First Data 2011 Annual Report Download - page 146

100% vested. If the sale of First Data results in a Change in Control whereby the sponsor stake drops below 50% and the sponsor no
longer controls a majority of the Board all call rights are eliminated and options granted in 2011 become 100% vested.
If an option holder terminates employment with FDC for any reason, all options are subject to call rights by Holdings until the
later of September 24, 2012 or a Change in Control or a Liquidity Event, as defined in the 2007 Equity Plan.
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. This
provision greatly enhances 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 the later of September 24, 2012 or a Liquidity Event.
However, if a partial 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 Holdings 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.
Restricted Stock Awards/Restricted Stock Units awarded in 2011 will have the restrictions lapse/vest at the later of: (a) three
years from grant date (March 18, 2014), and (b) following an IPO plus any mandatory lock-up period (up to 180 additional days from
IPO).
Grant Process
Equity grants made during 2011 under the 2007 Equity Plan were made at the then-current fair market value ($3) on the date of
each grant respectively. 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 Committee.
Perquisites
FDC's compensation philosophy is to focus on performance-based forms of compensation while providing only minimal, but
competitive, executive benefits and perquisites. Reimbursement for relocation and moving expenses and an annual stipend for
personal financial planning are offered to FDC's executive officers. Executives are also authorized to use the corporate aircraft for
personal purposes in limited instances. The Company also makes private golf facilities available to executives for limited personal
use.
FDC's relocation program is required to attract and retain top talent in a competitive environment. The program ensures a new or
transferred executive can transition into their new work location as quickly and efficiently as possible.
The financial planning benefit is provided as a fixed dollar benefit, grossed-up to cover taxes on the benefit. For the Chief
Executive Officer, the benefit is $20,000 per year. For all other executives, the benefit is $20,000 in their first year as an executive
officer and $10,000 in each subsequent year.
Competitive analysis indicates that the relocation and financial planning benefits are comparable to what is offered by other
companies with whom the Company competes for talent. The Committee reviews the appropriateness of perquisites provided to
executive officers on an annual basis.
Retirement Plans
In 2011, 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. FDC 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. FDC offers the ISP not only because it is a market competitive practice, but
it is critical to provide a vehicle for its employees to save for retirement.
The Company matches 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.