FIRST DATA CORPORATION
1992 LONG-TERM INCENTIVE PLAN
PERFORMANCE GRANT AGREEMENT
(AWARD PERIOD BEGINNING JANUARY 1, 1999)
This AGREEMENT is made by and between FIRST DATA CORPORATION, a Delaware
corporation (the "Company") and [Officer Name], an officer of the Company (the
"Executive"), as of January 1, 1999.
RECITALS
--------
WHEREAS, the Board of Directors of the Company (The "Board") established
and the Company maintains the 1992 Long-Term Incentive Plan (The "Plan") which
authorizes the Compensation and Benefits Committee of the Board (the
"Committee") to award Performance Grants to eligible key employees of the
Company and its affiliates; and
WHEREAS, the Committee has determined to award a Performance Grant to
Executive on the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
AGREEMENT
---------
1. Defined Terms. All terms not otherwise defined herein shall have the
-------------
meaning set forth in the Plan.
2. Award of Performance Grants. The Company hereby grants to Executive a
---------------------------
Performance Grant (referred to hereinafter as the "Performance Grant")
subject to the terms and conditions set forth below.
3. Terms and Conditions of Performance Grants.
------------------------------------------
(a) The value of the Performance Grant (the "Unit Value") shall be
determined by the Committee in accordance with the formula set forth
on Exhibit A attached hereto based upon the percentage increase in the
share price of the Company's common stock, $.01 par value per share
(the "Common Shares"), plus dividends paid, if any, during the period
beginning on January 1, 1999 and ending on December 31, 2000 (the
"Award Period") (the "Growth in Shareholder Value"), relative to the
Growth in Shareholder Value of those companies in the S&P 500 index
whose Growth in Shareholder Value during the Award Period would place
such companies above the fiftieth (50th) percentile of all companies
in the S&P 500 index ("Comparator Companies"); provided, however, that
the Growth in Shareholder Value is in excess of the fiftieth
percentile of the Comparator Companies and
the Threshold Rate as defined below. For purposes of this Agreement, the
share price of the Common Shares and the share price of the Comparator
Companies shall be the average of such share price for the sixty (60) day
period ending on the last Business Day preceding the first day of the
Award period and the last day of the Award Period, respectively. For
purposes of this Agreement, the Threshold Rate for any Award Period shall
mean the rate of return during the Award Period of the average two-year
treasury note for the sixty (60) day period ending on the last Business
Day preceding the first day of the Award Period assuming that dividends
with respect to such two-year treasury note paid during the Award Period
are reinvested at such two-year treasury note rate. For purposes of this
Agreement, the methodology which shall be used to determine whether the
Growth in Shareholder Value of the Company's common shares during the
Award Period exceeds the 50th percentile shall be to rank each of the
comparator companies from one (1) to five hundred (500) based on its
Growth in Shareholder Value during the Award Period and then compare the
Growth in Shareholder Value of the Company with the Growth in Shareholder
Value of the Comparator Companies. If the Committee determines that a
Performance Grant has no Unit Value, such Performance Grant shall be
deemed to have been canceled.
(b) Subject to the conditions set forth in Subparagraph 3 (e) and Paragraph 4
below, Executive shall have no vested or non-forfeitable interest in the
Unit Value of a Performance Grant, as determined by the Committee, until
the expiration of two fiscal years following the end of the Award Period
with respect to the Performance Grant (the "Vesting Period"). For each
fiscal year during the Vesting Period in which the Company's net income
(determined pursuant to the guidelines previously approved by the
Committee) before dividends divided by stockholder's equity at the
beginning of such fiscal year ("Return on Equity Percentage") is a
positive number, the Unit Value of the Award shall increase in an amount
equal to fifty (50%) percent of the Return on Equity Percentage ("Adjusted
Return on Equity Percentage"). For each fiscal year during the Vesting
Period in which the Return on Equity Percentage is a negative number, the
Unit Value of the Award shall decrease by an amount equal to the Return on
Equity Percentage.
(c) Subject to the terms and conditions set forth in Paragraph 4 below,
Executive shall be entitled to receive an amount equal to the Unit Value
of the Performance Grant, as adjusted pursuant to the Adjusted Return on
Equity Percentage or the Return on Equity Percentage, as the case may be
(the "Adjusted Unit Value") as determined as of the last day of the
Vesting Period applicable to the Performance Grant. Such Adjusted Unit
Value shall be payable solely in cash and shall be paid to Executive
within 90 days after the last day of such Vesting Period.
(d) Executive may elect to defer receipt of cash in the amount of the Adjusted
Unit Value of a Performance Grant in accordance with the terms and
conditions of the First Data Corporation Salary Deferral Plan.
(e) In the event that Executive's employment is terminated for any reason
prior to the end of the Award Period (with respect to a Performance
Grant), or for any reason other than Executive's death, Disability, or
early, normal or deferred retirement under an approved retirement plan of
the Company (or any such other plan or arrangement as may be approved by
the Committee in its discretion, for this purpose) after the Award Period
with respect to such Performance Grant but prior to the end of the Vesting
Period, any unpaid Unit Value shall not be paid out and the Performance
Grant shall be forfeited.
4. Committee Authority. The Committee has the sole and exclusive authority to
-------------------
interpret and apply any provision of this Agreement, and may reduce the
amount of any such award to be made hereunder (including a determination of
a lower Unit Value than that which the formula on Exhibit A would yield)
based on factors it selects in its discretion. The Board may, for time to
time, amend, modify or terminate, in whole or in part, any or all provisions
of the Plan; provided, that no such change or termination shall in any way
materially impair Executive's right under this Agreement without the prior
written consent of Executive. Notwithstanding anything in the foregoing
sentence to the contrary, the Committee may, in its sole discretion, extend
at any time the Vesting Period for any Performance Grant for up to an
additional two fiscal years (the "Extended Phase") provided that (a) the
Committee in its sole discretion may provide for the payment to Executive
during the Extended Phase of all or any portion of the Unit Value of the
Performance Grant, and (b) any action by the Committee in extending the
Vesting Period pursuant to this sentence shall be disregarded for purposes
of Paragraph 3 (e) of this Agreement.
5. Nontransferability. The Performance Grant shall not be transferred or
------------------
assigned, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except in the event of Executive's death)
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner.
6. No Employment Contract. Neither the Plan nor this Agreement shall constitute
----------------------
a contract of employment between the Company and Executive, and the Company
specifically reserves the right to terminate the employment of or
performance of services by the Executive at any time for any reason.
7. Compliance with Other Laws and Regulations. The Performance Grant shall be
------------------------------------------
subject to all applicable federal and state laws, rules and regulation,
including those related to disclosure of financial and other information to
Executive, and to such approvals by any government or regulatory agency as
may be required.
8. Executive Bound by Plan. Executive hereby acknowledges a receipt of a copy
-----------------------
of the Plan, and agrees to be bound by all the terms and provisions thereof,
which are incorporated herein by reference.
9. Acceptance. By executing this Agreement and accepting the Performance Grant,
Executive (or any person acting on Executive's behalf or claiming under or
through Executive) shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, any action taken under the
Plan by the Company, the Board or the Committee or its delegates.
10. Funding. The Plan shall be unfunded. The Company shall not be required to
-------
establish any special fund or to make any other segregation of assets to
assure the payment of the Adjusted Unit Value attributable to any
Performance Grant. Any rights to the payment of any such Adjusted Unit
Value shall be no greater than the right of the Company's general creditors.
11. Notices. Any notice hereunder to the Company shall be addressed to:
-------
First Data Corporation
0000 Xxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Executive Vice President and General
Counsel
and any notice hereunder to Executive shall be addressed to Executive at
Executive's last address on the records of the Company, subject to the
right of either party to designate at any time hereafter in writing some
other address. Any notice shall be deemed to have been duly given when
enclosed in a properly sealed envelope, addressed as set forth above, and
deposited (with first class postage prepaid) in the United States mail.
12. Counterparts. This Agreement may be executed in one or several
------------
counterparts, each of which shall constitute one and the same instrument.
13. Governing Law. The validity, construction, interpretation, administration
-------------
and effect of the Plan and this Agreement, and of its and their rules and
regulations, and rights relating to the Plan and to the Performance Grants
granted under the Plan pursuant to this Agreement shall be governed by the
substantive laws, but not the choice of law rules, of the State of
Delaware.
14. Variation of Pronouns. All pronouns and any variations thereof contained
---------------------
herein shall be deemed to refer to masculine, feminine, neuter, singular or
plural, as the identity of the person or persons may require.
15. Shareholder Approval. This Agreement shall be void in the event the
--------------------
stockholders of the Company fail to approve either this Agreement or a plan
authorizing this Agreement prior to the payment of any amount to Executive
under this Agreement.
IN WITNESS WHEREOF, the Company and Executive has executed this Agreement
as of the date first written below.
FIRST DATA CORPORATION
BY: _____________________________
TITLE: ___________________________
[OFFICER]
__________________________________
EXHIBIT A
(TO CHIEF EXECUTIVE OFFICER AGREEMENT)
UNIT VALUE
ANNUAL GROWTH IN TARGET UNIT
SHAREHOLDER VALUE VALUE
----------------- -----
*** ***
Threshold
Rate
Exceeds Comparator Company at 50% level $ 660,000
Exceeds Comparator Company at 55% level 1,200,000
Exceeds Comparator Company at 60% level 1,800,000
Exceeds Comparator Company at 65% level 2,400,000
Exceeds Comparator Company at 70% level 3,000,000
Exceeds Comparator Company at 75% level (Maximum) 3,600,000
If the Company's Growth in Shareholder Value exceeds a Comparator Company at a
level above 50% and below 75%, the Target Value will be interpolated to the
nearest whole percent based on the scale above.
*** For purposes of this Agreement, the Threshold Rate for any Award Period
shall mean the rate of the return during the Award Period of the average two-
year treasury note for the sixty (60) day period ending on the last Business Day
preceding the first day of the Award Period assuming that interest with respect
to such two-year treasury note paid during the Award Period is reinvested at
such Threshold Rate. If the Growth in Shareholder Value for the Award Period is
less than the Threshold Rate, then regardless of the Growth in Shareholder
Value, the Committee shall assign no Unit Value to the Performance Grant. For
example, if Growth in Shareholder Value exceeds that of the Comparator Company
at the seventy-fifth percent (75%) level but that Growth in Shareholder Value is
less than the Threshold Rate, no Unit Value shall be assigned.
EXHIBIT A
(TO EVP AGREEMENTS)
UNIT VALUE
ANNUAL GROWTH IN TARGET UNIT
SHAREHOLDER VALUE VALUE
----------------- -----
*** ***
Threshold
Rate
Exceeds Comparator Company at 50% level $250,000
Exceeds Comparator Company at 55% level 350,000
Exceeds Comparator Company at 60% level 450,000
Exceeds Comparator Company at 65% level 550,000
Exceeds Comparator Company at 70% level 650,000
Exceeds Comparator Company at 75% level (Maximum) 750,000
If the Company's Growth in Shareholder Value exceeds a Comparator Company at a
level above 50% and below 75%, the Target Unit Value will be interpolated to the
nearest whole percent based on the scale above.
*** For purposes of this Agreement, the Threshold Rate for any Award Period
shall mean the rate of the return during the Award Period of the average two-
year treasury note for the sixty (60) day period ending on the last Business Day
preceding the first day of the Award Period assuming that interest with respect
to such two-year treasury note paid during the Award Period is reinvested at
such Threshold Rate. If the Growth in Shareholder Value for the Award Period is
less than the Threshold Rate, then regardless of the Growth in Shareholder
Value, no Unit Value shall be assigned to the Performance Grant by the
Committee. For example, if Growth in Shareholder Value exceeds that of the
Comparator Company at the seventy-fifth percent (75%) level but that Growth in
Shareholder Value is less than the Threshold Rate, no Unit Value shall be
assigned.
EXHIBIT A
(TO CHIEF OPERATING OFFICER AGREEMENT)
UNIT VALUE
ANNUAL GROWTH IN TARGET UNIT
SHAREHOLDER VALUE VALUE
----------------- -----
*** ***
Threshold
Rate
Exceeds Comparator Company at 50% level $ 500,000
Exceeds Comparator Company at 55% level 800,000
Exceeds Comparator Company at 60% level 1,100,000
Exceeds Comparator Company at 65% level 1,400,000
Exceeds Comparator Company at 70% level 1,700,000
Exceeds Comparator Company at 75% level (Maximum) 2,000,000
If the Company's Growth in Shareholder Value exceeds a Comparator Company at a
level above 50% and below 75%, the Target Unit Value will be interpolated to the
nearest whole percent based on the scale above.
*** For purposes of this Agreement, the Threshold Rate for any Award Period
shall mean the rate of the return during the Award Period of the average two-
year treasury note for the sixty (60) day period ending on the last Business Day
preceding the first day of the Award Period assuming that interest with respect
to such two-year treasury note paid during the Award Period is reinvested at
such Threshold Rate. If the Growth in Shareholder Value for the Award Period is
less than the Threshold Rate, then regardless of the Growth in Shareholder
Value, no Unit Value shall be assigned to the Performance Grant by the
Committee. For example, if Growth in Shareholder Value exceeds that of the
Comparator Company at the seventy-fifth percent (75%) level but that Growth in
Shareholder Value is less than the Threshold Rate, no Unit Value shall be
assigned.
