Dividend Equivalent Unit Account Sample Clauses
The Dividend Equivalent Unit Account clause establishes a mechanism for tracking and crediting dividend equivalents to participants in a plan or agreement, typically when they hold units or awards that do not directly receive dividends. Under this clause, whenever dividends are paid on the underlying shares, an equivalent amount is credited to a separate account for the participant, which may be paid out in cash or additional units at a later date. This ensures that participants are not disadvantaged by holding units instead of actual shares, maintaining fairness and aligning their interests with shareholders.
Dividend Equivalent Unit Account. As soon as practical following each of the Company’s dividend payable dates, the Colleague’s Dividend Equivalent Unit Account shall be credited with the number of Dividend Equivalent Units equal to the dividends paid by the Company during the quarter on a number of Shares equal to the aggregate number of Restricted Stock Units in the Colleague’s Restricted Stock Unit Account as of the record date for such quarter’s dividend payment. Colleague shall be given the opportunity to elect one or more of the Investment Options for the purpose of determining the Investment Performance of the Colleague’s Dividend Equivalent Unit Account. Colleague’s initial election shall remain effective until amended; amendments will be allowed no more than once per calendar quarter and will be effective for the quarter following the quarter in which the election is made. If Colleague does not make an election, then Colleague’s Investment Performance will be calculated using the Three Month U.S.
Dividend Equivalent Unit Account. As soon as practical following each of the Company’s dividend payable dates, the Colleague’s Dividend Equivalent Unit Account shall be credited with the number of Dividend Equivalent Units equal to the dividends paid by the Company during the quarter on a number of Shares equal to the aggregate number of Restricted Stock Units in the Colleague’s Restricted Stock Unit Account as of the record date for such quarter’s dividend payment.
Dividend Equivalent Unit Account. With respect to the number of Shares subject to a DEU Option, a notional number of shares shall be credited to an account (“Dividend Equivalent Account”) to be established for the Participant, which account shall be unfunded and unsecured and shall be held with the general assets of the Company. Each such credit shall be recorded as of the first business day of the calendar quarter immediately following each record date for a cash dividend declared on Shares for any DEU Option which is outstanding on such record date. The notional share amounts (such amounts, together with any amounts credited pursuant to (b) below, the “Dividend Equivalent Units”) credited to the Participant’s Dividend Equivalent Account shall be the aggregate number of Shares, rounded to the nearest whole Share, derived by (1) multiplying (x) the Net Dividend Rate by (y) the exercise price of the DEU Option, (2) dividing the product thereof by four (or whatever other multiplier was used in arriving at the annualized dividend rate), (3) multiplying the resultant quotient by the number of Shares subject to the unexercised portion of the DEU Option as of the dividend record date, and (4) dividing the product thereof by the average closing price of a Share during the immediately preceding calendar quarter on the principal exchange on which the Shares are traded. For example, assume that (1) on January 1, 2000 the Committee awards a DEU Option to a Key Employee for 1,000 Shares having an exercise price of $25 per Share, (2) on January 1, 2000, the average annual yield of the Standard and Poors 500 Index is 1.5%, (3) the Board declares a quarterly dividend of $0.50 for shareholders of record as of February 10, 2000, (4) the Participant has not exercised the DEU Option as of February 10, 2000, and (5) the average closing price for Shares on the New York Stock Exchange during the calendar quarter ending March 31, 2000 is $26. The Net Dividend Rate for the DEU Option is 4 times $0.50 divided by $25, i.e., 8.0%, less 1.5%, or 6.5%. As of April 3, 2000, the first business day of the next calendar quarter, there would be credited to the Participant’s Dividend Equivalent Account the number of Dividend Equivalent Units as follows: First, 6.5% times $25 divided by 4 times 1,000 Shares equals $406.25. Next, $406.25 divided by $26 equals 15.625 Shares, or 16 Dividend Equivalent Units, rounded to the nearest whole number.