendar year to each chairperson of the following committees of the Board (each, a “Committee”) in the form of cash, unless the Non-Employee Director makes a timely election to receive all or a portion of the Annual Committee Chair Retainer in the form of RSUs (subject to the limitations described below): •Audit – $40,000; •Compensation – $15,000; and •Nominating and Corporate Governance – $10,000.
Annual Government Advisory Committee Retainer: $15,000 will be payable for each calendar year in the form of RSUs to each Non-Employee Director serving on the Company’s Government Advisory Committee during a calendar year (subject to the limitations described below). Non-Employee Directors serving on the Government Advisory Committee may not make an election to receive the Annual Government Advisory Committee Retainer in any other form.
Quarterly Retainer Election I hereby elect to receive _____% of the Quarterly Retainer(s) (and any Chair Quarterly Retainer or Lead Director Quarterly Retainer, as applicable) due to me on each Quarterly Payment Date in Shares having an equivalent value.
RETAINER GRANT ELECTION. By signing below, I elect to forego receiving payment of all (but not less than all) of the compensation I am otherwise eligible to receive in cash under the heading “Annual Cash Compensation” of the Policy for the period during the fiscal year of the Company ended [___] commencing on [______]1 and ending on [______],2 and to receive a Retainer Grant in lieu thereof. If I do not timely submit a properly completed Election Form, I will not receive the applicable Retainer Grant and will instead receive the applicable cash compensation under the heading “Annual Cash Compensation” of the Policy.
A retainer is a fee paid upfront to secure the services of a professional, typically a lawyer, consultant, or freelancer. It acts as a form of down payment that guarantees the commitment of the professional to handle certain tasks or responsibilities as they arise. Retainers are often used to ensure that a professional is available to provide ongoing services and are generally deducted from the ultimate costs of the services performed.
A retainer should be used when you:
For example, businesses may use retainers to have legal support available at all times, ensuring quick access without the need to negotiate fees or availability with each occurrence.
Writing a retainer involves a few key components to ensure clarity and mutual understanding between the parties involved. The agreement should include:
Example:
Retainer Agreement between Client and Consultant
Scope of Work: The Consultant agrees to provide advisory services related to financial planning.
Fee Structure: Client to pay a monthly retainer of $2,000.
Duration: This agreement is valid for a period of six months with the option to renew.
Unused Funds: Unused retainer amounts will be rolled over to the subsequent month until the conclusion of the agreement.
Retainer agreements are commonly found in contracts for:
Retainer agreements are structured to provide stability and predictability for both service providers and clients, making them a popular choice in industries where ongoing collaboration is essential.
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