First Data 2013 Annual Report Download - page 136

If the option holder’s employment is terminated voluntarily or for Cause (as defined in the 2007 Equity Plan), call rights may be exercised on vested
options at the lesser of the fair market value share price or the option exercise price. In this event, shares obtained through previous option exercises may be
called at the lesser of the fair market value share price or the option exercise price. In the case of involuntary termination for Cause, call rights may be
exercised on purchased shares at the lesser of the fair market value share price or the original purchase price. In the case of voluntary termination, call rights
may be exercised on purchased shares at the fair market value share price. These provisions greatly enhance the retention of executives who participate in the
2007 Equity Plan by eliminating all potential option gains for executives who voluntarily terminate prior to a Liquidity Event.
Shares of purchased stock held by executives may not be sold prior to a Liquidity Event. If a shareholder’s employment is terminated involuntarily or
due to Death, Disability, Good Reason or Not for Cause (as defined in the 2007 Equity Plan), call rights may be exercised on purchased shares at the fair
market value share price. In the event of Death or Disability, the shareholder has a put right to sell shares back to Holdings at the fair market value share price.
Other than awards made to newly hired executives, Restricted Stock Awards/Restricted Stock Units awarded in 2013 will have the restrictions lapse/vest
at the later of: (a) three years from grant date and (b) a Liquidity Event — as defined in the Plan, but generally equivalent to an IPO plus any mandatory lock-
up period (up to 180 additional days from IPO).
Grant Process
All equity grants were made under the 2007 Equity Plan, and granted at the then-current fair market value on the date of each grant. Fair market value
was determined by the full Holdings Board at the time of grant. Equity grants were made on the date the grants were approved by the Holdings Committee.
Perquisites
The Company’s compensation philosophy is to focus on performance-based forms of compensation while providing only minimal executive benefits
and perquisites. Reimbursement for relocation and moving expenses are offered to the Company’s executive officers. Executives are also authorized to use the
corporate aircraft for personal purposes in limited instances.
The financial planning benefit previously offered to all executives was stopped in 2013. Per his employment agreement, Mr. Bisignano is eligible for up
to $100,000 per year of financial planning assistance; however, this benefit was not used during 2013.
Retirement Plans
In 2013, all employees in the U.S., including executive officers, were eligible to participate in the First Data Corporation Incentive Savings Plan (“ISP”).
The ISP is a qualified 401(k) plan designed to comply with Internal Revenue Service (“IRS”) safe harbor rules. The Company maintains the ISP to allow
employees to save for their retirement on a pre-tax basis and provides company contributions to help employees build retirement savings. The company
contribution component of this plan will be suspended beginning in 2014.
In 2013, the Company matched 100% of employee deferrals up to 3% of eligible pay and 50% of employee deferrals on the next 1% of eligible pay.
Eligible pay includes base and incentive compensation and is capped by IRS limitations applicable to qualified plans. Company contributions become 100%
vested after 2 years of service and there is no service requirement to begin receiving company matching contributions.
Beginning January 1, 2014, the Company match has been suspended for all employees, including executives.
FDC does not currently offer defined benefit plans or non-qualified retirement plans to its executive officers.
SEVERANCE AND CHANGE IN CONTROL AGREEMENTS
In general, the Company does not enter into employment agreements with employees, including the Company’s executive officers, except in the case of
Mr. Bisignano, Mr. Judge and Mr. Labry. A description of these agreements is provided below. All current executive officers serve at the will of the Board.
The Company believes that reasonable and appropriate severance and Change in Control benefits are necessary in order to be competitive in the
Company’s executive attraction and retention efforts. The Company’s severance benefits are equivalent to those typically found in other companies and reflect
the fact that it may be difficult for such executives to find comparable employment
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