First Data 2008 Annual Report Download - page 211

The 2007 Equity Plan allows executives to invest in the Company by purchasing shares of restricted common stock. For each share of stock purchased,
a proportional amount of stock options are granted. In January 2008, the Committee approved share purchases and option grants for all named executive
officers, with the exception of Ms. Patmore. Mr. Yates also received a grant of restricted stock in recognition of his late 2007 promotion to President of First
Data International and Mr. Wall received an additional option grant in June 2008, following his promotion to Chief Financial Officer.
Half of all the options granted to each officer have time-based vesting, whereby 20% of the options vest on each of the first five anniversaries of
September 24, 2007. The other half of the options granted are subject to EBITDA-based performance vesting. Performance-vested options are eligible to vest
and become exercisable in equal increments of 20% at the end of fiscal years 2008, 2009, 2010, 2011 and 2012, but will vest on those dates only if First Data
attains specified annual EBITDA performance targets, as determined in good faith by the Committee. These targets were not met for 2008 and no
performance-vested options became vested during 2008.
All performance-vested options granted also are eligible to vest and become exercisable on a "catch up" basis if at the end of fiscal years 2009, 2010,
2011 or 2012, the cumulative total EBITDA earned in all prior completed fiscal years exceeds the cumulative total of all EBITDA targets applicable to these
years. EBITDA performance targets for each year can be found on page 55 of First Data Corporation's proxy statement on Schedule 14A filed with the SEC
on June 26, 2007.
Vesting of Mr. Capellas' options is on the same terms as described above, with the exception that his time-based and performance-based options are
subject to four-year vesting periods rather than five-year vesting periods. Mr. Capellas also received a grant of premium-priced options which have four-time
time vesting.
Vesting of time options is fully accelerated upon a Change in Control or a Liquidity Event, as defined in the 2007 Equity Plan. Vesting of performance
options is fully accelerated upon a Change in Control or a Liquidity Event only if one of the following conditions is also met: (a) the Sponsor IRR (as defined
in the 2007 Equity Plan) is achieved, or (b) the Sponsor Return (as defined in the 2007 Equity Plan) is achieved.
All options granted are also subject to call rights by the Company for a period of five years following September 24, 2007 if an option holder terminates
employment with First Data for any reason. If an option holder's employment is terminated due to Death, Disability, Good Reason or Not for Cause (as
defined in the 2007 Equity Plan), call rights may be exercised on vested options at the fair market value share price. In this event, shares obtained through
previous option exercises may be called at the fair market value share price. In the event of Death or Disability, the option holder has a put right to exchange
vested options for the difference of the fair market value and the option exercise price.
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. These provisions enhance the retention of executives who participate in the
2007 Equity Plan and incent these executives to create long-term and sustainable value.
Shares of purchased stock held by executives may not be sold prior to the later of September 24, 2012 or until an initial public offering has been
completed. However, if a public offering occurs before September 24, 2012, a pro-rata portion of shares equal to the percentage of equity offered to the public
will become unrestricted. If a shareholder's employment is terminated voluntarily 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 the Company at the fair market value share price.
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