Exhibit 10.1

 

NCR DIRECTOR COMPENSATION PROGRAM

 

Effective April 27, 2005

 

PREAMBLE

 

This NCR Director Compensation Program (“Program”) is adopted effective April
27, 2005, and replaces the NCR Director Compensation Program adopted by the
Committee on Directors and Governance effective April 29, 2003.

 

The Program is approved and adopted by the Committee on Directors and Governance
of the Board of Directors of NCR Corporation (“Company”) pursuant to its
authority under Section 4.2 of the NCR Management Stock Plan, as amended by the
Board effective April 18, 2003, to grant stock awards to non-employee directors
and to determine the terms and conditions of such awards.

 

The Program is intended to provide competitive remuneration to individuals
serving as non-employee members of the Board of Directors of the Company, and to
align the interests of the Directors with the interests of the Company’s
shareholders.

 

ARTICLE I

 

Definitions

 

1.1 Committee means the Committee on Directors and Governance of the Board of
Directors of NCR Corporation.

 

1.2 Common Stock means the common stock of NCR Corporation, par value $.01 per
share.

 

1.3 Company means NCR Corporation, a Maryland corporation.

 

1.4 Deferred Stock Award means the annual retainer and/or meeting fees, if any,
elected by a Participant to be deferred as set forth in ARTICLE III.

 

1.5 Deferred Stock Grant means the initial, annual or mid-year equity grants, if
any, elected by a Participant to be deferred as set forth in ARTICLE IV.

 

1.6 Director means a member of the Board of Directors of NCR Corporation who is
not an employee of the Company.

 

1.7 Fair Market Value of a share of Common Stock as of a specified date means
the average of the high and low sales prices of a share of Common Stock on the
New York Stock Exchange on such date, or if there were no trades on such date,
on the day on which a trade occurred next preceding such date.

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1.8 Management Plan means the NCR Management Stock Plan, adopted effective as of
January 1, 1997.

 

1.9 Participant means a Director, and any former Director entitled to payment of
a benefit from the Program.

 

1.10 Year of Service means the approximately 12 month period beginning on the
date of an annual shareholders’ meeting of the Company and ending on the day
before the Company’s annual shareholders’ meeting of the next following year,
during which an individual serves as a Director.

 

ARTICLE II

 

Compensation

 

2.1 Annual Compensation. A Director will receive the compensation described in
Sections 2.2 through 2.5 below, as determined by the Committee in its
discretion, based on review of competitive data.

 

2.2 Annual Retainer. For each Year of Service, a Director will receive an annual
retainer as determined by the Committee, which may include an additional
retainer amount for Committee Chairs. A Director may elect to receive the
retainer in cash, in Common Stock, or as a Deferred Stock Award, as described in
ARTICLE III. If no election is made, the retainer will be paid in cash. If paid
in cash or Common Stock, payment of 25% of the annual amount will be made on
June 30, September 30, December 31, and March 31, provided the individual is
serving as a Director on such dates. If the individual is not serving as a
Director on any such date, the remaining amount of the retainer shall be
forfeited.

 

If paid in Common Stock, the number of shares of Common Stock to be paid shall
be determined by dividing the cash amount of the retainer due to the Director by
the Fair Market Value of the Common Stock on the date the payment is due,
rounding up to the next whole share.

 

2.3 Meeting Fees. The Committee may determine that Directors will receive a
meeting fee for each meeting attended, and may determine that Committee Chairs
will determine whether a particular special meeting is subject to a meeting fee.
Meeting fees, if any, will be paid quarterly at the same time as the retainer,
for meetings attended in the immediately preceding quarter, and may be paid in
cash, Common Stock or as a Deferred Stock Award as provided in Article III.

 

2.4 Initial Stock Grant. On the date of first election to the Board, each
Director will receive an initial equity grant under the Management Plan of a
number of whole

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shares of Common Stock as determined by the Committee in its discretion . A
Director may elect to receive such Common Stock as a Deferred Stock Grant as
provided in ARTICLE IV. A Director will receive only one initial equity grant
for any continuous period served as a Director. If a Director ceases to serve as
a Director for a period of at least three years and is later again elected as a
Director, he or she will receive a second initial equity grant for the second
period served as a Director.

 

2.5 Annual Equity Grant. At each annual shareholders’ meeting of the Company,
each individual then serving as a Director or newly elected as a Director shall
receive an equity grant under the Management Plan, determined by the Committee,
consisting of Common Stock and/or nonqualified stock options for Common Stock.
If stock options are granted, the exercise price for each optioned share will be
the Fair Market Value of one share of Common Stock on the grant date. The stock
options will be fully vested and exercisable at grant, and will have a term of
ten years from the date of grant. If Common Stock is awarded, the Committee may
determine that the shares will be forfeited if the Director ceases to serve as a
director during a restriction period determined by the Committee. A Director may
elect to receive such Common Stock (other than Common Stock issued on exercise
of a stock option) as a Deferred Stock Grant as provided in ARTICLE IV.

 

2.6 Mid-Year Equity Grants. The Committee in its discretion may grant stock
options and/or awards of Common Stock, as described in Section 2.5, to Directors
who are newly elected to the Board after the annual shareholders’ meeting. A
Director may elect to receive Common Stock (other than Common Stock issued on
exercise of a stock option) awarded as a mid-year grant as a Deferred Stock
Grant as provided in ARTICLE IV.

 

ARTICLE III

 

Deferred Stock Awards

 

3.1 Election to Defer. For each calendar year, a Director may elect to defer
receipt of pay for services relating to the retainer and meeting fees, if any,
to be received in that calendar year, and receive them instead as a Deferred
Stock Award. The election must be made prior to the January 1 of the calendar
year in which the retainer or meeting fees will be rendered by a Director or
such later date as is permitted by guidance issued under Section 409A of the
Internal Revenue Code (the “Code”); provided, however, that a newly-elected
Director may make an election within the 30 days prior to the date of his or her
election to the Board of Directors. The election to defer shall be irrevocable
commending on January 1 of the calendar year that such election is in effect. A
new election to defer may be made for each subsequent calendar year, provided
the deferral election is made prior to the January 1 of the calendar year and be
irrevocable for the following calendar year. If a new election is not made, or a
prior election is not revoked for the immediately succeeding calendar year, the
most recent election to defer will remain in effect and be irrevocable for the
following calendar year.

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3.2 Form of Election. The election to defer must be made in writing.

 

3.3 Deferral Periods. A Director may elect to receive the Deferred Stock Award
at one of the following times:

 

  (a) on the date of termination as a Director consistent with the definition of
separation of services as defined pursuant to Section 409A of the Code,

 

  (b) on the date either five or ten years from the date of grant, or

 

  (c) in one to five equal annual installments, payable on April 30 of each
year, beginning either on the next following April 30 after the retainer is
earned, or the April 30 next following the date of termination as a Director.

 

3.4 Deferred Stock Awards. If a Director elects to receive the annual retainer
and meeting fees, if any, as a Deferred Stock Award, the Company will maintain a
deferred stock account credited, as of the date a payment of the retainer or
meeting fee would have otherwise been paid, with a number of stock units equal
to the shares of Common Stock (rounded up to the nearest whole share) that could
have been purchased with the amount deferred as of such date at the Fair Market
Value of the Common Stock on such date. As of the date any dividend is paid to
shareholders of Common Stock, the Director’s deferred stock account shall also
be credited with an additional number of stock units equal to the number of
shares of Common Stock (including fractions of a share) that could have been
purchased at the Fair Market Value on such date with the dividend paid on the
number of shares of Common Stock equivalent to the number of share units
credited to the Director’s deferred stock account. In case of dividends paid in
property, the dividend shall be deemed to be the fair market value of the
property at the same time of distribution of the dividend, as determined by the
Committee.

 

3.5 Distribution of Deferred Stock Award. Payment of a Director’s Deferred Stock
Award shall be made at the times elected by the Director at the time of
deferral. Distribution shall be made in cash unless a Participant elects in
writing delivered to the Company no later than 60 days prior to the date of
distribution (or the date of the first distribution, if made in installments)
that all or any designated portion of the deferred stock account be paid in
shares of Common Stock. The amount of a cash distribution shall be determined by
multiplying the number of shares attributable to the payment by the Fair Market
Value of the Common Stock on the date the payment is to be made. If distribution
is to be made in shares of Common Stock, the Participant shall receive the
number of whole shares of Common Stock to which the distribution is equivalent.

 

 

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ARTICLE IV

 

Deferred Stock Grants

 

4.1 Election to Defer. A Director may elect to defer receipt of the Common Stock
subject to the initial stock grant described in Section 2.4 and any grant of
stock made in connection with the annual or mid-year equity grants described in
Sections 2.5 and 2.6, respectively. For the annual equity grant, the election to
defer must be made prior to the January 1 of the calendar year in which the
grant is made. For both the initial and mid-year equity grants for newly-elected
Directors, such Directors must make the deferral election within the 30 days
prior to the date or his or her election to the Board of Directors. The election
to defer shall be irrevocable commencing on January 1 of the calendar year that
such election is in effect.

 

A new deferral election for annual equity grants may be made for each subsequent
calendar year, provided the election to defer is made prior to the January 1 of
that calendar year. If a new election is not made, or a prior election is not
revoked for the immediately succeeding calendar year, the most recent election
to defer will remain in effect and be irrevocable for the following calendar
year. If no deferral election is made, the Common Stock subject to the annual
equity grant will be issued to the Director within a reasonable time after the
effective date of the grant.

 

4.2 Form of Election. The election to defer must be made in writing.

 

4.3 Deferral Periods. A Director may elect to receive the Common Stock at one of
the times specified in Section 3.3 above.

 

4.4 Deferred Stock Accounts. If a Director elects to defer receipt of the Common
Stock subject to the initial, annual or mid-year equity grants, the Company will
maintain a deferred stock account credited, as of the date of election to the
Board, with a number of stock units equal to the shares of Common Stock the
Director was entitled to receive as the initial, annual, or mid-year equity
grant, as applicable. As of the date any dividend is paid to shareholders of
Common Stock, the Director’s deferred stock account shall also be credited with
an additional number of stock units equal to the number of shares of Common
Stock (including fractions of a share) that could have been purchased at the
Fair Market Value on such date with the dividend paid on the number of shares of
Common Stock equivalent to the number of share units credited to the Director’s
deferred stock account. In case of dividends paid in property, the dividend
shall be deemed to be the fair market value of the property at the same time of
distribution of the dividend, as determined by the Committee.

 

4.5 Distribution of Deferred Stock Grant. Payment of a Director’s Deferred Stock
Grant shall be made at the times elected by the Director at the time of
deferral, in shares of Common Stock. The Participant shall receive the number of
whole shares of Common Stock to which the amount of the distribution is
equivalent.

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ARTICLE V

 

Distribution Upon Death

 

5.1 Distribution Upon Death. In the event of the death of a Participant, whether
before or after termination of employment, any Deferred Cash Award or Deferred
Stock Grant to which he or she was entitled shall be converted to cash and
distributed in a lump sum to the Participant’s designated beneficiary, or if no
beneficiary is designated, to the Participant’s estate. Distribution of a
Participant’s stock options will be according to the terms of the stock option
agreements.

 

5.2 Designation of Beneficiary. A Participant may designate an individual or
entity as his or her beneficiary to receive payment of any Deferred Cash Award,
Deferred Stock Grant, or retainer or meeting fees due and unpaid on the date of
the Participant’s death, by delivering a written designation to the Company. A
Participant may from time to time revoke or change any such designation in
writing delivered to the Company. If there is no unrevoked designation on file
with the Company at the time of the Participant’s death, or if the designated
beneficiary has predeceased the Participant or otherwise ceased to exist, such
distribution shall be made in accordance with the Participant’s will or in the
absence of a will, to the administrator of the Participant’s estate.
Distribution shall be made as soon as practicable following notification of the
Company of the Participant’s death. A Participant’s deferred stock account shall
be converted to cash by multiplying the number of whole and fractional shares of
Common Stock to which the Participant’s deferred stock account is equivalent by
the Fair Market Value of the Common Stock on the date of death.

 

ARTICLE VI

 

Administration

 

6.1 Withholding Taxes. The Company shall deduct from all distributions under the
Program any taxes required to be withheld by federal, state or local
governments. If distributions are made in shares of Common Stock, the Company
shall have the right to retain the value of sufficient shares equal to the
amount of the tax required to be withheld with respect to such distributions. In
lieu of withholding the value of shares, the Company may require a recipient of
a distribution in Common Stock to reimburse the Company for any such taxes
required to be withheld upon such terms and conditions as the Company may
prescribe.

 

6.2 Unfunded Nature of Program. This Program shall be unfunded. The funds used
for payment of benefits hereunder shall, until such actual payment, continue to
be

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part of the general funds of the Company, and no person other than the Company
shall, by virtue of this Program, have any interest in any such funds. Nothing
contained herein shall be deemed to create a trust of any kind or create any
fiduciary relationship. To the extent that any person acquires a right to
receive payments from the Company under this Program, such right shall be no
greater than the right of any unsecured general creditor of the Company.

 

6.3 Non-alienation of Benefits. No benefit under the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, including assignment pursuant to a domestic relations
order, and any attempt to do so shall be void. No such benefit shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, or torts of the Participant.

 

6.4 Acceleration Upon a Change in Control. As provided in Section 14.2(iv) of
the Management Plan, Deferred Stock Awards and Deferred Stock Grants will
accelerate and become payable upon the occurrence of a Change in Control. For
purposes of the Program, Change in Control shall be applied to the extent
necessary to comply with Section 409A(a)(2)(a)(v) of the Code, and in Treasury
Regulations issued pursuant to Section 409A(e) of the Code, rather than as
defined in Section 14.1 of the Management Plan.

 

6.5 Amendment or Termination of the Program. The Committee at any time may amend
or terminate the Program, provided that no such action shall adversely affect
the right of any Participant or Beneficiary to a benefit to which he or she has
become entitled pursuant to the Program, and no amendment or termination of the
Program can alter the Participant’s deferrals of compensation in noncompliance
with Section 409A of the Code, or the rules and regulations issued pursuant
thereto. Any amendment or termination of the Program that is inconsistent with,
or in violation of Code Section 409A, shall be void and of no effect.

 

6.6 Interpretation of the Program. The Program is intended to comply with the
provisions of Section 409A of the Code, and the Treasury Regulations issued
pursuant thereto; and the provisions of the Program will at all times be
administered consistent therewith. Any provision of the Program that is
inconsistent with, or in violation of, Section 409A of the Code, shall be void
and of no effect. The Senior Vice President, Human Resources, and the General
Counsel of the Company are delegated the responsibility to interpret and
administer the Program consistent with Section 409A of the Code and to take
necessary action pursuant to this Section 6.6 and Section 6.5 to assure that the
Program is administered consistent with such provision.