First Data 2009 Annual Report Download - page 205

Half of all the options originally 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 FDC attains specified annual EBITDA
performance targets, as determined in good faith by the Committee. These targets were not met for either 2008 or
2009 and therefore no performance-vested options are currently vested.
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 the years 2008 through 2012 were $2.74 billion, $3.07 billion, $3.37 billion, $3.68 billion
and $4.01 billion, respectively. Given that these targets were established during 2007 and the unanticipated
severe economic climate that has occurred since that time, during the coming year, the Committee expects to
review the targets for future years. The Committee desires that performance-related targets for option vesting
continue to be appropriate stretch goals, in order to effectively incent a high level of performance.
Vesting of Mr. Capellas’ options is on the same terms as described above, with the exception that his
originally granted time-based and performance-based options are subject to four-year vesting periods rather than
five-year vesting periods. His September 2009 option grant is subject to 5-year vesting as described above.
Mr. Capellas also received a grant of premium-priced options which have four-year 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 FDC 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.
If the shareholder’s employment is terminated for Cause (as defined in the 2007 Equity Plan), call rights
may be exercised on purchased shares at the lesser of the fair market value share price or the original purchase
price.
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