First Data 2009 Annual Report Download - page 194

ITEM 9B. OTHER INFORMATION
Resignation of CEO and Appointment of Interim CEO
On March 5, 2010, Michael Capellas, Chairman and CEO of First Data Corporation (the “Company”),
submitted his resignation from those positions and as a director of the Company, effective March 31, 2010. He
has accepted a new role as a senior advisor to Kohlberg Kravis Roberts & Co. (“KKR”) relative to the
technology industry. In this new role, Mr. Capellas will facilitate introductions to senior management teams and
boards of directors, assist in the sourcing of new investments and the evaluation of investment opportunities, and
work with specific KKR portfolio companies. Mr. Capellas will also continue to serve in an advisory capacity to
the Company and act on its behalf as a senior liaison with major technology providers. The compensation that
Mr. Capellas will receive for his advisory services will be determined as and when the nature, extent and timing
of those services become known.
On March 10, 2010, the Company’s board of directors accepted Mr. Capellas’ resignation and thanked him
for his many contributions to the Company during his tenure as chairman and CEO. On that same date, the board
appointed Joe W. Forehand, a current director of the Company, to serve as its chairman and interim CEO
effective March 31, 2010 while the board conducts a search for Mr. Capellas’ replacement. Mr. Forehand’s
compensation for serving in this interim appointment has not been determined and the Company will provide
additional disclosure when his compensation is finalized.
Mr. Forehand, age 61, has been a member of the Company’s Board of Directors since September 2009. Mr.
Forehand retired as Chairman of the Board of Directors of Accenture Ltd in 2006. In his more than 30 years with
Accenture, Mr. Forehand served as the CEO from 1999-2004, prior to that, as chief executive of the
Communications and High Technology Operating Group, and as Chairman of the Board of Directors from 2001-
2006. Mr. Forehand is a member of the Portfolio Management Committee for KKR and has also been involved
with KKR’s growth and emphasis on the technology industry sector.
2010 Executive Compensation
On March 8, 2010, the Company’s Governance, Compensation and Nominations Committee established
salary and target bonus amounts for 2010 for the Named Executive Officers of the Company under the First Data
Corporation Senior Executive Incentive Plan as set forth in Exhibit 10.24 to this Form 10-K.
Equity Compensation
As part of its practice of continually evaluating its compensation programs for senior management and in
light of economic challenges faced since the inception of the 2007 Stock Incentive Plan for Key Employees of
First Data Corporation (the “2007 Stock Plan”), the Company has decided to make a change in its approach to
long-term incentive compensation. The 2007 Stock Plan, under which members of senior management were
invited to invest and were granted options to purchase common stock of the Company’s parent, will be
suspended during the first half of 2010. Existing investments will continue to remain in place according to the
terms under which they were made.
The Company expects to adopt a new long term incentive structure for executives that may not require
investment by the employee in the common stock of the Company’s parent. Under the proposed new structure
which is still under review, options will be granted at fair market value and subject to a vesting
schedule. Executives who were previously invited to invest but have not yet made an investment nor received the
proportionate grant of stock options, including Pat Shannon, Chief Financial Officer, whose expected investment
and option grants under the 2007 Stock Plan were previously disclosed in the Current Report on Form 8-K filed
by the Company on September 8, 2009, and Kevin Schultz, Executive Vice President of FDC’s Financial
Services, will have the ability to either make an investment with a proportional grant of stock options as initially
offered or receive a grant of options. The number of options granted will be commensurate with each employee’s
position, as determined by the Governance, Compensation and Nominations Committee of the Company.
Additional option grants may be made periodically. The Company continues to believe that an equity plan is a
powerful mechanism to both facilitate equity ownership and closely align executive and shareholder interests.
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