(1)  Some of NCR’s executive officers and directors own fractional shares of NCR stock. For purposes of this table, all fractional shares have been rounded to the nearest whole number. This column also includes 24,311 shares granted to Mr. Boykin that were deferred pursuant to his election until the time of his departure from the Board.

(2)  This column includes shares held by NCR’s executive officers and directors who have entered into a standard brokerage account form with Fidelity which includes a provision for the pledge of NCR shares owned by such executive officer or director. The pledge applies to all shares listed for each individual in the table above which are held in such individual’s Fidelity brokerage account.

(3)  This column shows those shares the officers and directors or their family members have the right to acquire through stock option exercises within 60 days after January 31, 2008. These shares are also included in the Total Shares Beneficially Owned column. For officers who are eligible for a “retirement” under the Company’s benefit plans, this includes the following options that would accelerate upon such retirement: Ms. Wallace, 10,983 shares, and an officer who is not an executive officer named in the Summary Compensation Table, 4,362 shares.

(4)  Includes an aggregate of 280 shares held by Mr. Frissora’s sons.

(5)  Includes 10 shares of common stock held by Mr. Bocian’s wife.

(6)  Includes an aggregate of 21,503 shares of common stock held by Mr. Koehler and his wife.

(7)  In addition to the shares listed in the table, directors hold the following number of restricted stock units that have not vested as of the filing date of this proxy statement: Mr. Boykin, 327 (the receipt of which Mr. Boykin has elected to defer); and Messrs. Daichendt, Frissora and Prahalad and Ms. Levinson, 327. The executive officers also hold the following number of restricted stock units that have not vested as of the filing date of this proxy statement, in addition to the shares listed in the table: Mr. Nuti, 222,658; Mr. Collins, 68,560; Mr. Fishman, 14,246; Mr. Lieb, 47,801; Ms. Wallace, 31,654; and other executive officers who are not named in the Summary Compensation Table, 86,997.

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Other Beneficial Owners of NCR Stock

To the Company’s knowledge, the following stockholders beneficially own more than 5% of the Company’s outstanding stock.

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ELECTION OF DIRECTORS

(Item 1 on Proxy Card)

The Board of Directors of NCR (the “Board”) is currently divided into three classes. Directors hold office for staggered terms of three years (or less if they are filling a vacancy) and until their successors are elected and qualify. One of the three classes is elected each year to succeed the directors whose terms are expiring. As of the 2007 annual meeting, theThe terms for the directors in Classes A, B and C of the Board of Directors expire at the annual meetings of stockholders in 2009, 2007,2010, and 2008, respectively.

Messrs. BoykinFrissora and Lund and Ms. LevinsonPrahalad are Class BC Directors whose current terms are expiring at the 20072008 annual meeting. Messrs. BoykinFrissora and Lund and Ms. LevinsonPrahalad have been nominated for reelection throughto serve until the 20102011 annual meeting of stockholders and until their successors are elected and qualify. Mr. Daichendt is a Class A Director who was elected by the Board of Directors following the 2006 annual meeting of stockholders. NCR’s Chief Executive Officer identified and recommended Mr. Daichendt to the Committee on Directors and Governance as a candidate for such position and that committee subsequently recommended to the Board of Directors that he be elected a director of the Company to serve as a Class A director until the 2007 annual meeting. Mr. Daichendt has been nominated for reelection through the 2009 annual meeting of stockholders and until his successor is elected and qualifies.

Proxies solicited by the Board will be voted for the election of each of the nominees, unless you withhold your vote on your proxy. The Board has no reason to believe that any of these nominees will be unable to serve. However, if one of them should become unavailable, the Board may reduce the size of the Board or designate a substitute nominee. If the Board designates a substitute, shares represented by proxies will be voted for the substitute nominee.

The Board recommends that you vote FOR each of the following nominees for election as a director.

Class B—C—Current Terms Expiring in 20072008 and New Terms Expiring in 2010:2011:

Edward P. “Pete” BoykinMark Frissora, 68, served52, became Chief Executive Officer of The Hertz Corporation, a car and equipment rental company, on July 19, 2006, and became Chairman of the Board of The Hertz Corporation on January 1, 2007. Prior to becoming Chief Executive Officer of The Hertz Corporation, Mr. Frissora was Chairman and Chief Executive Officer of Tenneco Inc. (“Tenneco”), a manufacturer of automotive emission control and ride control products and systems, from March 2000, after serving as theits President and Chief OperatingExecutive Officer ofComputer Sciences Corporation (“CSC”), an information technology services company he joined in 1966, from July 2001 to June 2003. From 1998 to 2001, he held a number of senior management positions at CSC, including group president of its Financial Services Group fromNovember 1999 to 2001 and vice president of its Technology Management Group from 1998 to 1999. From 1996 to 1998,until March 2000. Mr. Boykin was President of The Pinnacle Alliance, a CSC-managed organization providing information technology outsourcing and other services to J.P. Morgan. Mr. BoykinFrissora became a director of NCR on June 5, 2002.

Linda Fayne LevinsonC.K. Prahalad, 65,66, is Chairthe Paul and Ruth McCracken Distinguished University Professor at The Ross School of Business, University of Michigan. Mr. Prahalad is a nationally recognized specialist in corporate strategy and the Boardrole of Directorstop management in large, diversified, multi-national corporations. From 2000 to 2002, he was Chairman of Vendare Media Corporation, an online media and marketing company providing solutions for brand marketers, direct marketers and web publishers, a position she has held since July 2006. She is also Chair of the Board of Directors of X1 Technologies,PRAJA, Inc., an Idealaba software company providing secure enterprise desktop search solutions, a position she has held since November 2006. From February 2006 through July 2006, Ms. Levinson was Interim Chief Executive Officer of Vendare Media. Ms. Levinson was a partner at GRP Partners, a private equity investment fund investinglocated in start-up and early-stage retail and electronic commerce companies, from 1997 to December 2004. From 1994 to 1999, she was President of Fayne Levinson Associates, an independent consulting firm. Ms. Levinson has also served as an executive with Creative Artists Agency Inc., as a partner in the merchant banking operations of Alfred Checchi Associates, Inc., as a Senior Vice President of American Express and as a Partner at McKinsey & Co. SheSan Diego, California. He is also a director of DemandTec, Inc.Teradata Corporation, Hindustan Lever Limited, India, and World Resources Institute, Washington, D.C., Jacobs Engineering Group Inc., Ingram Micro Inc., and The Western Union Company. Ms. Levinsona non-governmental organization. Mr. Prahalad became a director of NCR on January 1, 1997.

Victor L. Lund, 59, has served as non-executive Chairman of the Board of DemandTec, Inc., a SAS demand forecasting company, since December 2006. Prior to this

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position, Mr. Lund served as the non-executive Chairman of the Board of Mariner Health Care, Inc., a long-term health care services company, from May 2002 to December 2004. He served as Vice Chairman of Albertson’s, Inc., a food and drug retailer, from June 1999 until June 2002. Mr. Lund served as Chairman of the Board of American Stores Company from 1995 until its acquisition by Albertson’s in June 1999, and as Chief Executive Officer of American Stores Company from 1992 until 1999. He was President of American Stores Company from 1992 until 1995. Prior to joining American Stores Company in 1977, Mr. Lund was a practicing certified public accountant. He also serves on the boards of Borders Group, Inc., Del Monte Foods Company, and Service Corporation International. Mr. Lund became a director of NCR on April 23, 2003.

Class A—Current Term Expiring in 2007 and New Term Expiring in 2009:

Gary Daichendt, 55, is the lead investor in Howie’s Game Shack LLC, a gaming center company, and the commercial real estate firm, TheoryR Properties LLC. He served as President and Chief Operating Officer of Nortel Networks, a global supplier of communication equipment, from March 2005 to June 2005. Prior to that and until his retirement in December 2000, Mr. Daichendt served as Executive Vice President, Worldwide Operations for Cisco Systems, a manufacturer of communications and information technology networking products. Mr. Daichendt joined Cisco in 1994 as Vice President, Intercontinental Operations, and soon became Senior Vice president, Sales. In 1998 he became Executive Vice President, Worldwide Operations. He became a director of NCR on April 26, 2006.

Directors Whose Terms of Office Continue

Class A—Current Terms Expiring in 2009:

William R. Nuti, 43,44, is our President andNCR’s Chairman of the Board, Chief Executive Officer.Officer and President. Mr. Nuti became Chairman of the Board on October 1, 2007. Before joining NCR in August 2005, Mr. Nuti served as President and Chief Executive Officer of Symbol Technologies, Inc., an information technology company (“Symbol Technologies”). Prior tothat, he was Chief Operating Officer of Symbol Technologies. Mr. Nuti joined Symbol Technologies in 2002 following 10 years at Cisco Systems where he held positions of increasing responsibility, advancing to the dual role of senior vice president of the company’s Worldwide Service Provider Operations and U.S. Theater Operations. Prior to his Cisco experience, Mr. Nuti held sales and management positions at IBM, Netrix Corporation and Network Equipment Technologies. Mr. Nuti became a director of NCR on August 7, 2005.

James M. RinglerGary Daichendt, 61,56, has been principally occupied as a private investor since June 2005 and has been a managing member of Theory R Properties LLC, a commercial real estate firm, since October 2002. He served as President and Chief Operating Officer of Nortel Networks Corporation, a global supplier of

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communication equipment, from March 2005 to June 2005. Prior to that and until his retirement in December 2000, Mr. Daichendt served as Executive Vice President, Worldwide Operations for Cisco Systems, a manufacturer of communications and information technology networking products. Mr. Daichendt is Chairmanalso a director of ShoreTel Inc. Mr. Daichendt became a director of NCR on April 26, 2006.

Class B—Current Terms Expiring in 2010:

Edward “Pete” Boykin, 69, is Chair of the Board of NCR,Directors of Capital TEN Acquisition Corp., a special purpose acquisition company, a position he has held since July 25, 2005. From March 30, 2005 to August 7, 2005, Mr. Ringler served as NCR’s President and Interim Chief Executive Officer.October 2007. He served as Vice Chairman of Illinois Tool Works Inc., a multi-billion dollar diversified manufacturer of highly engineered components and industrial systems, from 1999 until 2004. Prior to joining Illinois Tool Works, from 1997 to 1999, Mr. Ringler was Chairman of Premark International, Inc. (“Premark”), a large, diversified manufacturing company serving the food equipment, builder products and consumer durable markets. He also served as Premark’s Chief Executive Officer from 1995 to 1999, and prior to that as its President and Chief Operating Officer.Officer of Computer Sciences Corporation, an information technology services company he joined in 1966, from July 2001 to June 2003. Mr. Ringler wasBoykin is also a director of Premark from 1990 until it merged with Illinois Tool Works in 1999. Mr. Ringler serves as a director of Autoliv Inc., The Dow Chemical Company, FMC Technologies, Inc., and Corn Products International, Inc. He joined NCR’s Board of Directors on November 1, 2003.

Class C—Terms Expiring in 2008:

Mark P. Frissora, 51, became Chief Executive Officer of The HertzTeradata Corporation, a cardata warehousing and equipment rental company, on July 19, 2006, and became Chairman of the Board of The Hertz Corporation on January 1, 2007. Prior to becoming Chief Executive officer of The Hertz Corporation,analytic technologies company. Mr. Frissora was Chairman and Chief Executive Officer of Tenneco Inc. (“Tenneco”), a manufacturer of automotive emission control and ride control products and systems, from March 2000, after serving as its President and Chief Executive Officer from November 1999 until March 2000. From March

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to November 1999, he was President, Worldwide Operations, at Tenneco’s automotive subsidiary, and also served as that company’s Senior Vice President and General Manager, Worldwide Original Equipment, from 1998 until March 1999. Mr. FrissoraBoykin became a director of NCR on June 5, 2002.

C.K. PrahaladLinda Fayne Levinson, 65,66, is Chair of the PaulBoard of Directors of Connexus Corporation (formerly VendareNetblue), an online marketing company, a position she has held since July 2006. From February 2006 through July 2006, Ms. Levinson was Interim Chief Executive Officer and Ruth McCracken Distinguished University Professor at The Ross SchoolChair of Business, UniversityVendare Media (subsequently merged with Netblue and known as VendareNetblue). From November 2006 through June 2007, she was also Chair of Michigan. Mr. Prahalad is a nationally recognized specialist in corporate strategy and the roleBoard of top management in large, diversified, multi-national corporations. From 2000 to 2002, he was ChairmanDirectors of PRAJA,X1 Technologies, Inc., an Idealab company providing secure enterprise desktop search solutions. Ms. Levinson was a software company locatedpartner at GRP Partners, a private equity investment fund investing in San Diego, California. Hestart-up and early-stage retail and electronic commerce companies, from 1997 to December 2004. She is also a director of Hindustan Lever Limited, India,DemandTec, Inc., Jacobs Engineering Group Inc., Ingram Micro Inc., and World Resources Institute, Washington, D.C., a non-governmental organization. Mr. PrahaladThe Western Union Company. Ms. Levinson became a director of NCR on January 1, 1997.1997 and was appointed the Independent Lead Director of the NCR Board of Directors on October 1, 2007.

William S. Stavropoulos, 67, retired as director and Chairman of the Board of Directors of The Dow Chemical Co. (“Dow Chemical”), a chemical and plastics producer, on April 1, 2006. He had served in such capacity since November 2000. Mr. Stavropoulos was the President and Chief Executive Officer of Dow Chemical from 1995 to 2000 and was reappointed to that position in December 2002. In November 2003, Mr. Stavropoulos relinquished the position as President and in November 2004 relinquished the position as Chief Executive Officer. In addition, he is a director of BellSouth Corporation, Chemical Financial Corporation, and Maersk Inc., and is a trustee of the Fidelity Group of Funds. Mr. Stavropoulos became a director of NCR on January 1, 1997.

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ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS

The Board of Directors oversees the overall performance of the Company on your behalf. Members of the Board stay informed of the Company’s business by participating in Board and committee meetings (including regular executive sessions of the Board), by reviewing materials provided to them prior to meetings and otherwise, and through discussions with the Chief Executive Officer and other members of management and staff, by reviewing materials provided to them, and by participating in regularly scheduled Board and committee meetings.staff.

Corporate Governance

NCR’s Board of Directors is elected by the stockholders to governoversee the performance of the business and affairs of the Company. The Board selects the senior management team, which is charged with conducting the Company’s business. Having selected the senior management team, the Board acts as an advisor to senior management and monitors its performance. The Board reviews the Company’s strategies, financial objectives and operating plans. It also plans for management succession of the Chief Executive Officer, as well as other senior management positions, and oversees the Company’s compliance efforts.

To help discharge its responsibilities, the Board of Directors has adopted Corporate Governance Guidelines on significant corporate governance issues. These guidelines address, among other things, such matters as director independence, committee membership and structure, meetings and executive sessions, and director selection, retirement, and training. The Board’s Corporate Governance Guidelines, as well as the Board’s committee charters, are found on NCR’s corporate governance website athttp://www.ncr.com/corpgovernance/guidelines.htm. You may obtain a written copy of these guidelines, or any of the Board’s committee charters, by writing to NCR’s Corporate Secretary at the address listed on page 312 of this proxy statement. The Board’s independent directors meet regularly in executive session and, as provided in the Corporate Governance Guidelines,session. Effective October 1, 2007, the Board of Directors has selectedappointed Linda Fayne Levinson as the ChairmanBoard’s Independent Lead Director. As the Independent Lead Director, Ms. Levinson will preside at the executive sessions of the Board to preside at its executive sessionsof Directors during 2007.2008.

In connection with its Corporate Governance Guidelines, the Board of Directors has established independence standards. In general, the Board shall determineannually determines whether aeach director is considered independent, taking into account the independenceguidelinesindependence guidelines of the New York Stock Exchange and the factors listed immediately following this paragraph, which are included as Exhibit B, Definition of Director Independence, to the Board’s Corporate Governance Guidelines referenced above, in addition to those other factors it may deem relevant. No director may qualify as independent unless the Board affirmatively determines (i) under the New York Stock Exchange (“NYSE”) listing standards, that he or she has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with NCR); and (ii) under the Company’s independence standards, that the director or director candidate:

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NCR’s Board of Directors has determined that all of the Company’s non-employee directors and nominees, namely Edward (Pete) Boykin, Gary Daichendt, Mark Frissora, Linda Fayne Levinson Victor Lund,and C.K. Prahalad James Ringler and William Stavropoulos, meet the New York Stock Exchange listing independence standards and the Company’s independence standards. In evaluating and determining the independence of Mr. Frissora, the Board of Directors considered the relationship between NCR and The Hertz Corporation. Mr. Frissora is the Chairman of the Board and Chief Executive Officer of The Hertz Corporation, which ishas various commercial relationships with NCR. The Board of Directors determined that none of these relationships, alone or in the primary supplier of rental cars to NCR.aggregate, were material. There were no other transactions, relationships or arrangements that required review by the Board for purposes of determining director independence.

The Board met 715 times last year. In 2006,2007, all of the directors attended 75%75 percent or more of the totalnumbertotal number of meetings of the Board and the committee(s) on which he or she serves. In addition, while there is no formal policy regarding director attendance at the annual meetings of stockholders, NCR’s directors have a practice of attending the Company’s annual meeting of stockholders each year.meetings. All of the directors who had been elected at the time of the meetingthen in office attended the Company’s 2006 annual meeting of stockholders. There is no formal policy regarding director attendance at the2007 annual meeting of stockholders.

Committees of the Board

NCR’s Board of Directors has four standing committees: the Audit Committee, the Compensation and Human Resource Committee, the Committee on Directors and Governance, and the Executive Committee.

Audit Committee:    The Audit Committee is the principal agent of the Board of Directors in overseeing (i) the quality and integrity of the Company’s financial statements; (ii) the assessment of financial risk and risk management programs; (iii) the independence, qualifications, and performance of the Company’s independent registered public accounting firm; (iv) the performance of the Company’s internal auditors; and (v) the integrity of management and the quality and adequacy of disclosures to stockholders. The committee also:

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The Audit Committee has fourthree members, Edward (Pete) Boykin, Gary Daichendt Victor Lund and C.K. Prahalad, each of whom is independent and financially literate as determined by the Board under applicable SEC and New York Stock Exchange (“NYSE”)NYSE standards. In addition, the Board has determined that Messrs.Mr. Boykin and Lund areis an “audit committee financial experts,expert,” as defined under SEC regulations. No member of the committee may receive any compensation, consulting, advisory or other fee from the Company, other than Board compensation described below under the caption “Compensation of Directors,“Director Compensation,” as determined in accordance with applicable SEC and NYSE rules. Members serving on the Audit Committee are limited to serving on no more than two other audit committees of boards of directors of public companies, unless the Board of Directors evaluates and determines that these other commitments would not impair his or herthe member’s effective service to the Company.

A more detailed discussion of the committee’s mission, composition, and responsibilities is contained in the Audit Committee Charter, which was adopted as revised by the Board of Directors in October 2006.2007. A copy of this charter can be found on NCR’s corporate governance website athttp://www.ncr.com/corpgovernance/corpgov_board_charters.htm.

Compensation and Human Resource Committee:    This committee reviews and approves the Company’s total compensation goals, objectives and programs covering executive officers and key management employees as well as the competitiveness of NCR’s total executive officer compensation practices. The committee also:

This committee may delegate its authority to the Company’s Chief Executive Officer to make equity awards to individuals other than executive officers in limited instances.

This committee currently has threetwo members, Linda Fayne Levinson James Ringler and Mark Frissora, each of whom the Board of Directors has determined meetmeets the New York Stock ExchangeNYSE listing independence standards and the Company’s independence standards. However, Mr. Ringler does not qualify as an “outside director” as defined in Section 162(m) of the Internal Revenue Code. Mr. Ringler does not participate in committee votes pertaining to plan design or compensation decisions under plans intended to be compliant with Section 162(m).

This committee is authorized to and has directly engaged its compensation consultant, Frederic W. Cook & Co., to review the Company’s long-term incentive program, the Management Incentive Plan and other key programs related to the compensation of executive officers. In 2006,2007, the committee directed its consultant to conduct

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market studies, review publicly available market data and be readily available for consultation with this committee and its members regarding such matters.

A more detailed discussion of the committee’s mission, composition, and responsibilities is contained in the Compensation and Human Resource Committee Charter, which was adopted as revised by the Board of Directors in January 2007.2008. A copy of this charter can be found on NCR’s corporate

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governance website athttp://www.ncr.com/corpgovernance/corpgov_board_charters.htmcorpgov_board_charters.htm..

Compensation and Human Resource Committee Interlocks and Insider Participation:    Mr. Ringler, a former NCR director who served as a director in 2007, served as President and Interim Chief Executive Officer from March 30, 2005, to August 7, 2005.

Committee on Directors and GovernanceGovernance::    This committee is responsible for reviewing the Board’s corporate governance practices and procedures and the Company’s ethics and compliance program, and:

This committee is authorized to and directly engaged Watson Wyatt as its consultantengage consultants to review the Company’s director compensation program. In 2006,2007, the committee directedengaged Mercer Human Resource Consulting, Inc. as its consultant to conduct market studies, review publicly available market data concerning various elements of potential director compensation, including retainer and meeting fees and long-term incentive payments, and be readily available for consultation with this committee and its members regarding such matters.

The Committee on Directors and Governance is composed entirely of independent directors, Edward (Pete) Boykin, Linda Fayne Levinson and C.K. Prahalad and William Stavropoulos.Prahalad.

Selection of Nominees for Directors

Your directors and the Committee on Directors and Governance are responsible for recommending candidates for membership to the Board. The director selection process is described in detail in the Board’s Corporate Governance Guidelines, which are posted on the Company’s corporate governance website athttp://www.ncr.com/corpgovernance/guidelines.htm.guidelines.htm In.In determining candidates for nomination, the Committee on Directors and Governance will seekthe input of the Chairman of the Board and the Chief Executive Officer, and, in the event the positions of Chairman of the Board and Chief Executive Officer are held by the same person, the Lead Director, and will consider individuals recommended for Board membership by the Company’s stockholders in accordance with the Company’s Bylaws and applicable law. From time to time, the committee may engage outside search firms to assist it in identifying and contacting qualified candidates. In 2006,2007, the Committee on Directors and Governance engaged Spencer StuartEgon Zehnder International to assist in identifying qualified candidates for the open Class A, Class B and Class C Director position. Although Spencer Stuart identified potential candidates,positions. As of the date of this proxy statement, the committee ultimatelyhas not selected a candidate, Mr. Daichendt, who had been recommended to the committee by the Company’s Chief Executive Officer.additional candidates for these open positions. All candidates are evaluated by the committee using the qualification guidelines included as part of the Board’s Corporate Governance Guidelines. As part of the selection process, the Committee on Directors and Governance and the Board of Directors examine candidates’ business skills and experience, personal integrity, judgment, and ability to devote the appropriate amount of time and energy to serving the best interests of stockholders. The Board and the Committee on Directors and Governance are committed to finding proven leaders who are qualified to serve as NCR directors.

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Stockholders wishing to recommend individuals for consideration as directors should contact the Committee on Directors and Governance by writing the Company’s Corporate Secretary at NCR Corporation, 1700 South Patterson Blvd., Dayton, OH 45479. Recommendations by stockholders that are made in this manner will be evaluated in the same manner as other candidates. Stockholders who want to nominate directors for election at NCR’s next annual meeting of stockholders must follow the procedures described in the Company’s Bylaws, which are available on our corporate governance website athttp://www.ncr.com/corpgovernance/corpgov_bylaws.htm.corpgov_bylaws.htm. See “Procedures for Stockholder Proposals and Nominations” on page 5670 of this proxy statement for further details regarding how to nominate directors.

The directors nominated by the Board of Directors for election at the 20072008 annual meeting were recommended by the Committee on Directors and Governance. All of these candidates for election are currently serving as directors of the Company and have been determined by the Board to be independent.

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A more detailed discussion of the committee’s mission, composition, and responsibilities is contained in the Committee on Directors and Governance Charter, which was adopted by the Board of Directors as amended in January 2007.Charter. A copy of this charter can be found on NCR’s corporate governance website athttp://www.ncr.com/corpgovernance/corpgov_board_charters.htm.corpgov_board_charters.htm.

Executive Committee:    This committee has the authority to exercise all powers of the full Board of Directors, except those prohibited by applicable law, such as amending the Bylaws or approving a merger that requires stockholder approval. This committee meets between regular Board meetings if urgent action is required.

Board Committee Membership

*Chair

Communications with Directors

Stockholders wishing to communicate directly with NCR’s Board of Directors, any individual director, the Chairman of the Board, or NCR’s non-management or independent directors as a group are welcome to do so by writing NCR’s Corporate Secretary at 1700 South Patterson Blvd., Dayton, Ohio 45479. The Corporate Secretary will forward any communications as directed. Any matters reported by stockholders relating to NCR’s accounting, internal accounting controls or auditing matters will be referred to members of the Audit Committee as appropriate. Anonymous and/or confidential communications with the Board of Directors may also be made by writing to this address. For more information on how to contact NCR’s Board, please see the Company’s Corporate Governance website athttp://www.ncr.com/corpgovernance/corpgov_contact.htm.corpgov_contact.htm.

Code of Conduct

The Company has a Code of Conduct that sets the standard for ethics and compliance for all of itsemployees. NCR’s Code of Conduct is available on NCR’s corporate governance web site athttp://www.ncr.com/

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corpgovernance/corpgov_code_ conduct.htm.conduct.htm. To receive a copy of the Code of Conduct, please send a written request to the Corporate Secretary at the address provided above.

Section 16(a) Beneficial Ownership Reporting Compliance

During 2006,2007, all executive officers and directors of the Company timely filed the reports required under Section 16(a) of the Securities Exchange Act of 1934, except that the Company filed aone late report: (a) in 2006report on behalf of each of Bruce Langos,Christine Wallace, the Company’s Senior Vice President, Global Operations, and Peter Dorsman, Vice President and General Manager, Systemedia Division, eachWorldwide Customer Services, in connection with a single transaction involving the grantuse of performance-based restricted stock and options awarded in September 2006; and (b) in 2007 on behalf of Peter Bocian, Senior Vice President and Chief Financial Officer,shares to satisfy tax withholding in connection with the exercisevesting of options in March 2006.restricted stock previously awarded.

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BOARD COMPENSATION AND HUMAN RESOURCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation and Human Resource Committee of the Board of Directors (the “Committee”) manages the Company’s compensation programs on behalf of the Board of Directors. The Committee reviewed and discussed with the Company’s management theCompensation Discussion and Analysis included in this Proxy Statement. In reliance on the review and discussions referred to above, the Committee recommended to the Board of Directors that theCompensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20062007 and theCompany’s Proxy Statement to be filed in connection with the Company’s 20072008 Annual Meeting of Stockholders, each of which will be filed with the Securities and Exchange Commission.

Dated:    February 26, 20072008

The Compensation and Human Resource Committee:

Linda Fayne Levinson, Chair

Mark P. Frissora, Member

James M. Ringler, Member

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

In order to better understand our executive compensation program, it is necessary to understand our business and the markets in which we compete. We provide technology and services that help businesses interact, connect, and relate with their customers. Our specific solutions for the retail and financial industries are provided through our Financial Self Service (which includes our ATM business) and Retail Store Automation businesses. Our Teradata Data Warehousing and Customer Services businesses also provide solutions for these industries, as well as to other major industries, including telecommunications, transportation, insurance, healthcare, manufacturing, travel, logistics and government. Our solutions are based on a foundation of long-established industry knowledge and consulting expertise, value-added software, hardware technology, global customer support services, and a complete line of business consumables and specialty media products.

We are a multinational company that has been in business for more than 120 years and has established a reputation of providing quality products, services and solutions to our customers. We maintain offices in approximately 70 countries and employ approximately 29,000 employees and contractors worldwide.

We operate in the intensely competitive information technology industry, which is characterized by rapidly changing technology, evolving industry standards, frequent new product introductions, price and cost reductions, and increasingly greater commoditization of products. As a global company, our business is affected by the economies of the numerous countries in which we operate.We also face many aggressive and well-financed competitors both in the United States and in the various international markets where we operate.

In this environment, our success depends on putting together and maintaining a leadership team with the integrity, skills, and dedication needed to manage a global organization and the vision to anticipate and respond to future market developments. We use our executive compensation program to help us achieve this objective. Asdescribed below, portions of the program have been designed to enable us to assemble and retain a group of executives who have the collective and individual abilities necessary to run our business to meet these challenges. Other portions are intended to focus these executives on achieving financial results that enhance the value of our stockholders’ investment. At the same time, we have structured the program to be flexible, so that we can meet the changing needs of our business over time.

The Company’sOur named executive officers discussed in thisCompensation Discussion and Analysisand the related compensation tables include Messrs. Nuti, Bocian, Collins and Koehler and Ms. Wallaceare the officers listed in the table below (collectively, the “Named Executive Officers”).

Compensation Philosophy

Name		Title as of December 31, 2007
William Nuti		Chairman of the Board, Chief Executive Officer and President
Peter Bocian		Former Senior Vice President and Chief Financial Officer
Robert Fishman		Interim Chief Financial Officer
Malcolm Collins		Senior Vice President, Financial Solutions Division
Peter Lieb		Senior Vice President, General Counsel and Secretary
Christine Wallace		Senior Vice President, Worldwide Customer Services
Michael Koehler		Former Senior Vice President, Teradata Division

Our Company’s goal is to attract, motivateThe Compensation and retain key leadership. We believe that, to be successful, we need to be competitive not only in our products and solutions, but also in the qualityHuman Resource Committee of our executives. This, in turn, requires that we pay our executives competitively. Accordingly, ourBoard of Directors (the “Committee”) has the sole authority to make compensation-related decisions for the Company’s executive compensation program is guided by the following four principles:

1. Our key program elements are current cash and long-term equity incentives.    We compensateofficers, including our Named Executive Officers primarily with cash (base salaryOfficers. The Committee relies on five key objectives to drive its executive compensation decisions: (i) attract, retain and annual incentives)motivate high quality talent; (ii) ensure a strong correlation between our executives’ actual compensation earned and equity awards. We believe these components providethe delivery of successful operating performance for the Company; (iii) establish commonality of interest between our executives with a stable source of income while, atand stockholders; (iv) ensure executive compensation programs are financially sound for the same time, affording us the flexibility, as described below, to structure most of their compensation so that it is directly aligned with our performance.Company; and (v) embrace policies reflecting best practices.

In recent years, we have begunThe material elements of executive compensation used to shift the relative mix of cash and equity compensation for our executives. This change supports our objective of ensuring that a large portion of total compensation for executives is tied to the achievement of multi-year operating performance goals and changes in stockholder value. In addition, this change enhances the retentive aspect of the overall program by requiring executives to remain employed for a multi-year period to fully vest in the awards. As part of this process, we have begun to rebalanceachieve these objectives are cash compensation (base salary and annual cash incentives)incentives (“Cash Compensation”)) and long-term equity incentives so that, when(stock options, time-based restricted stock units and performance-based restricted stock units). In addition, we

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achieve targeted financial results, the total compensation of provide to our executives, including the Named Executive Officers will be at the competitive market median.severance and change in control arrangements, and, on a limited basis, retirement benefits and executive perquisites.

Consistent with our focus on cash and equity, we have historically de-emphasized the ancillary components of our program, such as perquisites and other personal benefits. This is intended to minimize the non-performance-based components of the overall compensation program and to place a greater portion of pay “at risk.” As reflected in the Summary Compensation Table on page30, our executives, including the Named Executive Officers, receive a limited number of perquisites. The Compensation and Human Resource Committee (the “Committee”) monitors our perquisite practices closely and must approve any perquisites before they can be offered to an executive.

In addition, as we have transitioned our employee retirement program from a defined benefit to a defined contribution structure, retirement benefits have played an increasingly smaller role in the overall program. Due to restrictions we have placed on participation in our defined benefit pension plans over the past three years, only three of our Named Executive Officers participated in these plans as of the end of 2006,is highly performance-based. We use performance-based cash and for these individuals, their benefits were frozen at pre-2007 levels.

2. We striveequity incentives to pay at competitive market levels.    When setting targeted total compensation forreward our executives, including the Named Executive Officers we seek to ensure that bothfor achieving performance targets set annually by the cash (base salary and annual incentive) and equity componentsCommittee. On average in 2007, nearly half of their packages are competitive in the relevant market. This supportstotal compensation (based on target) for our objective of attracting and retaining high quality executives and ensures that the overall economic cost of compensation is reasonable, and therefore sustainable, in relation to our peers. In fashioning the cash component, we look at compensation data about comparable positions at companies in the relevant peer group (as discussed on pages 17-18), as well as the cash compensation arrangements of our other senior executives. To set the target value of equity awards, we consider several factors, including compensation data about comparable positions in the peer group, amounts previously awarded to our other executives, and, in the case of a new hire, the amount that the prospective executive may be forfeiting by leaving his or her current employer.

3. To motivate and reward our executives for superior performance, the majority of our key program elements are performance-based.    Although we provide our executives, including the Named Executive Officers with a competitive base salary, most of their compensation iswas performance-based. Importantly, theThe portion of performance-based “at risk” compensation increases directly with the executive’s role and responsibility within the Company. Consequently, the senior-most executivesCompany, ensuring that our senior officers are held most accountable to stockholders for the achievement of operational targets and strategic goals. Generally, we use three different vehicles to achieve this purpose:our stockholders.

We believe that,OurCompensation Discussion and Analysis includes:    (i) an overview of the Company’s executive compensation program, including a discussion of the compensation philosophy of the Committee and the material elements of compensation earned by emphasizing these vehicles, we are ableor paid to reinforce our goalNamed Executive Officers; and (ii) an analysis of maintaining a results-oriented culture that provides above-target rewards only when performance is also above target. Thus, the interests of our executives are directly aligned with those of our stockholders ascompensation decisions made by the financial success of both is contingent upon performance.

Equity compensation is used as a tool to unite all executivesCommittee in a common set of goals and foster stock ownership, which creates commonality of interest with stockholders, while the annual incentive plan is used to ensure that performance targets vary among business units in a manner consistent with each business unit’s key objectives.2007.

4.To encourage high-performing executives to stayInformation regarding two Named Executive Officers, Messrs. Bocian and Koehler, who are no longer with us, key program elements are structured to enable them to shareNCR, is included in our long-term growthCompensation Discussion and success.Analysis. Mr. Bocian is included because he served as the Company’s Chief Financial Officer (“CFO”) until May 2007, which caused him to be a Named Executive Officer under the SEC proxy disclosure rules. Mr. Koehler is included because he served as the Company’s Senior Vice

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President, Teradata Division, during 2007 and his compensation for services to the Company during 2007 caused him to be a Named Executive Officer under the SEC proxy disclosure rules. Also included is Mr. Fishman, who served as our Interim Chief Financial Officer (“Interim CFO”) during 2007 and part of 2008. Mr. Fishman was no longer serving as our Interim CFO as of the filing date of this proxy statement, but he continues to serve as the Company’s Controller.

In order to understand the compensation decisions made in 2007, it should be noted that in September 2007, the Company completed a transaction in which it strategically separated one of its business units, referred to as the Teradata Division (“Teradata”), into a separate publicly-held corporation, Teradata Corporation. The spin-off of Teradata (the “Spin-Off”) required the Committee to take a number of actions, such as the adjustment of equity awards, the grant of Spin-Off recognition awards and the reevaluation of the Company’s peer group.

Our executive compensation program is designed to achieve five key objectives. Each objective, including its underlying supporting principles, is described below.

1. Attract, retain and motivate high quality talent. To ensure that our effortsachieve this objective, we generally set target compensation for Named Executive Officers at or near the competitive market median. For certain high performing executives or as needed to attract and motivateexecutives from outside the Company, we may set target compensation levels above the median or even near the 75^th percentile. In addition, we condition our executives provide benefits to our stockholders, we have designed our key program elementsequity awards upon multi-year vesting schedules to encourage our executives to remain with us throughout the entire vesting period. We also offer a highly-leveraged performance-based compensation program that allows our executives to attain higher payouts based on their successful performance.

2. Ensure a strong correlation between our executives’ actual compensation earned and the delivery of successful operating performance for the Company. For example,A significant portion of our executives’ compensation and our key program elements are performance-based. Performance-based compensation is a strong motivator of key, successful behaviors because it links compensation earned with company performance. We use three types of programs to accomplish this: annual performance-based equity awards, our performance-based annual cash incentive plan, and special performance awards for exemplary individual contributions paid in the form of cash or equity. As a result of the substantial focus on performance-based compensation, actual realized pay may fall above or below the targeted levels described above.

3. Establish commonality of interest between our executives and stockholders.We use both performance-based cash and equity programs, including performance shares and stock options, that tie actual payouts to Company performance and changes in stockholder value. This ensures that the majority of executive compensation is paid only in the event that operating performance objectives are subject toachieved and stockholder value increases. The performance measures focus on the successful attainment of both individual executive and Company-level objectives over both annual and multi-year vesting schedules and we set our cash compensation at competitive levels. We also devote significant attention to talent management and succession planning toperiods. Thus, the performance measures support the individual careerCompany’s short-term and long-term strategy and the use of equity-based compensation helps to ensure that executives think and act like stockholders. Additionally, we maintain an executive stock ownership policy that encourages executives to accumulate a specified amount of Company stock, to retain a portion of shares acquired through the vesting of performance stock units or restricted stock units, and to hold shares obtained through the exercise of stock options.

4. Ensure executive compensation programs are financially sound for the Company.We take appropriate steps to maximize the tax-deductibility of executive compensation and to avoid unnecessary cash flow costs, accounting charges and share dilution. Costs under the annual incentive plan and the performance share plan are incurred only to the extent that underlying performance goals are attained. In addition, an annual budget is set for both annual incentive payouts and aggregate long-term incentive expense and share dilution, each of which is set based on careful assessment of competitive peer levels and affordability compared to the annual operating plan approved by the Board of Directors.

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growth of5. Embrace policies reflecting best practices.We strive to be a leader in best practices by monitoring evolving executive compensation best practice standards and implementing such policies into our executives and to identify promotion opportunities for key individuals.executive compensation programs as appropriate.

The Committee, which oversees our executive compensation program, evaluates these principlesobjectives regularly to ensure that they are consistent with our goals and needs.

General Compensation Levels

The Committee has the authority to determine compensation-related decisions for the Company’s executive officers, set plan metrics and make other compensation-related decisions as authorized and required by its charter. The Committee considers recommendations from its compensation consultant, Frederic W. Cook & Co. (“FWC”), as well as our Chief Executive Officer and Chairman of the Board, Mr. Nuti (whom we refer to as our “CEO”) in making such decisions.

As discussed on page 10 of this proxy statement, under its Charter, the Committee is authorized to and has directly engaged FWC, who is independent of the Company’s management and reports directly to the Committee. FWC has no economic relationships with the Company other than its role in advising the Committee. FWC works with management only under the direction and approval of the Committee on matters that fall within the Committee’s responsibility as outlined in its charter. FWC plays an integral role in providing the Committee expert advice regarding compensation matters for the executive officers, including the CEO, such as information about competitive market rates; assistance in the design of the variable incentive plans, including the establishment of performance goals; assistance in the design of indirect compensation programs (e.g., change in control policy, general severance and perquisites); and assistance with Section 162(m) compliance, disclosure matters, and other technical matters.

Our CEO attends most meetings of the Committee and participates by discussing with, and making recommendations to, the Committee regarding candidates for executive positions, compensation packages for new and existing executives, and executive benefits. Our CEO also provides recommendations to the Committee concerning the financial performance metrics to be used to determine short-term and long-term incentive compensation for all executive officers. Although our CEO provides written input regarding his compensation that describes his accomplishments for the applicable calendar year, he is not present at Committee meetings during the time decisions are made regarding his compensation levels, as the decision-making authority on this matter rests with the Committee. In an effort to ensure our compensation consultant remains independent from management, our CEO typically will not meet with the Committee’s compensation consultant in the absence of the Committee. Our CEO did not meet with or speak directly with FWC at any time in 2007 in the absence of the Chair of the Committee.

Each year, we review the base salaries, and annual incentive opportunities and long-term incentive opportunities offered to our executives, including the Named Executive Officers, to ensure that they are competitive with market practices, support our executive recruitment and retention objectives, and are internally equitable among executives. While we do not set specific total compensation targets, our process essentially results in ade facto target – that is, a totalThe Committee establishes the amount of each compensation that we will pay an executive if all corporateelement using the factors described in thisCompensation Discussion and individual performance objectives are fully met. Each of our key program componentsAnalysis for each compensation element. Cash Compensation is generally set with market median as a guideline, except that long-termguideline. However, we may at times pay top performers in key business roles closer to the 75^th percentile in order to attract and/or retain them. In some cases, the actual compensation of a Named Executive Officer may be below median, and the actual compensation of a Named Executive Officer who is in a key business role may be below the 75^th percentile. Long-term incentives are generally based upon a combination of affordability, market practicespractice and retention objectives.

As part of this process,In setting compensation, the Committee considers market dataaffordability to the Company by balancing the Company’s desire to attract, motivate, and input provided by itsretain top executives against the cost of providing executive compensation consultant, Frederic W. Cook & Co.,at

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levels necessary to do so. As a result, affordability considerations are central to the Committee’s compensation-setting process. Sections II and our management. The market dataIII of thisCompensation Discussion and Analysis describe the Committee’s consideration of affordability for each element of compensation, as applicable.

Our compensation policies and practices are consistently applied to each Named Executive Officer. Our CEO is derived from several published high-technologycompensated at substantially higher Cash Compensation and general industry compensation surveys. We use this data to match our specific executive positions to those with similar functional descriptions at companies with similar business characteristics. For example, survey data from high-technology companies is weighted more heavily forequity levels than the other Named Executive Officers in chargeto reflect the market rate for CEO talent, the strategic nature of business units using more advanced technology (suchhis position as Teradata) than for the Named Executive Officers in charge of “lower technology” businesses (such as Systemedia or Customer Services).

In most cases, each Named Executive Officer is specifically matched to comparable positions within the compensation surveys to ascertain the appropriate placement relative to market. Where it is not possible to match a Named Executive Officer’s role, he or she will be compared with several other senior executive positions based on functionalleading the entire organization, the extent and scope of his responsibilities, revenue size of the business unit, and individual experience. We also take into consideration market trends todetermine how base salary and annual cash incentives are changing from year to year and how each component relates as a percentage of total compensation. We generally start by setting base salary at the relevant market median and build on that, factoring inhis performance and the experiencejudgment that he brings to his position.

The Company’s management and skillsthe Committee’s compensation consultant, FWC, conduct analyses of the Named Executive Officer. However, we use the market data as context only,our executive compensation and any cash compensationrelated decisions also factor in individual experienceusing various tools to assess external and internal fairness. Accordingly, base salary will –factors. Management and does – vary among the Named Executive Officers. Annual cash incentive award target levels are set as a percentageFWC complete analyses of base salary. Through this process, we believe that the cash compensation package for our Named Executive Officers has been balanced for bothexternal factors using market surveys and peer group data. Management conducts analysis of internal factors using internal equity, tally sheets and external fairness.affordability.

Peer Groups and Benchmarking

We use several methods to benchmark the various elements of our executive compensation program in order to gauge where we stand versus the market and our competitors. We use several methods to benchmark our executive compensation practices against other companies. First, we use publicly available market surveys to match the roles of our Named Executive Officers to roles in the surveys. We then compare the actual base salary and annual cash incentives for our Named Executive Officers to those disclosed in the surveys. In addition, we conduct a total compensation study which is reviewed for accuracy and appropriateness by the Committee’s compensation consultant. The Committee’s compensation consultant also conducts an analysis of the Named Executive Officers to assist the Company with establishing a budget for overall long-term incentive awards and assists the Committee with setting compensation for our executives. Both management and FWC prepare separate analyses of competitive data. These two separate sources of data are used to ensure that adequate perspective and information is available to the Committee to use when making compensation decisions. FWC generally leads the effort to develop and present peer group data that is used by the Committee. FWC’s typical independent analysis includes an examination of the cash and equity elements of compensation for the five most highly compensated executives in each peer company and a comparison of NCR’s similarly ranked Named Executive Officers. For further perspective, we evaluate the base salary, annual incentive awards, and long-term incentives providedOfficers to the named executive officerslower, median and upper quartiles of the companies in our peerentire group. We extract this data from publicly available sources.The analysis also includes a comprehensive analysis of long-term incentive costs and resulting levels of stockholder value transfer and dilution, which helps the Committee to develop an annual budget for aggregate, Company-wide long-term incentives.

The unique combination of industries represented by our business units creates challenges in identifying comparable companies for executive compensation benchmarking. We select our primary peer group by examining our competitors in terms of industry, size and recruiting. That is, we look first at companies with similar business models in comparable industries that

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are of reasonably similar size based primarily on annual revenue and market capitalization. Then, in addition to industry peers, we examine companies that compete with us for executive talent on a national and geographically-specific basis. Because of

Prior to the Spin-Off, our unique business mix, when appropriate, we may use alternative peer groups that provide more accurate market information concerning a particular industry in which we operate. For 2006, our primary peer group includedfor 2007 consisted of the following companies:

Avaya Inc.		Cognos Inc.		CA International		Diebold Inc.
DST Systems Inc.		EMC Corporation		Fiserv Inc.		Hewlett-Packard
Hyperion Solutions Corp.		IBM		Lexmark International Inc.		Micros Systems Inc.
Oracle Corporation		Pitney Bowes, Inc.		Symbol Technologies Inc.		Unisys Corp.

Cognos, Inc.

CA International

Diebold, Inc.

DST Systems, Inc.

EMC Corporation

Fiserv Inc.

Hewlett-Packard

Hyperion Solutions Corporation

IBM

Lexmark International Inc.

Micros Systems, Inc.

Oracle Corporation

Pitney Bowes Inc.

Symbol Technologies, Inc.

Unisys CorpThe Committee reevaluated the Company’s peer group in connection with the Spin-Off to reflect the change in our business. Following the Spin-Off, our peer group for 2007 consisted of the following companies:

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Management’s analyses typically concentrate on comparing the compensation of our executive officers against that of similar roles found in publicly available executive compensation market surveys. In 2007, we used five surveys for the analysis, three of which were general industry in nature and two of which concentrated on companies in high-tech industries. The surveys included both NCR competitors and non-competitors. The number of companies in each survey ranged from approximately 100 to over 700. The Committee was not provided with the names of the companies who participated in these surveys. We chose these particular surveys for several reasons. First, a few surveys are global surveys that enable us to obtain salary structure market data in numerous countries under a consistent methodology. Second, the surveys are broad in that they include positions in a variety of disciplines. Using this approach allows us to collect substantial and meaningful market data through the purchase of a limited number of surveys. Management’s market survey process involves matching the roles of our executives to descriptions of roles in various surveys based on job content, organizational alignment, revenue size, and, at times, industry. We then compare the actual base salary, target annual cash incentives, and actual long-term incentive values for our Named Executive Officers to those found for the matching roles in the surveys. We generally make comparisons at the median and 75^th percentile levels. Management also periodically reviewreviews survey data compiled by other compensation consultants to benchmark how we compare to the market on other compensation components, such as executive perquisites or the provisions of severance plans or agreements. In such instances where management presents competitive or market data to the Committee that affects our Named Executive Officers, FWC reviews the methodology and results for appropriateness and accuracy.

We strive to balance the compensation of our executives with the external market, as described above, and our internal compensation structure. The Committee regularly reviews tally sheets prepared by management when considering compensation changes for our executives. Tally sheets provide total compensation history, an analysis of the value of future vestings at current and assumed future prices, and estimates of benefits provided to each executive upon various termination scenarios. The tally sheets are used by the Committee to review the degree to which historic compensation, including unvested equity awards and separation benefits, support the Company’s retention objectives. The tally sheets are also used to compare year over year compensation as part of the process of setting compensation for the next year.

ElementsIn addition to the tally sheets, management also prepares an overview of Executive Compensationeach executive’s base salary, annual incentive targets, and long term incentive award in comparison to internal peers. To maintain fairness throughout the executive ranks, we strive to ensure a level of consistency with differences based on the degree of judgment and strategic nature of the role of the executive, as well as each executive’s performance.

While, as described earlier, our primary emphasis was onAffordability considerations from both a cash outlay and accounting expense impact are central to the Committee’s compensation-setting process. When considering decisions for every element of compensation (cash, equity, perquisites and other benefits), both the needs of the business and the cost of the compensation weprograms are considered to ensure the sustainability of any changes going forward. The Committee’s goal with respect to all elements is to pay enough to attract, motivate, and retain talented executives while maintaining the overall cost of the Company’s executive compensation program at a level that the Committee deems to be reasonable and in the best interests of the Company’s stockholders.

We used several compensation elements in our executive compensation program in 2006, including:2007, consisting of:

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When designing compensation plans or making compensation decisions, certain elements are evaluated together, if appropriate, and the magnitude of compensation in one element may impact the magnitude and design of other elements. For example, base salary and annual cash incentives, which together comprise Cash Compensation, are evaluated together so as to make better comparisons both internally and externally. The ratio between the two components is evaluated to ensure our cash compensation structure is leveraged appropriately for the position and against our competitors. When an increase in base salary is proposed, the impact on annual incentives is also evaluated since the incentive is calculated via a formula applied to base salary. Cash Compensation relative to peer group companies and market data is a factor when determining the amount of, and even the form of, annual long-term incentive awards for the Named Executive Officers. Total direct compensation and the amount of leverage in the total compensation package are evaluated against competitive data as well. The fact that NCR has relatively few executive perquisites is a factor, albeit usually a small one, when making base salary decisions. This factor does become more important when hiring an executive from outside the company who has significantly more perquisites at his or her prior company as we may increase salary to compensate for the forfeited perquisites. While the actual payouts or results of post-termination compensation decisions are dependent upon cash compensation and equity compensation decisions (since they are based on a multiple of compensation), post-termination plan designs are generally made independently of and do not factor into cash compensation and equity decisions. In addition, post-termination compensation decisions are made less frequently than decisions on the other elements of compensation.

In 2006,2007, we provided cash compensationCash Compensation to our Named Executive Officers through base salary and one or more annual incentive opportunities. This is consistent with both general market practice and the practices of our peer groups,group, which typically provide base salary and annual incentives in the form of cash.

Base SalaryIn determining the Cash Compensation component for each Named Executive Officer, we look at compensation data of comparable positions at companies in the peer group, comparable positions as reflected in market surveys, and the Cash Compensation arrangements of our other senior executives. In the case of a new hire, we would also consider the amount of performance or retention bonuses that the prospective executive may be forfeiting by leaving his or her current employer. Affordability considerations are also central to the Committee’s compensation-setting process for all elements, including Cash Compensation. With respect to Cash Compensation, affordability is measured on the basis of the amount of cash that is necessary to fund each element. For short-term incentives, we analyze whether payouts above target are balanced against the additional profitability the over-performance drives.

We

In order to ensure successful business performance, we strive to set base salary to besalaries at a level that is competitive with the general market and our peer groups. In additiongroup to base salary, we rely on other formsattract and retain top quality executive talent and to ensure a reasonable level of compensation (both cash and equity) to motivate and reward the Named Executive Officers.

overall fixed costs. Generally, the median of the relevant market data as described above is used as a guideline for determining base salary. In January or February of each year, and at other times during the year as necessary, the base salary of each of our Named Executive Officers is reviewed and approved. Adjustments to base salary levels on a year-over-yearyear over year basis depend largely on the Committee’s assessment of market data and Company, business unit, and individual performance. The Named Executive Officers’ experience,performance, expertise, and internal positioning are also factored into the annual review, and the CEO provides recommendations as to pay actions with respect to the Named Executive Officers other than himself. During our 2006 review, the Committee decided to increase the salaries for Mr. Bocian and Mr. Koehler in support of our retention objectives, and because Mr. Bocian’s salary was well below the market median. In addition, in March 2006, the Committee approved an increase in base salary for Ms. Wallace in connection with her new assignment.

The base salaries paid to the Named Executive Officers during 2006 are reported in the Summary Compensation Table on page 30.20

Short-Term Incentives

Our annual incentive awards are payable in cash under our stockholder-approved Management Incentive Plan, which was approved by our stockholders in 2006 (“MIP”), and are performance based to ensure that amounts payable to senior executives are deductible for NCR’s federal income

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tax purposes. We believe it is important to provide annual cash incentives to motivate our executive officers to attain specific short-term performance objectives that, in turn, further our long-term objectives. This planOur short-term incentive structure ensures that a significant portion of each executive officer’s cash compensationCash Compensation is “at risk” and payable only when our stockholders have also benefited from his or her efforts. The annual cash incentives paid in 2007 were paid under the Management Incentive Plan, which was approved by our stockholders in 2006 (the “Management Incentive Plan”).

We haveThe Management Incentive Plan is designed to comply with the MIP soperformance-based compensation requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), such that the awards payablebonuses paid to theour Named Executive Officers will beunder this plan are fully deductible for NCR’s federal income tax purposes. AsThe awards payable are established pursuant to a result, the award payable to each Named Executive Officer for 2006 was based on the Company’s earnings before interestformula approved by our stockholders, and taxes (“EBIT”). The award was 1.5% of actual EBIT for Mr. Nuti and 0.75% of EBIT for each of the other Named Executive Officers. Pursuant to the terms of the MIP, however, the Committee has the ability tomay use and did use its negative discretion to reduce the amount of the awards that were generated pursuant to this formula.such awards.

For 2006, theThe Committee established a series of objectives to be considered, in addition to any other factors the Committee deemed appropriate, in exercising such negative discretion for awards granted in 2007 (the “2007 Management Incentive Plan Objectives”). The 2007 Management Incentive Plan Objectives consisted of three components:

We implemented our long-term incentive program to ensure that a large portion of total compensation for executives is directly aligned with Company performance and tied to changes in stockholder value. Long-term equity awards granted to our Named Executive Officers in 2007 were made under the 2006 NCR Corporation Stock Incentive Plan (the “Stock Incentive Plan”) approved by our stockholders in 2006. The use of equity (i) unites all executives in a common set of goals and fosters stock ownership, which creates commonality of interests with stockholders, and (ii) enhances the retentive aspect of the overall compensation program by requiring executives to remain employed for a multi-year period until awards fully vest.

Our long-term incentive opportunities offered to our executives, including the Named Executive Officers, are granted in amounts that are (i) competitive with market practices, (ii) supportive of our executive recruitment and retention objectives, (iii) internally equitable among our executives, and (iv) fit within the expense plan of the Company. As described in more detail in Section III.C.1 and 2 of thisCompensation Discussion and Analysis, equity awards are granted during our annual awards cycle and, from time to time, on an ad-hoc basis.

We used three types of equity awards under our long-term incentive plan in 2007: performance-based restricted stock units, stock options and time-based restricted stock units.

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Consistent with our compensation philosophy to maximize performance-based components of the overall compensation program, perquisites and other personal benefits do not comprise a significant aspect of our executive compensation program. The perquisites provided to our Named Executive Officers are limited to items that enable them to be more efficient (such as financial counseling), balance their personal, business, and travel schedules (such as limited use of the corporate aircraft, Company-owned lodging at a historical site the Company uses for meetings and other events, and rental cars), and promote their continued good health (such as the Executive Medical Program). The Committee monitors our perquisite practices closely and must approve any perquisites before they can be offered to an executive.

We provide retirement benefits to our employees to attract and retain talented employees and to assist our employees in planning for their retirement. Historically, we have provided retirement benefits to our United States (“U.S.”) employees under a number of defined benefit pension plans. However, all of our U.S. defined benefit plans were closed to new entrants in 2004 and were frozen as of December 31, 2006. Plans that are applicable to one or more of our Named Executive Officers consist of:

The actuarial present values of the accumulated pension benefits of the Named Executive Officers who participate in these plans as of the end of 2007, as well as other information about each of our defined benefit pension plans, are reported in the Pension Benefits Table and the narrative thereto on page 50.

Potential transactions that could result in a change in control may be considered by the Company. We want to ensure that in such an event, we retain key staff members and promote independence and objectivity in the consideration of potential transactions that may maximize stockholder value. In order to further these objectives, in 2006, we adopted a Change in Control Severance Plan. The design and magnitude of benefits under this plan

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were considered in the context of other factors, such as the amount of unvested equity compensation and the value of such awards, which together create a strong linkage between management’s interests and those of stockholders.

The Change in Control Severance Plan provides for separation payments and benefits to our executives based on the plan level, or “tier,” to which the executive is assigned by the Committee. We selected these benefit levels for the different tiers because, based on our analysis, they represent the most common market practices. The market data supports including the CEO and CFO in Tier I. While market data supports inclusion of business unit Senior Vice President positions and infrastructure positions in either Tier I or Tier II, our CEO recommended, and our Committee agreed, that business unit Senior Vice President positions should be in Tier I and infrastructure positions should be in Tier II. This differentiation was made because of the increased need to retain the focus of the specialized leaders of our revenue-producing business units during a time of change, while maintaining the affordability of the entire change in control program. Accordingly, Messrs. Nuti and Collins and Ms. Wallace participate in Tier I, and Messrs. Fishman (as Controller) and Lieb participate in Tier II. In addition, in 2007, Messrs. Bocian and Koehler participated in the plan in Tier I while they were employees of NCR, and Mr. Fishman participated in the plan in Tier I while he served as Interim CFO.

The Change in Control Severance Plan has a double-trigger – the events that trigger such payment are that a change in control has occurred, and, within the two year period following the change in control, (i) a participant’s employment is terminated by the Company without cause (other than by reason of the participant’s death or disability) or (ii) a participant’s employment is terminated by the participant for good reason. Additional details regarding the payments and benefits provided to the Named Executive Officers upon satisfaction of the double-trigger are described in the discussion of Potential Payments Upon Termination and Change in Control beginning on page 51 of this proxy statement.

To ensure that we offer a competitive executive compensation program, we believe it is important to provide reasonable severance benefits to our executive officers, including the Named Executive Officers.

We do not have individual severance agreements with Messrs. Bocian, Fishman, Collins, Lieb, Koehler or Ms. Wallace. Instead, they are or were covered under our standard U.S. Reduction-in-Force Plan, with the exception of Mr. Collins, who is covered under our United Kingdom (“U.K.”) Reduction-in-Force Plan. Generally, these plans provide employees with severance benefits if we terminate their employment in connection with a business restructuring (unless the termination is for cause). The Spin-Off did not trigger a severance payment to Mr. Koehler. The payments and other benefits provided under these plans reflect the fact that it may be difficult for these individuals to find comparable employment within a short period of time. We have a separate severance arrangement with Mr. Nuti. A description of the reduction-in-force plans and the severance arrangement with Mr. Nuti, as well as the estimated payments and benefits payable to the Named Executive Officers assuming an event triggering payment under these plans and arrangements as of December 31, 2007, are reported in the discussion of Potential Payments Upon Termination or Change in Control beginning on page 51 of this proxy statement.

Our approval process for making equity awards to our executives and other employees works as follows:

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Our processes for determining exercise price as well as the number of shares granted are as follows:

We have adopted stock ownership guidelines for our executive officers, including the Named Executive Officers, which operate to promote commonality of interest between management and our stockholders by encouraging our executives to accumulate a substantial stake in our common stock. The guidelines encourage the executives to accumulate ownership of common stock equal to two times base salary (three times base salary in the case of our CEO) over a period of five years. For these purposes, ownership includes shares owned outright by the executive, interests in restricted stock and restricted stock units, stock acquired through our employee stock purchase plan, and investments in NCR stock through the Company’s Section 401(k) savings plan. Stock options are not taken into consideration in exercising its negative discretionmeeting the ownership guidelines.

The guidelines are intended to ensure that our executive officers maintain an equity interest in the Company at a level sufficient to assure our stockholders of our executive officers’ commitment to value creation.

Under Section 162(m) of the Code, certain compensation in excess of $1 million annually is not deductible for federal income tax purposes unless it is awarded pursuant to a performance-based plan approved by stockholders. We believe that the incentive compensation paid in 2007 to our executive officers, including the Named Executive Officers, qualifies as performance-based compensation for purposes of Section 162(m) of the Code and determiningis fully deductible for federal income tax purposes, except that a limited number of incentive awards that were accelerated in connection with the Spin-Off became non-deductible upon such acceleration. While we generally try to ensure the deductibility of the incentive compensation paid to our executive officers, the Committee has not adopted a policy that requires all compensation to be deductible because we want to preserve the ability to award amounts (the “2006 Annual MIP Objectives”). These objectives consisted of three components. First,cash or equity compensation to an executive that is not deductible under Section 162(m) if we believe that it is in our stockholders’ best interests.

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Base salary decisions are made after evaluating peer group data, market data, internal equity among executives, and individual performance. The table below describes, for each Named Executive Officer, was assigned financial performance objectives linkedall actions that the Committee took in connection with salary in 2007.

The base salaries paid to corporate and/or business unit performance applicable to his or her role. Second, thosethe Named Executive Officers with business unit responsibilities were assigned stretch objectives relatingduring 2007 are reported in the Summary Compensation Table on page 35.

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The cash incentive awards payable in 2007 to his or her respective business unit’s financial performance. Finally, each Named Executive Officer were made under the Management Incentive Plan. The awards payable to each Named Executive Officer equaled 1.5 percent and 0.75 percent of the Company’s earnings before interest and taxes (EBIT) for Mr. Nuti and each of the other Named Executive Officers, respectively. The awards were then adjusted downward by the Committee through the application of negative discretion. EBIT is used to determine the awards payable to ensure that bonuses are determined as a percentage of controllable profit. We use a measure that excludes interest and taxes to ensure that profit is defined based on operating results that the Named Executive Officers can directly influence. The funding percentages were set at a level sufficient to ensure reasonable award levels under all expected future scenarios, taking into consideration possible changes in the level of EBIT that might result from operational performance, as well as merger and acquisition and related activities, such as the Spin-Off that occurred in 2007. The Management Incentive Plan, including the formula to determine awards payable, was subjectapproved by stockholders at the April 26, 2006 Annual Stockholders’ Meeting.

In 2007, the Committee used its discretion to adjust the awards payable under the Management Incentive Plan downward based on: (i) the 2007 Management Incentive Plan Objectives, which included financial performance objectives, relatingstretch objectives and diversity objectives; and (ii) other factors it deemed appropriate, each as discussed below. The table below presents the award payable using EBIT (due to the Company’s endeavors to increaseSpin-Off, the diversity of its workforce. The Committee determined each executive’s actual award by comparingTeradata data warehousing business results are not included in EBIT) and the actual corporate and/or business unit performance againstawards paid under the Management Incentive Plan for 2007. The awards paid under the Management Incentive Plan in 2007 are reported in the Summary Compensation Table on page 35 and the Summary Compensation Supplemental Table on page 37. Additional information about these awards is also reported in the Grants of Plan-Based Awards Table on pages 42-43.