Document:

Exhibit 10.01

 

FEDERAL HOME LOAN BANK OF NEW YORK 2014 INCENTIVE COMPENSATION PLAN

 

I.                            OBJECTIVE

 

The objective of the Federal Home Loan Bank of New York’s (“Bank”) 2014 Incentive Compensation Plan (“Plan”) is to motivate employees to take actions that support the Bank’s strategies and lead to the attainment of the Bank’s business plan and fulfillment of its mission.

 

The Plan is intended to accomplish this objective by:

 

·                  Linking annual cash pay-out award opportunities to Bank performance measured by the Bank’s “Business Effectiveness”; “Community Investment Effectiveness” ; and, “Growth Effectiveness” goals as well as utilizing individual, department and group performance measures for certain employees where appropriate and applicable;

·                  Establishing the goal-setting process as an effective reward system so that employee monetary interests are related to and dependent upon Bank performance; and

·                  Retaining top performing employees by affording them the opportunity to share in the Bank’s enhanced performance.

 

II. DEFINITIONS

 

A.           Bank: The Federal Home Loan Bank of New York, its successors and assigns.

B.           Board: The Board of Directors of the Federal Home Loan Bank of New York.

C.           Committee: The Compensation and Human Resources Committee of the Board.

D.           Fiscal Year: The 12-month period used as the annual accounting period by the Bank.

E.            Manager: The person to whom the Participant reports directly.

F.             Participant: An employee of the Bank as defined by the terms of the Financial Institutions Retirement Fund who is exempt from the application of the overtime provisions of the Fair Labor Standards Act and who is also selected by the President to participate in the Plan.

G.           Plan: This Incentive Compensation Plan, as may be amended or supplemented from time to time.

H.          Plan Year: 2014

I.                President: The Chief Executive Officer of the Bank, regardless of title, or his designee.

 

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III.      ADMINISTRATION

 

A.            The Plan shall become effective upon fulfillment of the conditions included in the resolution pertaining to the Plan adopted by the Committee on January 15, 2014. Once such conditions are fulfilled, the terms of the Plan shall become effective for the Plan Year beginning January 1, 2014.

B.            The Plan shall be administered by the President, subject to any requirements for review and approval by the Committee that the Committee may establish. The Committee shall keep the Board apprised of any amendments to the Plan.  The Director of Human Resources shall be the President’s designee until there is a written communication by the President naming other(s) to fulfill that duty.  In all areas not specifically reserved by the Committee for its review and approval, decisions of the President or his designee concerning the Plan shall be binding on the Bank and on all Participants.

C.            While the President has the full power and authority to interpret and administer the Plan, he will also have the following specific rights and duties:

 

1.       To adopt, amend and rescind administrative guidelines, rules and regulations pertaining to the Plan.

2.        To accept, modify or reject recommendations of the Managers to set final awards.

3.        To interpret and rule on any questions pertaining to any provisions of the Plan.

4.       To retain all such other powers as may be necessary to discharge the duties and responsibilities herein. Notwithstanding the foregoing, matters specifically affecting the President shall be handled by the Committee.

 

D.            The President will be responsible for ensuring effective communication of Plan provisions each year.  Each Participant will be given a copy of the Plan document and of any schedule deemed necessary by the President.  Material modifications or changes to the Plan will be documented and distributed to Participants as soon as practicable.

E.                Nothing contained in this Plan shall be construed as a contract of employment between the Bank and a Participant, or as a right of a Participant to be continued in the employment of the Bank, or as a limitation of the right of the Bank to discharge a Participant with or without cause.

 

IV.                               ELIGIBILITY

 

A.            Employees in positions determined to have a measurable impact on Bank results and for whom incentive participation is consistent with competitive practice may be eligible for participation in the Plan.

B.            The President will select annually, for approval by the Committee, those positions which will be eligible for awards granted under the terms of the Plan.  Eligibility may vary from year to year.

C.            Incentive compensation opportunity by rank and position is listed in Schedule A, incorporated by reference, which may be updated annually or more frequently, as appropriate.

D.            New employees deemed eligible for Plan participation will be considered eligible immediately upon date of hire.

 

V.                        INDIVIDUAL AWARD OPPORTUNITIES

 

A.            The President shall recommend to the Committee for its approval the award levels which shall be used to calculate awards earned by Plan Participants.

B.            Award levels shall be expressed as a percent of the base salary of each Participant for that Plan Year.

 

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C.            Each position shall have an assigned threshold, target and maximum award opportunity level. The range of award opportunities for each Plan Participant is included in Schedule A, which is incorporated by reference.  This Schedule A may be amended or otherwise modified from year to year by the Committee.

 

VI.                   OBJECTIVE SETTING

 

The President shall from time to time recommend to the Committee Bankwide performance goals that incentive payments to Participants shall be based upon, either in their entirety or selectively.  Individual and/or group performance measures and goals may be developed by Participants in collaboration with their Managers. The Bankwide performance goals will specify target performance levels as well as the achievement levels required to receive threshold and maximum incentive award amounts. Target performance goal(s) reflect achievement of the Bank’s budgeted performance. Maximum performance goal(s) shall be established as goal(s) representing a “reach” for the Bank and/or the group or individual as applicable. The Committee shall review and have final approval over the Bankwide performance measures and goals for all Participants, including the President.  Individual and/or group performance measures and goals for Participants other than the President will be reviewed and approved by the participant’s and/or group’s manager.  Changing the measures of Bankwide performance or changing the achievement levels of Bankwide performance will require approval of the Committee.

 

VII.              OBJECTIVE WEIGHTING

 

Actual incentive awards under the Plan will be based on (i) Bankwide performance results, and (ii) individual and/or group performance results, if applicable or appropriate. The relative weighting of Bank performance may vary for any group of Participants or individual Participant.

 

VIII.         PERFORMANCE MEASUREMENT

 

A.            Performance against goals will be measured as soon as practicable following the close of the Plan Year.

B.            Group and/or individual performance, where applicable, will be measured by each Participant’s Manager.

 

IX.                  AWARD DETERMINATION

 

A.            Aggregate performance of Bankwide goals, individual and/or group goals, where applicable, will be used to determine the Participants’ awards.  There will be no payout to Participants for Bankwide goals if results on all Bankwide goals fall below the threshold level. Should the Bank not meet all of its Bankwide goals, Participants who have attained at least an overall performance rating of 3.0 will be paid an incentive award based on their individual performance component.

B.            A Participant’s overall performance as rated in his/her last performance evaluation must be rated at least a 3.0 in order to receive an incentive payment. However, regardless of his or her overall rating, a Participant with a written performance warning in his or her employment file who does not also have corresponding documentation from his or her manager in his/her employment file evidencing acceptable improvement in the Participant’s performance prior to the payment of the award shall not receive any incentive payment.

C.            Participants who are on official leaves of absence, paid or unpaid, and who have an 1) executed 90-day follow-up performance evaluation (for newly- hired Participants) or 2) annual performance evaluation for the Plan Year shall be eligible to receive incentive

 

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awards for the Plan Year, payment of which will be made when the Participant returns from the paid or unpaid leave of absence if that occurs later than the payment of awards to other Participants.

D.                Recommendations will be made to the Committee regarding the actual Bankwide performance and the associated level of payments as soon as practicable following the conclusion of the Plan Year. Such recommendations shall be based on achieved levels of performance, measured against the performance objectives adopted for each portion of the award.

E.                 Plan Participants, including the President, will receive a cash payment of the award as soon as practicable after final approval by the Committee, in accordance with Paragraph N below.

F.                  Awards earned may vary from the target award defined for each Plan Participant according to performance achieved by the Bank, and where applicable by the group or individual.

G.                Payments may vary from the assigned threshold, target and maximum award opportunity level as indicated in Schedule A if the Committee determines at the end of the Plan year that an adjustment to the schedule would better serve the purposes of the Plan.

H.               Individuals who are hired during the Plan Year, but in no event after October 31 of that year, to fill eligible positions will receive prorated incentive payments based on length of time worked. To receive such payments, the newly hired employee must have an executed 90-day follow-up performance evaluation and have received at least a “Meets Requirements” rating. The final incentive payment will be calculated on a calendar day basis.

I.                    If a Participant’s rank or assignment from one tier to another as indicated in Schedule A is changed, the incentive payment may be determined on a pro rata basis according to that portion of the Plan Year worked in each eligible position.

J.                    If a Participant is promoted and their incentive compensation opportunity, as indicated in Schedule A, does not change, the incentive payment may be determined on a pro rata basis according to that portion of the Plan Year Participant worked in each eligible position.

K.               Incentive payments for Participants who are non-officers shall be calculated using the base salary as of the end of the Plan year without regard to prorating.

L.                 If a Participant other than the President dies, the payment may be awarded based upon the judgment of the Committee. The final payment may be made after approval by the Committee following the conclusion of the Plan Year. If the President dies, the payment may be awarded based upon the judgment of the Board. The final payment may be made after approval by the Board following the conclusion of the Plan Year.

M.             If, prior to the payment of an award, (i) the employment of a Participant is terminated by the Bank or (ii) the Participant leaves the Bank voluntarily, no incentive award will be made or payable under this Plan, except in the discretion of the Committee (or in the case of the President, the Board).

N.                All incentive awards under this Plan shall be paid to Participants on or before March 13, 2015; provided that, in the event the Bank shall be prevented from calculating and paying such incentive awards by March 13, 2015 by any event, including specifically, but not limited to, (i) its unforeseeable failure to receive any necessary approvals of its financial statements of the Bank for the calendar year 2014 from its regulators or outside accountants in sufficient time in advance of March 13, 2015, (ii)  the unforeseeable temporary absence of Bank employees necessary to calculate such incentive awards by such date, or (iii) any other event which the Bank may reasonably deem, in good faith, to constitute administrative impracticability of the Bank to calculate and pay such incentive awards by such date, the failure of the Bank to pay

 

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such incentive awards to Participants by March 13, 2015 shall be deemed to be due to administrative impracticability, within the meaning of § 1.409A-1(b)(4)(ii) of the Regulations under § 409A of the Internal Revenue Code of 1986, as amended (the “Code”), should such provision of the Code be deemed applicable to the Plan notwithstanding the provisions of Section X of this Plan, in which event, or in any other event which may meet the requirements of such provision of such Regulations, the Bank shall pay such incentive awards as soon as the calculation and payment thereof shall be practicable, both administratively and otherwise.

O.                Notwithstanding anything to the contrary contained above, payments will be made to certain Participants who are members of the Bank’s Management Committee on a deferred basis in accordance with the provisions of Schedule B attached hereto.

 

X.  BINDING EFFECT AND AMENDMENT AND TERMINATION OF PLAN

 

No Participant shall have any legally binding right, whether by reason of the  performance of services or otherwise, to receive any incentive awards or payments under this Plan and nothing in this Plan is intended, nor shall it be deemed, to confer upon any Participant any such legally binding right, the Bank reserving and retaining the right, by its unilateral action at any time and for any reason, to reduce or eliminate any incentive awards or payments and to amend, modify or terminate this Plan.  All actions by the Bank pursuant to this Section X shall be made in writing and shall be effective when approved by the Committee or, in the case of actions affecting the President, when approved by the Board.

 

XI.   CLAWBACK PROVISION

 

Any undue incentives paid to a Participant with a rank of Vice President or higher based on the achievement of financial or operational goals within this Plan that subsequently are deemed by the Bank to be inaccurate, misstated or misleading shall be recoverable from such Participant by the Bank.  Inaccurate, misstated and/or misleading achievement of financial or operational goals shall include, but not be limited to, overstatements of revenue, income, capital, return measures and/or understatements of credit risk, market risk, operational risk or expenses.  The value of any benefits delivered or accrued related to the undue incentive (i.e., the amount of the incentive over and above what should have been paid to the Participant barring inaccurate, misstated and/or misleading achievement of financial or operational goals) shall be reduced and/or recovered by the Bank to the fullest extent possible. Participants shall be responsible for the repayment of any such excess incentive payments as described in this paragraph upon demand by the Bank.

 

XII.  OTHER PROVISIONS

 

The provisions of the Plan shall be governed by the laws of the State of New York.

 

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Schedule A

 

2014 Incentive Compensation Opportunity Table

 

	
 
    	
 
    	
Bank
    	
 
    	
 
    
	
 
    	
 
    	
Performance/Individual
    	
 
    	
Incentive Compensation
    
	
Ranking
    	
 
    	
Performance
    	
 
    	
Opportunity
    
	
President
    	
 
    	
90%/10%
    	
 
    	
20%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
40%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
80%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Management Committee Member
    	
 
    	
90%/10%
    	
 
    	
15%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
30%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
60%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Key Vice President
    	
 
    	
70%/30%
    	
 
    	
12.5%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
25%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
50%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Vice President
    	
 
    	
60%/40%
    	
 
    	
10%   (Threshold)
    
	
&
    	
 
    	
 
    	
 
    	
20%   (Target)
    
	
Director of Compliance
    	
 
    	
 
    	
 
    	
40%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Assistant Vice President
    	
 
    	
40%/60%
    	
 
    	
7.5%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
15%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
30%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sales/Calling Officer Responsibilities
    	
 
    	
35%/65%
    	
 
    	
15%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
32.5%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
50%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Officer
    	
 
    	
40%/60%
    	
 
    	
5%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
10%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
20%   (Maximum)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exempt
    	
 
    	
25%/75%
    	
 
    	
2%   (Threshold)
    
	
 
    	
 
    	
 
    	
 
    	
4%   (Target)
    
	
 
    	
 
    	
 
    	
 
    	
8%   (Maximum)
    

 

 

SCHEDULE B TO FEDERAL HOME LOAN BANK OF NEW YORK 2014 INCENTIVE COMPENSATION PLAN

 

DEFERRED INCENTIVE COMPENSATION PLAN PROVISIONS APPLICABLE TO THE MEMBERS OF THE BANK’S MANAGEMENT COMMITTEE

 

Definitions

 

The total amount of the incentive award (if any) under the Plan communicated to Management Committee Participants shall be referred to in this Schedule B as the “Total Communicated Award”.

 

The Total Communicated Award, if any, will be divided such that: 1) 50 percent of the Total Communicated Award shall be referred to as the “Current Communicated Incentive Award” and 2) the remaining 50 percent of the Total Communicated Award shall be referred to as the “Deferred Incentive Award.”

 

Payment Schedule

 

The following illustrates how the Current Communicated Incentive Award and Deferred Incentive Award will be paid:

 

	
Payment
    	
 
    	
Description
    	
 
    	
Payment Year
    
	
Current   Communicated Incentive Award
    	
 
    	
50%   of the Total Communicated Award
    	
 
    	
2015*
    
	
Deferred   Incentive Award installment
    	
 
    	
Up   to 33 1/3% of the Deferred Incentive Award
    	
 
    	
2016**
    
	
Deferred   Incentive Award installment
    	
 
    	
Up   to 33 1/3% of the Deferred Incentive Award
    	
 
    	
2017**
    
	
Deferred Incentive Award installment
    	
 
    	
Up to 33 1/3% of the Deferred Incentive Award
    	
 
    	
2018**
    

 

 *Payment shall be made on or before March 13, 2015.

**Payment shall be made within the first two and a half weeks of March in the year indicated.

 

The Current Communicated Incentive Award at maximum shall not exceed 100 percent of the participant’s base salary.

 

Payments of Deferred Incentive Awards In The Event of a Change in Control

 

If prior to the payout of all Deferred Incentive Award payments a Change in Control event occurs (as defined below) then, in such case, the Deferred Incentive Awards shall be inapplicable and all unpaid Deferred Incentive Awards: (i) shall vest 30 days after the Federal Housing Finance Agency (“Finance Agency”) issues its written approval of such a transaction and (ii) shall be paid to the participants 30 days after the closing of the transaction.

 

For purposes of this section, “Change in Control” shall mean a “change in control event” as defined in IRS regulations pertaining to Code Section 409A which involves:  (i) the merger,

 

 

reorganization, or consolidation of the Bank with or into another Federal Home Loan Bank or other entity, (ii) the sale or transfer of all or substantially all of the business or assets of the Bank to another Federal Home Loan Bank or other entity, (iii) the purchase by the Bank or transfer to the Bank of all or substantially all of the business or assets of another Federal Home Loan Bank, (iv) a change in the composition of the Board of Directors, as a result of one or a series of related transactions, that causes the number of directors of the Bank elected by members of the Bank located in New Jersey, New York, Puerto Rico and the U.S. Virgin Islands to cease to constitute a majority of the directors of the Bank that are elected by members of the Bank (excluding, for purposes of this clause (iv), non-member independent directors), or (v) the liquidation of the Bank, provided that the term “reorganization” contained in this definition shall not include any reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. Section 1421, et seq., as amended, and 12 U.S.C. Section 4501 et seq., as amended, and which the Director of the Finance Agency (or successor agency) has determined should not be a basis for making payment under this Plan, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency’s supervision of the Bank or because any of the conditions identified in 12 U.S.C. Section 4617(a)(3) are met with respect to the Bank (which conditions do not result solely from the mandated reorganization itself, or from action that the Agency has required the Bank to take under 12 U.S. C. Section 1431(d)).

 

Payments of Deferred Incentive Awards in the Event Employment Ends After The Current Communicated Incentive Award Is Paid

 

A. Retirement or Involuntary Termination of Employment Other Than For Cause

 

Participants who terminate employment due to retirement1 or involuntary termination2 (other than for cause3) after the Current Communicated Incentive Award payout date but before completion of the payment of all corresponding Deferred Incentive Award installments (as set forth above) shall receive such Deferred Incentive Award installment payments at the same time as such payments are made to Plan participants who are current Bank employees.

 

1  “Retirement” for purposes of this Plan is defined as any individual who retires as an Employee in accordance with the rules of the Bank’s Retirement Plan.

2  “Involuntary termination” shall, in all events, result in a “separation from service” as defined in the IRS regulations pertaining to Code Section 409A and (i) exclude termination for cause and (ii) include a resignation for “good reason” as defined in the “safe harbor” contained in such regulations.

3  For purposes of the Plan, “cause” means: (1) continued failure of the Participant to perform his or her duties with the Bank (other than any such failure resulting from disability), after a warning approved by the Director of Human Resources has been delivered to the Participant which specifically identifies the manner in which the Participant has not performed his or her duties; or (2) removal of the Participant by or at the direction of the Federal Housing Finance Agency pursuant to federal laws, rules, and regulations, including 12 U.S.C. §4501 et. seq. as amended or by any successor agency to the Federal Housing Finance Agency pursuant to a similar statute.

 

 

B. Resignation from Employment or Involuntary Termination of Employment For Cause

 

Participants who otherwise resign employment before the completion of the payment of all corresponding Deferred Incentive Award installments shall not receive payment of such installments.  Any Participant that is terminated by the Bank for cause (as defined in this Plan) prior to receiving payment of all corresponding Deferred Incentive Award installments shall not receive payment of any remaining unpaid Deferred Incentive Award installments.

 

C. Death or Disability

 

In the case of a Participant whose employment terminates due to death or disability before completion of the payment of all corresponding Deferred Incentive Award installments, such installments shall promptly vest following the death or disability and the remaining installments shall be paid by the Bank within 90 days of the date of death or determination of disability.

 

The “Performance Scorecard” below shall be used for determining the payment of Deferred Incentive Awards:

 

	
Performance
   Measure
    	
 
    	
Threshold
   75% of Deferred
   Incentive Award
   Installment
    	
 
    	
Target
   100% of Deferred
   Incentive Award
   Installment
    	
 
    	
Maximum
   125% of Deferred
   Incentive Award
   Installment
    
	
Market   Value of Equity (“MVE”) to Par Value of Capital Stock
    	
 
    	
100%
    	
 
    	
105%
    	
 
    	
110%
    

 

Each Deferred Incentive Award payment may be increased or decreased by 25% based on the Bank’s performance on MVE as outlined in the table above.  An employee who terminates employment with the Bank other than for “good reason” or who is terminated by the Bank for “cause” (each as defined in the 2014 Plan ) will forfeit any portion of the Deferred Incentive Award that has not yet been paid upon such termination. In addition, the Deferred Incentive Award will be paid in full in connection with a “change in control” (as defined in the 2014 Plan).

 

The actual results may fall between two benchmark levels. When this happens, the payout figures are interpolated for results that fall between the two applicable ranges; either threshold and target, or target and maximum.

 

Qualifiers

 

The failure to disclose required information, report financial results and/or resolve material regulatory deficiencies in a timely manner as determined by the Board may result in the reduction or elimination of Deferred Incentive Awards; further, the achievement of financial or operational goals within this Plan that subsequently are deemed by the Bank to be inaccurate, misstated or misleading may also result in the reduction or elimination of Deferred Incentive Awards.  Inaccurate, misstated and/or misleading achievement of financial or operational goals shall include, but not be limited to, overstatements of revenue, income, capital, return measures and/or understatements of credit risk, market risk, operational risk or expenses.  The value of any benefits delivered or accrued related to the undue incentive (i.e., the amount of the incentive over

 

 

and above what should have been paid to the Participant barring inaccurate, misstated and/or misleading achievement of financial or operational goals) shall be reduced and/or recovered by the Bank to the fullest extent possible. Participants shall be responsible for the repayment of any such excess incentive payments as described in this paragraph upon demand by the Bank.Exhibit 10.1

 

FIRST DATA CORPORATION
 SEVERANCE/CHANGE IN CONTROL POLICY 
 (Executive Committee Level)

As amended and restated effective July 22, 2014

 

1.                                      Background and Purpose

 

This severance/change in control policy (the “Policy”) was established effective July 26, 2005 by First Data Corporation, a Delaware corporation (“FDC”), to enable FDC to offer a form of income protection to its Eligible Executives in the event their employment with the Company is involuntarily terminated other than for Cause. The Policy was also intended to secure for the benefit of the Company the services of the Eligible Executives in the event of a Change in Control without concern for whether such executives might be hindered in discharging their duties by the personal uncertainties and risks associated with a Change in Control, by affording such executives the opportunity to protect the share value they have helped create as of the date of any Change in Control and offering income protection to such executives in the event their employment terminates involuntarily or for Good Reason in connection with a Change in Control.

 

On September 24, 2007 (the “Closing Date”), a Change in Control occurred by reason of the consummation of the Agreement and Plan of Merger by and among New Omaha Holdings L.P., a Delaware limited partnership (“Parent”), Omaha Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent, and First Data Corporation, a Delaware corporation, dated April 1, 2007 (the “Merger”).  Effective September 24, 2007, this Policy has been amended and restated to reflect the Merger, provided that as to any Eligible Executive who is not party to a Stock Option Agreement with respect to any option granted under the Option Plan, this Policy shall be applied without regard to the September 24, 2007 amendment and restatement.

 

This Policy shall constitute a “welfare plan” within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and shall be construed in a manner consistent with such intent. To the extent the Company determines, in its sole discretion, that the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) may apply to this Policy, the Company shall adopt amendments to the Policy or adopt other procedures or take any other actions that it determines are necessary or appropriate to either exempt this Policy from Code Section 409A or to comply with the requirements of Code Section 409A, including without limitation amendments, procedures and actions with retroactive effect. Notwithstanding the foregoing, any actions taken by the Company in this regard shall preserve to the maximum extent possible the benefits for Eligible Executives contemplated in this Policy.

 

2.                                      Effective Date

 

The effective date of this Policy as amended and restated is July 22, 2014(the “Effective Date”).

 

3.                                      Definitions

 

(i)                                     “Base Salary” means the Eligible Executive’s current annualized rate of base cash compensation paid on each regularly scheduled payday for the executive’s regular work schedule as of his or her Termination Date and is calculated to include any before-tax contributions that are deducted for Company benefit plan purposes. Base Salary does not include taxable or nontaxable fringe benefits or awards, vacation, performance awards, bonus, commission or other incentive pay, or any payments which are not made on each regular payday, regardless of how such payments may be characterized.

 

(ii)                                  “Board” means the Board of Directors of FDC.

 

(iii)                               “Cause” shall have the meaning ascribed to it in the 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (the “Option Plan”) or any Stock Option Agreement awarding stock options thereunder to which the Eligible Executive is a party.

 

(iv)                              “Change in Control” shall have the meaning ascribed to it in the Option Plan.

 

 

(v)                                 “Company” means FDC or its subsidiaries or any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise, including, without limitation, any successor due to a Change in Control) to the business or assets of FDC.

 

(vi)                              “Disability” shall have the meaning ascribed to it under the Option Plan or any Stock Option Agreement awarding stock options thereunder to which the Eligible Executive is a party.

 

(vii)                           “Eligible Executive” means an individual who is a member of the Company’s executive committee unless such individual is eligible, by virtue of an acquisition agreement or otherwise, to receive severance, termination, or similar benefits under another policy, plan, program, or agreement.

 

(viii)                        “Good Reason” shall have the meaning ascribed to it under the Option Plan or any Stock Option Agreement awarding stock options thereunder to which the Eligible Executive is a party.

 

(ix)                              “Severance Benefits” are the benefits payable to an Eligible Executive pursuant to this Policy, other than the Change in Control-related benefits referenced in Sections 8 hereof.

 

(x)                                 “Severance Period” means the period for which Severance Benefits will be paid as reflected in Section 7 commencing on an Eligible Executive’s Termination Date.

 

(xi)                              “Termination Date” is the date on which the Eligible Executive’s employment with the Company terminates for a reason set forth under Section 5.

 

(xii)                           “Years of Service” are the number of full years of uninterrupted service as an Eligible Executive up to his or her Termination Date.  Partial years of service are not taken into account for purposes of this Policy. Years of Service also include time spent on Company-approved leave of absences, provided that no more than one (1) cumulative Year of Service will be credited for such leave of absences.

 

4.                                      Eligibility

 

All Eligible Executives are eligible for benefits under this Policy.

 

5.                                      Eligible Termination Reasons

 

An eligible termination reason is any involuntary separation of service with the Company other than for Cause or Disability, or any voluntary separation of service by the Eligible Executive for Good Reason.

 

6.                                      Non-Eligible Termination Reasons

 

A non-eligible termination reason is any reason for termination that is not an eligible termination reason under Section 5.

 

7.                                      Severance Benefits

 

The provisions of this Section are subject, without limitation, to the provisions of Section 9 hereof.

 

(i)                                     Severance Pay. If an Eligible Executive’s employment with the Company is terminated after the Effective Date for any reason set forth in Section 5, the Company shall pay the following amounts:

 

(a)         For any individual who became an Eligible Executive on or before May 1, 2011:

 

(1)         an amount equal to the product of (i) the sum of the executive’s Base Salary and the bonus paid to the executive, if any, pursuant to the Company’s Senior Executive Incentive Plan (or the bonus plan then applicable to the executive) for the year immediately preceding the year in which the Termination Date occurs, and (ii) two (2) years (the “Severance Period”); plus

 

 

(2)         A pro-rata portion of the bonus paid to the Eligible Executive pursuant to the Company’s Senior Executive Incentive plan (or the bonus plan then applicable to the Executive) for the year immediately preceding the year in which the Termination Date occurs.  Such payment shall be based on the ratio of the number of days elapsed during such year prior to the Termination Date to 365.  Any such bonus payment will be made within 30 days of the Eligible Executive signing their Agreement & Release (but no later than March 15th of the calendar year following the Termination Date).

 

(b)         For any individual who became an Eligible Executive after May 1, 2011 and has less than two (2) Years of Service as an Eligible Executive on the Termination Date:

 

(1)         The Executive’s Base Salary multiplied by (1) one year (the “Severance Period”); plus

 

(2)         A pro-rata portion of the bonus paid to the Eligible Executive pursuant to the Company’s Senior Executive Incentive plan (or the bonus plan then applicable to the Executive) for the year immediately preceding the year in which the Termination Date occurs.  Such payment shall be based on the ratio of the number of days elapsed during such year prior to the Termination Date to 365.  Any such bonus payment will be made within 30 days of the Eligible Executive signing their Agreement & Release (but no later than March 15th of the calendar year following the Termination Date).

 

(c)          For any individual who became an Eligible Executive after May 1, 2011 and who has two (2) or more but less than five (5) Years of Service as an Eligible Executive on the Termination Date:

 

(1)         an amount equal to the product of (i) the sum of the executive’s Base Salary and the bonus paid to the executive, if any,  pursuant to the Company’s Senior Executive Incentive Plan (or the bonus plan then applicable to the executive) for  the year immediately preceding the year in which the Termination Date occurs, and (ii) 1.5 years (the “Severance Period”); plus

 

(2)         A pro-rata portion of the bonus paid to the Eligible Executive pursuant to the Company’s Senior Executive Incentive plan (or the bonus plan then applicable to the executive) for the year immediately preceding the year in which the Termination Date occurs.  Such payment shall be based on the ratio of the number of days elapsed during such year prior to the Termination Date to 365.  Any such bonus payment will be made within 30 days of the Eligible Executive signing their Agreement & Release (but no later than March 15th of the calendar year following the Termination Date).

 

(d)         For any individual who became an Eligible Executive after May 1, 2011 and who has five (5) or more Years of Service as an Eligible Executive on the Termination Date:

 

(1)         an amount equal to the product of (i) the sum of the executive’s Base Salary and bonus paid to the executive, if any, pursuant to the Company’s Senior Executive Incentive Plan (or the bonus plan then applicable to the executive) for the year immediately preceding the year in which the Termination Date occurs, and (ii) 2 years (the “Severance Period”); plus

 

(2)         A pro-rata portion of the bonus paid to the Eligible Executive pursuant to the Company’s Senior Executive Incentive plan (or the bonus plan then applicable to the executive) for the year immediately preceding the year in which the Termination Date occurs.  Such payment shall be based on the ratio of the number of days elapsed during such year prior to the Termination Date to 365.  Any such bonus payment will be made within 30

 

 

days of the Eligible Executive signing their Agreement & Release (but no later than March 15th of the calendar year following the Termination Date).

 

(ii)                                  Continued Benefits Coverage. If an Eligible Executive’s employment with the Company is terminated after the Effective Date for any reason set forth in Section 5, subject to the terms of any applicable plan documents and the remaining provisions of this subsection, the Company shall provide the Eligible Executive (and his or her dependents) for the duration of the Severance Period with all welfare benefits coverage which the Eligible Executive (or his or her dependents) was participating in or receiving as of the Termination Date. The cost to the Eligible Executive of such coverage and the terms and conditions of such coverage during the Severance Period shall be the same as those applicable to similarly situated active employees during such period. Notwithstanding the foregoing, after the expiration of the first year of the Severance Period, the Eligible Executive (and his or her dependents) shall lose Company-sponsored group health coverage unless a timely election is made for continued group health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”). The Company shall pay to the Eligible Executive, as an additional Severance Benefit, a lump sum approximately equal to the difference in cost between COBRA premiums and active employee premiums for period of time remaining, if any, in the Severance Period of COBRA coverage calculated by the Company in its discretion as of the Termination Date, which payment shall constitute taxable income to the Eligible Executive and which shall be paid no later than the 30th day following the expiration of the first year of the Severance Period. An Eligible Executive receiving Severance Benefits under this Policy shall also be entitled to receive during the Severance Period any financial planning benefits which the Eligible Executive was receiving as of the Termination Date, but shall not be entitled to receive any other perquisites after such date. Notwithstanding the foregoing, the executive’s continued benefits coverage under this subsection shall cease as of the date the executive becomes eligible to receive such benefits under a subsequent employer’s benefit programs. Eligible Executives receiving Severance Benefits under this Policy are not eligible to continue contributions to the Company’s qualified retirement plans or nonqualified deferred compensation program.

 

(iii)                               Incentive Awards.  If an Eligible Executive’s employment with the Company is terminated after the Effective Date for any reason set forth in Section 5, outstanding cash incentive awards granted to the Eligible Executive that are eligible to become fully vested and payable solely contingent upon the Eligible Executive’s continued employment and the passage of time shall continue to vest and be payable in accordance with their terms, notwithstanding the executive’s earlier termination of employment.

 

8.                                      Certain Additional Payments

 

(i)                                     Notwithstanding anything to the contrary set forth herein, but subject to clause (v) below, if it is determined that any payments or benefits provided by the Company to or on behalf of an Eligible Executive (whether pursuant to the terms of this Policy or otherwise) (any such payments or benefits being referred to in this Section as “Payments”), but determined without taking into account any additional payments required under this Section, would be subject to the excise tax imposed by Code Section 4999, or any interest or penalties are incurred by the Eligible Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively referred to herein as the “Excise Tax”), then the Eligible Executive will be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount so that after payment by the Eligible Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, the Eligible Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing, if it is determined that the Eligible Executive is entitled to a Gross-Up Payment, but that the Payments to the Eligible Executive do not exceed 110% of the amount which is one dollar less than the smallest amount that would give rise to any Excise Tax (the “Reduced Amount”), then no Gross-Up Payment will be made to the Eligible Executive and the Payments shall be reduced to the Reduced Amount. In such event, the reduction will occur in the following order: (i) reduction of cash payments; (ii) cancellation of accelerated vesting of equity awards; and (iii) reduction of employee benefits.  If acceleration of vesting of compensation

 

 

from an Eligible Executive’s equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant, unless the Eligible Executive elects in writing a different order for cancellation, provided, however, such election by the Eligible Executive shall apply only to equity awards that do not constitute nonqualified deferred compensation within the meaning of Code Section 409A.

 

(ii)                                  Subject to the provisions of Section 8(iii), all determinations required to be made under this Section, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, will be made by the independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control (the “Accounting Firm”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). The Accounting Firm shall provide its calculations, together with detailed supporting documentation, to the Company and the Eligible Executive within fifteen (15) calendar days after the date on which the Eligible Employee’s right to Payment is triggered (if requested at that time by the Company or the Eligible Executive) or such other time as requested by the Company or the Eligible Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Company to the Eligible Executive within five days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Eligible Executive, it shall furnish the Eligible Executive with a written opinion that no Excise Tax will be imposed. Any good faith determination by the Accounting Firm shall be binding upon the Company and the Eligible Executive. As a result of the uncertainty in the application of Code Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(iii) and the Eligible Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be paid by the Company to or for the benefit of the Eligible Executive within five days of receipt of the Accounting Firm’s determination.

 

(iii)                               The Eligible Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Eligible Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Eligible Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Eligible Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Eligible Executive in writing prior to the expiration of such period that it desires to contest such claim, the Eligible Executive shall:

 

(a)         give the Company any information reasonably requested by the Company relating to such claim;

 

(b)         take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

 

(c)          cooperate with the Company in good faith in order effectively to contest such claim; and

 

(d)         permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Eligible Executive harmless, on an after-tax basis, for any Excise Tax or income tax

 

 

(including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(iii), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Eligible Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Eligible Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs the Eligible Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Eligible Executive on an interest-free basis and shall indemnify and hold the Eligible Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Eligible Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Eligible Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

 

(iv)                              If, after the receipt by the Eligible Executive of an amount advanced by the Company pursuant to Section 8(iii), the Eligible Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Eligible Executive shall (subject to the Company’s complying with the requirements of Section 8(iii)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Eligible Executive of an amount advanced by the Company pursuant to Section 8(iii), a determination is made that the Eligible Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Eligible Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

 

(v)                                 This Section 8 shall not apply with respect to any Payment that would otherwise be subject to the Excise Tax if such Excise Tax would be avoided by obtaining stockholder approval of the Payment in the manner prescribed by Section 280G of the Code and regulations thereunder.

 

(vi)                              Any payments that the Company is required to pay to or on behalf of the Executive pursuant to this Section 8 shall be paid within the time periods specified under Section 8; provided, that in no event shall such payments be made later than the end of the calendar year following the calendar year in which the corresponding taxes are remitted.

 

9.                                      Requirement of Release

 

The provision of Severance Benefits under this Policy is conditioned upon the Eligible Executive timely signing an Agreement and Release (in a form satisfactory to the Company) which will include restrictive covenants and a comprehensive release of all claims. The Eligible Executive must sign the Agreement and Release within fifty (50) days following the date of the termination of the Eligible Executive’s employment (which Agreement and Release shall be delivered to the eligible Executive within five (5) days following the date of such termination).  In this Agreement and Release, the Eligible Executive will be asked to release the Company and its employees from any and all claims the Eligible Executive may have against them, including but not limited to any contract, tort, or wage and hour claims, and any claims under Title VII, the ADEA, the ADA, ERISA, and other federal, state or local laws.  Under the Agreement and Release, the Eligible Executive must also agree not to solicit business similar to any business offered by the Company, not to recruit, solicit, or encourage any employee to leave their employment with the Company, not to disclose any of Company’s trade secrets or confidential information, and not to disparage the Company or its employees in any way. These obligations are in addition to any other non-solicitation, noncompete, nondisclosure, or confidentiality agreements the Eligible Executive may have executed while employed by the Company. Should the Eligible Executive violate any applicable confidentiality, non-competition and non-solicitation provisions following receipt of Severance Pay, or should the Company discover after termination that the executive

 

 

engaged  while employed by the Company in conduct that would have resulted in a termination for Cause, the Company shall be entitled to  immediately cease  payment of any remaining severance benefits under this Policy and to repayment by the executive of 90% of the total amount of Severance Pay (provided under Section 7) the Eligible Executive has, as of such date, received under this Policy.

 

10.                               Method of Payment

 

With respect to cash Severance Benefits which are excludible from the requirements of Code Section 409A under the involuntary separation pay exception of Treasury Regulation Section 1.409A-1(b)(9)(iii) (the “Excludible Amount”), the Company reserves the right to determine whether the Excludible Amount shall be paid to an Eligible Executive under the Policy in a single lump sum or in substantially equal installments, and to choose the timing of such payments; provided that a lump sum shall be paid within one (1) month following the Eligible Executive’s Termination Date, and installments shall commence no later than the second month following the Eligible Executive’s Termination Date (or, if later, the earliest date the Company determines will not result in a violation of Code Section 409A, if applicable), and shall be paid in full no later than the end of the Severance Period.  Any cash Severance Benefits in excess of the Excludible Amount (the “Excess Amount”) payable to an Eligible Executive under the Policy shall be paid in substantially equal monthly installments; provided that the installments shall commence no later than the second month (which shall be in all cases within 90 days) following the Eligible Executive’s Termination Date (or, if later, the earliest date the Company determines will not result in a violation of Code Section 409A, if applicable), and shall be paid in full no later than the end of the Severance Period.  Notwithstanding the foregoing, in no event shall payment of any Severance Benefit be made prior to the Eligible Executive’s Termination Date or prior to the effective date of the Agreement and Release described in Section 9 above or (prior to the earliest date the Company determines will not result in a violation of Code Section 409A, if applicable).  Notwithstanding the foregoing, with respect to the Excess Amount, if termination of the Eligible Executive’s employment occurs within fifty (50) days of the end of the calendar year, the first payment will be made on the later of (I) the effective date of the Agreement and Release, or (II) January 2 of the year following the year in which termination of Eligible Executive’s employment occurs; and provided further that the first payment shall include any amounts that would have otherwise been due prior to the date of first payment.  If an Eligible Executive dies after becoming eligible for Severance Benefits and executing an Agreement and Release but before full receipt of all cash Severance Benefits, the remaining cash Severance Benefits (which shall include both the Excludible Amount and the Excess Amount) will be paid to the Eligible Executive’s estate in one lump sum within ninety (90) days (but no later than the end of the Severance Period) of the Eligible Executive’s death.  If an Eligible Executive dies after becoming eligible for Severance Benefits but before executing an Agreement and Release, his or her estate or representative may not execute an Agreement and Release and no Severance Benefits with respect to the Eligible Executive are payable under this Policy.  All payments under this Policy will be net of amounts withheld with respect to taxes, offsets, or other obligations.

 

11.                               Offsets

 

The Company may, in its discretion and to the extent permitted under applicable law and Code Section 409A, offset against the Eligible Executive’s benefits under this Policy any other severance benefits payable to the Eligible Executive by the Company, the value of unreturned property, and any outstanding loan, debt or other amount the Eligible Executive owes to the Company. The Company may recover any overpayment of benefits made to an Eligible Executive or an Eligible Executive’s estate under this Policy or, to the extent permitted by applicable law, offset any other overpayment made to the Eligible Executive against any Policy benefits or other amount the Company owes the Eligible Executive or the Eligible Executive’s estate.

 

12.                               Outplacement

 

In the Committee’s sole and absolute discretion, Eligible Executives who are eligible for Severance Benefits under the Policy also may be eligible for outplacement services selected by the Company. Eligibility for, and the scope of any, outplacement services will be determined in the sole discretion of the Committee. Under no circumstances will Eligible Executives be eligible to receive a cash payment in lieu of outplacement services.

 

13.                               Re-employment and Other Employment

 

In the event an Eligible Executive is re-employed by the Company prior to the commencement of or within the Severance Period, the payment of any Severance Benefits payable with respect to the prior termination immediately will cease and such Severance Benefits will no longer be payable under this Policy.

 

 

Subject to Section 9 of this Policy, if an Eligible Executive obtains employment (other than with the Company) while receiving Severance Benefits, the Eligible Executive will continue to receive any remaining cash Severance Benefits in accordance with the payment schedule then in effect, but, except as otherwise required under applicable law, he or she will no longer be eligible to receive continued benefits under Section 7(b) of this Policy as of the date the executive becomes eligible to receive such benefits under a subsequent employer’s benefit programs.

 

14.                               Funding

 

This Policy is not funded, and payment of benefits hereunder is made from the general assets of the Company.

 

15.                               Administration

 

This Policy shall be administered by the Committee, which as the Named Fiduciary shall have the absolute discretion and exclusive right to interpret, construe and administer the Policy and to make final determinations on all questions arising under the Policy, including but not limited to questions concerning eligibility for, the amount of and receipt of Policy benefits. All decisions of the Committee will be conclusive, final and binding upon the parties.

 

16.                               Amendment or Termination of the Policy

 

The Company reserves the right to amend or terminate this Policy at any time in its sole discretion, provided, however, that during the period commencing on the Closing and ending on the 36 month anniversary of a Change in Control (other than the Merger), the Company shall not amend or terminate this Policy without the consent of each affected Eligible Executive.

 

17.                               Limitation on Individually Negotiated Severance Arrangements

 

As of the Effective Date, this Policy is intended to be the sole source of severance and change in control benefits for Eligible Executives. Absent prior Board approval, no individual agreement shall be entered into with any Eligible Executive or any person being considered for promotion or hire as an Eligible Executive which would provide severance or change in control-type benefits.

 

18.                               Miscellaneous

 

No executive vests in any entitlement to or eligibility for benefits under this Policy until he or she has satisfied all requirements for eligibility and the conditions required to receive the benefits specified in this Policy have been satisfied. No interest accrues on any benefit to which an Eligible Executive may be entitled under this Policy. Eligible Executives cannot assign or pledge any benefits that they are eligible for under this Policy. Subject to state and federal law, no creditor may attach or garnish any Eligible Executive’s Policy benefits. This Policy does not create any contract of employment or right to employment for any period of time. Employment with the Company is at-will, and may be terminated by either the Company or the Eligible Executive at any time for any reason.

 

19.                               Review Procedure

 

Executives eligible to receive benefits under this Policy will be notified of such eligibility as soon as administratively practicable after the event occurs which gives rise to the provision of Policy benefits. If an executive who believes he or she is eligible to receive Policy benefits does not receive such notice or disagrees with the amount of benefits set forth in such notice, or if an executive is informed that he or she is not eligible for benefits under this Policy, the executive (or his or her legal representative) may file a written claim for benefits with the Company’s senior human resources executive or such other officer or body designated by the Committee for this purpose. The written claim must include the facts supporting the claim, the amount claimed, and the executive’s name and mailing address.

 

If the claim is denied in part or in full, the Company’s senior human resources executive (or other designated officer or body) will notify the executive by mail no later than 90 days (or 180 days in special circumstances) after receipt of the written claim. The notice of denial will state the specific reasons for the denial, the provisions of the Policy on which the denial is based, a description of any additional information or material required by the Committee to consider the claim if applicable, as well as an explanation as to why such information

 

 

or material is necessary, an explanation of the Policy’s review procedures and the time limits applicable to such procedures, and the executive’s right to bring a civil action under ERISA Section 502(a) in the event of an adverse determination upon review.

 

An executive (or his or her legal representative) may appeal the denial by filing a written appeal with the Committee. The written appeal must be received no later than 60 days after the executive or legal representative received the notice of denial. During the same 60-day period, the executive or legal representative may have reasonable access to pertinent documents and may submit written comments and supporting documents, records and other materials to the Committee. The Committee will review the appeal and notify the executive or legal representative by mail of its final decision no later than the next regularly scheduled Committee meeting, or if the appeal is received less than 30 days before such meeting, the second regularly scheduled meeting after the Committee receives the written appeal.

 

20.                               Notwithstanding any provision of the Plan to the contrary, the Plan is intended to comply with the requirements of Code Section 409A.  Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Code Section 409A.  Further, for purposes of the limitations on nonqualified deferred compensation under Code Section 409A, each payment of compensation under this Plan shall be treated as a separate payment of compensation.  Any amounts payable solely on account of an involuntary separation from service of an Eligible Executive within the meaning of Code Section 409A shall be excludible from the requirements of Code Section 409A, either as involuntary separation pay or as short-term deferral amounts to the maximum possible extent.  Notwithstanding any provision of the Plan to the contrary, if an Eligible Executive is a “specified employee” within the meaning of Code Section 409A at the time of termination of employment, to the extent necessary to comply with Code Section 409A, any payment required under this Plan shall be delayed for a period of six (6) months after termination of employment pursuant to Code Section 409A, regardless of the circumstances giving rise to or the basis for such payment. Payment of such delayed amount shall be paid in a lump sum within ten (10) days after the end of the six (6) month period.  If the Eligible Executive dies during the postponement period prior to the payment of the delayed amount, the amounts delayed on account of Code Section 409A shall be paid to the personal representative of the Eligible Executive’s estate within ninety (90) days after the date of the Eligible Executive’s death.  For these purposes, a “specified employee” shall mean an employee who, at any time during the 12-month period ending on the identification date, is a “specified employee” under Code Section 409A, as determined by the Company.  The determination of “specified employees,” including the number and identity of persons considered “specified employees” and the identification date, shall be made by the Company in accordance with the provisions of Code Sections 416(i) and 409A.

 

21.                               Rights Under the Employee Retirement Income Security Act (ERISA)

 

As a participant in the Policy, an Eligible Executive is entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA), which provides that all Policy participants shall be entitled to:

 

Receive Information About The Policy And Benefits

 

The executive may examine, without charge, at the plan administrator’s office and at other specified locations such as worksites, all documents governing the plan and a copy of the latest annual report (Form 5500 Series) filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

 

The executive may obtain, upon written request to the plan administrator, copies of documents governing the operation of the Policy including copies of the latest annual report (Form 5500 Series). The administrator may make a reasonable charge for the copies.

 

The executive may receive a summary of the plans’ annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary annual report.

 

 

Prudent Actions by Policy Fiduciaries

 

In addition to creating rights for Policy participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Policy, called “fiduciaries” of the Policy, have a duty to do so prudently and in the interest of the Policy participants and beneficiaries. No one, including an executive’s employer or any other person, may fire an executive or otherwise discriminate against an executive in any way to prevent such executive from obtaining a welfare benefit or exercising his or her rights under ERISA.

 

Enforcement of Rights

 

If an executive’s claim for benefits is denied or ignored, in whole or in part, the executive has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps that can be taken to enforce the above rights. For example, if an executive requests a copy of Policy documents or the latest annual report from the Policy and does not receive them within 30 days, the executive may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the materials, and pay the executive up to $110 a day until the executive receives the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If an executive has a claim for benefits which is denied or ignored, in whole or in part, he or she may file suit in a state or Federal Court. If it should happen that the Policy fiduciaries misuse the plan’s money, or if an executive is discriminated against for asserting his or her rights, the executive may seek assistance from the U.S. Department of Labor, or may file a suit in a Federal court. The court will decide who should pay court costs and legal fees. If the executive is successful the court may order the person the executive has sued to pay these costs and fees. If the executive loses, the court may order the executive to pay these costs and fees, for example, if it finds the executive’s claim is frivolous.

 

Assistance With Questions

 

An executive who has questions about the Policy should contact the plan administrator. If an executive has any questions about this statement or about his or her rights under ERISA, or if the executive needs assistance in obtaining documents from the plan administrator, he or she should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in a telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, D.C. 20210. The executive may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publication’s hotline of the Employee Benefits Security Administration.

 

 

ADDITIONAL INFORMATION

 

The details on the following pages are provided for the Eligible Executive’s information and possible use.

 

Name of Policy

First Data Corporation Severance/
 Change in Control Policy 
 (Executive Committee Level)

 

Type of Policy

Welfare

 

Policy Year

1/1 to 12/31

 

Type of Policy Administration

Self-Administered

 

Policy Sponsor

First Data Corporation

6200 S. Quebec Street

Greenwood Village, CO 80111

 

Plan Administrator

Governance, Compensation & Nominations Committee

of the Boards of Directors of First Data Corporation

c/o First Data Corporation

Office of the General Counsel

6200 S. Quebec Street, Suite 320

Greenwood Village, CO 80111

 

Agent for Service of Legal Process

First Data Corporation

Office of the General Counsel

6200 S. Quebec Street, Suite 320

Greenwood Village, CO 80111

 

In addition, service of legal process may be made upon the Plan Administrator.

 

Identification Number (Policy Sponsor)

47-0731996

 

THIS DESCRIPTION OF THE FIRST DATA CORPORATION SEVERANCE/CHANGE IN CONTROL POLICY FOR EXECUTIVE COMMITTEE-LEVEL PARTICIPANTS SERVES AS THE OFFICIAL PLAN DOCUMENT AND AS THE LEGAL SUMMARY PLAN DESCRIPTION.

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