First Data 2012 Annual Report Download - page 139

2012 Equity Awards
In 2012, the Holdings Committee implemented an annual equity grant program for FDC executives in order to maintain a
more competitive overall total compensation structure and promote long-term retention of key talent. Annual grants will be made on a
discretionary basis, with amounts determined in the sole discretion of the Holdings Committee based on each executive’ s role and
performance. Per his employment agreement, Mr. Judge has an annual equity award target value of $1,000,000.
2012 grants were made half in time-vested options and half in restricted stock awards, based on the grant date fair value of $3
per share of stock and a grant of two options for each share of restricted stock granted. Equity awards made pursuant to this structure
in 2012 were made under the 2007 Equity Plan. Restricted shares vest upon the later of three years from grant date or a liquidity
event, as defined by the plan. Time options vest one-third per year over a three year period from the grant date.
The following equity awards were approved for executive officers in March 2012:
The Committee believes that annual equity grants in conjunction with: (1) personal investments by senior executives in
Holdings stock with a long holding period, (2) making a proportional one-time grant of stock options with a relatively long five year
vesting period, and (3) performance-based vesting requirements on one half of all investment-matching options granted, is an effective
approach to align the interests of executives and shareholders, as well as maximize teamwork, retention and motivation within the
executive team.
General Provisions for Options and Purchased Shares under the 2007 Equity Plan
Options granted in 2010 and prior: Vesting of all time options is fully accelerated upon a Change in Control or a Liquidity
Event, as defined in the 2007 Equity Plan. Vesting of all 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.
Options granted in 2012: Initial Public Offering (“IPO”) or sale of First Data has no impact on options vesting unless the
Sponsor’ s (KKR’ s) stake drops to a level below 10% of their original investment. If it does, then all options granted in 2012 become
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 2012 become 100% vested.
If an option holder terminates employment with FDC for any reason, all options are subject to call rights by Holdings until 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
p
revious 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
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Stock Option Grant Restricted Stock Award
Jonathan J. Judge 333,333 166,667
Edward A. Labry III 200,000 100,000
John Elkins 183,333 91,667
Ray E. Winborne 166,667 83,333
Kevin Kern 166,667 83,333