First Data 2007 Annual Report Download - page 159

• reduces share utilization and dilution compared to previous years' equity grants which were made exclusively as stock options; and
• promotes share ownership because restricted stock facilitates executive officer share ownership.
2007 Equity Awards
Annual equity awards were granted to all executive officers in February 2007 under the LTIP. Equity award target values for 2007 were established by the
Committee at a level consistent with the Company's philosophy that equity awards are the most important element of the Company's predominantly
performance-based compensation structure and the key driver of alignment between executives and shareholders. Awards were also set at a level consistent
with First Data's objectives on market positioning for equity compensation.
The following table provides details on the equity grants made to NEOs in conjunction with the 2007 annual equity grant. The value of restricted stock awards
on their grant date was based on a per share price of $25.555 and the value of each option was determined using a Black-Scholes valuation methodology
based on a per share exercise price of $25.555.
Grant Date
Grant Date Fair
Value of 2007
Equity Award
Restricted
Stock
Shares
Number of
Options
Michael Capellas (1) n/a n/a n/a n/a
Henry C. Duques 2/21/07 $ 7,442,256 96,000 678,800
Kimberly Patmore 2/21/07 $ 3,282,173 36,000 254,500
Peter Boucher 2/21/07 $ 2,735,299 30,000 212,100
David Dibble 2/21/07 $ 2,735,299 30,000 212,100
Edward A. Labry III 2/21/07 $ 4,157,728 45,600 322,400
David Bailis 2/21/07 $ 3,610,854 39,600 280,000
Pamela Patsley 2/21/07 $ 3,610,854 39,600 280,000
(1) Mr. Capellas was not yet employed by First Data at the time annual grants were made.
Stock options granted in 2007 to NEOs under the LTIP were to vest on the basis of continued employment over a four year period, 25% becoming exercisable
on each anniversary of the grant date and have a ten year term before they expire. Option repricing is expressly prohibited by the terms of the LTIP.
Restricted stock awards granted under the LTIP were to vest one third each year on the anniversary date of the grant over a period of three years. Recipients of
restricted stock received dividends on, and could vote on, the shares subject to a grant. Shares of restricted stock could not, however, be sold or otherwise
transferred prior to the lapse of the restrictions.
Impact of Merger on Equity
As a result of the merger on September 24, 2007, all options granted under the LTIP and predecessor equity plans were cancelled in return for consideration,
while all shares of unvested restricted stock granted under the LTIP became fully vested and were purchased at the merger price of $34.00. Consideration paid
for each option was calculated as the excess, if any, between the merger per share price of $34.00 and the exercise price of the option. Post-merger, no further
awards will be made under the LTIP.
Equity compensation is a key component in achieving First Data's most critical compensation objectives, including aligning compensation to increased
shareholder value and facilitating executive ownership. Following the merger, the Committee adopted the 2007 Stock Incentive Plan for Key Employees of
First Data Corporation (the "2007 Equity Plan") as the vehicle for providing equity-based compensation for executive officers. The 2007 Equity Plan allows
for executive officers to purchase shares of restricted stock and receive matching grants of stock options in First Data Holdings Inc.
Post-Merger Equity Grants
The purpose of the 2007 Equity Plan is to promote First Data's long-term financial interests and growth by:
• attracting and retaining executives with the experience and ability required to make a substantial contribution to the success of the Company's
business;
157